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, and End-Stage Renal Disease Treatment Choices Model, 76344-76507 [2023-23915]

Download as PDF 76344 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations DEPARTMENT OF HEALTH AND HUMAN SERVICES Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply. Centers for Medicare & Medicaid Services Table of Contents 42 CFR Parts 413 and 512 [CMS–1782–F] RIN 0938–AV05 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, and End-Stage Renal Disease Treatment Choices Model Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). ACTION: Final rule. AGENCY: This final rule updates and revises the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year (CY) 2024. 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 final rule updates requirements for the ESRD Quality Incentive Program and the ESRD Treatment Choices Model. DATES: These regulations are effective on January 1, 2024. 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. ESRDApplications@cms.hhs.gov, for issues related to applications for the Transitional Drug Add-on Payment Adjustment (TDAPA) or Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES). ESRDQIP@cms.hhs.gov, for issues related to the ESRD Quality Incentive Program (QIP). ETC–CMMI@cms.hhs.gov, for issues related to the ESRD Treatment Choices (ETC) Model. SUPPLEMENTARY INFORMATION: Current Procedural Terminology (CPT) Copyright Notice: Throughout this final rule, we use CPT® codes and descriptions to refer to a variety of services. We note that CPT® codes and descriptions are copyright 2020 American Medical Association (AMA). All Rights Reserved. CPT® is a registered trademark of the AMA. Applicable Federal Acquisition ddrumheller on DSK120RN23PROD with RULES2 SUMMARY: VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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) 2024 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) A. Background B. Provisions of the Proposed Rule, Public Comments, and Responses to the Comments on the CY 2024 ESRD PPS C. Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) Clarifications and Application for CY 2024 Payment D. Continuation of Approved Transitional Add-On Payment Adjustments for New and Innovative Equipment and Supplies for CY 2024 E. Continuation of Approved Transitional Drug Add-On Payment Adjustments for CY 2024 III. Calendar Year (CY) 2024 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 CY 2024 Payment for Renal Dialysis Services Furnished to Individuals With AKI C. Annual Payment Rate Update for CY 2024 IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP) A. Background B. Updates to the Regulation Text for the ESRD QIP C. Updates to the Requirements Beginning With the PY 2026 ESRD QIP D. Updates to the Requirements Beginning With the PY 2027 ESRD QIP V. End-Stage Renal Disease Treatment Choices (ETC) Model A. Background B. Summary of the Proposed Provisions, Public Comments, and Responses to Comments on the ETC Model VI. Collection of Information Requirements VII. Regulatory Impact Analysis A. Statement of Need B. Overall Impact C. Impact Analysis D. Detailed Economic Analysis E. Accounting Statement F. Regulatory Flexibility Act Analysis (RFA) G. Unfunded Mandates Reform Act Analysis (UMRA) H. Federalism I. Congressional Review Act VIII. Files Available to the Public via the Internet PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 I. Executive Summary A. Purpose This 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), the ESRD Quality Incentive Program (QIP), and the ESRD Treatment Choices (ETC) Model. Additionally, this rule finalizes policies that reflect our commitment to achieving equity in health care for our beneficiaries by supporting our ability to assess whether, and to what extent, our programs and policies perpetuate or exacerbate systemic barriers to opportunities and benefits for underserved communities. Our policy objectives include commitment to advancing health equity, which stands as the first pillar of the Centers for Medicare & Medicaid Services (CMS) Strategic Plan,1 and reflect the goals of the Administration, as stated in the President’s Executive Order 13985.2 We define health equity as the attainment of the highest level of health for all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes.’’ 3 In the calendar year (CY) 2023 ESRD PPS final rule, we noted that, when compared with all Medicare fee-for-service (FFS) beneficiaries, Medicare FFS beneficiaries receiving dialysis are disproportionately young, male, African American, have disabilities and low income as measured by eligibility for both Medicare and Medicaid (dual eligible status), and reside in an urban setting (87 FR 67183). In this final rule, we continue to address health equity for beneficiaries with ESRD who are members of underserved communities, including but not limited to those living in rural communities, those who have disabilities, and racial and ethnic minorities. The term ‘underserved communities’ refers to populations sharing a particular characteristic, including geographic communities, that have been systematically denied a full 1 Centers for Medicare & Medicaid Services (2022). Health Equity. Available at: https:// www.cms.gov/pillar/health-equity. 2 86 FR 7009 (January 25, 2021). https:// www.federalregister.gov/documents/2021/01/25/ 2021-01753/advancing-racial-equity-and-supportfor-underserved-communities-through-the-federalgovernment. 3 Centers for Medicare & Medicaid Services (2022). Health Equity. Available at: https:// www.cms.gov/pillar/health-equity. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations opportunity to participate in aspects of economic, social, and civic life.4 Specifically, in the CY 2024 ESRD PPS proposed rule (88 FR 42431), we requested information regarding a potential payment adjustment for geographically isolated and rural ESRD facilities, proposed additional payment for the subgroup of Pediatric ESRD Patients (as defined in 42 CFR 413.171), and proposed policies to further our efforts to determine if payment to ESRD facilities treating patients with comorbidities such as sickle cell anemia is aligned with resource use by such ESRD facilities. As discussed in sections II.B.1.g and II.B.1.j of this final rule, we are now finalizing the proposed payment adjustment for Pediatric ESRD Patients and policies to improve the measurement of individual resource use. Additionally, we are adding three new measures to the ESRD QIP measure set that are aimed at promoting health equity for ESRD patients, including by enabling ESRD facilities to identify gaps experienced by their patient populations. ddrumheller on DSK120RN23PROD with RULES2 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 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 percentage increase, reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. This final rule updates the ESRD PPS for CY 2024. 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). 4 86 FR 7009 (January 25, 2021). https:// www.federalregister.gov/documents/2021/01/25/ 2021-01753/advancing-racial-equity-and-supportfor-underserved-communities-through-the-federalgovernment. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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 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 final rule updates the AKI payment rate for CY 2024. 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 establishes incentives for facilities to achieve high quality performance on measures with the goal of improving outcomes for ESRD beneficiaries. This final rule finalizes several updates for the ESRD QIP, including: (1) updates that will begin with Payment Year (PY) 2026, including one new quality measure, modifications to two current measures, and the removal of two measures; (2) the addition of two new measures beginning with PY 2027; (3) a revision to the regulatory definition of ‘‘minimum total performance score’’ that more accurately captures how we calculate the median of national ESRD facility performance on reporting measures; and (4) the codification of our previously finalized measure selection, retention, and removal policies. 4. End-Stage Renal Disease Treatment Choices (ETC) Model The ETC Model is a mandatory Medicare payment model tested under section 1115A of the Act. The ETC Model is operated by the Center for Medicare and Medicaid Innovation (Innovation Center) and tests the use of payment adjustments to encourage greater utilization of home dialysis and kidney transplants, to preserve or enhance the quality of care furnished to Medicare beneficiaries while reducing Medicare expenditures. The ETC Model was finalized as part of a final rule published in the Federal Register on September 29, 2020, titled ‘‘Medicare Program: Specialty Care Models to Improve Quality of Care and Reduce Expenditures’’ (85 FR 61114), referred to herein as the ‘‘Specialty Care Models final rule.’’ We revised and updated certain ETC Model policies in PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 76345 the CY 2022 ESRD PPS final rule (86 FR 61874), and the CY 2023 ESRD PPS final rule (87 FR 67136). In this final rule, we are finalizing a modification to our regulations at 42 CFR 512.390 to acknowledge the availability of administrative review of targeted review requests. This change will provide ETC Participants with information about the availability of administrative review if an ETC Participant wishes to seek additional review of its targeted review request. B. Summary of the Major Provisions 1. ESRD PPS • Update to the ESRD PPS base rate for CY 2024: The final CY 2024 ESRD PPS base rate is $271.02, an increase from the CY 2023 ESRD PPS base rate of $265.57. This amount reflects the application of the combined wage index and transitional pediatric ESRD add-on payment adjustment (TPEAPA) budgetneutrality adjustment factor (0.999534) and a productivity-adjusted market basket percentage increase of 2.1 percent as required by section 1881(b)(14)(F)(i)(I) of the Act, equaling $271.02 (($265.57 × 0.999534) × 1.021 = $271.02). • 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 2024, we are updating the wage index values based on the latest available data. • Annual update to the outlier policy: We are updating the outlier policy based on the most current data. Accordingly, we are updating the Medicare allowable payment (MAP) amounts for adult and pediatric patients for CY 2024 using the latest available CY 2022 claims data. We are updating the ESRD outlier services fixed dollar loss (FDL) amount for pediatric patients using the latest available CY 2022 claims data and updating the FDL amount for adult patients using the latest available claims data from CY 2020, CY 2021, and CY 2022. For pediatric beneficiaries, the final FDL amount will decrease from $23.29 to $11.32, and the MAP amount will decrease from $25.59 to $23.36, as compared to CY 2023 values. For adult beneficiaries, the final FDL amount will decrease from $73.19 to $71.76, and the MAP amount will decrease from $39.62 to $36.28. The 1.0 percent target for outlier payments was not achieved in CY 2022. Outlier payments represented approximately 0.8 percent of total E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76346 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Medicare payments rather than 1.0 percent. • Update to the offset amount for the transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES) for CY 2024: The final CY 2024 average per treatment offset amount for the TPNIES for capital-related assets that are home dialysis machines is $10.00. This offset amount reflects the application of the ESRD Bundled (ESRDB) productivityadjusted market basket update of 2.1 percent ($9.79 × 1.021 = $10.00). There are no capital-related assets set to receive the TPNIES in CY 2024 for which this offset will apply. • Clarifications to the TPNIES eligibility criteria: We are finalizing certain clarifications regarding our evaluation of the TPNIES eligibility criteria under § 413.236(b). • TPNIES application received for CY 2024: In this final rule, we announce our determination on the one TPNIES application under consideration for the TPNIES for CY 2024 payment. • Modifications to the administrative process for the low-volume payment adjustment (LVPA): We are finalizing exceptions to the current LVPA attestation process for ESRD facilities that are affected by disasters and other emergencies. These exceptions will allow ESRD facilities to close and reopen in response to a disaster or other emergency and still receive the LVPA. Additionally, the exceptions will allow an ESRD facility to receive the LVPA even if it exceeds the LVPA treatment volume threshold if its treatment counts increase due to treating additional patients displaced by a disaster or emergency. • Policy to measure patient-level utilization: We are finalizing a requirement for ESRD facilities to report the time on machine (that is, the amount of time that a beneficiary spends receiving an in-center hemodialysis treatment) on claims, effective January 1, 2025. This will serve to provide more data to better inform CMS’s pursuit of equitable payment policies in the future. • Transitional Pediatric ESRD Addon Payment Adjustment (TPEAPA): We are finalizing the establishment of a new budget neutral add-on payment adjustment of 30 percent of the per treatment payment amount for renal dialysis services furnished to Pediatric ESRD Patients effective January 1, 2024, for CYs 2024, 2025, and 2026. This will serve to bring Medicare payments for renal dialysis services furnished to pediatric patients more in line with their estimated relative costs for the next 3 years until further collection and VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 analysis of cost report data can be conducted. • Add-on payment adjustment following the end of the transitional drug add-on payment adjustment (TDAPA) period: We are finalizing a new add-on payment adjustment for certain new renal dialysis drugs and biological products in existing ESRD PPS functional categories after the end of the TDAPA period, which we call the post-TDAPA add-on payment adjustment. This payment adjustment will be case-mix adjusted and set at 65 percent of expenditure levels for the given renal dialysis drug or biological product. The post-TDAPA add-on payment adjustment will be applied to all ESRD PPS payments and paid for 3 years. • Reporting of discarded billing units of certain renal dialysis drugs and biological products paid for under the ESRD PPS: We are finalizing a new policy to require the use of the JW or JZ modifier on claims to track discarded amounts of single-dose container and single-use package renal dialysis drugs and biological products paid for under the ESRD PPS, effective January 1, 2025. 2. Payment for Renal Dialysis Services Furnished to Individuals With AKI We are updating the AKI payment rate for CY 2024. The final CY 2024 payment rate is $271.02, which is the same as the base rate finalized for the ESRD PPS for CY 2024. 3. ESRD QIP We are finalizing several updates for the ESRD QIP. Beginning with PY 2026, we are adding the Facility Commitment to Health Equity reporting measure to the ESRD QIP measure set, modifying the COVID–19 Vaccination Coverage Among Healthcare Personnel (HCP) reporting measure to align with updated measure specifications developed by the Centers for Disease Control and Prevention (CDC), removing the Ultrafiltration Rate reporting measure and the Standardized Fistula Rate clinical measure, and updating the Clinical Depression Screening and Follow-Up measure’s scoring methodology and converting that measure to a clinical measure. Beginning with PY 2027, we are adding the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure to the ESRD QIP measure set. In addition, we are revising the codified definition of ‘‘minimum total performance score’’ and codifying our previously finalized measure selection, retention, and removal policies. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 4. ETC Model We are finalizing a modification to our regulations at § 512.390 to acknowledge the ability of the CMS Administrator to review the results of ETC Participants’ targeted review requests. C. Summary of Costs and Benefits In section VII.D.5 of this final rule, we set forth a detailed analysis of the impacts that the finalized changes will have on affected entities and beneficiaries. The impacts include the following: 1. Impacts of the Final ESRD PPS The impact table in section VII.D.5.a of this final rule displays the estimated change in Medicare payments to ESRD facilities in CY 2024 compared to estimated Medicare payments in CY 2023. The overall impact of the CY 2024 changes is projected to be a 2.1 percent increase in Medicare payments. Hospital-based ESRD facilities have an estimated 3.1 percent increase in Medicare payments compared with freestanding ESRD facilities with an estimated 2.0 percent increase. We estimate that the aggregate ESRD PPS expenditures will increase by approximately $190 million in CY 2024 compared to CY 2023. This reflects an increase of approximately $180 million from the payment rate update and the final post-TDAPA add-on payment adjustment and approximately $10 million in estimated TDAPA payment amounts for Korsuva® and Jesduvroq (daprodustat), as further described in the following paragraphs. Because of the projected 2.1 percent overall payment increase, we estimate there will be an increase in beneficiary coinsurance payments of 2.1 percent in CY 2024, which translates to approximately $40 million. Section 1881(b)(14)(D)(iv) of the Act provides that the ESRD PPS may include such other payment adjustments as the Secretary determines appropriate. Under this authority, CMS implemented § 413.234 to establish the TDAPA, a transitional drug add-on payment adjustment for certain new renal dialysis drugs and biological products and § 413.236 to establish the TPNIES, a transitional add-on payment adjustment for certain new and innovative equipment and supplies. The TDAPA and the TPNIES are not budget neutral. As discussed in section II.D of this final rule, the TPNIES payment period for the Tablo® System ends on December 31, 2023. As discussed in section II.E of this final rule, the TDAPA E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 payment period for Korsuva® (difelikefalin) will continue through March 31, 2024, and for Jesduvroq, will continue throughout 2024. As described in section VII.D.5 of this final rule, we estimate that the overall TDAPA payment amounts in CY 2024 will be approximately $13.3 million, of which, approximately $2.7 million will be attributed to beneficiary coinsurance amounts. We note that these expenditures are estimated in addition to the overall $180 million increase described in the preceding paragraphs and are not fully represented in the detailed impact analysis shown in Table 24. Lastly as discussed in section II.B.1.i of this final rule, we are finalizing a non-budget-neutral payment adjustment for certain new renal dialysis drugs and biological products after the TDAPA period ends, starting in CY 2024. The structure of the post-TDAPA add-on payment adjustment for a new renal dialysis drug or biological product will be based on the case-mix adjusted average per-treatment expenditure for such drug or biological product. We will apply a 65 percent risk-sharing adjustment to the calculated payment amount for the post-TDAPA add-on payment adjustment. We are finalizing a 3-year period following TDAPA during which the drug or biological product would be included in the post-TDAPA add-on payment adjustment. During this period, the renal dialysis drug or biological product would be considered for outlier payments, if it meets the definition of an ESRD outlier service. The first drug that will meet these criteria in CY 2024 will be Korsuva®, which fits into the existing ESRD PPS functional category for antipruritic drugs and biological products. The postTDAPA add-on payment adjustment calculated for Korsuva® will be $0.2493. 2. Impacts of the Final Payment Rate for Renal Dialysis Services Furnished to Individuals With AKI The impact table in section VII.D.5.c of this final rule displays the estimated change in Medicare payments to ESRD facilities for renal dialysis services furnished to individuals with AKI compared to estimated Medicare payments for such services in CY 2023. The overall impact of the CY 2024 changes is projected to be a 2.0 percent increase in Medicare payments for individuals with AKI. Hospital-based ESRD facilities have an estimated 2.1 percent increase in Medicare payments compared with freestanding ESRD facilities that have an estimated 2.0 percent increase. The overall impact reflects the effects of the final Medicare VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 payment rate update and final CY 2024 ESRD PPS wage index. We estimate that the aggregate Medicare payments made to ESRD facilities for renal dialysis services furnished to individuals with AKI, at the final CY 2024 ESRD PPS base rate, will increase by $1 million in CY 2024 compared to CY 2023. 3. Impacts of the Final Changes to the ESRD QIP We estimate that the overall economic impact of the PY 2026 ESRD QIP will be approximately $136.9 million. The $136.9 million estimate for PY 2026 includes $120.9 million in costs associated with the collection of information requirements and approximately $16 million in payment reductions across all facilities. We also estimate that the overall economic impact of the PY 2027 ESRD QIP will be approximately $144.3 million. The $144.3 million estimate for PY 2027 includes $130.5 million in costs associated with the collection of information requirements and approximately $13.8 million in payment reductions across all facilities. 4. Impacts of the Final Changes to the ETC Model The impact estimate in section VII.D.5.d of this final rule describes the estimated change in anticipated Medicare program savings arising from the ETC Model over the duration of the ETC Model as a result of the changes in this final rule. We estimate that the ETC Model will result in $28 million in net savings over the 6.5-year duration of the ETC Model. We also estimate that the changes in this final rule will produce no change in net savings for the ETC Model. As the ETC Model targeted review process has already been finalized in the Specialty Care Models final rule and ETC Participants are not required to seek administrative review of targeted review determinations, we expect there will be minimal additional burden associated with the administrative review policy we are finalizing. II. Calendar Year (CY) 2024 End Stage Renal Disease (ESRD) Prospective Payment System (PPS) A. Background 1. Statutory Background On January 1, 2011, CMS 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 Act, as added by section 153(b) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 76347 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 (Affordable Care Act) (Pub. L. 111–148), established that beginning with CY 2012, and each subsequent year, the Secretary shall annually increase payment amounts by an ESRD market basket percentage increase 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 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. 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 percentage increase 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 E:\FR\FM\06NOR2.SGM 06NOR2 76348 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 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. Section 204 of the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. L. 113–295) 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 drugs and biological products 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 pertreatment payment is made to an ESRD facility for all 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 definition 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, and four comorbidity categories (that is, pericarditis, gastrointestinal tract bleeding, hereditary hemolytic or sickle cell anemia, myelodysplastic syndrome). A different set of case-mix adjusters are applied for the pediatric population. Pediatric patient-level adjusters include two age categories (under age 13, or age 13 to 17) and two dialysis modalities (that is, peritoneal or hemodialysis) (§ 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 payment 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). There are four additional payment adjustments under the ESRD PPS. The ESRD PPS provides adjustments, when VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 applicable, for: (1) a training add-on for home and self-dialysis modalities (§ 413.235(c)); (2) an additional payment for high cost outliers due to unusual variations in the type or amount of medically necessary care (§ 413.237); (3) a TDAPA for certain new renal dialysis drugs and biological products (§ 413.234(c)); and (4) a TPNIES for certain new and innovative renal dialysis equipment and supplies (§ 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 4year transition period. Since the implementation of the ESRD PPS, we have published annual rules to make routine updates, policy changes, and clarifications. Most recently, we published a final rule, which appeared in the November 7, 2022, issue of 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, and End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model,’’ referred to herein as the ‘‘CY 2023 ESRD PPS final rule.’’ In that rule, we updated the ESRD PPS base rate, wage index, and outlier policy for CY 2023. We also finalized changes that included rebasing and revising the ESRD Bundled (ESRDB) market basket to reflect a 2020 base year, refining the methodology for outlier calculations, implementing a wage index floor of 0.600, implementing a permanent 5 percent cap on year-overyear wage index decreases for ESRD facilities, and modifying the definition of ‘‘oral-only drug.’’ For further detailed information regarding these updates, see 87 FR 67136. B. Provisions of the Proposed Rule, Public Comments, and Response to the Comments on the CY 2024 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, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model’’ (88 FR 42430 through 42544), referred to PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 herein as the ‘‘CY 2024 ESRD PPS proposed rule,’’ appeared in the Federal Register on June 30, 2023, with a comment period that ended on August 25, 2023. In that rule, we proposed to make a number of annual updates for CY 2024, including updates to the ESRD PPS base rate, wage index, outlier policy, and the offset amount for the TPNIES. We also proposed two new exceptions to the LVPA eligibility requirements for ESRD facilities impacted by a disaster or other emergency, a new add-on payment adjustment for pediatric ESRD patients, a new add-on payment adjustment for certain new drugs and biological products after the TDAPA period ends, a new reporting requirement for discarded billing units of certain renal dialysis drugs or biological products, and a new reporting requirement for time on machine data for in-center hemodialysis treatments. We proposed clarifications regarding our evaluation of the TPNIES eligibility criteria under § 413.236(b) and included a summary of the one CY 2024 TPNIES application that we received by the February 1, 2023 deadline with our preliminary analysis of the applicant’s claims related to substantial clinical improvement and other eligibility criteria for the TPNIES. In addition, the proposed rule included a request for information regarding potential changes to the LVPA and a potential new payment adjustment for geographic isolation. We received 344 public comments on our ESRD PPS proposals, including comments from kidney and dialysis organizations, such as large and small dialysis organizations; for-profit and non-profit ESRD facilities; ESRD networks; and a dialysis coalition. We also received comments from patients; healthcare providers for adult and pediatric ESRD beneficiaries; home renal dialysis services and advocacy organizations; provider and legal advocacy organizations; administrators and insurance groups; a non-profit dialysis association, a professional association, and alliances for kidney care and home dialysis stakeholders; drug and device manufacturers; health care systems; a health care consultant; and the Medicare Payment Advisory Commission (MedPAC). We received comments related to issues that we either did not discuss in the CY 2024 ESRD PPS proposed rule or that we discussed for the purpose of background or context, but for which we did not propose changes in the rule. These include, for example, concerns regarding staff training, education for kidney disease patients, access to innovation for Medicare Advantage E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations beneficiaries, transportation for ESRD patients, nutrition for ESRD patients, and telehealth. We also received several comments on Medicare coverage for certain Humanitarian Use Devices. We are not providing detailed responses to those comments in this final rule because they are out of the scope of the CY 2024 ESRD PPS proposed rule. We thank the commenters for their input and will consider the recommendations in potential future rulemaking. We received numerous comments on the potential inclusion of oral-only drugs into the ESRD PPS bundled payment beginning January 1, 2025. As noted in the CY 2023 ESRD PPS final rule (87 FR 67180), we expect that the only oral-only drugs and biological products that would be included in the ESRD bundled payment in CY 2025 are phosphate binders. Commenters expressed concerns on potential access and health equity issues, which could result from including oral-only drugs and biological products in the ESRD PPS bundled payment. Some commenters also expressed additional concerns associated with the potential inclusion of oral-only drugs and biological products in the ESRD PPS bundled payment, such as concerns about the following: the administrative burden of managing a patient’s dosage and combination of phosphate lowering drugs; administration of the prescription insofar as patients think they must go to the ESRD facility to obtain the phosphate binders; confusion for patients, in that some patients think the phosphate lowering drugs would only be dispensed at the ESRD facility, and since the drugs must be taken with food, they would not be able to take the drugs because eating during dialysis is not allowed, or they must go to the ESRD facility to get the phosphate binders even when they do not have a dialysis treatment; innovation of new oral-only drugs and biological products, such as phosphate lowering therapies, would be unavailable because of the cost of the new drugs or biological products; and the definition of oral-only drugs and biological products for phosphate lowering agents until an intravenous or injectable equivalent of the drug is available. We thank the commenters for their insight regarding the potential inclusion of oral-only drugs and biological products in the ESRD PPS bundled payment beginning in CY 2025; however, we did not make any proposals related to the potential inclusion of oral-only drugs and biological products in the ESRD PPS bundled payment in CY 2025 in the CY 2024 ESRD PPS proposed rule. We will VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 take commenters’ insight, concerns, and recommendations into consideration for future rulemaking on this topic. Additionally, we received some comments from commenters including ESRD patients and caregivers which contained details of quality-of-care concerns or adverse quality events for which the commenters had first-hand experience. We address these comments as they concern the proposals in the CY 2024 ESRD PPS proposed rule, but we wish to note that any serious adverse quality events can be reported to the CMS ombudsman. Information on beneficiary rights and how to report quality events can be found at https:// www.cms.gov/center/special-topic/ ombudsman/medicare-beneficiaryombudsman-home. 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 2024 ESRD PPS. 1. CY 2024 ESRD PPS Update a. CY 2024 ESRD Bundled (ESRDB) Market Basket Percentage Increase; Productivity Adjustment; and LaborRelated Share (1) Background In accordance with section 1881(b)(14)(F)(i) of the Act, as added by section 153(b) of MIPPA and amended by section 3401(h) of the Affordable Care Act, beginning in 2012, the ESRD PPS payment amounts are required to be annually increased by an ESRD market basket percentage increase 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. Section 1881(b)(14)(F)(i) of the Act 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 included in renal dialysis services. As required under section 1881(b)(14)(F)(i) of the Act, CMS developed an all-inclusive ESRD Bundled (ESRDB) input price index using CY 2008 as the base year (75 FR 49151 through 49162). We subsequently revised and rebased the ESRDB input price index to a base year of CY 2012 in the CY 2015 ESRD PPS final rule (79 FR 66129 through 66136). In the CY 2019 ESRD PPS final rule (83 FR 56951 through 56964), we finalized a rebased ESRDB input price index to reflect a CY PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 76349 2016 base year. In the CY 2023 ESRD PPS final rule (87 FR 67141 through 67154), we finalized a revised and rebased ESRDB input price index to reflect a CY 2020 base year. 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. The ESRDB market basket is a fixedweight, Laspeyres-type price index. A Laspeyres-type price index measures the change in price, over time, of the same mix of goods and services purchased in the base period. Any changes in the quantity or mix of goods and services (that is, intensity) purchased over time are not measured. (2) CY 2024 ESRD Market Basket Update We proposed to use the 2020-based ESRDB market basket as finalized in the CY 2023 ESRD PPS final rule (87 FR 67141 through 67154) to compute the proposed CY 2024 ESRDB market basket percentage increase based on the best available data. Consistent with historical practice, we proposed to estimate the ESRDB market basket percentage increase based on IHS Global Inc.’s (IGI) forecast using the most recently available data at the time of rulemaking. IGI is a nationally recognized economic and financial forecasting firm with which CMS contracts to forecast the components of the market baskets. As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42435 through 42436), we proposed to calculate the market basket update for CY 2024 based on the proposed market basket percentage increase and the proposed productivity adjustment, following our longstanding methodology. (a) CY 2024 Market Basket Percentage Increase Based on IGI’s first quarter 2023 forecast of the 2020-based ESRDB market basket, the proposed CY 2024 market basket percentage increase was 2.0 percent. We also proposed that if more recent data became available after the publication of the CY 2024 ESRD PPS proposed rule and before the publication of the final rule (for example, a more recent estimate of the market basket percentage increase), we would use such data, if appropriate, to determine the CY 2024 market basket percentage increase in this final rule. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76350 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations (b) Productivity Adjustment Under section 1881(b)(14)(F)(i) of the Act, as amended by section 3401(h) of the Affordable Care Act, for CY 2012 and each subsequent year, the ESRDB market basket percentage increase shall be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. The statute defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10year period ending with the applicable fiscal year (FY), year, cost reporting period, or other annual period) (the ‘‘productivity adjustment’’). The Bureau of Labor Statistics (BLS) publishes the official measures of productivity for the United States economy. As we noted in the CY 2023 ESRD PPS final rule (87 FR 67155), the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act previously was published by BLS as private nonfarm business MFP. Beginning with the November 18, 2021, release of productivity data, BLS replaced the term ‘‘multifactor productivity’’ with ‘‘total factor productivity’’ (TFP). BLS noted that this is a change in terminology only and will not affect the data or methodology.5 As a result of the BLS name change, the productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as private nonfarm business TFP; however, as mentioned previously, the data and methods are unchanged. We referred readers to https://www.bls.gov/ productivity/ for the BLS historical published TFP data. A complete description of IGI’s TFP projection methodology is available on CMS’s website at https://www.cms.gov/ Research-Statistics-Data-and-Systems/ Statistics-Trends-and-Reports/Medicare ProgramRatesStats/MarketBasket Research. In addition, in the CY 2022 ESRD PPS final rule (86 FR 61879), we noted that effective for CY 2022 and future years, we will be changing the name of this adjustment to refer to it as the productivity adjustment rather than the MFP adjustment. We stated this was not a change in policy, as we will continue to use the same methodology for deriving the adjustment and rely on the same underlying data. Based on IGI’s first quarter 2023 forecast, the proposed productivity adjustment for CY 2024 (the 10-year 5 Total Factor Productivity in Major Industries— 2020. Available at: https://www.bls.gov/ news.release/prod5.nr0.htm. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 moving average of TFP for the period ending CY 2024) was 0.3 percentage point. Furthermore, we proposed that if more recent data became available after the publication of the CY 2024 ESRD PPS proposed rule and before the publication of this final rule (for example, a more recent estimate of the productivity adjustment), we would use such data, if appropriate, to determine the CY 2024 productivity adjustment in this final rule. (c) CY 2024 Market Basket Update In accordance with section 1881(b)(14)(F)(i) of the Act, we proposed to base the CY 2024 market basket percentage increase on IGI’s first quarter 2023 forecast of the 2020-based ESRDB market basket. We proposed to then reduce this percentage increase by the estimated productivity adjustment for CY 2024 based on IGI’s first quarter 2023 forecast. Therefore, the proposed CY 2024 ESRDB market basket update was equal to 1.7 percent (2.0 percent market basket percentage increase reduced by a 0.3 percentage point productivity adjustment). Furthermore, as noted previously, we proposed that if more recent data became available after the publication of the CY 2024 ESRD PPS proposed rule and before the publication of the final rule (for example, a more recent estimate of the market basket and/or productivity adjustment), we would use such data, if appropriate, to determine the CY 2024 market basket percentage increase and productivity adjustment in the final rule. We invited public comment on our proposals for the CY 2024 ESRDB market basket update and productivity adjustment. Approximately 150 commenters, including large dialysis organizations (LDOs); provider advocacy organizations; nonprofit dialysis associations; a coalition of dialysis organizations; a network of dialysis organizations; professional organizations and several ESRD facilities, commented on the proposed CY 2024 ESRDB market basket update. The following is a summary of the public comments received on these proposals and our responses. Comment: Commenters generally supported increasing the ESRD PPS base rate and the utilization of the most recent data available (for example, a more recent estimate of the market basket and/or productivity adjustment) to determine the final CY 2024 ESRD PPS update. MedPAC recommended that the ESRD PPS base rate increase for CY 2024 should be updated by the amount determined under current law, and commented that analysis reported PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 in the March 2023 Report to the Congress: Medicare Payment Policy 6 concluded that this increase is warranted based on its analysis of payment adequacy (which includes an assessment of beneficiary access, supply and capacity of facilities, facilities’ access to capital, quality, and financial indicators for the sector). Many commenters expressed concern that the CY 2024 payment update does not adequately factor in the effects of many challenges faced by ESRD facilities, such as the impact of the COVID–19 public health emergency (PHE), inflationary pressure, higher patient acuity, Federal budget sequestration, increasing labor costs due to labor shortages, and other increased costs, such as personal protective equipment (PPE), drugs, and supplies. Several commenters also asserted that during the last two ESRD PPS rulemaking cycles the ESRDB market basket updates have not kept pace with the market basket increases for other Medicare providers, such as hospitals and Skilled Nursing Facilities (SNFs). Commenters additionally noted that the proposed CY 2024 ESRDB market basket increase was lower than certain other estimates of overall inflation and healthcare-specific inflation. One commenter stated that since the ESRD PPS’ inception, the annual updates in several years have fallen far below other measures, such as general inflation or health care inflation as measured by the Consumer Price Index (CPI). Response: We are required to update ESRD PPS payments annually by the market basket update adjusted for productivity, as directed by section 1881(b)(14)(F)(i) of the Act. Specifically, section 1881(b)(14)(F)(i)(I) of the Act states that the increase factor shall be based on an ESRD market basket percentage increase for a bundled payment system for renal dialysis services that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services. We believe the increase in the 2020-based ESRDB market basket adequately reflects the average change in the price of goods and services ESRD facilities purchase to provide ESRD medical services and is technically appropriate to use as the ESRD payment update factor. The ESRDB market basket is a fixed-weight, Laspeyres-type index that measures price changes over time and would not reflect increases in costs associated with changes in the volume or intensity of 6 https://www.medpac.gov/wp-content/uploads/ 2023/03/Mar23_MedPAC_Report_To_Congress_v2_ SEC.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations input goods and services. As such, the ESRDB market basket update would reflect the prospective price pressures described by the commenters (such as wage growth or higher energy prices) but would not inherently reflect other factors that might increase the level of costs, such as the quantity of labor used or any shifts between contract workers and staffed employees. We note that cost changes (that is, the product of price and quantities) would only be reflected when a market basket is rebased, and the base year weights are updated to a more recent time period. We finalized the 2020-based ESRDB market basket in the CY 2023 ESRD PPS final rule (87 FR 67141), and therefore, any change in the cost structure for ESRD facilities that occurred between 2016 and 2020 is now reflected in the cost weights for the 2020-based ESRDB market basket, which was the most recent fully complete cost data available at the time of rulemaking. We will continue to monitor the cost share weights and, if technically appropriate, consider rebasing the ESRDB market basket more frequently than usual should the cost weights change significantly. Any proposal to rebase the ESRDB market basket would occur through notice-and-comment rulemaking. The final CY 2024 ESRDB market basket update reflects the most recent available data regarding prices of labor used to provide renal dialysis services. As set forth later in section II.B.1.a.(2)(c) of this final rule, the final productivity-adjusted CY 2024 ESRDB market basket update is 2.1 percent, representing a ESRDB market basket increase of 2.4 percent reduced by a productivity adjustment of 0.3 percent. We note that the final CY 2024 ESRDB market basket update is 0.4 percentage points higher than the proposed CY 2024 ESRDB market basket update. We recognize that this 2.1 percent productivity-adjusted ESRDB market basket update may still be lower than some commenters believe is appropriate; however, it reflects the most recent available data regarding expected price inflation for inputs required to provide renal dialysis services based on CMS’s longstanding methodology. We acknowledge commenters’ claims that the CY 2024 ESRD PPS proposed market basket increase is less than increases for other Medicare payment systems, including the Inpatient Prospective Payment System (IPPS) and the Hospital Outpatient Prospective Payment System (OPPS). In response to these concerns, we note that one cause of these differences is that the mix of VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 76351 inputs used to provide renal dialysis services is different from those used for other services captured by other CMS market baskets. For example, the ESRDB market basket labor cost weights (reflecting those cost weights that use an Employment Cost Index (ECI) as price proxy) are generally lower than the labor cost weights in other CMS PPS market baskets, and the pharmaceuticals and medical supply cost weights in the ESRDB market basket (which is based on the ESRD Medicare cost report (Form CMS–265–11)) are higher than the pharmaceuticals and medical supply cost weights in other CMS PPS market baskets.7 The weighting together of these different mixes of inputs can appropriately result in differential rates of increase for various market baskets. Additionally, we acknowledge that many measures of inflation are higher than both the proposed 1.7 percent and the final 2.1 percent productivityadjusted ESRDB market basket update for CY 2024. We note that some of the measures of inflation that commenters referenced in their comments are either measures of past inflation or measures of current inflation. The ESRDB market basket update is based on a forecast for the changes in input prices as measured by the ESRDB market basket for CY 2024, and not a measure of inflation during CY 2023. Under section 1881(b)(14)(F)(i) of the Act, the annual market basket update reflects the changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services. We believe that this is a more accurate estimate of the changes in input prices faced by ESRD facilities than less specific measures such as overall inflation or inflation across the entire healthcare sector. Additionally, concerns raised by commenters that the ESRDB market basket updates have been lower than general inflation or healthcare inflation measures are not relevant comparisons, because the law requires that the increase be based on an index that measures input price pressures for providing renal dialysis services. We acknowledge that many patients, ESRD facilities, and other health care providers believe that rising prices are a major concern in providing high quality care; however, we project that growth in input prices for renal dialysis services will slow in CY 2024 relative to CY 2023, which is reflected in the productivity-adjusted ESRDB market basket update of 2.1 percent. Comment: Several commenters indicated a belief that the ESRDB market basket update would have an impact on quality of care provided by ESRD facilities. Other commenters indicated that they believe the current quality of care that ESRD PPS beneficiaries receive is too low, and used this belief as justification for either supporting or opposing the ESRDB market basket update. Response: We appreciate commenters’ insight into the quality of care which Medicare beneficiaries receive at ESRD facilities. Medicare beneficiaries have a right to safe, appropriate, and quality health services. For ESRD facilities, the Federal health and safety requirements are codified at 42 CFR part 494. To determine if a facility meets ESRD conditions for coverage, the State survey agency (SA), or a CMS-approved national accrediting organization (AO), performs an on-site survey of the facility. After the initial approval, dialysis facilities have routine onsite surveys to monitor compliance with the Federal requirements. If a dialysis facility is found to be deficient in one or more of the standards in the conditions for coverage, it may participate in, or be covered under, the Medicare program only if the dialysis facility has submitted an acceptable plan of correction for achieving compliance within a reasonable period of time acceptable to CMS. In the case of an immediate jeopardy situation (that is, a situation in which the facility’s non-compliance with one or more Medicare conditions for coverage has caused, or is likely to cause, serious injury, harm, impairment, or death to a patient), we may require a shorter time period for achieving compliance. When poor quality or unsafe health care is furnished by any type of Medicare-certified provider or supplier, a complaint may be filed by anyone, including patients, family members, or staff. Dialysis facility complaints relating to improper care, unsafe conditions, and quality of care may be filed with the State Health Department or the ESRD Network.8 CMS has an established complaint process to protect all patients from abuse, neglect, exploitation, and inadequate care and supervision. The goal of the complaints process is to establish a system that will assist in promoting and protecting the health and safety of all patients receiving health services in a Medicare-certified facility. The procedures for handling complaints 7 Public data can be found at https://www.bls.gov/ eci/home.htm and https://www.cms.gov/dataresearch/statistics-trends-and-reports/cost-reports. 8 https://www.cms.gov/training-education/opendoor-forums/end-stage-renal-disease-clinicallaboratories-esrd/network. PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76352 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations are outlined in Chapter 5 of the State Operations Manual,9 and they are followed when complaints and reported incidents, including referrals from the public or other Federal entities, involve Medicare-certified providers/suppliers. The evaluation, investigation, and resolution of complaints are critical certification activities. CMS and the SAs, or AOs, are responsible for ensuring that participating providers/ suppliers of healthcare services continually meet Federal requirements. This requires that the SA, or AO, promptly reviews complaints/incidents, conducts unannounced onsite investigations of reports alleged noncompliance, and informs the CMS locations any time a facility is found to be out of compliance with the applicable certification requirements. We believe the resources provided by the ESRD PPS are appropriate to enable ESRD facilities to comply with the requirements and procedures described above. Comment: One ESRD patient stated that ESRD facilities were already being paid too much and that the quality of care provided by ESRD facilities was insufficient given the payment amount. Response: We appreciate the comments on Medicare payment amounts to ESRD facilities. As stated previously, we are required to update ESRD PPS bundled payments by the market basket update adjusted for productivity under section 1881(b)(14)(F)(i) of the Act, which states that the Secretary shall annually increase payment amounts by an ESRD market basket percentage increase that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services. As such, we believe that the final CY 2024 ESRDB market basket update is appropriate. We note that MedPAC states that payment rates are adequate for the ESRD facilities. In addition, regarding the commenter’s belief that ESRD facilities are being paid too much, and the concerns the commenter noted citing specific quality of care issues for ESRD patients, we note that, as described earlier in this section, CMS is actively engaged in efforts to ensure Medicare ESRD beneficiaries receive quality care. Additionally, the ESRD QIP actively monitors and adjusts payments to facilities under the ESRD PPS based on their performance on several quality measures. Comment: Several commenters, including a coalition of dialysis 9 https://www.cms.gov/medicare/providerenrollment-and-certification/surveycertification geninfo/downloads/som107c05pdf.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 organizations, stated that ESRD facilities face relatively small profit margins when caring for Medicare beneficiaries and indicated that they believe the ESRDB market basket increase amount would lead to lower standards of care in CY 2024 and that to prevent this, CMS should consider increasing payments by a larger amount. One ESRD patient characterized the proposed CY 2024 ESRDB market basket update as being insufficient for the extent of the financial impact of recent inflationary events. Numerous commenters stated that a larger payment rate increase would allow ESRD facilities to hire more staff and increase the quality of care. Some commenters suggested that CMS reevaluate the proposed market basket update and instead increase ESRD PPS payments by a larger amount. Response: We understand that commenters are concerned about the profit margins for ESRD facilities. As stated previously, we believe that the final CY 2024 ESRDB market basket update reflects the most recent available data regarding the input prices required to provide renal dialysis services. We did not propose any additional increases to the ESRD PPS base rate to improve ESRD facility margins or otherwise account for factors that commenters believe are not adequately represented in the market basket update methodology, and we are not finalizing any such increases. We will continue to monitor the adequacy of the ESRD PPS payment amount and will consider these comments in potential future rulemaking. In addition, as described earlier in this section, CMS is actively engaged in efforts to ensure Medicare ESRD beneficiaries receive quality care. Comment: Several commenters, including a provider advocacy organization, noted that the ESRD PPS payment rate update would have implications for Medicare Advantage payment rates. Many of these commenters expressed that the proposed ESRDB market basket update of 1.7 percent would lead to lower payments from Medicare Advantage. Response: We understand that some commenters are concerned about the impact that the proposed CY 2024 ESRDB market basket update would have on rates for other payors, including Medicare Advantage. However, we are required to update the ESRD PPS bundled payment by the market basket update adjusted for productivity under section 1881(b)(14)(F)(i) of the Act, which states that the Secretary shall annually increase payment amounts by an ESRD market basket percentage increase that reflects changes over time in the prices of an appropriate mix of PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 goods and services included in renal dialysis services. This update is not intended to account for or direct the business practices of other payors. We note that the final productivity-adjusted CY 2024 ESRDB market basket update is 2.1 percent, which represents an increase to the proposed productivityadjusted CY 2024 ESRDB market basket update of 1.7 percent, and we anticipate that the increase alleviates some of the commenters’ concerns. We did not propose to make any additional methodological changes to the market basket update or ESRD PPS base rate to account for other payors and are not finalizing any additional methodological changes on this topic. Comment: We received numerous other comments on potential implications of the proposed CY 2024 ESRDB market basket update. Several commenters claimed the proposed CY 2024 ESRD PPS base rate update would have a negative impact on other factors including, but not limited to, wait times for dialysis appointments, access to innovative treatments for ESRD patients, ESRD treatments for nursing home patients, ESRD treatments for the elderly, Medicare Part A payments, and hospitalizations for ESRD PPS patients. Response: We recognize that commenters are concerned about the impact that the magnitude of the CY 2024 ESRDB market basket update has on ESRD facilities’ ability to provide quality renal dialysis services. As stated previously, the final CY 2024 ESRDB market basket update reflects the most recent available data regarding prices for inputs used to provide renal dialysis services. We recognize that payment policy within the ESRD PPS can affect the quality and accessibility of renal dialysis services; however, the CY 2024 ESRDB market basket update adequately reflects the average change in the price of goods and services ESRD facilities purchase to provide renal dialysis services, so we do not agree with commenters’ claims that the ESRDB market basket update would have a negative impact on these other factors. We did not propose any changes to the existing ESRDB market basket update methodology in the CY 2024 ESRD PPS proposed rule and are not finalizing any such methodological changes in this rule. We appreciate the insight of commenters into the implications of the ESRDB market basket update and will keep these implications in mind in future rulemaking. Comment: Several commenters questioned CMS’s longstanding market basket methodology. Commenters expressed concern over the accuracy of the forecast underlying the proposed E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations market basket update for CY 2024, including that CMS’s use of the IGI forecast for determining the market basket update does not capture the specialized nature of ESRD facility costs. A few commenters requested that CMS reexamine the forecasting approach or consider other methods and data sources to calculate the final rule market basket update that better reflect the rapidly increasing input prices and costs facing ESRD facilities. Other commenters indicated that they believed that it is inappropriate to continue to use the same mix of goods and services that were used at the inception of the ESRD PPS in the CY 2011 ESRD PPS final rule. One ESRD facility suggested that, because there has been significant variation between the forecasted and actual ESRDB market basket price growth, CMS should evaluate whether the market basket methodology is inherently flawed. Several commenters believed that a retrospective adjustment to the base rate to account for past differences between the ESRDB market basket update for a given year and what the ESRDB market basket update would have been for that year based on the actual changes in prices, known as a forecast error adjustment, could alleviate some of the perceived flaws in the market basket update methodology. Response: We thank commenters for providing these comments on the ESRDB market basket update methodology. In response to the commenters’ request that we reexamine the current forecasting approach for determining the ESRDB market basket update, we provide the following information. IGI is a nationally recognized economic and financial forecasting firm with which CMS contracts to forecast the price proxies used in the market baskets. At the time of the CY 2024 ESRD PPS proposed rule, based on the IGI first quarter 2023 forecast with historical data through the fourth quarter of 2022, the 2020-based ESRDB market basket update was forecasted to be 2.0 percent for CY 2024, reflecting forecasted compensation price growth of 3.7 percent (by comparison, compensation price growth in the ESRDB market basket averaged 2.6 percent from 2013 to 2022). In the CY 2024 ESRD PPS proposed rule, we proposed that if more recent data became available, we would use such data, if appropriate, to derive the final CY 2024 ESRDB market basket update for the final rule. For this final rule, we now have an updated forecast of the price proxies underlying the market basket that incorporates more recent VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 historical data and reflects a revised outlook regarding the U.S. economy and expected price inflation for CY 2024. Based on IGI’s third quarter 2023 forecast with historical data through the second quarter of 2023, we are projecting a CY 2024 ESRDB market basket update of 2.4 percent (reflecting forecasted compensation price growth of 4.1 percent) and a productivity adjustment of 0.3 percentage point. Therefore, for CY 2024 a final ESRDB productivity-adjusted market basket update of 2.1 percent (2.4 percent less 0.3 percentage point) will be applicable, compared to the 1.7 percent productivity-adjusted market basket update that was proposed. We note that section 1881(b)(14)(F)(i) of the Act states that the Secretary shall annually increase payment amounts by an ESRD market basket percentage increase that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services. We believe that the current market basket update methodology as finalized in the CY 2011 ESRD PPS final rule (75 FR 49151 through 49162), and most recently updated in the CY 2023 ESRD PPS final rule (87 FR 67141 through 67157) to reflect a 2020 base year, fulfills this statutory requirement. We support the continued use of the current mix of goods and services to provide continuity to the financial impacts of the ESRD PPS payment policy, and we note that the weighting for this mix of goods and services is updated periodically through rebasing. However, we will consider the commenter’s suggestion regarding the use of different methods or other data sources for the ESRDB market basket for future rulemaking. We discuss the commenters’ request for a forecast error adjustment below. We did not propose any methodological changes to the ESRDB market basket update methodology for CY 2024, and we are finalizing the continued use of the ESRDB market basket methodology as finalized in the CY 2023 ESRD PPS final rule (87 FR 67141 through 67157). We do not believe that the ESRDB market basket update is inherently flawed because the forecast errors for CYs 2021 and 2022 were higher-than-normal due to the high inflation during the COVID– 19 PHE, which we discuss further in section II.B.1.a.(2)(d) of this final rule. We will continue to monitor the performance of the ESRDB market basket update, and we will keep these comments on the market basket methodology in mind for future rulemaking. We note that CMS engages with the public, including the dialysis PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 76353 industry and associations, routinely throughout the year in our continuing efforts to align payment with resource utilization. We welcome continuing dialogue on the topic of improving the market basket update methodology, and other topics pertinent to the ESRD PPS, toward the common goal of improving care for ESRD patients. Comment: Some commenters provided information on additional rising costs faced by ESRD facilities that the commenters believed were not adequately captured in the proposed CY 2024 ESRDB market basket update. These additional costs included the following: costs associated with compliance with additional regulations regarding infection control; costs related to supply chain problems; rising costs for certain supplies; and cost related to changes in labor, such as additional pay for traveling nurses or contract nurses. Response: We appreciate the insight into changing costs that ESRD facilities face. As stated previously, the final CY 2024 ESRDB market basket update reflects the most recent available data regarding prices for inputs used to provide renal dialysis services. These costs which commenters listed are included in the ESRDB and so the change in their prices would be included in the CY 2024 ESRDB market basket update. If the rising costs the commenters’ mentioned are due to an increase in quantity of the good purchased, rather than an increase in price, we note that such cost changes would only be reflected when a market basket is rebased, and the base year weights are updated to a more recent time period. We finalized the 2020based ESRDB market basket in the CY 2023 ESRD PPS final rule (87 FR 67141); therefore, any change in the cost structure for ESRD facilities that occurred between 2016 and 2020 is now reflected in the cost weights for the 2020-based ESRDB market basket, which was the most recent fully complete cost data available at the time of rulemaking. We believe that it is technically appropriate to use the 2020based ESRDB market basket for the CY 2024 ESRDB market basket update. Comment: One commenter asserted that experience over the past few years has indicated that the ESRD PPS methodology is unable to reflect shortterm and long-term impacts of an economic shock, such as the COVID–19 PHE. The commenter noted that although CMS offers detailed explanations of the market basket’s construction and issues data through its website, the dialysis provider community still has little insight into the factors contributing to annual E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76354 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations payment updates that the commenter believes consistently fail to reflect increases in the cost of care delivery. The commenter urged CMS to engage in a formal dialogue with the kidney care community outside of the annual rulemaking process to better identify the methodology’s limitations and inform development of improvements. The commenter also requested that IGI have representation and participation in this dialogue. Response: We appreciate the commenter’s concerns regarding the market basket methodology. Our longstanding ESRDB market basket update methodology sets rates prospectively on an annual basis. We acknowledge that over the course of a year, short term changes in economic conditions can lead to uncertainty, which may be exacerbated by economic shocks. Because the ESRD PPS base rate is updated annually, the purpose of the ESRDB market basket update is to account for the change in price of the ESRDB from year to year, not necessarily to capture the effect of shorter term fluctuations of prices. That short term fluctuations are not addressed by the ESRDB market basket update is a consequence of the annual nature of the update as required by section 1881(b)(14)(F) of the Act. We believe the ESRDB market basket update appropriately captures the change in the price of goods and services over time in the long term. Some commenters have suggested a forecast error adjustment as a way to mitigate the impact of these short-term uncertainties, which we discuss in further detail in section II.B.1.a.(2)(d) of this final rule. CMS will continue to engage with the public regarding ways to ensure the Medicare ESRD PPS payments are appropriate and that the market basket price proxies and base year weights are accurate. Comment: We received several comments, including from a patient organization, stating that the proposed ESRDB market basket update would not sufficiently support innovation. Response: We note that ESRD PPS policies to encourage the adaptation of new innovations, such as the TDAPA and TPNIES, are add-on payment adjustments to the base rate, and although there is only one ESRD PPS bundled payment, these adjustments are not a part of the ESRDB and therefore, are not included in the ESRD PPS base rate or the ESRDB market basket update. This is similarly true for the postTDAPA add-on payment adjustment that we are finalizing in this rule, which is described in further detail in section II.B.1.i of this final rule. These add-on payment adjustments are actively VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 supporting the adoption of certain new and innovative drugs, biological products, equipment and supplies by ESRD facilities, by providing additional payment to offset the additional cost of those drugs, biological products, equipment and supplies. We did not propose any changes to the ESRDB market basket update methodology to account for innovation within the ESRD PPS and are not finalizing any such changes in this final rule. We will consider these comments on supporting innovation and access to innovative products in potential future rulemaking. Comment: We received approximately 90 comments related to the nature of labor costs at ESRD facilities, including comments from large dialysis organizations, advocacy organizations, ESRD facilities, providers, and a coalition of dialysis organizations. Commenters generally stated that labor costs at ESRD facilities are increasing, which is driving overall cost increases at ESRD facilities, and that the proposed ESRDB market basket update was insufficient to cover these increased labor costs. Many of the commenters cited that the growth in their labor costs has outpaced the ESRDB market basket updates or the growth of the market basket compensation cost category in the ESRDB market basket. Additionally, some commenters noted that labor costs were rising across the healthcare sector, which the commenters asserted was not appropriately reflected in the ESRDB market basket update. Commenters described other barriers to hiring and maintaining staff including, but not limited to, burnout, lack of resources, inability to match competitive pay, and long travel times for staff. A coalition of dialysis organizations commented that it was increasingly difficult for ESRD facilities to hire new staff while competing with other health care providers with more resources and nonhealthcare employers. They stated that this was leading to some ESRD facilities having to turn away patients or being unable to continue operations. One LDO noted that staffing concerns are leading to ESRD facilities using a higher percentage of more-expensive contract labor and that contract labor wages and benefits make up 1.9 percent and 0.5 percent of the 2020-based ESRDB, respectively. Some commenters highlighted the COVID–19 PHE as a significant factor in the workforce shortage that ESRD facilities face; however, some commenters indicated that they believe this workforce shortage has been in progress for a long time. Some ESRD facilities and LDOs included various additional information or data on the extent to which their PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 labor costs have increased over the past few years. Several commenters, including an LDO and a non-profit dialysis organization, referenced an analysis that showed labor costs grew at a compound average growth rate of 6.96 percent from 2018 to 2022, whereas the proxy for labor used in the ESRDB market basket update methodology grew at a compound average growth rate of 3.15 percent from 2018 to Q1 2022. One provider advocacy organization commented that its analysis found that direct patient care labor costs per dialysis treatment increased by 18.9 percent from 2017 to 2022. Commenters also stated that the increasing labor costs were resulting in staffing concerns at ESRD facilities. Some of these comments highlighted access issues arising from fewer available dialysis sessions. Some comments referenced quality issues related to the burden placed on workers at ESRD facilities by low staffing and the limited training of staff at ESRD facilities due to high turnover. Many of these comments came from ESRD patients, caretakers and patient advocates and included the commenters’ personal experience on the issues related to receiving care at ESRD facilities (for example, difficulty finding appointments, having to travel significant distances to get care, and how low staffing at ESRD facilities has impacted their care). Other commenters conveyed their concern about inadequate staffing and related many incidents of significant adverse events and sub-standard quality care, which they attributed to low staffing. A kidney disease patient organization included multiple testimonials from ESRD patients regarding their issues in trying to locate dialysis treatments. Some commenters highlighted the impact that staffing shortages had on home dialysis. Several patients expressed a willingness and desire for self-dialysis training, but stated they were unable to receive self-dialysis dialysis training due to staff shortages at their clinics. Response: We thank commenters for their insight into labor supply and labor costs at ESRD facilities, and we recognize that labor costs are a driving factor in cost increases at ESRD facilities. We acknowledge that CY 2022 price growth for the 2016-based ESRDB market basket was higher (5.1 percent) than was forecasted at the time of the CY 2022 ESRD PPS final rule (2.4 percent). We note that the lower projected CY 2024 ESRDB market basket percent increase (2.4 percent) relative to the observed CY 2022 historical increase, as well as the forecasted CY E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 2023 ESRDB market basket increase of 3.1 percent, reflect the expectation that wage and price pressures will lessen in CY 2024 compared to recent years. As described previously, the ESRDB market basket measures price changes (including changes in the prices for wages and salaries and benefits) over time and would not reflect increases in costs associated with changes in the volume or intensity of input goods and services until the market basket is rebased. An ESRD-specific compensation price index is unavailable; therefore, we use a composite wage and benefit index of various Employment Cost Indices (ECIs) reflecting the occupational mix of fulltime equivalents (FTE) data from ESRD Medicare Cost reports and ECIs from BLS (87 FR 67147). Health-related occupations account for 79 percent of the 2020-based ESRDB compensation cost weight and are proxied by the ECI for All Civilian Workers in Hospitals, reflecting similar medical occupations used in ESRD facilities (particularly nurses) and their associated price growth. As discussed in the CY 2023 ESRD PPS final rule, we believe the composite weighted index for wages and salaries and benefits to be a reasonable proxy for the compensation component of the ESRDB market basket. We note that section 1881(b)(14)(F)(i) of the Act states that the Secretary shall annually increase payment amounts by an ESRD market basket percentage increase that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services. While labor is included in the mix of goods and services in the ESRD PPS bundled payment, the annual market basket increase accounts for more than the price change for labor. As such, it is possible for the market basket increase to be less than the increase in the price of labor if the other goods and services included in the ESRDB do not experience as large of a price increase. Our analysis of the data used to determine the ESRDB market basket forecast indicates that this dynamic is reflected in the market basket increases for the past few years. For example, in 2021 the overall market basket forecast was an increase of 1.9 percent, but the labor portion of the ESRDB market basket was forecasted to increase by 2.5 percent. We recognize commenters’ view that the proposed ESRDB market basket increase for CY 2024 was less than ESRD facilities’ reported labor increases. However, if, as commenters have stated, labor is the driving factor for the increase in costs for ESRD VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 facilities, it would be expected that the labor percentage increase would be greater than the overall ESRDB market basket percentage increase. This is because the ESRDB market basket increase is a weighted average of the changes in prices for the ESRDB market basket. Labor is only one part of the ESRDB market basket, and commenters have indicated that other components of the ESRDB market basket have not experienced the same growth in price as labor. We believe the 2020-based ESRDB market basket increase adequately reflects the average change in the price of goods and services ESRD facilities purchase to provide renal dialysis services, including labor, and is technically appropriate to use as the ESRD PPS payment update factor. The ESRDB market basket update will reflect the expected prospective price pressures described by the commenters as increasing during a high inflation period (such as faster wage growth or higher energy prices) but inherently will not reflect other factors that might increase the level of costs, such as the quantity of labor used. Therefore, the final CY 2024 ESRDB market basket update reflects the most recent available data regarding both prices and the items and services used to provide renal dialysis services. We thank commenters for including detailed information and data on the changes to labor costs that ESRD facilities face. We agree that during the COVID–19 PHE, labor costs increased more than normal. According to our analysis, the ESRDB market basket compensation price growth was forecasted to increase a cumulative 18.9 percent from CY 2017 to CY 2022. This is the same as the figure which one commenter described as being the change in direct labor costs over that time. We recognize that some comments indicated that ESRD facilities experienced larger or smaller changes in labor costs than this over that time. We note that the ESRDB market basket does not measure each individual ESRD facility’s own experience, but instead the ESRDB market basket cost weights reflect the experience of the average ESRD facility. Therefore, if one area of the country experienced an increase in labor costs at a higher rate than other areas of the country, that would not be wholly captured in the annual update. Instead, the relative difference in labor cost growth should be captured in changes to the wage index for that ESRD facility. However, we recognize that our wage index methodology uses historical data instead of a forecast and as such PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 76355 takes longer to update in response to periods of large change. We appreciate comments from ESRD patients which highlighted their experiences at ESRD facilities. We are concerned by the comments which indicate access and quality concerns at ESRD facilities related to staffing issues. We note that § 494.180(b) requires that an ESRD facility have an adequate number of qualified and trained staff; however, the governing body of the facility has a measure of discretion when determining staffing. The ESRD PPS provides a bundled payment that encompasses all renal dialysis services, including labor. We recognize that staffing shortages can pose a difficulty to ESRD patients who desire training for self-dialysis. We note that the ESRD PPS includes an add-on payment adjustment for self-dialysis training (42 CFR 413.235(c); 81 FR 77851 to 77856). We appreciate the comments regarding these staffing issues and will consider them for potential future rulemaking. Comment: One commenter encouraged CMS to explore other changes to the composition of the market basket to better capture evolving dynamics in the labor force. The commenter provided as an example that the ECI may no longer accurately capture the changing composition and cost structure of the hospital labor market given the large increases in short-term contract labor use and its growing costs. Several commenters expressed concern that not all the ESRDB market basket price proxies, particularly the labor-related price proxies, accurately reflect ESRD facilities’ faster than expected cost growth. One commenter noted that for healthcare providers across all sectors, the impact of the tight labor market (both in the healthcare sector and general economy overall) has forced ESRD facilities to rely more heavily on contracted labor. The commenter further pointed out that under the 2020-based ESRDB market basket, contract labor wages and benefits have 1.9 percent and 0.5 percent weights, respectively; however, the commenter expressed concern that these weights were derived by assuming that ESRD facilities use the same labor amount and mix as they did more than a decade ago, which does not reflect the current environment in which dialysis providers deliver care. They stated that use of the U.S. Census Bureau’s Services Annual Survey (SAS) data may not reflect staffing ratio or minimum wage requirements adopted by State and municipal governments since 2012, the recent years’ shift in labor mix, unanticipated increase in compensation E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76356 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations expenses, or the COVID–19 PHE’s overall impact on the healthcare labor force. A few commenters stated that certain market basket components rely, to some extent, on severely lagged data, which during times of unusual circumstances, could limit a forecast model’s ability to capture economic shocks and the subsequent impact on health care providers’ costs. The commenters stated, for example, the BLS’s ECI price proxies generally hold the employment mix constant for several years. They stated that the ECI’s weights reflected the 2012 occupational mix until recently (the December 2022 BLS release updated the data to reflect 2021 employment weights). The commenters noted that since ECI employment weights are held constant for a period this would introduce inaccuracies into the market basket updates. They stated that since the ECI 2012 weights were used for the price proxies in the ESRDB market basket through the CY 2022 rulemaking cycles it could have resulted in errors in the ESRDB market basket update. Response: We appreciate the commenters’ concerns about the composition of the ESRDB market basket and whether the price proxies used in the market basket are accurately capturing the price pressures experienced by ESRD facilities. The commenters are correct that the ECI data are based on fixed occupational weights; however, we believe these indexes continue to be technically appropriate measures of pure compensation inflation to be used in the ESRDB market basket. Because the market baskets are intended to measure price changes over time, and not changes in costs that also reflect quantity and intensity changes, the fixed occupational distribution of the ECI is appropriate. BLS periodically updates these distributions (in the January 2023 release of December 2022 ECI data they introduced updated 2021 fixed employment weights, replacing the 2012 weights used through September 2022). Additionally, the observed ECI for Wages and Salaries for All Civilian workers in Hospitals (which accounts for 29 percent of the 2020based ESRDB market basket) data has reflected recent wage ‘‘price’’ pressures as growth in 2021 and 2022 accelerated relative to 2020. The projection of the ECI also considers anticipated wage pressures due to various economic and industry-specific factors; the hospital ECI is projected to grow faster in 2023 compared to the historical average growth in the series, particularly prior to 2021. We note that when developing VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 its forecast for the ECI for All Civilian Workers in Hospitals, IGI considers overall labor market conditions (including rise in contract labor employment due to tight labor market conditions) as well as trends in contract labor wages, which both have an impact on wage pressures for workers employed directly by the hospital. We also acknowledge the commenters’ concerns that the ECI only reflects employed labor costs; however, we note that the alternative publicly available average hourly earnings series also does not include contract labor costs. Additionally, we analyzed the FTE data reported on the Medicare cost reports and found that the share of contract labor FTEs is about 2 percent of all FTEs and has remained relatively constant in 2021 and 2022. We will continue to monitor the cost report data as it is received to ensure that the ECI series used to proxy ESRD labor categories continues to offer the most appropriate price proxies for measuring compensation price growth in ESRD facilities. Lastly, we acknowledge commenters’ concern that the contract labor cost weight in the ESRDB market basket relies on 2012 SAS data published by the United States Census Bureau inflated to 2020-dollar values as the basis for the contract labor cost weight. We proposed and finalized the methodology for deriving the compensation cost share weights in the CY 2023 ESRD PPS rulemaking cycle (87 FR 67141 through 67157). Because the Medicare cost report data does not capture the specific costs for contract labor, we therefore must rely on other data sources to estimate the share of contract labor costs that are reported within Administrative and General costs on the cost reports. We have not identified any other data source that provides specific contract labor costs for ESRD facilities. Final Rule Action: After consideration of the comments received, we are finalizing a CY 2024 ESRDB productivity-adjusted market basket increase of 2.1 percent based on the most recent data available. As noted previously, based on the more recent data available for this CY 2024 ESRD PPS final rule (that is, IGI’s third quarter 2023 forecast of the 2020-based ESRDB market basket with historical data through the second quarter of 2023), the CY 2024 ESRDB market basket update is 2.4 percent. Based on the more recent data available from IGI’s third quarter 2023 forecast, the current estimate of the productivity adjustment for CY 2024 is 0.3 percentage point. Therefore, the current estimate of the CY 2024 ESRD PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 productivity-adjusted market basket increase factor is equal to 2.1 percent (that is, the 2.4 percent market basket update reduced by the 0.3 percentage point productivity adjustment). (d) Requests for a Forecast Error Payment Adjustment In the CY 2024 ESRD PPS proposed rule (88 FR 42435), we discussed that in the CY 2023 ESRD PPS final rule (87 FR 67157), many commenters requested that CMS apply a forecast error payment adjustment to the ESRD PPS base rate to support ESRD facilities during the inflationary period occurring at that time, particularly accounting for what commenters stated was an error in the forecasted payment updates for CYs 2021 and 2022. In response to those comments, we reminded readers that ESRDB market basket updates are set prospectively, meaning the update relies on a mix of both historical data for part of the period for which the update is calculated and forecasted data for the remainder. We explained that while there is no precedent to adjust for market basket forecast error in the annual ESRD PPS update, the forecast error for a market basket update is calculated as the actual market basket increase for a given year less the forecasted market basket increase.10 We also explained that due to the uncertainty regarding future price trends, forecast errors can be both positive and negative. For example, the CY 2017 ESRDB forecast error was ¥0.8 percentage point, while the CY 2021 ESRDB forecast error was +1.2 percentage points. At the time of the CY 2023 ESRD PPS final rule, CY 2022 historical data was not yet available to calculate a forecast error for CY 2022; however, based on the latest available historical data for CY 2022, we now calculate that the CY 2022 ESRDB forecast error was +2.7 percentage points. We further noted that, in the CY 2023 ESRD PPS final rule (87 FR 67156), we recognized that recent higher inflationary trends impacted the outlook for price growth over the next several quarters. For that CY 2023 ESRD PPS final rule, we used an updated forecast of the price proxies underlying the market basket that incorporated more recent historical data and reflected a revised outlook regarding the U.S. economy and expected price inflation for CY 2023 for ESRD facilities. We explained that predictability in 10 FAQ—Market Basket Definitions and General Information. Available at: https://www.cms.gov/ research-statistics-data-and-systems/statisticstrends-and-reports/medicareprogramratesstats/ downloads/info.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Medicare payments is important to enable ESRD facilities to budget and plan their operations, and that forecast errors are unpredictable (87 FR 67517). Prior to the COVID–19 PHE period, the positive differences between the actual and forecasted market basket increase in prior years have offset negative differences over time. Therefore, we stated in the CY 2024 ESRD PPS proposed rule that, in accordance with our longstanding ESRDB market basket update methodology, we would not propose to apply a forecast error adjustment to the ESRDB market basket update for CY 2024. Comment: We received approximately 30 comments related to CMS’s decision not to propose a forecast error adjustment for CY 2024. These commenters, including a coalition of dialysis providers, several LDOs, and numerous provider and patient advocacy organizations, requested that CMS reevaluate and implement a payment adjustment to account for past forecast errors. Many commenters requested that CMS apply a forecast error adjustment to the ESRD PPS payment update for CY 2024. Some specific suggestions for payment adjustments included: a CY 2024 adjustment of 10 to 20 percent per discharge; an adjustment for the ‘‘underpayment’’ of ESRD facilities since 2020; and/or the adoption a forecast error adjustment like the one used in the SNF PPS. Several commenters stated that absent a forecast error adjustment they may be forced to close some of their ESRD facilities, particularly those facilities located in areas with vulnerable populations. The commenters stated that the forecast error was driven mainly by unforeseen increased costs for labor (including a higher reliance on contract labor staff), equipment, and medical supplies (including PPE and pharmaceuticals), which resulted in increased costs to provide care to ESRD beneficiaries that were never properly reimbursed under the Medicare ESRD PPS payments. Commenters stated that while the growth in these costs has begun to stabilize somewhat in 2023, they continue to be substantially higher than pre-pandemic levels. Commenters also pointed out that while high wage inflation and labor shortages affect all health care providers, dialysis providers are particularly vulnerable because there is not variation in types of services performed or billed and due to the less variable payer mix that relies more on Medicare and Medicaid payment than other health care provider types. One commenter noted that while other health care providers have VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 experienced similar forecast errors in CY 2022 and CY 2023, the current cumulative underpayment error for the ESRD PPS exceeds the errors in other payment systems such as IPPS, home health, and long-term care hospitals. Some commenters acknowledged that since the market basket updates are set prospectively, they are inherently imperfect, and forecast errors from year to year may occur in either a positive or negative direction. However, several commenters noted that in the case of the ESRDB market basket these differences have not offset one another over time. The commenters stated a belief that the magnitude of the errors in 2021 and 2022, which they state resulted from a flawed methodology that failed to accurately forecast higher than normal inflation, are highly unlikely to even out over time unless there is a similar, fast moving deflationary event resulting in the same magnitude in the forecast. Many commenters requested CMS establish a payment adjustment modeled after the forecast error adjustment for payments to SNFs that was established in 2004 (68 FR 46057). These commenters responded to CMS’s view that historical negative forecast errors are offset by positive errors by noting that over the past few years the forecast errors have been predominantly positive, at 1.2 percent and 2.7 percent in CYs 2021 and 2022 respectively. As such, the ESRD PPS base rate is lower than it would have been if the forecasts had been accurate. Many of these commenters supported a forecast error adjustment methodology that would, like the SNF adjustment of 2004, only be applied if the error is larger than a certain threshold. Multiple commenters supported a threshold of 0.5 percentage point for this adjustment. Many commenters compared the state of SNF payment in 2004 and of the ESRD PPS today, emphasizing the similarities in the amount by which the recent market basket updates had been incorrect, the source of the error mainly attributable to unexpectedly large increases in the costs of labor, and certain similar statutory language describing the SNF PPS and the ESRD PPS. A coalition of dialysis organizations suggested that for the CY 2024 ESRD PPS final rule CMS should adjust the ESRD PPS base rate by the cumulative forecast error since 2019 but added that they would also approve of adjusting the ESRD PPS base rate by the cumulative forecast error since the inception of the ESRD PPS in 2011. Some commenters, including an LDO, suggested in lieu of a permanent forecast error adjustment policy for ESRDs, CMS could apply a one-time positive adjustment to the ESRD PPS PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 76357 base rate to account for the forecast error in recent years, with commenters suggesting it be applied to the ESRD PPS base rate in a non-budget neutral manner. Some commenters, including an LDO, recognized that CMS’s view that the market basket errors could balance out over time could be true for small variations; however, the commenters stated that it would not hold true for periods of significant missed forecasts due to periods of rapid change, for example during the COVID– 19 PHE. Generally, commenters stated that they agreed with CMS on the importance of predictability for payments but stated that payment accuracy was more important, so a forecast error payment adjustment would be useful as it would improve payment accuracy. Some comments included additional information on what commenters stated could happen with or without a forecast error adjustment. One LDO commented that their analysis indicated that the under-forecast would lead to a total of $1.8 billion in underpayments between CY 2021 to 2027. One patient-led dialysis organization recommended an ‘‘Essential Worker Safety Catch’’ to revise past updates to ensure labor is adequately compensated. A provider advocacy organization questioned CMS’s use of 2020-cost reports in determining payment for CY 2024, saying it was outdated and inaccurate. One ESRD facility commented that given the size of recent errors, they believed it was likely that errors would continue to increase and potentially become larger in the future. Response: While the projected ESRDB market basket updates for CY 2021 and CY 2022 were under-forecast (that is, actual increases were greater than forecasted), as is the preliminary CY 2023 forecast error, this was largely due to unanticipated inflationary and labor market pressures as the economy emerged from the COVID–19 PHE. An analysis of the forecast error of the ESRDB market basket over a longer period shows the forecast error has been both positive and negative. We recognize that the COVID–19 PHE and high inflationary environment have had an adverse impact on costs for ESRD facilities. Due to ESRD payments being set prospectively, we rely on a projection of the ESRDB market basket that reflects both historical and forecasted trends. Due to the uncertainty regarding future price trends, the difference between the projected and actual market basket increases can be both positive and negative. We note that from CY 2012 to CY 2020, the only year in which the forecast error of the ESRDB E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76358 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations market basket update exceeded the 0.5 percentage point threshold in absolute terms (which is applicable for the SNF PPS forecast error adjustment) was CY 2017. The forecasted CY 2017 ESRDB market basket update was 0.8 percentage point higher than the actual CY 2017 percentage increase of the 2012-based ESRDB market basket based on historical data. We also acknowledge that the ESRDB market basket forecast errors for CY 2021 (1.2 percentage points) and CY 2022 (2.7 percentage points) exceeded the 0.5 percentage point threshold where the forecasted ESRDB market basket updates were lower than the actual percentage increases based on historical data. These recent forecast errors were largely a function of uncertainty in the overall economy and the health sector specifically due to the nature of the COVID–19 PHE and the unforeseen rapidly accelerating inflationary environment. Rapid increase in costs during the COVID–19 PHE has led to a positive forecast error for every Medicare PPS. The data on which the final CY 2024 ESRDB market basket update is based is the most recent available data. We note that the 2020 cost report data was used for rebasing the market basket as finalized in the CY 2023 ESRD PPS final rule (87 FR 67141 through 67154), and at the time of CY 2023 rulemaking the 2020 cost report data was the most recent year of complete cost report data available to develop the ESRDB market basket cost weights. The ESRDB market basket cost weights do not change from year to year since it is a fixed-weight Laspeyres index; therefore, for CY 2024, we use the most recent available forecast of the price proxies to estimate the growth in the input prices of this mix of goods and services for providing renal dialysis services for the coming year. The most recent forecast of the price proxies in the ESRDB market basket for this final rule is the IGI third quarter 2023 forecast with historical data through the second quarter of 2023. This is the established methodology as finalized in the CY 2011 ESRD PPS final rule (75 FR 49151 through 49162). Therefore, while the weighting of the various goods and services that make up the ESRDB market basket did utilize 2020 data for rebasing, it is inaccurate to characterize the CY 2024 market basket increase as being based on 2020 data generally. We do not agree with the commenter that stated a belief that because forecast errors have been greater in recent years it is likely that forecast errors will be larger in the future. As we have indicated, the larger-than-normal VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 forecast errors in CY 2021 and CY 2022 were largely due to unanticipated inflationary and labor market pressures as the economy emerged from the COVID–19 PHE, which we do not anticipate will continue in CY 2024. Our preliminary estimates of the CY 2023 ESRD PPS forecast error indicate that it was smaller than the forecast errors in CY 2022 and CY 2021. For these reasons, after evaluating the historical performance of the ESRDB market basket and the financial environment unique to ESRD facilities, we do not believe it is appropriate to include adjustments to the ESRDB market basket update for future years based on the difference between the actual and forecasted ESRDB market basket increase in prior years. However, we will continue to monitor the overall performance of the ESRDB market basket update, including analyzing the change in the price of labor inputs for ESRD facilities over time. We will take commenters’ concerns into consideration for potential future rulemaking. Comment: One LDO commented that they believe that CMS has a statutory obligation to implement a forecast error adjustment under section 1881(b)(14)(F)(i) of the Act, which states that the Secretary shall annually increase payment amounts by an ESRD market basket percentage increase for a bundled payment system for renal dialysis services that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services. The commenter acknowledged that forecasting prices is inherent in a PPS but indicated that they believe that the current methodology fails to annually capture the changes over time in the price of providing renal dialysis services. The commenter stated that correcting for prior and future forecast errors is a step CMS can easily implement to ensure the ESRD PPS payment, and future market basket update factors, reflect the prices of delivering renal dialysis services. The commenter noted that in 2004 when CMS implemented a forecast error adjustment in the payment system for SNFs it was based on very similar statutory language and was implemented under what the commenter stated were ‘‘virtually identical’’ circumstances to the ESRD PPS today. Response: We thank the commenter for sharing their view on this issue; however, we do not agree that CMS’s position regarding an ESRD PPS forecast error payment adjustment conflicts with any statutory requirements for the ESRD PPS. We appreciate the commenter’s PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 interpretation of the circumstances involved in the implementation of the forecast error adjustment for SNF payment; however, we disagree with the claim that the circumstance was virtually identical to the ESRD PPS today. While the cumulative underforecast of the SNF market basket increases in 2004 was based on a rapid increase in the price of labor, it was not due to a PHE as occurred with the ESRD PPS’s under-forecast in recent years. Additionally, it was an issue which only SNFs were experiencing, unlike the current ESRD PPS environment where multiple Medicare payment systems have faced similar forecast errors. We note that when CMS finalized a forecast error adjustment for the SNF payment system, we concluded that a forecast error adjustment was appropriate for payment accuracy for SNFs; not that it was required under the statute (68 FR 46057). For these reasons, we do not agree with the commenter’s stated belief that a forecast error adjustment would be required to fulfill the ESRD PPS statutory requirements, and, at this time, for the reasons discussed previously, we do not believe that a forecast error payment adjustment would be appropriate for the ESRD PPS. Final Rule Action: After consideration of the comments we received, we are finalizing a CY 2024 ESRDB productivity-adjusted market basket increase of 2.1 percent based on the most recent data available. As noted previously, based on the more recent data available for this CY 2024 ESRD PPS final rule (that is, IGI’s third quarter 2023 forecast of the 2020-based ESRDB market basket with historical data through the second quarter of 2023), the CY 2024 ESRDB market basket update is 2.4 percent. Based on the more recent data available from IGI’s third quarter 2023 forecast, the current estimate of the productivity adjustment for CY 2024 is 0.3 percentage point. Therefore, the current estimate of the CY 2024 ESRD productivity-adjusted market basket increase factor is equal to 2.1 percent (2.4 percent market basket update reduced by 0.3 percentage point productivity adjustment). We are finalizing our proposal to determine the CY 2024 ESRDB market basket update for the final rule without an adjustment to account for past forecast errors. Additionally, we did not propose and are not finalizing any methodology for a forecast error payment adjustment. We will continue to monitor the performance of the ESRDB market basket forecasts and will consider the information provided by commenters for potential future rulemaking. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations (e) Labor-Related Share We define the labor-related share as those expenses that are labor-intensive and vary with, or are influenced by, the local labor market. The labor-related share of a market basket is determined by identifying the national average proportion of operating costs that are related to, influenced by, or vary with the local labor market. For the CY 2024 ESRD PPS payment update, we proposed to continue using a laborrelated share of 55.2 percent, which was finalized in the CY 2023 ESRD PPS final rule (87 FR 67153 through 67154). Comment: We received three comments which acknowledged our proposal to use the labor-related share of 55.2 percent as finalized in the CY 2023 ESRD PPS final rule. Additionally, one LDO commented on the weights attributed to contract labor and benefits in the 2020-based ESRDB market basket, indicating that they thought that these areas were under-represented in the 2020-based ESRDB market basket. This LDO recognized that CMS did not propose any changes to the labor-related share from CY 2023. One provider advocacy organization suggested CMS utilize a different labor-related share for ESRD facilities with low wage index values, noting that for facilities with low wage index values, labor likely relates to a smaller share of total costs. Response: We thank commenters for reviewing the proposed labor-related share. We appreciate the comment on the weights of contract labor in the 2020-based ESRDB market basket. As stated in section II.B.1.a.(2)(c) of this final rule, changes in both the cost and quantity of an input are reflected when the ESRDB market basket is rebased, and the base year weights are updated to a more recent time period. We finalized the 2020-based ESRDB market basket in the CY 2023 ESRD PPS final rule (87 FR 67141), and, therefore, any change in the cost structure for ESRD facilities that occurred between 2016 and 2020 is now reflected in the cost weights for the 2020-based ESRDB market basket, which was the most recent fully complete cost data available at the time of rulemaking. Our monitoring indicates that the 2020based ESRDB market basket is still appropriate for determining the cost weights for inputs for providing renal dialysis services. Therefore, following the methodology finalized in the CY 2011 ESRD PPS final rule (75 FR 49116), we consider the labor related components of the ESRDB market basket to be an appropriate basis for the laborrelated share for the CY 2024 ESRD PPS payments. We will continue to monitor VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 the cost share weights and, if technically appropriate, consider rebasing the ESRDB market basket more frequently than usual should the cost weights change significantly. We appreciate the suggestion to use a different labor-related share for low wage index ESRD facilities. We did not propose any methodological changes to the application of the labor-related share, such as using a different laborrelated share for different ESRD facilities, but we will consider this comment in potential future rulemaking. Comment: One commenter expressed appreciation that the labor-related share of the ESRD PPS increased from 52.3 percent to 55.2 percent in CY 2023 and stated that they believe this is a consistent trend with the ESRD PPS, for which CMS has increased the laborrelated share of the market basket over the lifetime of the PPS. The commenter opined that increasing the labor-related share of the market basket, while positive, does not fully address the steep rising costs of labor needed to deliver care to Medicare beneficiaries with ESRD, since it only alters the percentage of ESRD PPS payments allocated to labor as compared with other inputs required for renal dialysis services but does not deliver more resources through the ESRD PPS to cover the rising costs of care associated with the increases in the cost of labor. Response: The purpose of the laborrelated share is to reflect the proportion of the national ESRD PPS base payment rate that is adjusted by the wage index. 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. Therefore, we include a cost category in the labor-related share if the costs are labor intensive and vary with the local labor market. We note that the historical increase to the laborrelated share is based on the increase to the labor-related cost-weights in the ESRDB market basket. As acknowledged by the commenter, the purpose of the labor-related share is to allocate ESRD payment between labor-related costs and non-labor costs. The labor-related share is not meant to increase payments overall for the rising cost of labor. Final Rule Action: We are finalizing our proposal to use the labor-related share of 55.2 percent, as finalized in the CY 2023 ESRD PPS final rule, for CY 2024 ESRD PPS payments. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 76359 b. CY 2024 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 § 413.231. Specifically, CMS adjusts the labor-related portion of the ESRD PPS 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) 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/informationfor-agencies/bulletins/. We have also adopted methodologies for calculating wage index values for ESRD facilities that are in urban and rural areas where there is no hospital data. For a full discussion, see the 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 applied 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 applied the wage index for Guam to American Samoa and the Northern Mariana Islands (78 FR 72172). Under § 413.231(d), a wage index floor value of 0.6000 is applied under the ESRD PPS as a substitute wage index for areas with very low wage index values, as finalized in the CY 2023 ESRD PPS final rule (87 FR 67161). Currently, all areas with wage index values that fall below the floor are in Puerto Rico and the U.S. Virgin Islands. However, the wage index floor value is applicable for any area that may fall E:\FR\FM\06NOR2.SGM 06NOR2 76360 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations below the floor. A further 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) and the CY 2023 ESRD PPS final rule (87 FR 67161). An ESRD facility’s wage index is applied to the labor-related share of the ESRD PPS base rate. In the CY 2023 ESRD PPS final rule (87 FR 67153), we finalized a labor-related share of 55.2 percent. In the CY 2021 ESRD PPS final rule (85 FR 71436), we updated the OMB delineations as described in the September 14, 2018, OMB Bulletin No. 18–04, beginning with the CY 2021 ESRD PPS wage index. In that same rule, we finalized 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. We finalized that the transition would be phased in over 2 years, such that the 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. In the CY 2023 ESRD PPS final rule (87 FR 67161), we finalized a permanent policy under § 413.231(c) 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 CY. For CY 2024, as discussed in section II.B.1.a.(2)(e) of this final rule, the labor-related share to which the wage index will be applied is 55.2 percent. ddrumheller on DSK120RN23PROD with RULES2 (2) CY 2024 ESRD PPS Wage Index For CY 2024, we proposed to update the wage indices to account for updated wage levels in areas in which ESRD facilities are located using our existing methodology. We proposed to use 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 2024, the updated wage data are for hospital cost reporting periods beginning on or after October 1, 2019, and before October 1, 2020 (FY 2020 cost report data). For CY 2024, we proposed to update the ESRD PPS wage index to use the most recent hospital wage data. We proposed that if more recent data become available after the publication of the proposed rule and before the publication of the final rule (for example, a more recent estimate of the wage index), we would use such data, VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 if appropriate, to determine the CY 2024 ESRD PPS wage index in the final rule. We received several comments on our proposal to update the ESRD PPS wage index. The comments and our responses are set forth below. Comment: We received several comments on CMS’s proposal to use the most recent wage index data in the CY 2024 ESRD PPS final rule. Commenters were generally supportive of the use of more recent data. Additionally, several commenters reiterated support for the 5 percent cap on wage index decreases that we finalized in the CY 2023 ESRD PPS final rule (87 FR 67161). Response: We thank the commenters for their support on the use of more recent data and for the policy to cap wage index decreases. Comment: One ESRD facility expressed concerns that the ESRD PPS wage index does not reflect the realities that it faces and, specifically, does not accurately reflect the increase in its cost of labor over the past few years. Response: We appreciate the concerns that the commenter raised; however, we did not propose to change the wage index methodology for CY 2024 and are not finalizing any changes to that methodology in this final rule. The wage data used to construct the ESRD PPS wage index are updated annually, based on the most current data available, and are based on OMB’s CBSA delineations when applying the rural definitions and corresponding wage index values. As discussed in CY 2011 ESRD PPS final rule (75 FR 49200), the wage index reflects the relative level of hospital wages and wage-related costs in the geographic area in which the ESRD facility is located. Because the wage index is scaled relative to the national average, it does not reflect changes over time to the cost of labor. Rather, the market basket increase accounts for national trends, including inflation. As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42435), we proposed to increase the ESRD PPS base rate for CY 2024 by the market basket increase factor in accordance with section 1881(b)(14)(F)(i) of the Act, which provides that the market basket increase factor should reflect the changes over time in the prices of an appropriate mix of goods and services that reflect the costs of furnishing renal dialysis services. As discussed in section II.B.1.a.(2).(c) of this final rule, the final productivity-adjusted market basket update for CY 2024 is 2.1 percent based on the latest available data. We note that this final update is 0.4 percentage point higher than the proposed update and reflects a revised outlook regarding the U.S. economy and PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 expected price inflation for CY 2024 for ESRD facilities. We believe the final productivity-adjusted market basket update will address some of the commenter’s concerns regarding rising wages due to inflation. Comment: Several commenters, including MedPAC, a coalition of dialysis organizations and an LDO, suggested that CMS reevaluate the wage index methodology for the ESRD PPS. MedPAC recommended we establish an ESRD PPS wage index for all ESRD facilities using wage data that represents all employers and industry-specific occupational weights, rather than the hospital wage data currently used. Two ESRD facilities and a provider advocacy organization requested CMS use the floors and reclassifications that IPPS uses for their wage index. Some of these commenters additionally indicated a belief that this change would help ESRD facilities compete with hospitals for labor. Response: We appreciate the suggestions from commenters on how to improve the ESRD PPS wage index methodology. The use of hospital wage data for the ESRD PPS wage index is set forth in §§ 413.196(d)(2) and 413.231(a). As we previously discussed in the CY 2011 ESRD PPS proposed rule (74 FR 49968), the ESRD PPS wage index uses the same wage index values used in the basic case-mix adjusted composite payment system, which 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. The application of the pre-floor, pre-reclassification hospital wage index for the ESRD case-mix adjusted composite payment system is further discussed in the CY 2009 Physician Fee Schedule (PFS) final rule (73 FR 69726, 69758) and the CY 2007 PFS final rule (71 FR 69624, 69685). We did not propose changes to the ESRD PPS wage index methodology for CY 2024, and we are not finalizing any changes to that methodology in this final rule. As discussed in the CY 2023 ESRD PPS final rule (87 FR 67160), the wage index is intended to be a relative measure of the value of labor in prescribed labor market areas. There is a variety of reasons why our longstanding ESRD PPS wage index policy has not applied the same floors or reclassifications as applied under the IPPS, which we note, are not applied to the ESRD PPS wage index by statute (sections 1881(b)(12)(D) & (b)(14)(D)(iv)(II) of the Act). For example, applying reclassifications to the ESRD PPS wage index would E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations significantly increase administrative burden, both for ESRD facilities and for CMS, that would be associated with ESRD facilities reclassifying from one CBSA to another, and it would significantly increase the complexity of the methodology. Furthermore, because floors and reclassifications would be applied budget-neutrally under the wage index, these policies would increase the wage index for some ESRD facilities while reducing ESRD PPS payments for all other ESRD facilities, which would upset the long-settled expectations with which ESRD facilities across the country have been operating. For example, under the IPPS rural floor policy, section 4410(a) of the Balanced Budget Act of 1997 (Pub. L. 105–33) provides that, for discharges on or after October 1, 1997, the area wage index applicable to any hospital that is located in an urban area of a State may not be less than the area wage index applicable to hospitals located in rural areas in that State. Applying the IPPS rural floor to the ESRD PPS wage index would result in increasing the wage index for any ESRD facilities located in an urban area whose wage index is less than the rural wage index for that State. As we discussed in the CY 2023 ESRD PPS final rule (87 FR 67164 through 67165) with respect to the increase to the ESRD PPS wage index floor in that year, a higher wage index floor will slightly decrease the ESRD PPS base rate for all ESRD facilities due to the application of the budget neutrality factor. Given that increasing the wage index floor results in a proportional decrease in the base rate for all ESRD facilities, we established a wage index floor value that strikes a balance between providing increased payment to areas for which labor costs are higher than the current wage index for the relevant CBSAs indicates, while maintaining the accuracy of payments under the ESRD PPS and minimizing the overall impact to all ESRD facilities. For these reasons, we believe that the ESRD PPS wage index is the most appropriate data to use for estimating the variation in wage levels across the country. However, we will take these comments into consideration to potentially inform future rulemaking. Comment: A non-profit health insurance organization commented that they believed a wage index floor of 0.7000 was justified and suggested CMS reevaluate the current wage index floor of 0.6000. The commenter indicated that CMS would find it appropriate to raise the wage index floor to 0.7000. Response: We appreciate the suggestion and will consider it for VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 potential future rulemaking. We did not propose any change to the current wage index floor of 0.6000 specified in § 413.231(d) and are not finalizing any changes to that floor in this final rule. Final Rule Action: We are finalizing our proposal to update the ESRD PPS wage index for CY 2024 to use the most recent hospital wage data, as proposed. The final CY 2024 ESRD PPS wage index is set forth in Addendum A and is available on CMS’s website at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ESRDpayment/ End-Stage-Renal-Disease-ESRDPayment-Regulations-and-Notices. Addendum A provides a crosswalk between the CY 2023 wage index and the CY 2024 wage index. Addendum B provides an ESRD facility level impact analysis. Addendum B is available on CMS’s website at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/ESRDpayment/End-StageRenal-Disease-ESRD-PaymentRegulations-and-Notices. c. CY 2024 Update to the Outlier Policy (1) Background Section 1881(b)(14)(D)(ii) of the Act requires that the ESRD PPS include a payment adjustment for high-cost outliers due to unusual variations in the type or amount of medically necessary care, including variability in the amount of erythropoiesis stimulating agents (ESAs) necessary for anemia management. Some examples of the patient conditions that may be reflective of higher facility costs when furnishing dialysis care are frailty and obesity. A patient’s specific medical condition, such as secondary hyperparathyroidism, may result in higher per treatment costs. The ESRD PPS recognizes that some patients require high-cost care, and we have codified the outlier policy and our methodology for calculating outlier payments at § 413.237. Section 413.237(a)(1) enumerates the following items and services that are eligible for outlier payments as ESRD outlier services: (i) Renal dialysis drugs and biological products that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B; (ii) renal dialysis laboratory tests that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B; (iii) 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; (iv) renal dialysis drugs and biological products that were or would PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 76361 have been, prior to January 1, 2011, covered under Medicare Part D, including renal dialysis oral-only drugs effective January 1, 2025; and (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.11 In the CY 2011 ESRD PPS final rule (75 FR 49142), CMS stated that for purposes of determining whether an ESRD facility would be eligible for an outlier payment, it would be necessary for the ESRD 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 ESRD outlier services were specified in Transmittal 2134, dated January 14, 2011.12 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. For example, we use these issuances to identify renal dialysis oral drugs that were or would have been covered under Medicare Part D prior to 2011 to provide unit prices for determining the imputed MAP amounts. In addition, we use these issuances to update the list of ESRD outlier services by adding or removing items and services that we determined, based our monitoring efforts, are either incorrectly included or missing from the list. Under § 413.237, an ESRD facility is eligible for an outlier payment if its imputed (that is, calculated) MAP amount per treatment for ESRD outlier services exceeds a threshold. The MAP amount represents the average estimated expenditure 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 MAP amount per treatment plus the FDL amount. As described in the following paragraphs, the ESRD 11 Under § 413.237(a)(1)(vi), as of January 1, 2012, the laboratory tests that comprise the Automated Multi-Channel Chemistry panel are excluded from the definition of outlier services. 12 Transmittal 2033 issued August 20, 2010, was 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. https://www.cms.gov/ Regulations-and-Guidance/Guidance/Transmittals/ downloads/R2134CP.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 76362 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 facility’s predicted MAP amount is the national adjusted average ESRD outlier services MAP amount per treatment, further adjusted for case-mix and facility characteristics applicable to the claim. We use the term ‘‘national adjusted average’’ in this section of this final rule for clarity, to distinguish the calculation of the average ESRD outlier services MAP amount per treatment from the calculation of the predicted MAP amount for a claim. The average ESRD outlier services MAP amount per treatment is based on utilization from all ESRD facilities, whereas the calculation of the predicted MAP amount for a claim is based on the individual ESRD facility and patient characteristics of the monthly claim. In accordance with § 413.237(c), ESRD 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 codified in § 413.220(b)(4), using 2007 data, we established the outlier percentage, which is used to reduce the per treatment ESRD PPS base rate to account for the proportion of the estimated total Medicare payments under the ESRD PPS that are outlier VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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 2023 ESRD PPS final rule, we finalized an update to the outlier methodology to better target 1.0 percent of total Medicare payments (87 FR 67170 through 67177). We finalized that we would continue to follow our established methodology for the calculation of the adult and pediatric MAP amounts, but we would prospectively calculate the adult FDL amounts based on the historical trend in FDL amounts that would have achieved the 1.0 percent outlier target in the 3 most recent available data years. PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 (2) CY 2024 Update to the Outlier Services MAP Amounts and FDL Amounts For CY 2024, we proposed to update the MAP amounts for adult and pediatric patients using the latest available CY 2022 claims data. We proposed to update the ESRD outlier services FDL amount for pediatric patients using the latest available CY 2022 claims data, and to update the ESRD outlier services FDL amount for adult patients using the latest available claims data from CY 2020, CY 2021, and CY 2022, in accordance with the methodology finalized in the CY 2023 ESRD PPS final rule (87 FR 67170 through 67174). CY 2022 claims data showed outlier payments represented approximately 0.8 percent of total Medicare payments (88 FR 42432 and 42438). The impact of this final update is shown in Table 1, which compares the outlier services MAP amounts and FDL amounts used for the outlier policy in CY 2023 with the updated estimates for this final rule. The estimates for the CY 2024 MAP amounts, which are included in Column II of Table 1, were inflation adjusted to reflect projected 2024 prices for ESRD outlier services. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76363 TABLE 1: Outlier Policy: Impact of Using Updated Data for the Outlier Policy Column I Column II Final outlier policy for CY 2024 Final outlier policy for CY 2023 (based on 2021 data, price inflated (based on 2022 data, price inflated to 2023) * to 2024) ** verage outlier services MAP amount er treatment Standardization for outlier services MIPPA reduction Adjusted average outlier services MAP amount Fixed-dollar loss amount fuat is added o tile predicted MAP to determine the outlier tlrreshold Patient-monfu-facilities qualifying for outlier payment Age< 18 Age>= 18 Age< 18 Age>= 18 $24.13 $41.36 $22.30 $37.92 1.0819 0.9774 1.0691 0.9763 0.98 $25.59 0.98 $39.62 0.98 $23.36 0.98 $36.28 $23.29 $73.19 $11.32 $71.76 12.90% 5.90% 20.86% 4.87% As demonstrated in Table 1, the estimated FDL per treatment that determines the CY 2024 outlier threshold amount for adults (Column II; $71.76) is lower than that used for the CY 2023 outlier policy (Column I; $73.19). The lower threshold is accompanied by a decrease in the adjusted average MAP for outlier services from $39.62 to $36.28. For pediatric patients, there is a decrease in the FDL amount from $23.29 to $11.32. There is a corresponding decrease in the adjusted average MAP for outlier services among pediatric patients, from $25.59 to $23.36. We estimate that the percentage of patient months qualifying for outlier payments in CY 2024 would be 4.87 percent for adult patients and 20.86 percent for pediatric patients, based on the 2022 claims data and methodology finalized in the CY 2023 ESRD PPS final rule. 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 ESAs and other injectable drugs). (3) Outlier Percentage In the CY 2011 ESRD PPS final rule (75 FR 49081) and under § 413.220(b)(4), we reduced the per VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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. In the 2023 ESRD PPS final rule, we finalized a change to the outlier methodology to better achieve this 1 percent target (87 FR 67170 through 67174). We stated in the CY 2024 ESRD PPS proposed rule that, based on the CY 2022 claims, outlier payments represented approximately 0.9 percent of total payments. Based on more complete CY 2022 claims data, this figure has been updated to 0.8 percent for this final rule, which is below the 1 percent target due to declines in the use of outlier services. However, this is significantly closer to the 1 percent target than the outlier payments based on CY 2021 claims, which represented approximately 0.5 percent of total payments. In the CY 2024 ESRD PPS proposed rule, we noted that we believe the update to the outlier MAP and FDL amounts for CY 2024 would increase payments for ESRD beneficiaries requiring higher resource utilization. This would move us even closer to meeting our 1 percent outlier policy goal, because we would be using more current data for computing the MAP and FDL amounts, which is more reflective of current outlier services PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 utilization rates. We also noted that the proposed recalibration of the FDL amounts would result in no change in payments to ESRD facilities for beneficiaries with renal dialysis items and 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: We received several comments on CMS’s proposals to update the FDL and MAP amounts for CY 2024. Commenters were generally supportive of the use of more recent data to determine the CY 2024 ESRD PPS final MAP and FDL amounts. Several commenters stated that they appreciated that the methodological changes CMS made to the outlier policy in the CY 2023 ESRD PPS final rule resulted in the total percentage of payments for outliers being closer to the 1 percent target than ever before. However, some commenters noted that the ESRD PPS base rate is reduced on the assumption that 1 percent of total payments will be attributable to outlier payments, and if the actual percentage is less than 1 percent it means that total payments to ESRD facilities are less than they should be. Commenters suggested that CMS should implement a policy to recompense ESRD facilities for E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.003</GPH> ddrumheller on DSK120RN23PROD with RULES2 *Column I was obtained from Column II of Table 11 from the CY 2023 ESRD PPS final rule (87 FR 67176). **The FDL amount for adults incorporates retrospective adult FDL amounts calculated using data from CYs 2020, 2021, and 2022. 76364 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations underpayment when total outlier payments are less than 1 percent of total ESRD PPS payments. One commenter recommended CMS reduce the outlier target to 0.5 percent of total payments. Response: We appreciate the support for the proposed use of more recent data to update the MAP and FDL amounts for the outlier policy and the thoughtful suggestions provided by commenters. We acknowledge that, even with annually adjusting the MAP and FDL amounts to reflect the most recent utilization and costs of ESRD PPS eligible outlier services according to the updated outlier methodology finalized in the CY 2023 ESRD PPS final rule, total outlier payments have not yet reached the 1 percent target. However, the performance of the outlier payments has improved significantly due to the modification to the outlier methodology finalized in CY 2023 ESRD PPS final rule, as outlier payments represented 0.8 percent of the total payments in CY 2022. We appreciate the comments suggesting solutions for refining the outlier policy methodology, for example, reducing the outlier percentage, as defined at § 413.220(b)(4), to less than 1 percent or establishing a mechanism that pays back ESRD facilities those allocated outlier amounts that were not paid out in the projected year. We did not propose any modifications to the ESRD PPS outlier policy for CY 2024 codified at § 413.220, and we are not finalizing any changes to the methodology in this final rule. We will consider the commenters’ suggestions regarding changes in methodology in potential future rulemaking. Final Rule Action: After considering the public comments, we are finalizing the updated outlier thresholds for CY 2024 displayed in Column II of Table 1 of this final rule based on the most current data. d. Impacts to the CY 2024 ESRD PPS Base Rate ddrumheller on DSK120RN23PROD with RULES2 (1) ESRD PPS Base Rate In the CY 2011 ESRD PPS final rule (75 FR 49071 through 49083), CMS established the methodology for calculating the ESRD PPS per-treatment base rate, that is, the ESRD PPS base rate, and calculating the per-treatment 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 VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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 pertreatment 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, and any applicable outlier payment, training adjustment add-on, TDAPA, and TPNIES. (2) Annual Payment Rate Update for CY 2024 In the CY 2024 ESRD PPS proposed rule, we proposed an ESRD PPS base rate for CY 2024 of $269.99 (88 FR 42432). We are finalizing an ESRD PPS base rate for CY 2024 of $271.02. 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 2024, we did not propose and are not finalizing 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 final CY 2024 wage index budgetneutrality adjustment factor using treatment counts from the 2022 claims and facility-specific CY 2023 payment rates to estimate the total dollar amount that each ESRD facility would have received in CY 2023. The total of these payments became the target amount of expenditures for all ESRD facilities for CY 2024. Next, we computed the estimated dollar amount that would have been paid for the same ESRD facilities using the final CY 2024 ESRD PPS wage index and final labor-related share for CY 2024. As discussed in section II.B.1.b of this final rule, the ESRD PPS wage index for CY 2024 includes an update to the most recent hospital wage data and continued use of the 2018 OMB delineations. The total of these payments becomes the new CY 2024 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 2024 amount. When we multiplied the wage index budget neutrality factor by the applicable CY PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 2024 estimated payments, aggregate Medicare 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 2024 wage index budgetneutrality adjustment factor is 1.000031. This CY 2024 wage index budgetneutrality adjustment factor reflects the impact of all wage index policy changes, including the final CY 2024 ESRD PPS wage index and labor-related share. TPEAPA Budget-Neutrality Adjustment Factor: As explained in section II.B.1.g.(7) of this final rule, we are finalizing a new, budget-neutral transitional add-on payment adjustment for pediatric ESRD renal dialysis services, which we call the TPEAPA. The final CY 2024 budget-neutrality adjustment factor for the TPEAPA is 0.999503. The budget-neutrality adjustment factor for the TPEAPA is discussed in section II.B.1.g of this final rule. Combined Wage Index and TPEAPA Budget-Neutrality Adjustment Factor: For purposes of calculating the ESRD PPS base rate for CY 2024, we are using one combined budget-neutrality adjustment factor includes both the wage index budget-neutrality adjustment factor and the TPEAPA budget-neutrality adjustment factor. The CY 2024 combined wage index and TPEAPA budget neutrality factor is 0.999534 (1.000031 × 0.999503). This application would yield a CY 2024 ESRD PPS base rate of $265.48 prior to the application of the CY 2024 market basket update percentage ($265.57 × 0.999534 = $265.45). Market Basket Update: 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 an ESRD market basket percentage increase. As discussed previously in section II.B.1.a.(2)(a) of this final rule, the latest CY 2024 projection of the ESRDB market basket percentage increase is 2.4 percent. In CY 2024, 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 in section II.B.1.a.(2)(b) of this final rule, the latest CY 2024 projection of the productivity adjustment is 0.3 percentage point, thus yielding a CY 2024 productivity-adjusted ESRDB market basket update of 2.1 percent for E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations CY 2024. Therefore, the final CY 2024 ESRD PPS base rate is $271.02 (($265.57 × 0.999534) × 1.021 = $271.02). The comments and our responses to the comments on our proposed updates to the ESRD PPS base rate are set forth below. Comment: We received several comments which characterized the proposed CY 2024 ESRD PPS base rate as too low. Some of these commenters requested that CMS increase the base rate. The reasoning for this requested increase varied by commenter. Some commenters wanted an increase to account for recent under-forecasts, whereas other commenters wanted an increase to allow facilities to provide an increased quality of care. Response: The CY 2024 ESRD PPS base rate is derived from the CY 2023 ESRD PPS base rate, the CY 2024 ESRDB market basket update, and the CY 2024 combined wage index-TPEAPA budget neutrality factor. In accordance with section 1881(b)(14)(F) of the Act, the primary factor in determining the ESRD PPS base rate increase from one year to the next is the ESRDB market basket update. We believe the final CY 2024 ESRDB market basket update reflects the most recent available data regarding the forecasted prices of labor used to provide renal dialysis services. We discuss the CY 2024 ESRDB market basket update in more detail in section II.B.1.a of this final rule, with detailed responses to comments on the magnitude of the productivity-adjusted ESRDB market basket increase in section II.B.1.a.(2)(c) of this final rule and detailed responses to comments on previous forecast errors for the ESRDB market basket update in section II.B.1.a.(2)(d) of this final rule. We appreciate the concerns of the commenters, but we did not propose any new payment adjustments to the base rate based on those concerns. We will continue to monitor the adequacy of the ESRD PPS payment and will consider these commenters’ insights for future rulemaking. Final Rule Action: We are finalizing a CY 2024 ESRD PPS base rate of $271.02. This amount reflects the combined CY 2024 wage index-TPEAPA budgetneutrality adjustment factor of 0.999534, and the CY 2024 ESRD PPS productivity-adjusted market basket update of 2.1 percent. e. Update to the Average per Treatment Offset Amount for Home Dialysis Machines In the CY 2021 ESRD PPS final rule (85 FR 71427), we expanded eligibility for the TPNIES under § 413.236 to include certain capital-related assets VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 that are home dialysis machines when used in the home for a single patient. To establish the TPNIES basis of payment for these items, we finalized the additional steps that the Medicare Administrative Contractors (MACs) must follow to calculate a pre-adjusted per treatment amount, using the prices they establish under § 413.236(e) for a capital-related asset that is a home dialysis machine, as well as the methodology that CMS uses to calculate the average per treatment offset amount for home dialysis machines that is used in the MACs’ calculation, to account for the cost of the home dialysis machine that is already in the ESRD PPS base rate. For purposes of this final rule, we refer to this as the ‘‘TPNIES offset amount.’’ The methodology for calculating the TPNIES offset amount is set forth in § 413.236(f)(3). Section 413.236(f)(3)(v) states that effective January 1, 2022, CMS annually updates the amount determined in § 413.236(f)(3)(iv) by the ESRD bundled market basket percentage increase factor minus the productivity adjustment factor. The TPNIES for capital-related assets that are home dialysis machines is based on 65 percent of the MAC-determined preadjusted per treatment amount, reduced by the TPNIES offset amount, and is paid for 2 CYs. As we discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42432), there are currently no capital-related assets that are home dialysis machines set to receive TPNIES for CY2024, as the TPNIES payment period for the Tablo® System ends on December 31, 2023, and the only TPNIES application for CY 2024 is not for a home dialysis machine. However, as required by § 413.236(f)(3)(v), we proposed to update the TPNIES offset amount annually according to the methodology described previously. We proposed a CY 2024 TPNIES offset amount for capital-related assets that are home dialysis machines of $9.96, based on the proposed CY 2024 ESRDB productivity-adjusted market basket update of 1.7 percent (2.0 percent market basket percentage increase reduced by 0.3 percentage point productivity adjustment). We explained in the CY 2024 ESRD PPS proposed rule that applying the proposed update factor of 1.017 to the CY 2023 offset amount resulted in the proposed CY 2024 offset amount of $9.96 ($9.79 × 1.017 = $9.96). We proposed to update this calculation to use the most recent data available in the CY 2024 ESRD PPS final rule. We received three comments on this proposal to update the TPNIES offset PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 76365 amount for capital related assets that are home dialysis machines, including comments from an LDO and a device manufacturer. The comments and our responses to the comments on the proposed update to the TPNIES offset amount are set forth below. Comment: A device manufacturer requested that CMS remove the TPNIES offset for capital-related assets that are home dialysis machines. The commenter and two others indicated that they believe that the TPNIES offset, combined with the 65 percent reduction for risk sharing, are leading to capitalrelated assets that are home dialysis machines being undervalued. An LDO agreed that the TPNIES for capitalrelated assets that are home dialysis machines should be offset by an amount currently in the base rate. Response: We appreciate the commenters’ insight into the impacts of the TPNIES offset for capital-related assets that are home dialysis machines. We did not propose any methodological changes for this TPNIES offset amount set forth at § 413.236(f), and we are not finalizing any changes. We will consider the commenters’ concerns for potential future rulemaking. Final Rule Action: We are finalizing our proposal to calculate the CY 2024 TPNIES offset amount using the most recent data available. The CY 2023 TPNIES offset amount for capital-related equipment that are home dialysis machines used in the home is $9.79. As discussed previously in section II.B.1.a.(2)(c) of this final rule, the final CY 2024 ESRDB productivity-adjusted market basket update is 2.1 percent (2.4 percent market basket percentage increase reduced by 0.3 percent productivity adjustment). Applying the update factor of 1.021 to the CY 2023 TPNIES offset amount results in a final CY 2024 TPNIES offset amount of $10.00 ($9.79 × 1.021). f. Refinement of the Low-Volume Payment Adjustment (LVPA) (1) Background Section 1881(b)(14)(D)(iii) of the Act provides that the ESRD PPS shall include a payment adjustment that reflects the extent to which costs incurred by low-volume facilities (as defined by the Secretary) in furnishing renal dialysis services exceed the costs incurred by other facilities in furnishing such services, and for payment for renal dialysis services furnished on or after January 1, 2011, and before January 1, 2014, such payment adjustment shall not be less than 10 percent. Therefore, the ESRD PPS provides a facility-level payment adjustment to ESRD facilities E:\FR\FM\06NOR2.SGM 06NOR2 76366 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 that meet the definition of a low-volume facility. In this section of the final rule, we discuss the low volume-payment adjustment (LVPA) under the ESRD PPS. The current amount of the LVPA is 23.9 percent. In the CY 2011 ESRD PPS final rule (75 FR 49118 through 49125), we finalized the methodology used to target the appropriate population of ESRD facilities that were low-volume and to determine the treatment threshold for those ESRD facilities identified. After consideration of public comments, we established an 18.9 percent adjustment for ESRD facilities that furnish less than 4,000 treatments annually and indicated that this increase to the ESRD PPS base rate would encourage small ESRD facilities to continue providing access to care. In the CY 2016 ESRD PPS proposed rule (80 FR 37819), we analyzed ESRD facilities that met the definition of a low-volume facility under § 413.232(b) as part of the updated regression analysis and found that these ESRD facilities still had higher costs compared to other ESRD facilities. A regression analysis of CYs 2012 and 2013 lowvolume facility claims and cost report data indicated a multiplier of 1.239 percent; therefore, we proposed an updated LVPA adjustment factor of 23.9 percent in the CY 2016 ESRD PPS proposed rule (80 FR 37819) and finalized this policy in the CY 2016 ESRD PPS final rule (80 FR 69001). In CY 2021, 366 ESRD facilities received the LVPA. Using the most recent available data for CY 2022, the number of ESRD facilities receiving the LVPA was 353. (a) Current LVPA Methodology 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 costs reports, whichever is most recent, except as specified in paragraph (g)(4)) preceding the payment year; and (2) has not opened, closed, or received a new provider number due to a change in ownership (except where the change in ownership results in a change in facility type) in the 3 cost-reporting years (based on as-filed or final settled 12consectuive month cost reports, whichever is most recent) preceding the payment year. In addition, 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 VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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. To receive the LVPA, an ESRD facility must submit a written attestation statement to its Medicare Administrative Contractor (MAC) confirming that it meets all the requirements specified in § 413.232 and qualifies as a low-volume ESRD facility. For purposes of determining eligibility for the LVPA, ‘‘treatments’’ mean total hemodialysis equivalent treatments (Medicare and non-Medicare). For peritoneal dialysis patients, one week is considered equivalent to three hemodialysis treatments (80 FR 68994). Section 413.232(e) generally imposes a yearly November 1st deadline for attestation submissions unless extraordinary circumstances justify an exception and specifies exceptions for certain years where the deadline is in December or January. The November 1st attestation timeframe provides 60 days for a MAC to verify that an ESRD facility meets the LVPA eligibility criteria (76 FR 70236). The ESRD facility would then receive the LVPA payment for all the Medicare-eligible treatments in the payment year. Once an ESRD facility is determined to be eligible for the LVPA, a 23.9 percent increase is applied to the ESRD PPS base rate for all treatments furnished by the ESRD facility (80 FR 69001). In the CY 2021 ESRD PPS final rule (85 FR 71443), we finalized a policy to allow ESRD facilities flexibility for LVPA eligibility due to the COVID–19 PHE. Under § 413.232(g)(4), for purposes of determining ESRD facilities’ eligibility for payment years 2021, 2022, and 2023, we will only consider total dialysis treatments for any 6 months of their cost-reporting period ending in 2020. ESRD facilities that would not otherwise meet the number of treatments criterion because of the COVID–19 PHE may attest that their total dialysis treatments for those 6 months of their cost reporting period ending in 2020 are less than 2,000. The attestation must further include 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. PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 (b) Current Issues and Concerns From Interested Parties Interested parties, including MedPAC and the Government Accountability Office (GAO),13 have recommended that we make refinements to the LVPA to better target ESRD facilities that are critical to beneficiary access to dialysis care in remote or isolated areas.14 These groups and other interested parties have also have expressed concern that the strict treatment count introduces a ‘‘cliff-effect’’ that may incentivize ESRD facilities to restrict their patient caseload to remain below 4,000 treatments per year to meet the LVPA threshold.15 (2) Requests for Information on Modification of LVPA Methodology and Development of a New Payment Adjustment Based on Geographic Isolation In the CY 2024 ESRD PPS proposed rule (88 FR 42440 through 42441), we explained that we recognize the importance of revising the ESRD PPS LVPA adjustment methodology to ensure that payments accurately reflect differences in cost and adequately target low-volume facilities, and to strive for healthcare equity for ESRD beneficiaries. The LVPA and rural adjusters currently result in increased payments to some geographically isolated ESRD facilities, but these adjusters do not specifically target geographically isolated ESRD facilities. We noted several points of concern that interested parties have raised in the past, as well as certain statutory limitations that could apply to some of the methodological approaches suggested in the past. We solicited information from the public about potential approaches to refine the ESRD PPS methodology, which we would take into consideration for any potential changes to the LVPA in the future. This section addresses several RFIs regarding the LVPA and a potential new adjustment for geographically isolated ESRD facilities. (a) Comment Solicitation for Modifications to LVPA Methodology In the CY 2024 ESRD PPS proposed rule, we solicited comments on 13 https://www.medpac.gov/wp-content/uploads/ import_data/scrape_files/docs/default-source/ reports/jun20_ch7_reporttocongress_sec.pdf. 14 https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2021.pdf. 15 https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2021.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations potential changes to the LVPA methodology (88 FR 42441 through 42444), including maintaining a single threshold, establishing LVPA tiers, and/ or utilizing a continuous function. Any potential refinements to the LVPA methodology that may result from our consideration of these comments would be proposed through notice-andcomment rulemaking in the future. We requested that commenters keep in mind that section 1881(b)(14)(D)(iii) of the Act requires the LVPA to reflect the extent to which costs incurred by lowvolume facilities in furnishing renal dialysis services exceed the costs incurred by other facilities in furnishing such services. (i) Maintain a Single LVPA Threshold As discussions about modifying the existing treatment threshold or payment adjustment percentage have been ongoing since the beginning of the multi-year LVPA reform efforts, we solicited comments on maintaining a single threshold for the LVPA. ESRD facilities that fall below the treatment threshold would continue to receive payment, and payments would not be adjusted for those ESRD facilities above the threshold. We stated that we were engaged in continuing monitoring efforts to align resource use with payment. As noted in the CY 2024 ESRD PPS proposed rule (88 FR 42442), if we were to re-compute the LVPA 76367 percentage amount using the latest available claims and cost report data and the methodology established in the CY 2011 and CY 2016 ESRD PPS final rules (75 FR 49118 through 49125 and 80 FR 69001), the current treatment threshold of 4,000 treatments per year would correspond to a 17.6 percent payment adjustment. The 4,000treatment threshold could be maintained, or the treatment threshold could be recalibrated to maintain the 23.9 percent payment adjustment. Maintaining a single threshold would not address concerns regarding the potential for gaming or remove what commenters call the payment cliff. Potential approaches for a single LVPA threshold are outlined in Table 2. TABLE 2: Potential Approaches for a Single LVPA Threshold ddrumheller on DSK120RN23PROD with RULES2 (ii) Establishment of Multiple LVPA Tiers We solicited comments on creating a tiered payment adjustment that would include multiple thresholds, with separate payment adjustments calibrated so that ESRD facilities in tiers with the lowest treatment volume would receive the highest payment adjustment, and vice versa. MedPAC has previously recommended setting LVPA treatment thresholds at fewer than 4,000 treatments, between 4,000 and 4,999 treatments, and between 5,000 and 6,000 treatments, with payment adjustments calibrated so that ESRD facilities in tiers with the lowest volume would receive the highest payment adjustment, and vice versa.16 Establishing multiple thresholds, with a separate payment adjustment for ESRD Description facilities under each threshold level, would reduce the potential for gaming through reduction of the magnitude of the payment cliff. Additionally, LVPA eligibility would be expanded to more ESRD facilities. We solicited comments regarding the establishment of multiple thresholds, including up to an eighttiered structure for the LVPA. Tables 3 through 6 outline various methodological options. Tables 3 and 4 would establish larger adjustment factors on average than the current methodology but would require reductions to the ESRD PPS base rate to maintain budget neutrality. Tables 5 and 6 show adjustment factors which are scaled to maintain budget neutrality within the LVPA, keeping the LVPA’s budget at the same amount that would occur under the current methodology without requiring reductions to the ESRD PPS base rate. As illustrated below, scaling the adjusters while maintaining budget neutrality within the LVPA results in lower LVPA adjusters. For example, Tier 1 (less than 5,000 treatments) in the Four-Tiered Model varies based on the approach to maintaining budget neutrality, as the LVPA adjuster is 13.7 percent where budget neutrality is maintained within the ESRD PPS (Table 3) and 5.8 percent where budget neutrality is maintained within the LVPA (Table 5). For comparison, the Eight-Tiered Model shows that for Tier 1 (less than 1,000 treatments), ESRD facilities would receive a 123 percent LVPA adjuster where budget neutrality is maintained within the ESRD PPS (Table 4) and 40.5 percent LVPA adjuster where budget neutrality is maintained within the LVPA (Table 6). 16 https://www.medpac.gov/wp-content/uploads/ import_data/scrape_files/docs/default-source/ reports/jun20_ch7_reporttocongress_sec.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.004</GPH> Option 76368 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 3: L VP A Adjustment with Four Tiers ($1.20 reduction to the ESRD PPS Base Rate to Maintain Budget Neutrality) Tier (by treatment count) LVPA Adjusters Tier 4 (7,000 - 7,999) 1.9% TABLE 4: LVPA Adjustment with Eight Tiers ($1.80 reduction to the ESRD PPS Base Rate to Maintain Budget Neutrality) Tier (by treatment count) L VPA Adjusters Tier 8 (7,000 - 7,999) 1.9% TABLE 5: LVPA Adjustment with Four Tiers (Adjusters scaled to maintain total LVPA payments at current levels) 318 ER06NO23.006</GPH> ER06NO23.007</GPH> 0.8% VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.005</GPH> ddrumheller on DSK120RN23PROD with RULES2 Tier 4 (7,000 - 7,999) Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76369 TABLE 6: L VP A Adjustment with Eight Tiers (Adjusters scaled to maintain total LVP A payments at current levels) 0.6% ddrumheller on DSK120RN23PROD with RULES2 (iii) Continuous Function We also solicited comments on potentially establishing a continuous function to adjust LVPA payments. Under this approach, ESRD facilities with the lowest treatment volume would receive the highest payment adjustment, and the payment adjustment would decrease continuously as volume increases. This could include calibration of the point at which the payment adjustment becomes zero to correspond with the existing 4,000 treatment upper bound, or establishment of a new upper bound based on a regression analysis. Establishment of a continuous function has the potential to significantly reduce the potential for gaming by eliminating payment cliffs entirely. Additionally, this would increase payment for ESRD facilities with the lowest volume, therefore better aligning payment with resource use. Furthermore, a continuous function would potentially expand LVPA eligibility to the most ESRD facilities. In the CY 2024 ESRD PPS proposed rule, we noted that we are considering several approaches to modifying the LVPA to address concerns about its incentive structure, treatment threshold, and administrative burden, as expressed by interested parties (including the GAO, MedPAC, and industry representatives). We issued this RFI to seek feedback on the suggested changes to the LVPA, as described previously, and to solicit further input from interested parties to inform future modifications to the methodology used to determine the LVPA. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 318 CMS welcomed input and responses to the following considerations, requests, and questions: • Regarding concerns about a payment cliff in the existing LVPA, we are considering implementing payment tiers or a continuous adjustment, based on treatment volume, in place of the current single tiered adjustment. ++ Comment on which payment structure would be more appropriate: single threshold as currently employed, tiered structure, or continuous function, and provide the reasoning behind your recommendation. ++ Comment on which option would be most effective in removing gaming incentives and which option would bring greater congruency between cost of providing renal dialysis services and payment. • Using the alternative methodology described previously, under a tiered or continuous payment adjustment, the treatment threshold for eligibility would be determined based on the median treatment count among all ESRD facilities (approximately eight thousand treatments per year). The resulting tiers and incremental payment adjustments between tiers could follow several different configurations. ++ What factors should be evaluated to best determine the treatment count threshold, as well as the tiering structure? Specifically, comment on the treatment volume beneath which pertreatment costs begin to increase. ++ Enumerate any concerns you might have should the implementation of a tiered or continuous adjustment result in an expanded set of eligible ESRD facilities, and payment redistribution. PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 • Interested parties have voiced concern regarding the administrative burden involved in the current LVPA attestation process. As such, we are considering potentially decreasing the number of years of attestation data needed to determine LVPA eligibility. ++ Comment on the extent to which this change would alleviate burden, and if there are other administrative changes that could be made to simplify this process. ++ Describe any anticipated effects of decreasing the amount of treatment volume data used to determine LVPA eligibility. ++ Describe the ways that simplifying the attestation process could help ESRD facilities with fewer resources to promote health equity by improving their ability to serve vulnerable and underserved communities. (b) Comment Solicitation on the Development of a New Payment Adjustment Based on Geographic Isolation CMS is striving to promote health equity by ensuring that ESRD facilities, including both rural and low-volume facilities, are being paid equitably for serving populations that are currently underserved. Therefore, in the CY 2024 ESRD PPS proposed rule (88 FR 42444 through 42445), we solicited comments on potentially assisting geographically isolated ESRD facilities and promoting access in these areas, including labor force hiring and retention. We stated that we considered establishing a new payment adjustment that accounts for isolation, rurality, and other geographical factors. We also requested information on geographic isolation to determine if ESRD facilities that are E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.008</GPH> Tier 8 (7,000 - 7,999) ddrumheller on DSK120RN23PROD with RULES2 76370 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations currently considered rural would benefit from a geographic isolation adjustment. The new geographically based payment adjustment may consider local dialysis need (LDN), as explained later in this section, instead of basing payment strictly upon a rural designation, as set forth in § 413.233 and 413.231(b)(2). We considered changes to the eligibility criteria to address the concerns that GAO and MedPAC raised about targeting LVPA payments to ESRD facilities that are not located near other ESRD facilities that are necessary to protect access to care. As noted previously, under section 1881(b)(14)(D)(iii) of the Act, the LVPA must reflect the extent to which costs incurred by low-volume facilities (as defined by the Secretary) in furnishing renal dialysis services exceed the costs incurred by other facilities in furnishing such services. We explained that our preliminary analysis found that, in general, low-volume facilities that are rural, isolated, or located in lowdemand areas did not have higher costs than low-volume ESRD facilities overall. Therefore, certain changes that interested parties have suggested would not comport with the statutory requirements and limitations for the LVPA. We solicited comments on potential methodologies for creating a separate payment adjustment that could potentially address GAO and MedPAC’s concerns, relying upon the authority under section 1881(b)(14)(D)(iv) of the Act, which states that the ESRD PPS may include such other payment adjustments as the Secretary determines appropriate. We solicited responses to the following questions. ++ What factors should be considered in formulating a payment adjustment for ESRD facilities in isolated geographical areas or areas for which there is a low need for renal dialysis services? ++ What are the best ways to incentivize renal dialysis service provision in isolated geographic areas? ++ Our analysis of the LDN methodology has shown that low LDN census tracts intersect with areas designated as Health Professional Shortage Areas. What impact would a payment adjustment based on geographic isolation have on the ability of ESRD facilities in isolated areas to recruit and retain health care professionals? ++ Comment on the appropriateness of maintaining the rural facility adjustment under § 413.233 if we were to establish an LDN payment adjustment in conjunction with a modified LVPA. ++ Comment on the relationship between geographic isolation and cost. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Please provide any data that could further inform CMS’s understanding of the relationship between geographic isolation and cost for low volume facilities. ++ Comment on the appropriateness of utilizing driving time between current beneficiary address and treatment location as the appropriate metric for travel time. ++ Are there ways in which the suggested methodology for this potential payment adjustment could fail in targeting isolated ESRD facilities, or ESRD facilities in areas with low LDN? ++ Are there ways in which the determination of LDN might be subject to gaming? ++ Would a payment adjustment for ESRD facilities in areas with low LDN improve health equity? Are there specific recommendations to change the LDN methodology described above to promote quality access to care for all ESRD beneficiaries? ++ Comment on the favorability of CMS’s implementation of a new payment adjustment for ESRD facilities in areas with low LDN as described above. ++ Are there any other considerations we should keep in mind when considering proposing a new payment adjustment based on an LDN methodology? (c) Summary of Request for Information on Potential Modification to LVPA Methodology and Information Received From Commenters As discussed above, in the CY 2024 ESRD PPS proposed rule (88 FR 42430), we sought comment on several approaches to modifying the LVPA to address concerns about its incentive structure, treatment threshold, and administrative burden. We issued an RFI to seek feedback from the public on potential changes to the LVPA methodology, including maintaining a single threshold, establishing LVPA tiers, and/or utilizing a continuous function to ensure that payments accurately reflect differences in cost and adequately target low-volume facilities. We also solicited comments on the establishment of an add-on payment adjustment for geographic isolation of ESRD facilities. We asked commenters whether a payment adjustment for geographic isolation of ESRD facilities in areas with low local dialysis need would improve health equity. We received 23 public comments in response to our RFI, including from large, small, and non-profit dialysis organizations; an advocacy organization; a coalition of dialysis organizations; a large non-profit health system; and PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 MedPAC. A high-level description of these comments is included in the following subsections of this CY 2024 ESRD PPS final rule. We thank the commenters for their detailed and thoughtful comments. While we will not respond to these comments in this CY 2024 ESRD PPS final rule, we intend to take them into consideration for future rulemaking and future policy development. We will provide more detailed information about the commenters’ recommendations in a future posting on CMS’s website located at the following link: https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ ESRDpayment/Educational_Resources. (i) Responses on Criteria for Receiving LVPA Status We received a wide range of responses to the RFI. Many commenters supported MedPAC’s proposal of implementing a two-tier low-volume and isolated (LVI) adjustment in place of the LVPA so that facilities can expand services to meet patient needs without substantial payment decreases while limiting administrative burden. Some commenters supported maintaining a single threshold with varying recommendations for adjusted treatment counts. Other commenters supported establishing varying numbers of tiers at varying treatment counts. Some commenters also supported establishing a continuous function as described in the CY 2024 ESRD PPS proposed rule. Many comments included general concerns regarding the administrative burden and transparency of the various methodologies described. While we are not providing a detailed response to these comments in this final rule, we thank the commenters for their input and will consider the recommendations in potential future rulemaking. (ii) Responses on the Local Dialysis Need (LDN) Methodology Commenters generally believed that the LDN methodology was overly complicated and lacked transparency. Several commenters expressed renewed support for incorporating geographic isolation directly into the LVPA formula, using a methodology such as the LVI adjustment that MedPAC suggested. While we are not providing a detailed response to these comments in this final rule, we thank the commenters for their input and will consider the recommendations in potential future rulemaking. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations (3) Exception to the Current LVPA Attestation Process for Disasters and Other Emergencies Under our current regulations at § 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, except as specified in § 413.232(g)(4)) preceding the payment year; and (2) has not opened, closed, or received a new provider number due to a change in ownership (except where the change in ownership results in a change in facility type) 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. When we first established these requirements in the CY 2011 ESRD PPS final rule, we explained that looking across data for three years provided us with sufficient information to view consistency in business operations (79 FR 49123). In the CY 2019 ESRD PPS final rule (83 FR 56949) and the CY 2021 ESRD PPS proposed rule (85 FR 42165), we acknowledged commenters’ concerns that the eligibility criteria in the LVPA regulations are very explicit and leave little room for flexibility during disasters or other emergency situations like the COVID–19 PHE. Commenters have emphasized that low-volume facilities rely on the LVPA, and that loss of the payment adjustment could result in beneficiary access issues. As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42165), the COVID–19 PHE caused ESRD facilities to have to shift patients among ESRD facilities to provide uninterrupted care to their Medicare ESRD population. In some cases, this patient shifting increased dialysis treatments at some low-volume ESRD facilities, putting the ESRD facility temporarily over the LVPA treatment threshold. This increase in dialysis treatments, resulting from the COVID–19 PHE, disqualified some ESRD facilities that would have otherwise received the LVPA of 23.9 percent per treatment. In the CY 2021 ESRD PPS final rule (85 FR 71485), we established a policy that ESRD facilities would be held harmless from increases in treatment counts due to temporary patient shifting because of the COVID– 19 PHE. To be held harmless, ESRD facilities must follow the attestation process for the exception set forth in § 413.232(g)(4) and are expected to provide supporting documentation to the MACs upon request. Interested VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 parties have expressed support for CMS’s swift response to the COVID–19 PHE’s impact on ESRD facilities, with an association of dialysis providers stating that holding harmless LVPA status for these ESRD facilities will better ensure that ESRD patients can continue to access the life-sustaining dialysis treatment they need, particularly in rural and underserved areas where low-volume facilities heavily depend on the LVPA to remain open and provide treatment for patients. In the CY 2024 ESRD PPS proposed rule, we stated that we recognize there could be future circumstances, potentially like the circumstances of the COVID–19 PHE, in which it would be appropriate to provide flexibilities with respect to certain LVPA requirements (88 FR 42446). Commenters have previously expressed concerns about the strict attestation requirements for ESRD facilities to remain eligible for the LVPA, particularly when faced with a disaster or other emergency, such as a local or national emergency, natural disaster, catastrophic event, or public health emergency. We noted that during disasters or other emergencies, lowvolume facilities could be forced to close, or could experience increases in their treatment counts if they treat patients who are displaced from a nearby ESRD facility that is impacted by such an event. For example, in August of 2021, an ESRD facility in Louisiana sustained significant damage because of Hurricane Ida, which required the ESRD facility to close for repairs and temporarily stop furnishing renal dialysis services. The ESRD facility served a rural community and for over 10 years received the LVPA due to the low number of dialysis treatments it furnished each year. This ESRD facility sought recourse to maintain its eligibility for the LVPA when it resumed operations following the required repairs to the ESRD facility, however, recourse was unavailable due to the limitations set forth in § 413.232(b). We explained that when we established the LVPA in the CY 2011 ESRD PPS final rule, we stated that we believed the LVPA should encourage small ESRD facilities to continue to provide access to care to an ESRD patient population where providing that care would otherwise be problematic (75 FR 49118). Given that these requirements for low-volume facilities were created to protect access to care for the vulnerable patient population that these ESRD facilities serve, we noted, adding certain flexibilities during disasters or other emergencies would PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 76371 promote our commitment to ensuring access to care for ESRD patients. (a) Changes to the LVPA We proposed to make two changes to the LVPA regulation at § 413.232 to allow for more administrative flexibilities during disasters or other emergencies. First, we proposed to create a new exception to the attestation process for disasters and other emergencies. Second, we proposed to establish a process that would allow low-volume facilities to close and reopen in response to a disaster or other emergency and still receive the LVPA. CMS would assess whether a particular situation is a disaster or other emergency based on the totality of the circumstances that could result in disruption of or inability to furnish renal dialysis services at one or more ESRD facilities, thus affecting the ESRD facility or facilities’ ability to qualify for the LVPA. For purposes of the proposal, disasters or other emergencies would include, but not be limited to, the below examples: • A public health emergency declared by the Secretary due to a significant outbreak of infectious disease or bioterrorist attacks. • Natural disasters including winter storms, floods, tornados, hurricanes, wildfires, earthquakes, or any combination thereof.17 • Catastrophic events outside of an ESRD facility’s control that disrupt operations and result in an ESRD facility’s closure, for example, loss of operations or patient shifting due to a local emergency such as fire, floods, earthquakes, or tornadoes. • Other disasters or emergency conditions under which a waiver could be granted pursuant to section 1135 of the Act. We stated that these policy changes could help displaced ESRD patients maintain access to renal dialysis services by preventing ESRD facilities from permanently closing due to the loss of their LVPA. It is important that ESRD facilities that are receiving the LVPA can maintain LVPA eligibility despite the impacts caused by a disaster or other emergency. This policy could potentially protect other ESRD facilities that need to maintain the LVPA to remain open from potentially losing their LVPA by exceeding the treatment threshold because they accepted displaced patients. We noted that we do not want the fear of losing the LVPA due to increased treatments exceeding the threshold to disincentivize ESRD facilities from accepting patients from 17 https://www.dhs.gov/natural-disasters. E:\FR\FM\06NOR2.SGM 06NOR2 76372 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 other ESRD facilities experiencing a disaster or other emergency. It is also important that ESRD facilities that are forced to close due to a disaster or other emergency can maintain their LVPA eligibility upon reopening to ensure continued access in areas that otherwise may lack sufficient ESRD facilities. This policy could also help those ESRD facilities affected by the disaster or other emergency potentially resume operations and avoid permanent closure if they would be allowed to receive the LVPA upon reopening despite the closure or disruption of operations. (i) Exception to the LVPA Treatment Threshold for ESRD Facilities That Accept Patients From an ESRD Facility Affected by a Disaster or Other Emergency We proposed in the CY 2024 ESRD PPS proposed rule to create an exception to the LVPA treatment threshold requirements set forth in § 413.232(b)(1) under a new provision in § 413.232(g)(5), which would allow an ESRD facility to receive the LVPA even if it exceeds the LVPA threshold if its treatment counts increase due to treating additional patients displaced by a disaster or other emergency. Qualification for the exception would require an ESRD facility to absorb those displaced patients from an outside or adjacent ESRD facility that experienced a temporary closure or operational disruption (such as a water shut off). If an ESRD facility accepts the patients of the ESRD facility affected by the disaster or other emergency, causing that ESRD facility to meet or exceed the 4,000treatment count for all dialysis patients, it would attest to its MAC that it furnished treatments equal to or in excess of 4,000 in the cost reporting year due to temporary patient-shifting as a result of the closure or operational disruption of an ESRD facility due to a disaster or other emergency. We proposed to define temporary patientshifting in the context of the LVPA in the ESRD PPS as providing renal dialysis services to one or more patient(s) at any time through the end of the CY following the 12-month period beginning when an ESRD facility first begins providing renal dialysis services to the displaced patient(s). The ESRD facility would be required to request this exception from CMS by writing to the ESRD Payment Mailbox (ESRDPAYMENT@cms.hhs.gov) no later than the annual attestation deadline of November 1st. CMS would review the exception request within 30 days to determine if the ESRD facility qualifies for the exception. If approved by CMS, the ESRD facility would be paid the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 LVPA for Medicare beneficiaries for up to the first 4,000 dialysis treatments in the payment year in which the temporary patient-shifting occurred. Under this exception, the ESRD facility would be held harmless for meeting or exceeding the 4,000-treatment threshold during one or more cost reporting years within the 3-year lookback for LVPA eligibility as long as their 4,000treatment threshold was exceeded as a result of temporary patient-shifting from the ESRD facility that experienced the disaster or other emergency. If CMS does not approve the request, CMS would notify the ESRD facility and the MAC, and the ESRD facility would be disqualified from receiving the LVPA until it meets all the LVPA criteria (including the 3-year lookback). The ESRD facility receiving this exception must maintain documentation of the number of displaced patients treated and information about the ESRD facility or facilities that previously treated those patients and closed or experienced an operational disruption due to a disaster or other emergency and must provide such documentation to CMS and the MAC upon request. The ESRD facility requesting this exception would have to repeat the process for requesting an exception for each cost reporting year in which its treatment volume meets or exceeds 4,000 due to temporary patientshifting from the ESRD facility that experienced the disaster or other emergency. Additionally, the ESRD facility requesting this exception would have to follow the attestation process as described at § 413.232(e) for the two payment years following the last cost reporting year in which its treatment volume meets or exceeds 4,000 due to treating displaced patients from the ESRD facility that experienced the disaster or other emergency and attest that the ESRD facility meets the criteria established at § 413.232. We provided the following example: if a disaster occurs on June 1, 2024, which results in ESRD facility X’s closure or operational disruption resulting in ESRD facility Y (an existing low-volume facility) treating additional patients from ESRD facility X that puts ESRD facility Y’s total renal dialysis treatments for cost reporting year 2024 over the 4,000 treatment threshold, ESRD facility Y would be required to request an exception to § 413.232(b)(1) from CMS by November 1, 2024 to continue receiving the LVPA. Since ESRD facility Y began treating the displaced patients in CY 2024, the window for temporary patient shifting would extend until December 31, 2025. To be approved for the exception under PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 the proposed provision in § 413.232(g)(5), CMS would determine that ESRD facility Y furnished treatments equal to or more than 4,000 in the cost reporting year due to temporary patient-shifting because of the closure or operational disruption of ESRD facility X resulting from a disaster or other emergency. Should the exception be approved by CMS, ESRD facility Y would receive the LVPA for up to the first 4,000 treatments it furnished in 2024. Additionally, ESRD facility Y would not be disqualified from receiving the LVPA for payment years (PYs) 2025 and 2026 due to exceeding the treatment volume threshold in cost reporting year 2024, assuming the temporary patient-shifting from ESRD facility X occurred only in cost reporting year 2024. For PY 2025 and PY 2026, ESRD facility Y would have to attest that it meets all the criteria for the LVPA because it furnished treatments equal to or more than 4,000 in the cost reporting year due to temporary patient-shifting as a result of the closure or operational disruption of an ESRD facility resulting from a disaster or other emergency and received an exception for cost reporting year 2024. This would be the same attestation process as if ESRD facility Y did not furnish any excess treatments and was attesting that it continued to meet the criteria for the LVPA for those payment years. If the closure or operational disruption of ESRD facility X causes the treatment volume for ESRD facility Y to meet or exceed the 4,000dialysis treatment threshold in cost reporting year 2025, ESRD facility Y would have to submit another request for an exception by November 1, 2025. Should this exception be approved, ESRD facility Y would receive the LVPA for up to the first 4,000 treatments it furnished in cost reporting year 2025 and would not be disqualified from receiving the LVPA for PYs 2026 and 2027 due to exceeding the treatment volume threshold in cost reporting year 2024 and cost reporting year 2025. If ESRD facility Y continued to treat displaced patients from ESRD facility X in cost reporting year CY 2026, it would only be considered temporary patientshifting if ESRD facility Y treated those patients before January 1, 2026, and if patients treated after January 1, 2026 cause ESRD facility Y to exceed the 4,000-treatment volume threshold in cost reporting year 2026 then the ESRD facility would be disqualified from receiving the LVPA under § 413.232(b)(1). Under this example, ESRD facility Y would still have to meet the other eligibility requirements to E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations receive the LVPA in any PY in which the ESRD facility would receive the LVPA. ddrumheller on DSK120RN23PROD with RULES2 (ii) Exception to the LVPA Closure Provision for ESRD Facilities Affected by a Disaster or Other Emergency In addition to the proposed exception to the treatment threshold requirement under § 413.232(b)(1) and (g)(5), we proposed an exception under § 413.232(g)(6) that would allow an ESRD facility to still receive the LVPA if it temporarily closes. That is, if an ESRD facility temporarily ceases to operate and the patients must go to another ESRD facility to receive renal dialysis services due to a disaster or other emergency, and the ESRD facility subsequently reopens, we proposed to create an exception to the requirement in § 413.232(b)(2) that an ESRD facility ‘‘has not opened, closed, or received a new provider number’’ in the 3 cost reporting years preceding the payment year. If an ESRD facility is affected by a disaster or other emergency and the ESRD facility is forced to close and reopen later, the ESRD facility would need to request an exception from CMS in writing at the ESRD Payment Mailbox at ESRDPAYMENT@cms.hhs.gov within 60 days of the closure and inform the MAC of the request. CMS would review the request within 30 days of receipt and either approve the request based on a determination that the ESRD facility closed due to a disaster or other emergency, or deny the request, and would inform both the ESRD facility and the MAC of its decision. Under the proposal, upon reopening and providing renal dialysis services, the ESRD facility would be required notify CMS and the MAC in writing within 30 days of its reopening. CMS would acknowledge receipt of the written notification within 30 days. If the exception is approved and CMS is duly informed of the ESRD facility’s reopening, the ESRD facility would remain eligible for the LVPA and the MAC would process payment accordingly. To continue receiving the LVPA the ESRD facility would still have to meet all the other eligibility requirements for the LVPA. The exception to § 413.232(b)(2) would be applicable for a period of 2 cost reporting years following the date of closure of the ESRD facility. After a period of 2-cost reporting years the ESRD facility would follow the normal attestation process for the LVPA specified in paragraphs (e) and (g) of § 413.232. The ESRD facility would be required to maintain documentation regarding its closure, and to provide VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 such supporting documentation to CMS and/or the MAC upon request. We provided the following example: If a disaster occurs on June 1, 2024, which results in an ESRD facility experiencing a closure, the ESRD facility would request an exception to § 413.232(b)(2) from CMS within 60 days of June 1, 2024 (that is, on or before July 31, 2024). CMS would review the request and notify the ESRD facility and the MAC within 30 days if the exception is approved or denied. If the ESRD facility then reopens on September 1, 2024, the ESRD facility would notify CMS and the MAC in writing within 30 days of reopening (that is, on or before October 1, 2024). CMS would notify the ESRD facility and the MAC of its receipt of the reopening notification within 30 days. If the exception was approved by CMS, the ESRD facility would remain eligible for the LVPA for the rest of payment year 2024 and for the entirety of payment year 2025 and payment year 2026, provided the ESRD facility continues to meet the other eligibility requirements for the LVPA. We received 10 public comments on our proposals to modify the LVPA regulation at § 413.232 to allow for more administrative flexibilities during disasters or other emergencies. These comments came from three LDOs, a non-profit dialysis organization, a coalition of dialysis organizations, a non-profit advocacy organization, and a non-profit kidney organization. The comments on our proposals and our responses are set forth below. Comment: All of the comments supported CMS’s proposal to establish exceptions to the LVPA requirements for ESRD facilities impacted by a disaster or other emergency. Response: We appreciate the support for our proposed exceptions to the LVPA requirements for ESRD facilities that are impacted by a disaster or other emergency. Comment: One LDO requested that CMS reevaluate the attestation deadline for ESRD facilities that exceed the LVPA treatment volume threshold due to accepting displaced patients from an ESRD facility that closes or experiences an operational disruption due to a disaster or other emergency. This LDO noted that if the disaster were to occur late in the year, it might be difficult for an ESRD facility to meet the November 1st attestation deadline. Response: We thank the commenter for the thoughtful suggestion on how to improve the proposed exception for ESRD facilities that exceed the 4,000treatment volume threshold due to treating patients displaced by a disaster PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 76373 or other emergency. We note that § 413.232(e) currently states that ‘‘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 as otherwise specified. We did not propose to change the attestation deadline for ESRD facilities impacted by a disaster or other emergency. In the CY 2012 ESRD PPS final rule (76 FR 70236), we finalized a yearly November 1st deadline for attestation submission, and noted that this timeframe provides 60 days for a MAC to verify that an ESRD facility meets the LVPA eligibility criteria. It is important that all ESRD facilities have the same attestation deadline for the LVPA to allow adequate verification time for the MACs and so that those ESRD facilities eligible for LVPA are able to receive it timely. In the past when we have extended the LVPA attestation deadline, we have done so for all ESRD facilities (85 FR 71442). However, we believe that a November 1st deadline is necessary so that the LVPA attestations can be properly processed, and payments can begin on January 1st of the next CY. In response to the concern for ESRD facilities which are impacted by a disaster late in the year, we are modifying the proposed regulation language at § 413.232(g)(5) to allow an ESRD facility to request the exception to the 4,000-treatment volume threshold requirement up to 30 days after the end of the cost reporting year for which they are attesting. Although the ESRD facility would still have to submit an attestation by the November 1st deadline, this will allow additional flexibility for ESRD facilities that experience temporary patient shifting late in the year if their cost-reporting year ends within 30 days of the attestation deadline. We clarify that under this exception, an ESRD facility would have to submit the exception request by either the attestation deadline or 30 days after the end of the ESRD facility’s cost reporting year, whichever is later, but would not be required to have received the exception by the attestation deadline. Then, in the event that the ESRD facility does not receive approval for the exception from CMS, the MAC would follow the current process. Specifically, as noted in § 413.232(h)(2), if the MAC determines an ESRD facility does not meet the definition of a low-volume facility, the MAC reprocesses claims and recoups E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76374 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations low-volume adjustments paid during the payment year. Comment: A coalition of dialysis organizations requested that the exception to the attestation process for ESRD facilities that treat displaced patients be extended to ESRD facilities that treat displaced patients from ESRD facilities that closed for reasons not related to a disaster or other emergency. This commenter noted that between 2020 and 2023, 383 ESRD facilities closed, which impacted an estimated 21,000 patients. Response: At this time, we do not agree that it is appropriate to allow ESRD facilities to exceed the LVPA treatment volume threshold due to treating displaced patients from ESRD facilities that close for reasons unrelated to disasters or other emergencies. If an ESRD facility closes due to a disaster or other emergency, the ESRD facility could re-open or another ESRD facility could open in its place, which would lead to the accepting ESRD facility returning to a lower treatment volume. However, if an ESRD facility closes for reasons unrelated to a disaster or other emergency, such as lack of demand or profitability, it is less likely that the ESRD facility would re-open or that a new ESRD facility would replace it. Additionally, implementing this commenter’s suggestion could lead to perverse incentives. For example, an ESRD facility that does not receive the LVPA and closes temporarily has its patients receive treatment at another affiliated ESRD facility, which usually receives the LVPA (and therefore, a higher payment rate). If the commenter’s suggestion were to be implemented, with the influx of new patients, the ‘‘accepting’’ ESRD facility could strategically surpass the 4,000-treatment level and still receive the LVPA. Final Rule Action: We are finalizing our proposals to establish an exception process to allow a facility to close and reopen in response to a disaster or emergency and still receive the LVPA, and to allow a facility to receive the LVPA even if it exceeds the LVPA threshold if its treatment counts increase due to treating additional patients displaced by a closure or operational disruption caused by a disaster or other emergency, as proposed, with two modifications. First, as noted above, we are finalizing one modification to § 413.232(g)(5)(ii) to change the deadline by which the ESRD facility must request the exception to § 413.232(b)(1) to be the later of the attestation deadline or 30 days after the end of the cost reporting year for which the ESRD facility is attesting. Specifically, we are finalizing VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 § 413.232(g)(5) which states that if an ESRD facility exceeds the 4,000treatment volume threshold due to temporary patient shifting from an ESRD facility that experiences a closure or operational disruption due to a disaster or other emergency, the accepting ESRD facility would be able to apply for an exception to the requirement at 413.232(b)(1) and, if the exception is approved, the ESRD facility would not be disqualified from receiving the LVPA on the basis of 413.232(b)(1) due to exceeding the 4,000-treatment volume threshold in that cost reporting year. The deadline for requesting this exception would be either the attestation deadline or 30 days after the end of the cost reporting year for which the ESRD facility is attesting, whichever is later. We are finalizing a definition of temporary patient shifting in the context of the ESRD PPS LVPA as providing renal dialysis services to one or more patient(s) at any time through the end of the CY following the 12-month period beginning when an ESRD facility first begins providing renal dialysis services to the displaced patient(s). We are finalizing a second modification of the proposed regulation text at § 413.232(g)(5)(iv) to indicate that we will not limit the LVPA payment to 4,000 treatments for the payment year in which the temporary patient-shifting occurred due to a disaster or other emergency. We proposed that if an exception is approved under § 413.232(g)(5), the ESRD facility would be paid the low-volume adjustment on claims for Medicare beneficiaries for up to the first 4,000 dialysis treatments during the payment year in which the temporary patient-shifting occurred, so long as all other requirements for the low-volume adjustment are met. The intent of this proposed limit was to support stability of payments for ESRD facilities experiencing temporary patient-shifting due to an emergency at a level commensurate with their historical treatment volumes, while protecting the Medicare program against the risk of paying the LVPA for a large number of treatments. After further consideration of the operational and payment implications of this policy, we are making this change to be consistent with our historical practice of not limiting payment of the LVPA in the year in which the LVPA threshold is exceeded. We are concerned that limiting LVPA payment to 4,000 treatments for facilities would create operational confusion for facilities and could limit the ability of these ESRD facilities to take on patients who are PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 displaced by a disaster or emergency. Furthermore, we considered that lowvolume ESRD facilities generally receive the LVPA on fewer than 4,000 treatments per year, since the 4,000 treatment threshold includes all treatments that the facility provides. We therefore do not believe it is necessary to apply the proposed limit, since ESRD facilities operating under an exception would be unlikely to exceed 4,000 treatments paid under the ESRD PPS. We intend to monitor the use of these new exceptions to ensure that they are being applied appropriately and do not create opportunities for gaming. Additionally, we are finalizing § 413.232(g)(6), which states that if an ESRD facility has closed and reopened in response to a disaster or other emergency, it would be able to apply for an exception to the requirement at 413.232(b)(2) and, if the exception is approved, the ESRD facility would not be disqualified from receiving the LVPA on the basis of 413.232(b)(2) due to closing in that year. The deadline for requesting this exception is 60 days after ESRD facility’s closure. (4) Technical Correction to § 413.232(g) We proposed a technical correction at § 413.232(g) to replace ‘‘their’’ with ‘‘its,’’ to clarify the regulation language. Final Rule Action: We did not receive comments regarding the technical correction to the regulations text for the LVPA, and we are finalizing this revision as proposed. g. Transitional Pediatric ESRD Add-On Payment Adjustment for Pediatric Patients With ESRD Receiving Renal Dialysis Services (1) Background Section 1881(b)(14)(D)(iv)(I) of the Act provides that the ESRD PPS may include such payment adjustments as the Secretary determines appropriate, including a payment adjustment for pediatric providers of services and renal dialysis facilities. Determining such a payment adjustment has been historically difficult due to the consistent lack of data. The Medicare pediatric ESRD patient population receiving dialysis is small compared to the adult ESRD population, representing approximately 0.14 percent of the total ESRD patient population in 2022. In the past, CMS has considered various payment adjustments for pediatric patients with ESRD, including different Medicare payments by sex or comorbidities (74 FR 49984 through 49986). However, many of these considered adjustments were not used as we were unable to get acceptable E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations precision due to the small sample size of pediatric patients with ESRD. Prior to the establishment of the ESRD PPS, payment for pediatric ESRD renal dialysis services was generally the same rate as adult ESRD renal dialysis services, unless the ESRD facility qualified for an exception to the composite rate. Section 1881(b)(7) of the Act stated that, subject to section 422(a)(2) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (Pub. L. 106–554) (BIPA), the Secretary shall provide for exceptions as may be warranted by unusual circumstances (including the special circumstances of sole facilities located in isolated, rural areas and of pediatric facilities). During this time, CMS received many comments and concerns regarding the payment rate for renal dialysis services furnished to pediatric patients with ESRD. Section 623(b) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108–173) later amended section 422(a)(2) of BIPA to provide that any pediatric ESRD facility would be eligible for an exception to the composite rate, effective October 1, 2002. This statute defined pediatric ESRD facilities as facilities with at least 50 percent patients under the age of 18. This enabled pediatric ESRD facilities to obtain payments that specifically recognized the higher cost associated with treating these patients (69 FR 47530). We finalized a basic case-mix adjustment to the composite payment rate in the CY 2005 Physician Fee Schedule (PFS) final rule published on November 15, 2004 (69 FR 66327). This included a 62 percent pediatric payment increase (that is, an adjustment factor of 1.62) applied to the composite payment rate per treatment for any facility when furnishing outpatient renal dialysis services to pediatric patients with ESRD. This factor was derived from the average exception amounts for 20 ESRD facilities that had received exceptions for pediatric patients. This was intended to be a temporary measure, which would be eliminated once we developed the case-mix methodology that would apply for the ESRD PPS bundled payment. The use of this methodology allowed CMS to provide additional payment for the pediatric ESRD population under the composite rate in a data-driven manner to account for the higher costs pediatric patients faced (69 FR 66327). Section 153(b) of MIPPA added section 1881(b)(14) of the Act, which required CMS to implement an ESRD bundled PPS beginning January 1, 2011, under which a single payment for renal dialysis services is made in lieu of any other payment. Renal dialysis services generally include items and services included in the composite rate for renal dialysis services as of December 31, 2010, and services furnished to individuals for treatment of ESRD, which were formerly separately billable, including drugs and biological products and laboratory tests. In the CY 2011 ESRD PPS proposed rule, we proposed a single composite rate modifier of 1.199 for all Pediatric ESRD Patients receiving dialysis (74 FR 49982 through 49983). A ‘‘Pediatric ESRD Patient’’ is defined as an individual less than 18 years of age who is receiving renal dialysis services (§ 413.171). We also proposed an eightgroup system for separately billable renal dialysis services furnished to Pediatric ESRD Patients with two subdivisions for each of the following factors: age (under 13, 13 to 17), modality (hemodialysis, peritoneal dialysis) and number of comorbidities (none, one or more) (74 FR 49983 76375 through 49987). The CY 2011 ESRD PPS proposed rule then calculated an ‘‘expanded bundle’’ modifier, which combined the composite rate and separately billable modifiers for each of the eight groups (74 FR 44987). These expanded bundle modifiers were the proposed pediatric patient-specific casemix adjustment factors that would be applied to the base rate under the ESRD PPS. These modifiers were based on a regression of costs for all renal dialysis services furnished to Pediatric ESRD Patients. Comments on this proposed rule indicated that many interested parties believe the expanded bundle modifier was insufficient (75 FR 49128). In the CY 2011 ESRD PPS final rule, we responded to those comments by implementing the first iteration of the current four-group system for both the expanded bundle and the separately billable services. This methodology was data driven, but unlike the simple regression for composite rate costs, allowed for different Medicare payment amounts based on two sets of two characteristics: age of the patient (under 13 or 13 to 17) and modality of the treatment (hemodialysis or peritoneal dialysis). Additionally, this methodology used the same groups for the expanded bundle and separately billable modifiers (75 FR 49134). We codified the Pediatric ESRD Patient payment adjustment in § 413.235(b), which states that CMS adjusts the per treatment base rate for pediatric patients in accordance with section 1881(b)(14)(D)(iv)(I) of the Act, to account for patient age and treatment modality. These multipliers were updated in the CY 2016 ESRD PPS final rule using the same methodology (80 FR 69001 through 69002). The current expanded bundle case mix adjusters are presented in Table 7. TABLE 7: Current Pediatric ESRDB Payment Modifiers As we discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42449), despite these changes intended to improve payment accuracy for renal dialysis services furnished to Pediatric ESRD Patients, we continue to receive comments and concerns from interested parties that the payment amounts for VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 renal dialysis services furnished to Pediatric ESRD Patients are too low. In addition to comments received through the annual ESRD PPS rulemaking, we have also solicited comments from interested parties on several occasions. During the December 2020 TEP, we queried a panel of experts on how to PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 improve payment for pediatric dialysis care under the ESRD PPS. Panelists 18 generally preferred creating more refined case-mix adjusters over creating 18 https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2021.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.009</GPH> ddrumheller on DSK120RN23PROD with RULES2 Current Pediatric ESRD Expanded Bundled Payment Modifiers by Age and Modality (Effective 1/1/2016) Age <13 13-17 Hemodialvsis 1.327 1.306 Peritoneal Dialysis 1.063 1.102 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations an entirely new pediatric ESRD PPS, citing the costs of creating an entirely new system both on CMS and the ESRD facilities and the need for new legislation to be able to increase payment through a separate pediatric ESRD PPS. Panelists also pointed to labor costs as a major reason for higher costs among pediatric dialysis clinics because these patients need more nursing attention and specialized pediatric nutritionists. We noted that, in the CY 2023 ESRD PPS proposed rule (87 FR 38529), we issued a request for information regarding health equity for pediatric patients with ESRD. Many commenters asserted that Medicare payments for Pediatric ESRD Patients are too low and that the ESRD PPS bundled payment does not target the unique issues facing ESRD facilities furnishing renal dialysis services to Pediatric ESRD Patients. As we explained in the CY 2024 ESRD PPS proposed rule, we are committed to improving health equity for Pediatric ESRD Patients receiving renal dialysis services by improving payment equity through more efficient Medicare payments. Ensuring Medicare payments are appropriate and reflect costs for renal dialysis services furnished to Pediatric ESRD Patients would allow more ESRD facilities to provide quality care to this vulnerable population. The main barrier to payment equity is the lack of sufficient data to determine the relative costs associated with furnishing renal dialysis services to Pediatric ESRD Patients. To improve payment rate accuracy for Pediatric ESRD Patients, CMS has issued changes to the cost reports for both freestanding ESRD facilities and hospital-based ESRD facilities effective January 1, 2023.19 20 21 These changes include separate categories for labor and supplies used in furnishing renal dialysis services to Pediatric ESRD Patients. These updates are intended to provide data for CMS to more comprehensively estimate the additional costs associated with ddrumheller on DSK120RN23PROD with RULES2 Cost ) Log ( - - - Treatment furnishing renal dialysis services to Pediatric ESRD Patients. However, we estimated it would take approximately 3 years to obtain and analyze the granular data provided by the stratified cost reports data from these changes that we need to consider proposing a more finely tuned payment adjustment. (2) Alternative Methodology for Estimating Relative Costs for Furnishing Renal Dialysis Services to Pediatric ESRD Patients As discussed in the CY 2024 ESRD PPS proposed rule, payment accuracy has been historically difficult for pediatric ESRD dialysis because of the small sample size of Pediatric ESRD Patients receiving renal dialysis services paid for under the ESRD PPS. Pediatric ESRD dialysis treatments are also furnished differently from adult ESRD dialysis treatments in several crucial ways. For example, pediatric ESRD facilities are more likely to be hospitalbased and, on average, have lower treatment volume and are in higher wage index areas. These systematic differences in treatment, when combined with the small sample size, make it very difficult to obtain low variance estimates of the differences in costs between pediatric and adult ESRD dialysis patients. Even if simple cost models show statistically significant estimates, it is possible that the systematic differences between pediatric and adult ESRD facilities can bias these estimates. Obtaining a reliable estimate of the additional costs that Pediatric ESRD Patients incur would allow us to create a payment adjustment to bring relative Medicare payments more in line with relative costs. One can account for this bias by selecting a specific sample of ESRD facilities that have similar characteristics except for proportion of dialysis treatments furnished to Pediatric ESRD Patients. This would help to show the additional costs of furnishing dialysis to Pediatric ESRD = Pediatric Share+ log(Facility Size) Patients based on the variation in costs across the ESRD facilities. To achieve this, we would use propensity score matching (PSM). PSM is a technique that uses regression analysis to account for systematic differences between two populations to isolate the effects of a single variable, in this case percentage of Pediatric ESRD Patients. The PSM regression includes a wide range of ESRD facility-level characteristics including facility type, size, geographic location, and the pediatric ESRD dialysis population nearby the ESRD facility to make a propensity score. This propensity score represents the probability that a given ESRD facility treats a high volume of Pediatric ESRD Patients given its facility-level characteristics. Once the propensity score for each ESRD facility is determined, each ESRD facility with a significant percentage of Pediatric ESRD Patients (high-pediatric) is matched with the ESRD facility without a significant percentage of Pediatric ESRD Patients (low-pediatric) with the most similar propensity score. We can then compare the relative pertreatment costs of those ESRD facilities to estimate the additional costs an ESRD facility faces when it furnishes renal dialysis services to a higher proportion of Pediatric ESRD Patients, controlling for some important facility-level characteristics. The dependent variable of this regression is the log of the cost per treatment for the ESRD facility. The independent variables are the percent of dialysis treatments that are furnished to Pediatric ESRD Patients, the log of the facility size, the type of ESRD facility (hospital-based, children’s hospitalbased or freestanding), the log of the wage index for the ESRD facility and the year for the cost report data. The regression equation for cost per treatment given a certain percentage of dialysis treatments furnished to Pediatric ESRD Patients is: + Hospital Type + log(wage Index) + Year Indicator This cost regression should be unbiased due to the use of PSM. However, PSM also requires a reduction in sample size, because there are relatively few ESRD facilities with a significant number of treatments furnished to Pediatric ESRD Patients that could be matched using PSM. This smaller sample size inherently results in an increase in margin of error. We stated that we believe this is a necessary tradeoff because a biased estimate cannot be relied upon, but we must be cautious while using high-error estimates. The result of this regression is that ESRD facilities that solely serve Pediatric ESRD Patients incur costs that are 40 percent higher per patient for furnishing renal dialysis services than similar ESRD facilities that serve no Pediatric ESRD Patients. The confidence 19 https://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/Transmittals/ r7p242. 20 https://www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/Transmittals/ r18p240i. 21 87 FR 26760 (May 5, 2022). https://www.federal register.gov/documents/2022/05/05/2022-09581/ agency-information-collection-activitiessubmission-for-omb-review-comment-request. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.010</GPH> 76376 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations interval of this estimate is 20 percent to 60 percent. Therefore, on average, furnishing renal dialysis services to a Pediatric ESRD Patient costs 40 percent more than furnishing renal dialysis services to an adult patient with ESRD. (3) Current Medicare Payments for Renal Dialysis Services Furnished to Pediatric ESRD Patients As discussed in the CY 2024 ESRD PPS proposed rule, the ESRD PPS already accounts for some of the higher costs that ESRD facilities incur while furnishing renal dialysis services to Pediatric ESRD Patients through the case-mix adjusters. Because the analysis described previously uses cost report data, it does not incorporate either the current case-mix adjusters or payment rates for Pediatric ESRD Patients receiving renal dialysis services. We noted that our most recent estimates showed that payments for dialysis treatments furnished to Pediatric ESRD Patients were approximately 10 percent higher than for adult patients with ESRD in CY 2022. We explained that we are striving for payment accuracy, which is achieved when relative Medicare payments are proportional to relative costs. There are several ways we could adjust ESRD PPS payments to achieve payment accuracy, including calculating the unaccountedfor cost differential, which is the amount by which ESRD PPS payments for pediatric ESRD renal dialysis services must be increased to achieve payment accuracy. We could do this by reducing the cost differential estimate of 40 percent by a factor 1.1 to account for the current payment differential of 10 percent. This would yield an unaccounted-for cost differential of approximately 30 percent (1.4 divided by 1.1 is 1.27 which we are rounding to 1.3). This is a reasonable estimate of the additional labor and supply costs, which are not accounted for by the current case-mix adjusters, incurred by ESRD facilities furnishing renal dialysis services to Pediatric ESRD Patients. (4) Transitional Pediatric ESRD Add-On Payment Adjustment As we stated in the CY 2024 ESRD PPS proposed rule, despite the high margin of error of the cost regression using PSM, we believe that 30 percent cost is the most reasonable estimate of the unaccounted-for costs incurred in treating Pediatric ESRD Patients compared to adult ESRD patients. Creating a new add-on payment adjustment using this figure would provide pediatric ESRD facilities with Medicare payments proportional to their estimated costs for a temporary period while we collect additional data. However, due to the high margin of error of the model, increasing Medicare payments to ESRD facilities such that payments are 40 percent higher for Pediatric ESRD Patients compared to all patients would risk making payments higher than appropriate. We noted that when we conduct the analysis with the more comprehensive cost report data provided by the cost report changes implemented for CY 2023, we might find that our analysis overestimated the cost of furnishing renal dialysis services to Pediatric ESRD Patients (that is, that the additional 30 percent payment adjustment was too large). We further stated that if we finalized the transitional add-on payment adjustment for Pediatric ESRD Patients as proposed, pediatric ESRD facilities should be prepared for the possibility that the payment rate for Pediatric ESRD Patients could decrease in the future, should that be indicated by future data analysis and finalized through noticeand-comment rulemaking. We discussed the alternative to propose a smaller, more cautious add-on payment adjustment based on the 20 percent lower bound of the confidence interval, leading to an additional 10 percent transitional add-on payment adjustment 76377 after accounting for the current payment rate. This option would still represent a significant increase in Medicare payments to ESRD facilities for Pediatric ESRD Patients without much risk of making payments higher than appropriate. However, this alternative option may lead to underpayment to ESRD facilities serving Pediatric ESRD Patients, which is contrary to our goal of aligning resource use with payment. We invited comments on the most appropriate amount for the proposed transitional add-on payment adjustment. We proposed in the CY 2024 ESRD PPS proposed rule a new transitional add-on payment adjustment of 30 percent (adjustment factor of 1.3) for dialysis treatments furnished to Pediatric ESRD Patients for 3 CYs, effective January 1, 2024. We stated that based on the time lag for cost report data, 3 years should allow for enough time for CMS to get more detailed data from the changes to the cost reports described previously. After that period, we would evaluate the more comprehensive cost report data from the first year of cost reporting periods beginning on or after January 1, 2023, to refine our methodology for determining the payment rate for pediatric ESRD dialysis. As proposed, this would be a separate, additional add-on payment adjustment of 30 percent of the per treatment payment amount under § 413.230, which reflects the other patient and facility level adjustments. This adjustment would not be part of the case-mix adjusters. This payment adjustment would only apply to the ESRD bundled payment and not to any outlier adjustments. Due to the multiplicative nature of the case-mix adjusters it would function similarly to a 30 percent increase to the expanded bundle case-mix adjusters. For comparison, the effective case-mix adjusters are presented in Table 8. TABLE 8: Pediatric ESRDB Effective Payment Modifiers VerDate Sep<11>2014 PD Current Case- Mix Adjuster (Effective 1/1/2016) 1.063 30% Increase Effective Case- Mix Ad_justers 1.382 Alternative 10% Increase Effective CaseMix Adjusters 1.169 HD 1.306 1.698 1.437 PD 1.102 1.433 1.212 HD 1.327 1.725 1.460 Age Modality <13 <13 13-17 13-17 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.011</GPH> ddrumheller on DSK120RN23PROD with RULES2 Pediatric ESRDB Effective Payment Modifiers by Age and Modality ddrumheller on DSK120RN23PROD with RULES2 76378 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations We noted that the exact magnitude of the increase in payment would vary based on the age of the patient and the wage index of a given area; we estimated approximately $80 for (hemodialysis-equivalent) peritoneal dialysis treatments and $100 for hemodialysis treatments. This would represent a substantial increase in payment for renal dialysis services furnished to Pediatric ESRD Patients and would account for the extra costs that this population incurs temporarily until additional cost data is available. This payment adjustment would apply for all dialysis treatments furnished to ESRD patients under the age of 18, not solely treatments furnished in pediatric ESRD facilities. This is warranted because many of the additional costs related to the treatment of Pediatric ESRD Patients are not specific to treatments furnished in pediatric ESRD facilities. We proposed to call this the Transitional Pediatric ESRD Add-on Payment Adjustment (TPEAPA) and make this adjustment budget neutral. We explained that, in general, add-on payment adjustments under section 1881(b)(14)(D)(iv) of the Act are not statutorily required to be budget neutral under the ESRD PPS, but we stated that we believed in this instance that budget neutrality is appropriate, due to the way this adjustment is derived. We noted that other non-budget neutral add-on payment adjustments that we have established under this authority generally account for costs that were not used for the construction of the ESRD PPS bundled payment, such as the TDAPA for calcimimetics (80 FR 69013 through 69027). We explained that we have also established certain non-budget neutral add-on payment adjustments for items or services that were not commonplace, and therefore not adequately represented in cost reports, such as home dialysis training (75 FR 49063). However, we noted that we have implemented other payment adjustments under this authority in a budget neutral manner; for example, the changes to the wage index in the CY 2023 ESRD PPS final rule were implemented in a budget neutral manner as they represented a shifting of cost allocations, rather than new costs not originally included in the ESRD PPS bundled payment (87 FR 67157). We stated that this TPEAPA is primarily for costs that would have been included in the cost reports used in the analysis conducted when we created the ESRD PPS bundled payment in the CY 2011 ESRD PPS final rule. We explained that the methodology used both in that VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 analysis, and when updating the casemix adjusters, attributed pediatric ESRD renal dialysis services costs to the general population. Therefore, we explained, it would be appropriate to reduce the ESRD PPS base rate to account for the new allocation of costs. Furthermore, we stated that any changes to the case-mix adjustments are required by section 1881(b)(14)(A)(ii) of the Act to be budget neutral, which means that any future modifications to the pediatric case-mix adjusters would be budget neutral. The proposed budget neutrality adjustment factor for the proposed TPEAPA consisting of 30 percent of the per treatment payment amount was 0.999532. We explained that applying this budget neutrality factor to the proposed ESRD PPS base rate would reduce the ESRD PPS base rate by an estimated $0.12. We stated that under the alternative 10 percent TPEAPA discussed in the proposed rule (88 FR 42464), the budget neutrality factor adjustment would be 0.999847. We explained that applying this budget neutrality factor to the proposed ESRD PPS base rate would reduce the ESRD PPS base rate by an estimated $0.04. To establish this new TPEAPA, we proposed to amend § 413.235 by splitting current paragraph (b) into paragraphs (b)(1) and (2). Paragraph (b)(1) would set forth the established age and modality of treatment case mix adjustment methodology as currently stated in paragraph (b). Paragraph (b)(2) would state that beginning January 1, 2024, we will provide a per-treatment transitional add-on payment adjustment of 30 percent of the per treatment payment amount under § 413.230 for renal dialysis services furnished to Pediatric ESRD Patients during CYs 2024, 2025, and 2026. We also proposed to revise the current language of § 413.235(b) to use the term ‘‘Pediatric ESRD Patients,’’ which is defined at § 413.171, to improve clarity for this section. (5) Costs and Benefits for a Transitional Pediatric ESRD Add-On Payment Adjustment (TPEAPA) As we explained in the CY 2024 ESRD PPS proposed rule, we believe CMS could better align the resource use of pediatric ESRD renal dialysis services with payment. Our analysis using the methodology outlined previously found that costs for Pediatric ESRD Patients receiving renal dialysis services are estimated to be 40 percent higher than for adult patients and that the current payment adjusters account for 10 percent higher costs. Implementing a transitional 30 percent add-on payment adjustment for renal dialysis services PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 furnished to Pediatric ESRD Patients would improve payment equity for these patients by increasing payments to align with the estimated costs of treatment more closely. A 30 percent increase in ESRD PPS payments for pediatric ESRD renal dialysis services would represent approximately $80 to $100 per pediatric ESRD dialysis treatment, although the exact magnitude of the increase would depend on age, modality, and the wage index of the area. This payment increase would have beneficial health equity impacts on this population by improving access to care and quality of care. Some ESRD facilities may not be able to absorb the additional expense of the Pediatric ESRD Patient population. Patients may need to travel to a limited number of primarily hospital-based ESRD facilities where pediatric ESRD dialysis is performed. As a result, this population may be underserved and disadvantaged with respect to access to ESRD care. We stated that additional payment to those ESRD facilities treating Pediatric ESRD Patients would thereby benefit this potentially underserved and disadvantaged population of Pediatric ESRD patients. Additionally, this would have a beneficial financial impact on the ESRD facilities, both pediatric and nonpediatric, that serve this pediatric population. We proposed that this payment adjustment be budget neutral, which would lead to an estimated decrease of $0.12 to the ESRD PPS base rate, corresponding to a budget neutrality factor of 0.99954. This relatively small adjustment would represent less than a twentieth of a percent of the total ESRD PPS base rate. However, we recognized that any decrease in the ESRD PPS base rate would represent a monetary loss to ESRD facilities. As stated previously, our analysis indicated that this transfer would be reasonable given the likelihood that the methodology used in the case-mix adjusters attributed some pediatric costs to the general population. However, we noted, should future analysis of the stratified pediatric cost data indicate that pediatric ESRD renal dialysis services costs are less than 40 percent higher than adult costs, this budget neutral decrease would mean that the treatments for adult patients with ESRD were slightly underpaid during this 3-year period. In either case there would be a risk of underpayment for one group of patients. We stated that we believe using the mean estimate of the analysis will provide us with the best approach for achieving payment accuracy while we collect additional data. Additionally, the health equity E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations implications of potentially underpaying for Pediatric ESRD Patients receiving dialysis by 20 percent would be significantly higher than the implications of potentially underpaying for adult patients by less than 0.1 percent. We noted that in CY 2021 there were 116 ESRD facilities that furnished more than 2 percent of their dialysis treatments to Pediatric ESRD Patients, out of 7882 total ESRD facilities. These ESRD facilities are a relatively small group, but they are critical for the care of Pediatric ESRD Patients. For these reasons, we stated that we believe the expected benefits for the TPEAPA would outweigh the costs. We explained that we believe providing this 30 percent TPEAPA for CYs 2024, 2025, and 2026 would be the best approach for improving payment accuracy until more precise data is available. However, we acknowledged that in any case there is a risk of making payments which are higher or lower than appropriate. Therefore, in the CY 2024 ESRD PPS proposed rule we requested comments on our proposal, including on (1) the alternative adjustment amount; and (2) the budget neutrality of the proposal. We received 30 comments in response to our proposed Transitional Pediatric ESRD Add-on Payment Adjustment (TPEAPA) for pediatric ESRD patients receiving renal dialysis services. Respondents included large and small dialysis organizations, non-profit organizations, an advocacy organization, a coalition of dialysis organizations, a large non-profit health system, and individual providers. The comments on our proposal and our responses are set forth below. Comment: We received several comments that supported CMS establishing an add-on payment adjustment for pediatric ESRD patients. Most commenters expressed their belief that an add-on payment adjustment of this nature is necessary to support the higher costs associated with providing for the unique care needs and specialized support required for renal dialysis services in the ESRD PPS pediatric population. Physician commenters cited the unique challenges in caring for this population that are not reflected in the current ESRD PPS payment models. Numerous commenters expressed their support for using an ESRD PPS add-on payment adjustment to improve patient access and equity among this vulnerable subpopulation of patients with ESRD. A pediatric ESRD facility noted that money invested in this population lowers avoidable adverse outcomes and complications from ESRD and facilitates VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 a faster path towards transplantation, ultimately yielding both cost savings and healthier adults. Response: We thank the commenters for their support and dedication to improving access and equity for the pediatric patient population with ESRD receiving renal dialysis services. Comment: We received several comments regarding the proposed TPEAPA payment amount, calculation, and length of payment period. Most commenters supported the implementation of the 30 percent addon payment adjustment as a reasonable estimate of the unaccounted-for costs incurred in treating pediatric ESRD patients. An LDO expressed concern that PSM does not provide for an accurate computation of the costs incurred in providing specialized pediatric care; while a pediatric nephrology society agreed that in the absence of accurate pediatric cost data, the PSM methodology seems reasonable. A pediatric nephrology society reported the 30 percent add-on to be consistent with anecdotal cost data collected by the society from around the country. An LDO urged CMS to implement a threeyear period of analysis after the proposed 30 percent adjustment. Another LDO requested more transparency on the data and assumptions used to calculate the pediatric adjustment. Response: We thank the commenters for their support and suggestions. Payment accuracy has been historically difficult for pediatric ESRD dialysis because of the small sample size of pediatric patients receiving renal dialysis services paid for under the ESRD PPS. Obtaining reliable data on the additional costs that pediatric patients with ESRD incur would facilitate the creation of a permanent payment adjustment based on resource use to bring relative Medicare payments more in line with relative costs. We recognize that while our use of PSM unavoidably leads to larger variance in parameter estimates because only a small subset of the broader provider population is utilized in the estimation, this approach is useful because it provides a means of comparison with less biased estimates and as suggested by commenters the 30 percent estimate is in line with anecdotal data. We plan to share data and assumptions through notice-and-comment rulemaking for potential future pediatric payment adjustments to ESRD facilities. Comment: Most commenters urged CMS to reconsider implementing the payment adjustment as a budget neutral add-on. An LDO expressed that it would be inappropriate to cut payment rates PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 76379 for service provided to adult patients, whose population is comprised of a significant percentage of patients from racial or ethnic minority groups, of lowsocioeconomic status, and living in medically underserved areas. A health system expressed concerns that the addon payment adjustment would shift funding away from ESRD facilities exclusively providing adult services. An LDO expressed that applying the add-on in a budget-neutral manner would effectively penalize all ESRD facilities for the inability of existing cost report data to improve payment accuracy. A nephrology society expressed concerns that while younger patients require more support, that does not mean that adults requiring dialysis require less support than they are already receiving. A non-profit dialysis association expressed that the budget neutral application of the adjustment is contrary to the Administration’s stated health equity goals, because it would cut payments for one medically vulnerable group to increase payments for another medically vulnerable group. Response: We examined the potential impact of the proposed TPEAPA as a budget neutral adjustment. As we noted in the CY 2024 ESRD PPS proposed rule, add-on payment adjustments under section 1881(b)(14)(D)(iv) of the Act are not statutorily required to be budget neutral under the ESRD PPS, but we believe in this instance that budget neutrality is appropriate due to the way this adjustment is derived. As explained in section II.B.1.g.(4) of this final rule, this TPEAPA is primarily for costs that would have been included in the cost reports used in the analysis conducted when we created the ESRD PPS bundled payment in the CY 2011 ESRD PPS final rule. We explained that the methodology used both in that analysis, and when updating the case-mix adjusters, attributed pediatric ESRD renal dialysis services costs to the general population. CMS has therefore determined it to be appropriate to reduce the ESRD PPS base rate to account for the new allocation of costs. We note that the adjustment would decrease the ESRD PPS base rate by a budget neutrality factor of 0.999503, a sum total of $0.14, due to the application of the budget neutrality factor. We further note that the adjustment does not rely on any assumption that resource use by adult patients has decreased over time; rather it assumes that the ESRD PPS payment rate as applied to adults has since its inception incorporated some amount of costs that were more properly attributable to treatment of pediatric E:\FR\FM\06NOR2.SGM 06NOR2 76380 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 ESRD patients. The TPEAPA therefore makes the ESRD PPS payment more reflective of relative costs by reallocating payments associated with those costs from the payment amounts for adults to pediatric ESRD patients. Comment: An ESRD facility urged CMS to extend the add-on payment adjustment to pediatric AKI patients to ensure these patients receive the same additional support. Response: We appreciate the suggestion to apply the TPEAPA to pediatric AKI patients. As we discussed in the CY 2017 ESRD PPS final rule, we have 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. Therefore, we have not historically applied these ESRD PPS adjustments and policies to AKI payments (81 FR 77959). We did not propose to apply the TPEAPA to pediatric AKI patients for the same reason. Comment: We received several additional comments regarding the TPEAPA implementation. Commenters suggested that CMS create and implement pediatric ESRD-specific metrics for the pediatric ESRD programs. A pediatric nephrology society requested CMS utilize means of communication such as the Medicare Learning Network to educate children’s hospitals on completing costs reports. A professional nursing association urged CMS to promote a shift towards pediatric ESRD dialysis care moving towards home-based settings. The association also urged investment into the field of pediatric nephrology, as there are limited qualified health care providers and recommended the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 inclusion (we assume in cost reports) of pediatric nurse practitioners. The association also recommended CMS consider direct patient labor categories when determining costs for pediatrics, as there are additional training and requirements necessary for the pediatric population. As an extension of labor categories, the association noted the shortage of pediatric nephrologists and suggested that CMS include pediatric nurse practitioners who can assist in meeting the needs of the youngest and most vulnerable individuals on dialysis. These commenters did not specify how CMS should include pediatric nurse practitioners or how such inclusion would relate to the ESRD PPS bundled payment. Response: We thank the commenters for their input. As the TPEAPA is a temporary adjustment until we can fully analyze the costs associated with pediatric dialysis, we did not include any proposals regarding shifts to homebased settings, or the inclusion of a pediatric nurse practitioner in the CY 2024 ESRD PPS proposed rule. However, as we continue to analyze how best to collect pediatric specific metrics and the payment for Pediatric ESRD Patients to facilitate future refinements, we will consider these comments for potential future ESRD PPS payment policies. We appreciate the suggestion about using Medicare Learning Networks to educate children’s hospitals on completing costs report. CMS is considering a number of options on how best to provide educational outreach on this topic. Final Rule Action: We did not receive any comments on our proposal to revise the language of § 413.235(b) to use the term ‘‘Pediatric ESRD Patients’’ to PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 improve clarity. As such we are finalizing this change as proposed. In addition, after consideration of the comments received and for reasons outlined in the CY 2024 ESRD PPS proposed rule and previously in this section of the final rule, we are finalizing our proposal to establish this new TPEAPA on a budget-neutral basis. Under our authority at section 1881(b)(14)(D)(iv) of the Act, we will adjust the per treatment base rate for Pediatric ESRD Patients to provide a per-treatment transitional add-on payment adjustment of 30 percent of the per treatment payment amount under § 413.230 for renal dialysis services furnished to Pediatric ESRD Patients during CYs 2024, 2025, and 2026. CMS is codifying this payment adjustment in the regulations at § 413.235(b)(2). The budget-neutrality factor for the CY 2024 TPEAPA is 0.999503. This change will be effective January 1, 2024, as proposed. h. Reporting Policy for Discarded Amounts of Renal Dialysis Drugs and Biological Products Paid for Under the ESRD PPS (1) Background As discussed in the CY 2023 PFS final rule (87 FR 69710), many drugs and biological products that are payable under Medicare Part B are dosed in a variable manner such that the entire amount identified on the vial or package is not administered to the patient. For example, many drugs are dosed based on the patient’s body weight or body surface area (BSA). Often, these drugs are available only in single-dose containers. As stated in U.S. Food and Drug Administration (FDA) guidance for E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations industry,22 a single-dose container is designed for use with a single patient as a single injection or infusion. The labeling for a drug packaged in a singledose container typically includes statements instructing users to discard unused portions. When the labeling instructs a health care provider to discard the amount of drug that was unused (that is, the discarded amount) from a single-dose container or other single-use package of a drug after administering a dose to a Medicare beneficiary, the program provides payment for the unused and discarded amount, as well as the dose administered, up to the amount of the drug indicated on the vial or package labeling. On a Medicare Part B claim, the JW modifier (drug amount discarded/not administered to any patient) is a Healthcare Common Procedure Coding System (HCPCS) Level II modifier used to report the amount of a drug that is discarded and eligible for payment. Beginning on January 1, 2017, CMS revised the Medicare Part B JW modifier policy to require the uniform use of the modifier for all claims for separately payable drugs with discarded drug amounts from single-dose containers or single-use packages payable under Part B, in order to more effectively identify and monitor billing and payment for discarded amounts of drugs.23 24 The policy does not apply to drugs that are not separately payable, such as packaged hospital outpatient prospective payment system (OPPS) drugs or those administered in federally qualified health centers (FQHCs) or rural health clinics (RHCs). In the CY 2023 PFS final rule (87 FR 69718 through 69719), we codified our existing policy as discussed in the prior paragraph in Chapter 17 of the Medicare Claims Processing Manual,25 and required that billing providers report the JW modifier for all separately payable drugs with discarded drug amounts from single-dose containers or singleuse packages payable under Part B, beginning January 1, 2023. These changes were promulgated in connection with the implementation of the discarded drug refund program under section 90004 of the Infrastructure Investment and Jobs Act (Pub. L. 117–9, November 15, 2021). In that same CY 2023 PFS final rule (87 FR 69722), we responded to commenters who requested we exempt drugs paid for under the ESRD PPS bundled 76381 payment from the discarded drug refund policy. One commenter expressed concern regarding how implementation of the discarded drug refund might inadvertently impact ESRD products, including those used by home dialysis patients. In response to those comments, we clarified that units for drugs that are packaged under the Medicare ESRD PPS were not subject to the JW modifier policy or the discarded drug refund. In the same CY 2023 PFS final rule, CMS also finalized a proposal to require billing providers to report the JZ modifier for all such drugs with no discarded drug amounts, beginning no later than July 1, 2023. Specifically, as discussed in the CY 2023 PFS proposed rule (87 FR 46058), we proposed to require the use of a separate modifier, the JZ modifier, to attest that there were no discarded amounts. We stated that to align with the JW modifier policy, the JZ modifier would be required when there are no discarded amounts from single-dose containers or single-use packages payable under Part B for which the JW modifier would be required if there were discarded amounts. Table 9 provides additional information about these modifiers. TABLE 9 - JW and JZ Short and Long Descriptors ddrumheller on DSK120RN23PROD with RULES2 JZ SHORT DESCRIPTOR (28-character limit) Discarded drug not administered Zero drug wasted We explained that on all claims for single-dose containers or single-use packages payable under Part B, either the JW modifier would be used (on a separate line) to identify any discarded amounts or the JZ modifier (on the claim line with the administered amount) would be present to attest that there were no discarded amounts. We noted that we believed the JZ modifier requirement would not increase burden on the provider, because under the current JW modifier policy, the provider already needs to determine whether there are any discarded units from a single-dose container or single-use 22 https://www.fda.gov/media/117883/download. 23 CR6603: https://www.cms.gov/Regulationsand-Guidance/Guidance/Transmittals/Downloads/ R3538CP.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 LONG DESCRIPTOR Drug amount discarded/not administered to any patient Zero drug amount discarded/not administered to any patient package, record discarded amounts in the patient medical record, and specify administered and discarded amounts on the claim form. We finalized the JZ modifier requirement in the CY 2023 PFS final rule. Lastly, we noted in the CY 2023 PFS final rule that we would begin claims edits for both the JW and JZ modifier beginning October 1, 2023 (87 FR 69179). Additional details can be found in Chapter 17 of the Medicare Claims Processing Manual and the JW/ JZ modifier frequently asked questions (FAQ) document.26 (2) Current Reporting of the JW Modifier Under the ESRD PPS 24 MLN Matters® Number MM9603: https:// www.hhs.gov/guidance/sites/default/files/hhsguidance-documents/mm96033.pdf. 25 https://www.cms.gov/regulations-andguidance/guidance/manuals/downloads/ clm104c17.pdf. 26 https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/ Downloads/JW-Modifier-FAQs.pdf. PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 As we discussed in the CY 2024 ESRD PPS proposed rule, the Medicare Part B JW modifier policy generally does not apply to drugs that are not separately payable. The ESRD PPS statute generally requires a single bundled payment for renal dialysis services. Specifically, section 1881(b)(14)(A)(i) 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. The only exception is E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.012</GPH> MODIFIER JW ddrumheller on DSK120RN23PROD with RULES2 76382 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations for oral-only drugs, as defined at § 413.234(a), which are currently paid separately under Medicare Part D. 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 drugs and biological products cannot be made under the ESRD PPS bundled payment prior to January 1, 2025. We noted that although the ESRD PPS includes certain add-on payment adjustments such as the TDAPA and TPNIES, these are adjustments to the ESRD PPS base rate and therefore part of the single payment made under the ESRD PPS; these payment adjustments are not separate payments. For example, as described in our TDAPA implementation guidance issued August 4, 2017, and updated January 10, 2018, available on the CMS website at https:// www.cms.gov/Regulations-andGuidance/Guidance/Transmittals/ 2018Downloads/R1999OTN.pdf, the methodology used to calculate the per treatment payment amount incorporates the cost of the drugs that are paid for using the TDAPA. Although renal dialysis drugs and biological products paid for under the ESRD PPS are not considered ‘‘separately billable’’ and are not subject to the general Part B JW modifier policy discussed in the prior paragraph, CMS has previously issued guidance on the use of the JW modifier on ESRD PPS claims for certain circumstances. Chapter 8, section 60.4.5.1 of the Medicare Claims Processing Manual pertains to self-administered supplies of ESAs.27 Under current guidance, when billing for discarded amounts of drugs in accordance with the policy in chapter 17 of this manual, section 40.1, the provider must bill for discarded amounts on a separate line item with the modifier JW. The line-item date of service should be the date of the last covered administration according to the plan of care or, if the patient dies, use the date of death. More specifically, in Chapter 17, section 40.1 of the Medicare Claims Processing Manual,28 we state that multi-use vials are not subject to payment for discarded amounts of drug or biological products, with the exception of self-administered ESAs by Method I home dialysis patients, for whom an ESRD facility furnishes and bills for renal dialysis services.29 27 https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/ clm104c08.pdf. 28 https://www.cms.gov/regulations-andguidance/guidance/manuals/downloads/ clm104c17.pdf. 29 Prior to the ESRD PPS, a Medicare ESRD beneficiary could elect to obtain home dialysis VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Current guidance in Chapter 17, section 40.1 of the Medicare Claims Processing Manual states that the ESRD facility must bill the program using the JW modifier for the amount of ESAs appropriately discarded if the home dialysis patient must discard a portion of the ESA supply due to expiration of a vial, because of interruption in the patient’s plan of care, or unused ESAs on hand after a patient’s death. We noted that separate payment is not made for ESAs under the ESRD PPS; however, ESAs are eligible for outlier payments when the criteria in § 413.237 are met. Most recently, the March 15, 2022, Change Request 30 that established the TDAPA for Korsuva® (difelikefalin) instructs facilities to use the JW modifier to report the amount of difelikefalin that is discarded and eligible for payment under the ESRD PPS. We noted that based on the latest available data at the time of the CY 2024 ESRD PPS proposed rule, nearly 40 percent of the TDAPA expenditures for those drugs that were reported in 2022 represented discarded amounts reported using the JW modifier, which represented approximately $1.3 million in TDAPA expenditures for discarded amounts of difelikefalin. Overall, our analysis of Medicare claims data from 2017 to 2021 found that approximately 2 percent of ESRD PPS claims indicate discarded or unused portions of drugs or biological products through use of the JW modifier. We estimated that the total amount of unused product billed from 2017 to 2021 and paid for under the ESRD PPS is approximately $22 million. We explained in the CY 2024 ESRD PPS proposed rule that, under our current policy, we do not reduce the single payment under the ESRD PPS for any discarded amounts of renal dialysis drugs or biological products that are reported with the JW modifier. Furthermore, when calculating any adjustments to the ESRD PPS base rate for the TDAPA or outlier payments, we include all units of renal dialysis drugs and biological products billed on the claim for which an adjustment is made, including any discarded amounts of such drugs and biological products. Additionally, we have previously established in the CY 2012 ESRD PPS final rule (76 FR 70243 through 70244) that ESRD facilities may only report units and charges for drugs and biological products purchased and may not bill for overfill units of drugs and biological products which exceed the amount indicated on the vial or package labeling.31 Additionally, we explained that consistent with prior rulemaking, under our authority in section 1881(b)(14)(D)(ii) of the Act, we were adopting the average sales price (ASP) policy on overfill for purposes of calculating the outlier payment. That is, we adopted a policy to exclude overfill units of drugs and biological products which exceed the amount indicated on the vial or package labeling from consideration for the purposes of calculating outlier payments. We stated we believe the use of the ASP policy for purposes of calculating the outlier payment is appropriate because we believe overfill does not represent a cost to the ESRD facility; thus, overfill should not factor into our determination of outlier payments. In summary, our longstanding policy for payment under the ESRD PPS, including the calculation of the TDAPA and outlier payment adjustments, includes payment for units of renal dialysis drugs and biological products billed with the JW modifier, but does not allow payment for overfill units. That is, the current ESRD PPS payment policy is consistent with the broader Medicare Part B policy to pay for the unused and discarded amount, as well as the dose administered, up to the amount of the drug indicated on the vial or package labeling. equipment and supplies from a supplier that was not a Medicare approved dialysis facility. This was referred to as Method II home dialysis. In the CY 2011 ESRD PPS final rule (75 FR 49061), we stated that all costs associated with home dialysis services (both Method I and Method II) are included in the composite portion of the two equation model, and we stated that effective January 1, 2011, all home ESRD patients would be considered Method I home patients and all Medicare payments for home dialysis services would be made to the ESRD facility. 30 https://www.cms.gov/files/document/ r11295CP.pdf. 31 We explained in the CY 2011 PFS final rule (75 FR 73466) that we had become aware of situations where manufacturers intentionally included a small amount of overfill in drug containers, and that this overfill is provided at no extra charge to the provider. We also noted that we understood the intent of the intentional overfill was to compensate for product loss during the proper preparation and administration of a drug. We explained that ASP calculations are based on data reported by manufacturers, including ‘‘volume per item’’. Therefore, providers may only bill for the amount of drug product actually purchased and the cost that the product represents (75 FR 73467). PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 (3) ESRD PPS Policy for Reporting of Discarded Amounts of Renal Dialysis Drugs and Biological Products As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42464) and in section II.B.1.j of this final rule, we are undertaking analysis of ESRD PPS claims and cost report data to better understand the patient-specific costs associated with furnishing renal dialysis services to Medicare beneficiaries. We E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations stated in the proposed rule that in considering potential refinements to the ESRD PPS case-mix adjustments in the future, it is important to understand and have consistent data about the costs associated with the quantities of the renal dialysis drugs and biological products that are used by ESRD beneficiaries. This is consistent with our longstanding policy principles, which are reflected by our policy for billing for unused amounts of renal dialysis drugs and biological products under the ESRD PPS. In the CY 2016 ESRD PPS final rule (80 FR 69033), we discussed our existing policy since the inception of the ESRD PPS that all renal dialysis service drugs and biological products prescribed for ESRD patients, including the oral forms of renal dialysis injectable drugs, must be reported by ESRD facilities, and the units reported on the monthly claim must reflect the amount expected to be taken during that month. We stated that ESRD facilities should use the best information they have in determining the amount expected to be taken in a given month, including fill information from the pharmacy and the patient’s plan of care. We noted that any billing system changes to effectuate this change needed to be made as soon as possible, as this requirement had been in effect since the ESRD PPS began in 2011. This policy is also discussed in the Medicare Benefits Policy Manual, Pub. 100–02, Chapter 11, section 20.3.C.32 Consistent with our longstanding billing policies for unused amounts of drugs and biological products and consistent with the requirements for the uniform use of the JW modifier for all claims for separately payable drugs under Part B since 2017, to more effectively identify and monitor billing and payment for discarded amounts of drugs, in the CY 2024 ESRD PPS proposed rule, we proposed to require ESRD facilities to report accurate and consistent data about discarded amounts of single-dose renal dialysis drugs and biological products paid under the ESRD PPS. Further, section 1881(b)(2)(B) of the Act requires the Secretary to prescribe in regulations any methods and procedures to determine the costs incurred by ESRD facilities in furnishing renal dialysis services to beneficiaries with ESRD, and to determine payment amounts for Part B services furnished by such ESRD facilities. We noted that, under our longstanding policy, payment is made 32 https://www.cms.gov/regulations-andguidance/guidance/manuals/downloads/ bp102c11.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 under the ESRD PPS bundled payment for discarded amounts of renal dialysis drugs and biological products, and such discarded amounts are included in the calculation of the ESRD PPS base rate and any applicable adjustments, such as the TDAPA and the outlier adjustment. Therefore, consistent with the current JW and JZ reporting requirements that were finalized in the CY 2023 PFS final rule for separately payable Part B drugs, we proposed to require that beginning no later than January 1, 2024, ESRD facilities must report information on ESRD PPS claims about the total number of billing units of any discarded amount of a renal dialysis drug or biological product from a single-dose container or single-use package that is paid for under the ESRD PPS, using the JW modifier (or any successor modifier that includes the same data). We also proposed that ESRD facilities must document any discarded amounts in the beneficiary’s medical record. Additionally, we proposed to require ESRD facilities to report the JZ modifier for all such renal dialysis drugs and biological products with no discarded amounts, beginning no later than January 1, 2024. We proposed to codify these reporting requirements in regulation at § 413.198(b)(5) and (6). We proposed the amount of a renal dialysis drug or biological product from a single-dose container or single-use package that is administered would be billed on one line (reflected as billing units in the unit field) and any discarded amounts would be billed on a separate line with the JW modifier (reflected as billing units in the unit field). If a renal dialysis drug or biological product from a single-dose container or single-use package is administered and there are no discarded amounts, then we proposed that a single line would be billed on the claim form with the JZ modifier and the billing units in the unit field. Therefore, on all claims for renal dialysis drugs and biological products from single-dose containers or single-use packages payable under the ESRD PPS, we proposed that either the JW modifier would be used (on a separate line) to identify any discarded amounts or the JZ modifier (on the claim line with the administered amount) would be present to attest that there were no discarded amounts. We proposed that claims for renal dialysis drugs and biological products from single-dose containers or single-use packages that do not report either the JW or JZ modifier may be returned as un-processable until claims PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 76383 are properly resubmitted.33 We also stated that if this proposal is finalized, CMS would publish information about which HCPCS codes would be identified as single-dose containers or single-use package renal dialysis drugs and biological products subject to required reporting of the JW or JZ modifier. We also stated that we would plan to issue guidance regarding additional operational considerations and billing instructions specific to the reporting requirements for these products. We further clarified that, under our proposal, ESRD facilities would not be required to document in the beneficiary’s medical record when there are no discarded amounts. We reiterated in the CY 2024 ESRD PPS proposed rule that, as discussed in the CY 2023 PFS final rule (87 FR 69722), units for renal dialysis drugs and biological products that are bundled under the Medicare ESRD PPS would not be subject to the Medicare Part B discarded drug refund program and would continue to be exempted from the Medicare Part B discarded drug refund. We also clarified that for any oral-only drugs, as defined in § 413.234(a), to the extent that any such drugs are produced in single-dose containers or single-use packaging, this proposed reporting requirement would not apply until such drugs are paid for under the ESRD PPS. We stated that we believe this reporting requirement would enable CMS to obtain more reliable information about the extent to which the costs of providing renal dialysis drugs and biological products represent amounts that beneficiaries use as well as amounts that are discarded. We explained that we believe this is particularly important because under Medicare Part B, beneficiaries are responsible for paying a 20 percent coinsurance. As noted previously, nearly 40 percent of TDAPA expenditures in CY 2022 represented discarded amounts of renal dialysis drugs and biological products. Medicare beneficiaries, therefore, paid approximately $260,000 in copayments for these discarded amounts. While this currently represents a small amount of payments overall, the cost for discarded renal dialysis drugs and biological products is borne by a very small population of beneficiaries. We stated that it is important for CMS to 33 Under the basic requirements for all claims at § 424.32(a)(1), a claim must be filed with the appropriate intermediary or carrier on a form prescribed by CMS in accordance with CMS instructions. Chapter 1 of the Medicare Claims Processing Manual, section 70.2.3.1 states that submissions that are found to be incomplete or invalid are returned to the provider (RTP). E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76384 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations understand the full scope of expenditures, including expenditures that may be incurred by beneficiaries, for discarded amounts of renal dialysis drugs and biological products in the future, which may be more expensive or more widely used than the current drug that is being paid for using the TDAPA under the ESRD PPS. Thus, we did not propose in the CY 2024 ESRD PPS proposed rule to alter payments to ESRD facilities based on the amounts of discarded renal dialysis drugs and biological products reported, but noted that data collected through adoption of the JW and JZ modifier reporting requirements discussed in that section of the proposed rule may inform future payment policies, which would be proposed through future notice and comment rulemaking if appropriate. Based on our analysis of ESRD PPS claims, as well as the billing guidance in sections 8 and 17 of the Medicare Claims Processing Manual, we stated that we believe the JW modifier requirement reflects current practices for ESRD facilities and would not significantly increase burden for ESRD facilities. Additionally, we stated that we believe the JZ modifier requirement would not increase burden on ESRD facilities, because under the current guidance provided regarding use of the JW modifier, the ESRD facility should already have processes in place to determine, in the case of certain drugs and biological products, whether or not there are any discarded units from a single-dose container or single-use package, record discarded amounts in the patient medical record, and specify administered and discarded amounts on the claim form. Furthermore, we noted that while renal dialysis drugs and biological products that are paid under the ESRD PPS are not considered separately payable, ESRD facilities are permitted to bill and receive separate payment using the AY modifier for drugs and biological products that are not related to the treatment of ESRD. Although we noted that renal dialysis drugs and biological products paid under the ESRD PPS are not subject to the Medicare Part B drug refund program or the current JW or JZ reporting requirements, any separately payable drugs, or biological products that ESRD facilities bill for using the AY modifier would be subject to such policies under Medicare Part B. Therefore, we explained that we believe most ESRD facilities should already be reporting the JW and JZ modifiers in such circumstances and would reasonably be able to report these modifiers for renal dialysis drugs and VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 biological products as well. We invited comments on this assumption and on the proposed JW and JZ reporting requirements for the ESRD PPS. We received public comments on our proposal to require the reporting of the JW and JZ modifiers on ESRD PPS claims. The comments on our proposal and our responses are set forth below. Comment: Several commenters raised concerns about the lead time needed to operationalize the proposed changes to report the JW and JZ modifiers on ESRD PPS claims. Commenters expressed that a minimum of six months after the publication of detailed guidance would be needed to reprogram systems and train staff to comply with the proposed requirements. Other commenters noted that, especially for independent ESRD facilities, a longer lead time of one year may be appropriate. Specifically, commenters expressed that ESRD facilities would need to implement extensive changes to their policies and procedures, including aligning information from numerous independent medical record systems, and that such activities could not begin in earnest until detailed guidance about these reporting requirements is available. Several commenters urged CMS to commit to publishing guidance by January 1, 2024, and to modify the effective date of the proposed JW and JZ modifier reporting requirement to begin no earlier than January 1, 2025. Response: We thank commenters for their detailed comments regarding the operational changes needed to comply with the proposed reporting requirement. As commenters pointed out, although ESRD facilities may have processes in place to track amounts of discarded drugs, these processes may not be uniformly applied to all drugs. We recognize the importance of providing ESRD facilities the appropriate amount of time to adjust systems and train staff to expand the scope of drugs to which existing processes are applied. In light of the operational needs that commenters described, we are modifying the effective date of this reporting requirement to begin January 1, 2025, instead of January 1, 2024. Commenters indicated that for certain independent facilities, 1 year would provide sufficient time to train staff and update systems as needed to comply with the reporting requirements we are finalizing in this final rule. We believe extending the effective date of the requirement by 1 year strikes an appropriate balance between the need to collect this data and ESRD facilities’ need to make operational changes. We intend to publish detailed operational guidance PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 regarding this requirement no later than January 1, 2024. Comment: Many commenters stated that although they understand and agree with CMS’s need to better understand patient-specific costs associated with furnishing renal dialysis services to Medicare beneficiaries, they did not agree that the proposed collection of information about the JW and JZ modifiers on claims was appropriate or relevant. Several commenters expressed their belief that Medicare beneficiaries do not incur additional coinsurance for renal dialysis drugs and biological products that are paid under the ESRD PPS bundled payment, and therefore information about discarded amounts would not be relevant to ESRD PPS payment. Several commenters encouraged CMS to withdraw the proposed reporting requirement. Response: We appreciate the concerns raised by commenters. We are not withdrawing the proposed reporting requirement. We do not agree with the commenters’ assertion that discarded amounts of renal dialysis drugs and biological products paid under the ESRD PPS have no impact on payment, or that Medicare beneficiaries do not incur additional coinsurance for such discarded amounts. As we discussed in the CY 2024 ESRD PPS proposed rule, certain ESRD PPS payment adjustments, specifically the outlier adjustment and the TDAPA, are dependent upon the amount of renal dialysis drugs and biological products billed on an ESRD PPS claim. For renal dialysis drugs and biological products from single-dose containers or single-use packaging which are eligible for such payment adjustments, discarded amounts contribute directly to increased ESRD PPS payment as well as increased beneficiary copays. Furthermore, because the ESRD PPS base rate includes payment for renal dialysis drugs and biological products, discarded amounts of renal dialysis drugs and biological products from single-dose containers and single-use packaging contribute to overall increases in the ESRD PPS base rate and the amount of beneficiary coinsurance. Comment: Several commenters expressed concerns about the application of the proposed reporting requirements for home dialysis patients and for any oral-only drugs from singledose containers or single-use packaging that may, after January 1, 2025, be paid under the ESRD PPS. Commenters expressed concern about ESRD facilities’ ability to accurately document the discarded amounts of such drugs and biological products that are not administered at the ESRD facility. One E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations commenter noted that CMS’s current policy applies to a very limited number of patients and ESAs, but the proposed expansion of this policy could apply to a broader range of ESAs, calcimimetics, intravenous iron, and more products. The same commenter noted that most home dialysis patients use multi-use vials, to which the current JW requirement does not apply. Commenters urged CMS to exempt oralonly drugs and renal dialysis drugs and biological products used by home dialysis patients from the proposed reporting requirements or clarify that ESRD facilities can report the amount of such drugs in good faith. Response: We thank commenters for their detailed comments regarding the applicability of the proposed reporting requirement for renal dialysis drugs and biological products paid under the ESRD PPS that are administered outside of an ESRD facility. Consistent with our longstanding policy discussed in the CY 2016 ESRD PPS final rule (80 FR 69033), all renal dialysis service drugs and biological products prescribed for ESRD patients, including the oral forms of renal dialysis injectable drugs, must be reported by ESRD facilities, and the units reported on the monthly claim must reflect the amount expected to be taken during that month. Accordingly, with respect to reporting discarded amounts of renal dialysis drugs and biological products that are administered to home dialysis patients and oral forms of renal dialysis drugs and biological products, ESRD facilities should use the best information they have in determining the amount expected to be discarded in a given month, including fill information from the pharmacy and the patient’s plan of care. Consistent with current guidance in Chapter 17, section 40.1 of the Medicare Claims Processing Manual, ESRD facilities must bill the program using the JW modifier for the amount of ESAs appropriately discarded if the home dialysis patient must discard a portion of the ESA supply due to expiration of a vial, because of interruption in the patient’s plan of care, or unused ESAs on hand after a patient’s death. In response to the commenter’s statement about the use of multi-use vials by home dialysis patients, we are reiterating that discarded amounts should only be reported for drugs and biological products from single-dose containers or single-use packaging. ESRD facilities should not report discarded amounts of renal dialysis drugs or biological products from multi-use vials. Discarded amounts of renal dialysis VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 drugs and biological products from multi-use vials should not be billed on ESRD PPS claims. Comment: Many commenters requested that CMS provide additional clarity about how information about discarded drug amounts may be used in the future to inform payment policy. Commenters pointed out that packaging for drugs and biological products is controlled by manufacturers and FDA, rather than by ESRD facilities, and expressed concern that data collected under this proposed reporting policy would be used in the future to reduce ESRD PPS payments. Commenters stated that ESRD facilities are already incentivized, by the nature of the ESRD PPS, to minimize the amount of discarded renal dialysis drugs and biological products to the extent possible. One commenter stated that the underlying issue of waste can only be solved by holding the manufacturers responsible. Some commenters requested clarification on whether CMS intends to apply penalties for noncompliance with the JW and JZ modifier reporting requirements. Response: As we noted in the CY 2024 ESRD PPS proposed rule, we did not propose any reduction to ESRD PPS payments based on the amounts of discarded renal dialysis drugs and biological products reported using the JW modifier. As we noted in the CY 2024 ESRD PPS proposed rule, we intend to analyze information about discarded amounts in the broader context of changes to the ESRD PPS case-mix adjustments and may propose changes in future rulemaking if appropriate. We appreciate and agree with commenters’ assertions that ESRD facilities have limited control over the amount of discarded renal dialysis drugs and biological products, and that ESRD facilities are required to discard any remaining amounts from a singledose container or single-use packaging that are not used by the patient. As we discussed in the CY 2024 ESRD PPS proposed rule, we have previously established in the CY 2012 ESRD PPS final rule (76 FR 70243 through 70244) that ESRD facilities may only report units and charges for drugs and biological products purchased and may not bill for overfill units of drugs and biological products which exceed the amount indicated on the vial or package labeling. We recognize that manufacturers of renal dialysis drugs and biological products are ultimately responsible for decisions about packaging, which drive the magnitude of discarded amounts. As some commenters noted, current provisions at §§ 414.902 and 414.940, which require PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 76385 refunds from manufacturers for discarded amounts of drugs, apply only to separately payable drugs and biological products and do not apply to drugs and biological products paid for under the ESRD PPS. We believe that collecting more complete information about discarded amounts of renal dialysis drugs and biological products from single-dose containers and singleuse packaging will help CMS to more fully evaluate the impact that such discarded amounts have on both Medicare payments and beneficiary copayments. Lastly, we are reiterating that we are not applying any penalties for noncompliance with this reporting requirement for discarded amounts; however, as we noted in the CY 2024 ESRD PPS proposed rule (88 FR 42455), claims for renal dialysis drugs and biological products from single-dose containers or single-use packages that do not report either the JW or JZ modifier may be returned as unprocessable until the claims are properly resubmitted. Final Rule Action: We are finalizing the proposed reporting requirement for discarded amounts of renal dialysis drugs and biological products from single-dose containers and single-use packaging, with a modified effective date of January 1, 2025. Therefore, consistent with the current JW and JZ reporting requirements that were finalized in the CY 2023 PFS final rule for separately payable Part B drugs, we are finalizing that beginning no later than January 1, 2025, ESRD facilities must report information on ESRD PPS claims about the total number of billing units of any discarded amount of a renal dialysis drug or biological product from a single-dose container or single-use package that is paid for under the ESRD PPS, using the JW modifier (or any successor modifier that includes the same data). We are also finalizing that ESRD facilities must document any discarded amounts in the beneficiary’s medical record. Additionally, we are finalizing that ESRD facilities must report the JZ modifier for all such renal dialysis drugs and biological products with no discarded amounts, beginning no later than January 1, 2025. We are finalizing a modification to the proposed regulation text to clarify that for renal dialysis drugs and biological products from single-dose containers and single-use packaging that are administered to home dialysis patients or that are oral forms of renal dialysis injectable drugs, the ESRD facility should report the amount of such drugs and biological products expected to be discarded. We are finalizing our E:\FR\FM\06NOR2.SGM 06NOR2 76386 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations proposal to codify these reporting requirements in regulation at § 413.198(b)(5) and (6), with changes to indicate that the January 1, 2025, effective date applies to each of these requirements. ddrumheller on DSK120RN23PROD with RULES2 i. New Add-On Payment Adjustment for Certain New Renal Dialysis Drugs and Biological Products After the TDAPA Period Ends (1) Background on the TDAPA Section 217(c) of PAMA required the Secretary to establish a process for including new injectable and intravenous (IV) products into the ESRD PPS bundled payment as part of the CY 2016 ESRD PPS rulemaking. Therefore, in the CY 2016 ESRD PPS final rule (80 FR 69013 through 69027), we finalized a process based on our longstanding drug designation process that allowed us to include new injectable and intravenous products into the ESRD PPS bundled payment and, when appropriate, modify the ESRD PPS payment amount. We codified this process in our regulations at § 413.234. We finalized that the process is dependent upon the ESRD PPS functional categories, consistent with the drug designation process we have followed since the implementation of the ESRD PPS in 2011. As we explained in the CY 2016 ESRD PPS final rule (80 FR 69014), when we implemented the ESRD PPS, drugs and biological products were grouped into functional categories based on their action. This was done to add new drugs or biological products with the same functions to the ESRD PPS bundled payment as expeditiously as possible after the drugs are commercially available, so beneficiaries have access to them. As we stated in the CY 2011 ESRD PPS final rule, we did not specify all the drugs and biological products within these categories, because we did not want to inadvertently exclude drugs that may be substitutes for drugs we identified, and we wanted the ability to reflect new drugs and biological products developed or changes in standards of practice (75 FR 49052). 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 that if a new renal dialysis injectable or IV product falls within an existing functional category, the new injectable drug or IV VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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. We noted in that rule that the productivity-adjusted ESRDB market basket update is used to increase the ESRD PPS base rate annually and accounts for price changes of the drugs and biological products. We also finalized in the CY 2016 ESRD PPS final rule that, if the new renal dialysis injectable or IV product does not fall within an existing 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 codified 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 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. The new injectable or IV product is not eligible as an outlier service during the TDAPA period. We established that following the TDAPA period, 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. In the 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, we revised the 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. In addition, we revised § 413.234(b) and (c) to expand the TDAPA to all new renal dialysis drugs and biological products, rather than just those in new ESRD PPS functional categories. In the CY 2020 ESRD PPS final rule, we revised § 413.234(b) and added paragraph (e) to exclude from TDAPA eligibility generic drugs approved by FDA under section 505(j) of the Federal Food, Drug, and Cosmetic 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 PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 Type 5 in combination with Type 2, or Type 9 when the ‘‘parent NDA’’ is a Type 3, 5, 7, or 8, effective January 1, 2020. Under our current TDAPA policy at § 413.234(c), a new renal dialysis drug or biological product that falls within an existing ESRD PPS functional category is considered included in the ESRD PPS base rate and is paid the TDAPA for 2 years. After the TDAPA period, the ESRD PPS base rate will not be modified. If the new renal dialysis drug or biological product does not fall within an existing ESRD PPS functional category, it is not considered included in the ESRD PPS base rate, and it will be paid the TDAPA until sufficient claims data for rate setting analysis is available, but not for less than 2 years. After the TDAPA period, the ESRD PPS base rate will be modified, if appropriate, to account for the new renal dialysis drug or biological product in the ESRD PPS bundled payment. As discussed in the CY 2019 and CY 2020 ESRD PPS final rules, for new renal dialysis drugs and biological products that fall into an existing ESRD PPS functional category, the TDAPA helps ESRD facilities to incorporate new drugs and biological products and make appropriate changes in their businesses to adopt such products, provides additional payments for such associated costs, and promotes competition among the products within the ESRD PPS functional categories, while focusing Medicare resources on products that are innovative (83 FR 56935; 84 FR 60654). For new renal dialysis drugs and biological products that do not fall within an existing ESRD PPS functional category, the TDAPA is a potential pathway toward a potential ESRD PPS base rate modification (83 FR 56935). For the complete history of the TDAPA policy, including the pricing methodology, see the CY 2016 ESRD PPS final rule (80 FR 69023 through 69024), CY 2019 ESRD PPS final rule (83 FR 56932 through 56948), and CY 2020 ESRD PPS final rule (84 FR 60653 through 60681). (2) Request for Information in the CY 2023 ESRD PPS Proposed Rule In the CY 2023 ESRD PPS proposed rule (87 FR 38522 through 38523), we summarized the concerns of interested parties and issued a request for information about methods that could be used to develop an add-on payment adjustment for certain new renal dialysis drugs and biological products after the end of the TDAPA. We explained that since 2019, dialysis associations and pharmaceutical representatives have expressed concerns E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations to CMS about payment following the TDAPA period for new renal dialysis drugs and biological products that are paid for using the TDAPA. We noted that these interested parties have asserted that unless money is added to the ESRD PPS base rate for these drugs and biological products, like what occurred with calcimimetics (85 FR 71406 through 71410), then it is unlikely that ESRD facilities would be able to sustain the expense of these drugs and biological products when the TDAPA period ends. Further, these interested parties cautioned that uncertainty about payment could affect ESRD facility adoption of these drugs and biological products during the TDAPA period. We noted that to date, calcimimetics are the only renal dialysis drugs or biological products that have been paid for using the TDAPA and incorporated into the ESRD PPS bundled payment following the TDAPA payment period. We stated that there have been no other renal dialysis drugs or biological products that have completed their TDAPA payment period, and as a result, CMS does not yet have data on other drugs or biological products to evaluate the specific risks and access challenges that interested parties have raised. We also discussed that, as mentioned in the CY 2019 (83 FR 56941) and CY 2020 (84 FR 60672 and 60693) ESRD PPS final rules, many commenters have suggested a rate-setting exercise at the end of the TDAPA period for all new renal dialysis drugs and biological products. We responded to those comments by noting that we do not believe adding dollars to the ESRD PPS base rate would be appropriate for new drugs that fall into the ESRD PPS functional categories, given that the purpose of the TDAPA for these drugs is to help ESRD facilities incorporate new drugs and biological products and make appropriate changes in their businesses to adopt such products, provide additional payments for such associated costs, and promote competition among the products within the ESRD PPS functional categories. In addition, we explained that the ESRD PPS base rate already includes money for renal dialysis drugs and biological products that fall within an existing ESRD PPS functional category. We stated that under a PPS, Medicare makes payments based on a predetermined, fixed amount that reflects the average patient, and that there would be patients whose treatment costs at an ESRD facility would be more or less than the ESRD PPS payment amount. We noted that a central objective of the ESRD PPS VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 and of prospective payment systems in general is for ESRD facilities to be efficient in their resource use. We also noted that price changes to the ESRD PPS bundled payment are updated annually by the productivityadjusted ESRDB market basket update, which includes a pharmaceutical cost category weight. In addition, we explained that our analysis of renal dialysis drugs and biological products paid for under the ESRD PPS has found costs and utilization to have decreased over time for some high volume formerly separately billable renal dialysis drugs, relative to overall ESRDB market basket growth. Therefore, we stated that we believe that any potential methodology for an add-on payment adjustment in these circumstances should adapt to changes in price and utilization over time. We noted that section 1881(b)(14)(D)(iv) of the Act provides that the ESRD PPS may include such other payment adjustments as the Secretary determines appropriate, such as a payment adjustment—(1) for pediatric providers of services and renal dialysis facilities; (2) by a geographic index, such as the index referred to in section 1881(b)(12)(D), as the Secretary determines to be appropriate; and (3) for providers of services or renal dialysis facilities located in rural areas. Regarding the patient access concerns that we discussed in the CY 2023 ESRD PPS proposed rule, we stated that we were considering whether it would be appropriate to establish an add-on payment adjustment for certain renal dialysis drugs and biological products in existing ESRD PPS functional categories after their TDAPA period ends. We noted that any add-on payment adjustment would be subject to the Medicare Part B beneficiary coinsurance payment under ESRD PPS. In the CY 2023 ESRD PPS proposed rule, we presented four potential methods that we were considering, which we noted could be used to develop an add-on payment adjustment for these drugs and biological products. We noted that the methods presented differed in terms of which formerly separately billable renal dialysis drugs and biological products would be considered for methodological inclusion in a potential add-on payment adjustment. We further noted that under the potential options presented, we would apply a reconciliation methodology only when an add-on payment adjustment would align resource use with payment for a renal dialysis drug or biological product in an existing ESRD PPS functional category. PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 76387 Following the discussion in the CY 2023 ESRD PPS proposed rule about these potential methodologies, we issued a request for information within that proposed rule (87 FR 38523) to seek feedback from the public on the need for an add-on payment adjustment of this kind and the potential methodologies for calculating such an add-on payment adjustment. We noted that while we would not be responding to specific comments submitted in response to this RFI, we intended to use this input to inform future policy development. We stated that any potential payment policies related to this RFI would be proposed through a separate notice and comment rulemaking. We provided a high-level summary of responses to this RFI in the CY 2023 ESRD PPS final rule (87 FR 67219 through 67220) and noted that we would publish more detailed information about the commenters’ recommendations in a future posting on the CMS website located at the following link: https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/ESRDpayment/Educational_ Resources. We noted that we received 27 public comments regarding our RFI, including from large, small, and nonprofit dialysis organizations; an advocacy organization; a coalition of dialysis organizations; a large, nonprofit health system; and MedPAC. In the CY 2023 ESRD PPS final rule, we stated that most commenters expressed their belief that an add-on payment adjustment of this nature is necessary to support the adoption of new renal dialysis drugs and biological products, and that most commenters stated that they supported CMS allowing all new renal dialysis drugs and biological products to be eligible to receive an add-on payment adjustment after the TDAPA period ends. However, we noted that MedPAC opposed this type of add-on payment adjustment by stating that it would undermine competition with existing drugs in the ESRD PPS bundled payment and encourage higher launch prices. We also noted that MedPAC recommended that CMS limit the add-on payment adjustment to new renal dialysis drugs and biological products that show a substantial clinical improvement compared with existing products reflected in the ESRD PPS bundled payment. We further noted in the CY 2023 ESRD PPS final rule that several commenters stated they supported reconciling the expenditure of the new renal dialysis drug or biological product with any reduction in expenditures for other formerly separately billable renal E:\FR\FM\06NOR2.SGM 06NOR2 76388 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 dialysis drugs that are clinically or statistically related to the introduction of the new renal dialysis drug in the bundle. Several commenters expressed their belief that the FDA-approved label should be used to determine the primary indication and clinical association, rather than end-action effect. MedPAC expressed opposition to calculating any add-on payment adjustment for new renal dialysis drugs and biological products in existing ESRD PPS functional categories after the TDAPA period ends but noted that if an add-on payment adjustment were applied, it would be appropriate to use an offset, like the approach used with the TPNIES, to avoid duplicative payment for renal dialysis services already included in the ESRD PPS base rate. (3) Add-On Payment Adjustment for Certain New Renal Dialysis Drugs and Biological Products After the TDAPA Period Ends As discussed previously, section 1881(b)(14)(D)(iv) of the Act provides that the ESRD PPS may include such other payment adjustments as the Secretary determines appropriate. Based on the public comments received regarding the RFI in the CY 2023 ESRD PPS proposed rule,34 we stated in the CY 2024 ESRD PPS proposed rule (88 FR 42458) that we believe it is appropriate to propose, beginning January 1, 2024, an add-on payment adjustment for new renal dialysis drugs and biological products in existing ESRD PPS functional categories after the end of the TDAPA period. We noted that this proposed payment adjustment would not apply to new renal dialysis drug or biological products used to treat or manage a condition for which there is not an ESRD PPS functional category, because we have already established a policy to modify the ESRD PPS base rate for such products, if appropriate, after the TDAPA period ends, to account for the products in the ESRD PPS bundled payment (§ 413.234(c)(2)(i)). We stated that we agreed with commenters who expressed concerns that the ESRD PPS’ current mechanisms may not fully account for the costs of these new drugs. We noted that several commenters asserted that the outlier adjustment and the ESRDB market basket updates cannot adequately account for these costs, and several organizations noted that if renal dialysis drugs and biological products with significant costs were adopted under the 34 https://www.cms.gov/files/document/cy-2023esrd-pps-payment-after-tdapa-rfi-summarycomments.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 outlier policy, the threshold to qualify for outlier payments would increase dramatically, thus adversely affecting access to products traditionally eligible for the outlier payment adjustment. We described comments which expressed that this increase in the outlier threshold may also raise health equity concerns because, as we noted in the CY 2023 ESRD PPS final rule (87 FR 67170 through 67171), the outlier adjustment protects access for beneficiaries whose care is unusually costly. We stated that we recognize that if the outlier threshold were to increase significantly due to significant use of a new renal dialysis drug or biological product after the end of the TDAPA, then ESRD facilities might be incentivized to avoid treating costlier beneficiaries. Additionally, we described several comments that raised concerns about the ability of the ESRDB market basket update to account for the cost of new renal dialysis drugs and biological products. These commenters referred to a Moran study 35 suggesting that the drug price proxies used in the ESRDB market basket have not adequately accounted for the costs of non-ESA drugs under existing functional categories. We explained that while we continue to believe that the market basket price proxies are the best available information for projecting the future price growth of renal dialysis drugs and biological products, and that they provide an adequate mechanism for projecting future ESRD PPS price growth, we recognize that there is additional uncertainty about future trends in the expenditures for new renal dialysis drugs and biological products, including trends in pricing and utilization of such drugs and any functionally equivalent substitutes such as generic drugs.36 We stated that we believe these trends could be more effectively analyzed by collecting additional ESRD facility cost data following the 2-year TDAPA period. We stated that we recognize that although the TDAPA for drugs and biological products in existing ESRD PPS functional categories enables ESRD facilities to incorporate new renal dialysis drugs and biological products into their businesses, additional support may be needed to assure continued access to such drugs and biological products for Medicare beneficiaries and to support ESRD facilities’ long-term 35 Kidney Care Partners. August 4, 2022. Comment Letter. https://kidneycarepartners.org/ wp-content/uploads/2022/08/KCP-PPS-CommentLetter-Part-1-Final.pdf. Accessed May 16, 2023. 36 https://www.fda.gov/drugs/frequently-askedquestions-popular-topics/generic-drugs-questionsanswers. PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 planning and budgeting. We also recognized the importance of providing an appropriate pathway for ESRD facilities to incorporate new renal dialysis drugs and biological products into their business operations. We noted that in the CY 2019 ESRD PPS final rule in which we first established the 2-year TDAPA period for new renal dialysis drugs and biological products in an existing ESRD PPS functional category (83 FR 56934), we acknowledged that ESRD facilities have unique circumstances regarding incorporation of new drugs and biological products into their standards of care. For example, we stated that when new drugs are introduced to the market, ESRD facilities need to analyze their budget and engage in contractual agreements to accommodate the new therapies in their care plans. We noted that newly launched drugs and biological products can be unpredictable regarding their uptake and pricing, which makes these decisions challenging for ESRD facilities. Furthermore, we stated that practitioners should have the ability to evaluate the appropriate use of a new product and its effect on patient outcomes. We noted that we agreed this uptake period would be best supported by the TDAPA pathway because it would help ESRD facilities transition or test new drugs and biological products in their businesses under the ESRD PPS. In the CY 2024 proposed rule, we stated that we continue to believe the 2-year TDAPA period is appropriate and achieves its stated goals. However, we also recognized that continuity and predictability is an integral part of ESRD facilities’ ongoing business operations. We stated that we agree with commenters’ concerns that a sudden decrease in payments after the end of the TDAPA for these products could result in a decrease in access for these new renal dialysis drugs and biological products. We therefore proposed to establish a new transitional add-on payment adjustment that would provide an appropriate transition of the level of payment following the TDAPA period for these drugs. For ease of reference, we proposed to refer to this add-on payment adjustment as the post-TDAPA add-on payment adjustment. We stated that our goals for the post-TDAPA addon payment adjustment are to support Medicare beneficiaries’ access to new renal dialysis drugs or biological products that are used to treat or manage a condition for which there is an ESRD PPS functional category and that are therefore considered included in the ESRD PPS bundled payment. We E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations also stated that we want to support ESRD facilities’ long-term planning with respect to continuing to budget and plan for new renal dialysis drugs and biological products that ESRD facilities have incorporated into their businesses during the TDAPA period. In addition, we explained that in accordance with the goals of prospective payment under the ESRD PPS, our goal for the postTDAPA add-on payment adjustment is to incentivize ESRD facilities to be efficient in the use of resources. We proposed to calculate the postTDAPA add-on payment adjustment following the methodology described in the following subsections for any new renal dialysis drug or biological product that is paid for using the TDAPA under § 413.234(c)(1). We proposed that the post-TDAPA add-on payment adjustment would be applied for a period of 3 years following the end of the TDAPA period for those products. We stated that we believe a 3-year payment period would provide sufficient time for CMS to analyze cost reports that include costs for the new renal dialysis drug or biological product paid for using the TDAPA under the ESRD PPS, to incorporate changes as appropriate to the ESRDB market basket price proxies. The ESRDB market basket is a fixed-weight, Laspeyres-type price index. A Laspeyres-type price index measures the change in price, over time, of the same mix of goods and services purchased in the base period. We stated that the proposed 3-year payment period for the post-TDAPA add-on payment adjustment would allow CMS to evaluate how the new drug or biological product affects the overall mix of renal dialysis drugs and biological products in the ESRDB market basket and to determine the appropriate price proxies for such new drug or biological product. We noted that for new renal dialysis drugs and biological products that are not considered included in the ESRD PPS base rate, the TDAPA is paid until sufficient claims data for rate setting analysis for the new renal dialysis drug or biological product is available, but not for less than 2 years. Similarly, as described earlier in this paragraph, we proposed a 3-year payment period for the post-TDAPA add-on payment adjustment, which would enable the collection and analysis of sufficient Medicare cost report information and would address the concerns that commenters raised about the effectiveness of the ESRDB market basket price proxies to reflect the prices of new renal dialysis drugs and biological products going forward by VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 allowing CMS to incorporate data showing trends in use over an adequate period of time. Additionally, we stated that we believe a 3-year period for the post-TDAPA add-on payment adjustment would be appropriate and consistent with the transition period that we finalized at the beginning of the ESRD PPS, when ESRD facilities were transitioned from receiving payments under the composite rate payment system to receiving payments under the ESRD PPS (79 FR 49162). We finalized the transition period for CY 2011 through CY 2013 to comply with the requirement of section 1881(b)(14)(E)(i) of the Act to provide a 4-year phase-in of the payment amount under the ESRD PPS, where full implementation of the ESRD PPS payment would occur beginning in the fourth year, CY 2014. We proposed a similar timeline to provide an appropriate transition for new renal dialysis drugs and biological products in existing ESRD PPS functional categories, which are not eligible for a modification to the ESRD PPS base rate. Based on the experience of ESRD facilities during the 4-year phase-in from CY 2011 to CY 2014, ESRD facilities would be familiar with this timeline for phasing in major changes that impact their long-term planning and budgeting. Lastly, in the interest of transparency, we noted that this 3-year period would provide time for analysis of utilization data for public awareness about the potential need for refinements to the ESRD PPS. Therefore, we proposed to calculate and apply the post-TDAPA add-on payment adjustment for a period of 3 years following the end of the TDAPA period, with no post-TDAPA add-on payment adjustment calculated beginning in the 4th year. We proposed that this post-TDAPA add-on payment adjustment would not be budget neutral, as discussed later in this section of the final rule. We noted that this post-TDAPA add-on payment adjustment, if finalized, would be calculated for Korsuva®, the only renal dialysis drug currently receiving the TDAPA, and that payment of this postTDAPA add-on payment adjustment, if finalized, would begin April 1, 2024, at the end of the TDAPA period for Korsuva®. We received several public comments on our proposal to establish a postTDAPA add-on payment adjustment beginning in CY 2024. The comments on our proposal and our responses are set forth below. Comment: Many commenters, including LDOs, drug manufacturers, patient advocacy organizations, coalitions of dialysis organizations, and PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 76389 patients, expressed support for establishing a post-TDAPA add-on payment adjustment. Commenters expressed that adequate payment is necessary to support Medicare beneficiaries’ access to both current and future new and innovative renal dialysis drugs and biological products. Response: We appreciate the support for the proposed post-TDAPA add-on payment adjustment. We agree with commenters about the importance of adequate payment. As we discussed in the CY 2024 ESRD PPS proposed rule and in the following section of this final rule, we believe the proposed payment methodology provides a significant level of payment that adequately supports beneficiaries’ access to drugs and biological products after the TDAPA period ends, while sharing a significant portion of the cost with ESRD facilities, thereby incentivizing ESRD facilities to allocate resources efficiently. Comment: MedPAC reiterated several concerns that it previously raised in response to the RFI on this topic in the CY 2023 ESRD PPS proposed rule. First, MedPAC reiterated its strong opposition to the establishment of a post-TDAPA add-on payment adjustment as proposed, stating that such a payment adjustment would be duplicative of payment under the ESRD PPS base rate. MedPAC specifically identified that when Mircera® (an ESA) became available in 2015, beneficiary access to the new drug was not impeded when the agency included it in the ESRD PPS bundled payment (in a budget-neutral manner). Between 2015 and 2020, use of Mircera® significantly and steadily increased. MedPAC further noted that, with respect to Mircera®, one LDO announced its intent to have more than 70 percent of the company’s ESA patients (110,000 patients) switched to Mircera® (from epoetin alfa) by the end of the first quarter of 2016, and sources suggest that this LDO reduced its total ESA costs. In addition, MedPAC also reiterated its concerns that CMS would not apply a clinical superiority standard when implementing the post-TDAPA payment adjustment policy and stated that beneficiaries and taxpayers would pay for a new drug without evidence that the new product is an advance in medical technology that substantially improves beneficiaries’ outcomes relative to technologies in the ESRD PPS. Response: We thank MedPAC for its comments. We recognize and agree with MedPAC about the importance of avoiding making payments under a post-TDAPA add-on payment adjustment that would be duplicative of payment under the ESRD PPS base rate E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76390 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations or that would undermine competition between new and existing renal dialysis services. We anticipate that the postTDAPA add-on payment adjustment will provide appropriate payment that supports Medicare beneficiaries’ access to new renal dialysis drugs and biological products, create stability in payments to ESRD facilities after the end of the TDAPA, and appropriately align incentives to promote competition between new and existing renal dialysis services. The proposed post-TDAPA add-on payment adjustment would not be duplicative of payment under the ESRD PPS base rate, because it would specifically support access to new renal dialysis services at the level observed during the most recent 12 months, providing a glidepath for new renal dialysis drugs and biological products in existing functional categories following the TDAPA, since under § 413.234(c)(1), there is no modification to the ESRD PPS base rate. As further discussed below, the proposed application of a risk-sharing methodology would account for existing substitute drugs and biological products included in the ESRD PPS. There are several important distinctions between the historical inclusion of Mircera® into the ESRD PPS bundled payment and the inclusion of renal dialysis drugs and biological products in existing ESRD PPS functional categories that receive TDAPA payment, for which we have proposed to calculate the post-TDAPA add-on payment adjustment beginning in CY 2024. First, when Mircera® was incorporated into the ESRD PPS bundled payment, CMS had not yet established any TDAPA policies, which are integral to the current ESRD PPS drug designation process. As we previously stated, section 217(c) of PAMA required the Secretary to establish a process for including new injectable and intravenous products into the ESRD PPS bundled payment, which CMS finalized in the CY 2016 ESRD PPS final rule (80 FR 69013 through 69027) and codified in our regulations at § 413.234. Under current law, new renal dialysis drugs and biological products in existing functional categories which qualify for TDAPA payment are generally paid for using the TDAPA for a period of 2 years, after which such drugs and biological products are considered included in the ESRD PPS base rate with no modification to the base rate. As we stated in the CY 2024 ESRD PPS proposed rule, we recognize continuity and predictability are integral parts of ESRD facilities’ ongoing business operations. We stated that we VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 agree with commenters’ concerns that a sudden decrease in payments after the end of the TDAPA for these products could result in a decrease in access for these new renal dialysis drugs and biological products. We therefore proposed to establish a new transitional add-on payment adjustment that would provide an appropriate transition of the level of payment following the TDAPA period for these drugs. Importantly, we note that under current regulations at § 413.234, Mircera® would not have been eligible for payment under the TDAPA, because it was approved under an NDA type that is excluded from TDAPA eligibility under § 413.234(e). In contrast to renal dialysis drugs and biological products that are paid for using the TDAPA, Mircera® was seen as a direct and less expensive substitute for existing renal dialysis drugs included in the ESRD PPS, specifically Amgen’s anemia management drug Epogen®.37 Accordingly, as MedPAC noted in its comment letter, ESRD facilities broadly adopted Mircera® into their business practices without the need for additional payment. However, as explained earlier, we do not consider Mircera® to be an appropriate comparison to new renal dialysis drugs and biological products for which we propose to calculate the post-TDAPA add-on payment adjustment, because under current regulation Mircera® would not be eligible to receive either the TDAPA or a post-TDAPA add-on payment adjustment. As we stated in the CY 2024 ESRD PPS proposed rule, we anticipate that the structure of the proposed postTDAPA payment methodology will serve to incentivize the use of drugs that represent a substantial improvement over existing drugs, which will promote competition between new and existing renal dialysis drugs and biological products and drive down prices of such new renal dialysis drugs and biological products over time. We expect that our methodology for the post-TDAPA addon payment adjustment will incentivize ESRD facilities’ efficient use of resources, because payment for an individual claim will not be dependent on individual utilization of the new renal dialysis drug or biological product. Accordingly, we anticipate that under our methodology, for new renal dialysis drugs and biological products that are not a substantial clinical improvement over existing renal dialysis drugs and biological products, utilization will diminish over time and 37 https://www.ncbi.nlm.nih.gov/pmc/articles/ PMC4090042/. PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 the amount of the post-TDAPA add-on payment adjustment will decline accordingly. In addition, we stated in the CY 2024 ESRD PPS proposed rule that we recognize that continuity and predictability is integral to ESRD facilities’ operations, and we do not think that this principle applies only to renal dialysis drugs and biological products that show a substantial clinical improvement. As we previously explained in the CY 2023 ESRD PPS final rule (87 FR 67189), the intent of the ESRD PPS functional category framework is to be broad and to facilitate adding new drugs to the therapeutic armamentarium of the treating physician. As we further explained in the CY 2023 ESRD PPS final rule, the functional category structure helps to ensure the ESRD patient has broad access to all renal dialysis service drugs, which is a distinct benefit to the patient. In addition, the structure of the functional categories helps to ensure the treating physician has a broad array of drugs to meet the specific, individual needs of each ESRD patient, including differing pharmaceutical profiles, comorbidities, contra-indications with other drugs the patient may be taking, and personal patient preference (87 FR 67189). We do not think that limiting the post-TDAPA add-on payment adjustment based on CMS’s determination of substantial clinical improvement would align with this stated intent of the ESRD PPS functional category framework to support broad access to all renal dialysis service drugs. We further note that the current TDAPA exclusion criteria under § 413.234(e) consider FDA’s determination of the drug’s NDA type or approval under section 505(j) of the Federal Food, Drug, and Cosmetic Act, which is less subjective than a determination of substantial clinical improvement. Therefore, we continue to be of the view that the proposed methodology most appropriately balances the need to provide adequate payment with the concerns that MedPAC raised regarding duplicative payment and clinical superiority or substantial clinical improvement. Comment: Many commenters expressed concerns about the proposed 3-year duration for the post-TDAPA add-on payment adjustment. Several commenters stated that the 3-year period would create a new payment cliff at the end of the 3-year post-TDAPA period and advocated for a permanent, non-budget neutral payment adjustment. Response: We appreciate the concerns that commenters raised about the E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations proposed 3-year period for the postTDAPA add-on payment adjustment. We recognize that the policy would not permanently maintain increased payments for new renal dialysis drugs and biological products that receive the TDAPA, and we do not believe that such a permanent increase in payments would be appropriate. The TDAPA for renal dialysis drugs and biological products in existing functional categories is inherently transitional in nature and therefore not permanent. As we discussed in the CY 2019 and CY 2020 ESRD PPS final rules (83 FR 56935; 84 FR 60654), for new renal dialysis drugs and biological products that fall into an existing ESRD PPS functional category, the TDAPA helps ESRD facilities to incorporate the new drugs and biological products and make appropriate changes in their businesses to adopt such products. We also explained that the TDAPA provides additional payments for such associated costs and promotes competition among the products within the ESRD PPS functional categories, while focusing Medicare resources on products that are innovative. Accordingly, we proposed a post-TDAPA add-on payment adjustment beginning in CY 2024 that is similarly transitional in nature and which provides a glidepath for inclusion of such new renal dialysis drugs and biological products into the ESRD PPS. In the CY 2024 ESRD PPS proposed rule, we stated that a 3-year period for the post-TDAPA add-on payment adjustment would be consistent with the transition period that was finalized at the beginning of the ESRD PPS, when ESRD facilities were transitioned from receiving payments under the composite rate payment system to receiving payments under the ESRD PPS (79 FR 49162). We finalized the transition period for CY 2011 through CY 2013, with full implementation in CY 2014, to comply with the requirement of section 1881(b)(14)(E)(i) of the Act to provide a 4-year phase-in of the payment amount under the ESRD PPS. We proposed a similar timeline for the post-TDAPA add-on payment adjustment to provide an appropriate transition for new renal dialysis drugs and biological products in existing ESRD PPS functional categories, which are not eligible for a modification to the ESRD PPS base rate. Comment: MedPAC encouraged CMS to clarify why an additional period of 3 years is appropriate for the proposed post-TDAPA add-on payment adjustment, as compared to the established 2-year TDAPA period for new renal dialysis drugs and biological VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 products in existing functional categories. MedPAC stated that a postTDAPA period is not needed to collect and analyze cost report data, and that if CMS has concerns about the price proxies for ESRD drugs used in the ESRDB market basket, CMS can conduct the necessary analyses, without creating the post-TDAPA add-on payment adjustment policy. In addition, MedPAC questioned the utility of current cost reports to evaluate whether the ESRDB market basket accounts for price changes of new ESRD drugs, since Medicare cost reports do not require providers to report the cost of each new item or product paid under a TDAPA or a TPNIES. Response: As we previously discussed, we proposed to pay the postTDAPA add-on payment adjustment for a period of 3 years following the payment of TDAPA for 2 years, to allow more complete cost reporting information to become available. CMS routinely rebases and revises the ESRDB market basket and price proxies, usually every four to five years, incorporating more recent cost report information. We agree with MedPAC that a post-TDAPA period is not strictly necessary to collect more recent cost report information. However, as we stated in the CY 2024 ESRD PPS proposed rule, we think that providing a post-TDAPA add-on payment adjustment during this period would provide stability in ESRD PPS payments while CMS analyzes such information. The existing 2-year TDAPA period provides useful information about ESRD facilities’ spending on drugs and biological products paid for using the TDAPA, but due to lags in the timing of when ESRD facilities submit their cost reports, such data would not become available in ESRD facilities’ cost report information until after the end of the TDAPA period. For example, CMS generally uses Medicare cost report data that lags by approximately 3 to 4 years prior to the rulemaking year. Therefore, complete Medicare cost report data for CY 2023 or CY 2024 could be used to consider changes to market basket cost categories, cost weights, and price proxies for the CY 2026 or CY 2027 rulemaking cycle. As proposed, the post-TDAPA add-on payment adjustment would begin to be paid on April 1, 2024, based on utilization of Korsuva®, the only renal dialysis drug currently receiving the TDAPA, and would end no later than March 31, 2027. CMS would be able to analyze Medicare cost report data for CY 2023 and CY 2024 to consider changes to the ESRDB market basket for CY 2027 rulemaking, if appropriate. The PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 76391 proposed post-TDAPA add-on payment adjustment would provide appropriate payment stability for ESRD PPS payments to ESRD facilities during the intervening years, which would support beneficiaries’ continued access to new renal dialysis drugs and biological products. With respect to the question of the utility of Medicare cost report data, we think that more recent cost reports, which would include information about total drug spending across categories, would provide meaningful information about how new renal dialysis drugs and biological products affect ESRD facilities’ costs. Although TDAPA and TPNIES costs are not reported separately, if spending for new renal dialysis drugs and biological products is driving significant increases in ESRD facilities’ costs, more recent Medicare cost report data will inform CMS’s understanding of how such spending affects the ESRDB market basket composition. We would also evaluate Part B spending data to determine the mix of the types of drugs and the appropriate price proxy based on changes to the relative mix of drugs used in the ESRD facility setting. Nevertheless, we recognize the limitations of the current Medicare cost reports that MedPAC identified, and we may consider changes in the future to improve the data that we collect through the Medicare cost report. Final Rule Action: After consideration of the comments, we are finalizing as proposed to establish, beginning for CY 2024, a post-TDAPA add-on payment adjustment for any new renal dialysis drug or biological product that is considered included in the ESRD PPS base rate that is paid for using the TDAPA under § 413.234(c)(1). This post-TDAPA add-on payment adjustment will be applied for a period of 3 years following the end of the TDAPA period for those products. (a) Calculation of the Post-TDAPA AddOn Payment Adjustment As discussed earlier in this section of the final rule, we proposed to establish a new add-on payment adjustment for certain new renal dialysis drugs and biological products in existing ESRD PPS functional categories after the end of the TDAPA period. In the CY 2024 ESRD PPS proposed rule, we proposed to apply the post-TDAPA add-on payment adjustment to all ESRD PPS payments beginning at the end of a new renal dialysis drug or biological product’s TDAPA period. Specifically, we proposed that the post-TDAPA addon payment adjustment would begin 8 calendar quarters after the beginning of E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76392 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations the first calendar quarter in which TDAPA payment is made for the new renal dialysis drug or biological product in an existing ESRD PPS functional category and would end no later than the 12th calendar quarter after the last calendar quarter in which TDAPA payment is made. We stated that we believe our calculation of the postTDAPA add-on payment adjustment would be the most appropriate to address the patient access concerns we discussed in the CY 2023 ESRD PPS proposed rule and in this section of the final rule, and the most consistent with the principles of prospective payment. We stated that this proposal would apply the patient-level adjustment factors to the post-TDAPA add-on payment adjustment amount paid on each claim, which would ensure that ESRD PPS payment would support access to new renal dialysis drugs and biological products for beneficiaries with conditions that are costlier to treat, in alignment with our goals as stated earlier in this final rule. We proposed to codify the payment of the post-TDAPA add-on payment adjustment as part of the per treatment payment amount at § 413.230(f). We proposed to codify the methodology for calculating the postTDAPA add-on payment adjustment at § 413.234(g). We proposed to make additional changes under § 413.234(b) and (c) to address payment of the postTDAPA payment adjustment. In determining the calculation of the post-TDAPA add-on payment adjustment, we considered the comments that we received regarding the RFI in the CY 2023 ESRD PPS proposed rule. Some commenters expressed that new and innovative drugs may only be used by a small percentage of the dialysis population and suggested that an add-on payment adjustment should address patientspecific needs to support access. First, we considered calculating the post-TDAPA add-on payment adjustment as the average cost for patients that used the new renal dialysis drug or biological product that was previously paid for using the TDAPA under the ESRD PPS and applying the post-TDAPA add-on payment adjustment only to claims that include the new renal dialysis drug or biological product. However, we were concerned that such an approach would not align with the principles of prospective payment under the ESRD PPS. As we noted previously, a central objective of the ESRD PPS (and of prospective payment systems in general) is for ESRD facilities to be efficient in their resource use. Under a PPS, Medicare makes payments based on a predetermined, VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 fixed amount that reflects the average patient, and CMS acknowledges there will be patients whose treatment costs at an ESRD facility will be more or less than the ESRD PPS payment amount. Additionally, we were concerned that such an approach would result in a substantial cost burden for beneficiaries who use the new renal dialysis drug or biological product, because they incur a 20 percent coinsurance under Part B for renal dialysis services. We stated that we do not believe this approach would align with our priorities to reduce drug costs for Medicare beneficiaries. In contrast, our proposed methodology would apply the post-TDAPA add-on payment adjustment to all ESRD PPS payments, which would result in a minimal increase in per-treatment coinsurance amounts for all beneficiaries. As discussed later in this section, we proposed to apply the ESRD PPS patient-level adjustments to the post-TDAPA add-on payment adjustment for each treatment. Next, we considered applying the post-TDAPA add-on payment adjustment based only on claims from ESRD facilities that used the new renal dialysis drug or biological product during the TDAPA period. However, like the previous option, we stated that we believe limiting application of this add-on payment adjustment to claims from ESRD facilities that include the new renal dialysis drug or biological product would be inconsistent with the principles of prospective payment. As we discussed in the CY 2011 ESRD PPS final rule, there are patients whose medical treatment results in more costly care as well as those with less costly care, and the ESRD PPS bundled base rate reflects Medicare payment for the average ESRD patient (75 FR 49045). Further, we were concerned that limiting the post-TDAPA add-on payment adjustment to claims from ESRD facilities that use the new renal dialysis drug or biological product could result in substantial overestimation of the post-TDAPA addon payment adjustment, if more ESRD facilities begin using the new renal dialysis drug or biological product. As we discuss later in this final rule, we proposed to apply this post-TDAPA add-on payment adjustment in a nonbudget neutral manner. Therefore, we stated in the CY 2024 ESRD PPS proposed rule that we were concerned that an overestimation of the postTDAPA add-on payment adjustment could result in an inappropriate increase in Medicare expenditures. As we discussed in the CY 2019 and CY 2020 ESRD PPS final rules (83 FR PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 56935; 84 FR 60654), for new renal dialysis drugs and biological products that fall into an existing ESRD PPS functional category, the TDAPA helps ESRD facilities to incorporate the new drugs and biological products and make appropriate changes in their businesses to adopt such products, provides additional payments for such associated costs, and promotes competition among the products within the ESRD PPS functional categories, while focusing Medicare resources on products that are innovative. We stated that we believe after the end of the TDAPA period, ESRD facilities will have made appropriate changes in their business models to adopt such products, and therefore any approach to a post-TDAPA add-on payment adjustment should apply equally to all ESRD PPS treatments, in order to apply the appropriate incentive structures for ESRD facilities’ utilization of renal dialysis drugs and biological products and to continue to promote competition among the products within the ESRD PPS functional categories, including the new renal dialysis drug or biological product that was previously paid for using the TDAPA under the ESRD PPS. Furthermore, we stated that we believe that such an approach would help to support access to new renal dialysis drugs and biological products to the widest scope of beneficiaries. This is in line with CMS’s commitment to advance health equity by supporting access to renal dialysis services. Accordingly, we proposed to apply the post-TDAPA add-on payment adjustment to each ESRD PPS treatment, and to adjust it for patient characteristics. In other words, the postTDAPA add-on payment adjustment would be multiplied by the ESRD PPS patient-level adjustments under § 413.235. We stated that we believe this approach would appropriately adjust aggregate ESRD PPS payment to account for the new renal dialysis drugs and biological products in a way that is consistent with the principles of prospective payment and would support beneficiary access to new renal dialysis drugs and biological products by recognizing the additional patientspecific needs associated with the existing ESRD PPS case-mix adjusters. We noted that to calculate an appropriate post-TDAPA add-on payment adjustment, we would apply a case-mix standardization factor to the post-TDAPA add-on payment adjustment amount as discussed in the following paragraphs. In addition, we explained that we considered the public comments regarding the need to reconcile E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations estimated expenditures for a new renal dialysis drug or biological product with the declines in expenditures for related drugs. We noted that commenters expressed support for establishing a methodology that would consider the decline in estimated expenditures for drugs that are clinically or empirically related to the new renal dialysis drug or biological product. We explained that such a methodology would be highly complex and less transparent than other potential options that commenters suggested. We also explained that commenters in the past noted various ideas that CMS would need to consider when attempting to establish the offsetting financial effects of drugs and biological products that are either clinically or empirically related to the new renal dialysis drug or biological product. For example, most commenters suggested that CMS use drugs with the same FDA clinical indication to offset the payment adjustment, in the interest of transparency and objectivity. However, some commenters, including MedPAC, noted that they do not believe that FDA determinations or ESRD PPS functional categories should be the basis of eligibility for the post-TDAPA payment adjustment, as CMS should make these determinations based on the specific needs of the Medicare population. We stated that we believe such considerations based on specific population needs could be less transparent than alternative approaches, especially in situations when there could, in the future, be multiple new renal dialysis drugs or biological products for which we would be calculating multiple offset adjustments. We stated that we anticipate it would be challenging for CMS to determine, within the annual rulemaking timeframes, the extent to which changes in the utilization of existing renal dialysis drugs and biological products are clinically or empirically related to utilization of a new renal dialysis drug or biological product paid for using the TDAPA. We noted that the latest available data at the time of the proposed rulemaking included less than a full year of TDAPA utilization. We explained that we anticipate that as additional data are collected, CMS will be able to analyze trends and may be able to retrospectively determine the extent of any substitution effects between new and existing renal dialysis drugs and biological products. Furthermore, we noted that the calculation of these offsets could involve multiple overlapping periods of time, which would further increase complexity and reduce transparency. As VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 an alternative, we explained that we considered MedPAC’s suggestion to align the methodology closer to that of the ESRD PPS TPNIES, wherein CMS pays a reduced percentage of the estimated incremental cost of a new product as a risk-sharing mechanism with ESRD facilities and to provide a disincentive for significant increases in drug prices. Under the TPNIES, CMS calculates the TPNIES amount as 65 percent of the MAC-determined price for certain new and innovative equipment and supplies (§ 413.236(f)). We stated that we believe this approach would have the same general effect of accounting for declines in other drug expenditures, while being significantly less complex and more transparent. In the CY 2020 ESRD PPS final rule that established the 65 percent cost-sharing proportion for the TPNIES, we stated that the goal of the TPNIES was to support ESRD facility use of new and innovative renal dialysis equipment and supplies (84 FR 60692). In that same CY 2020 ESRD PPS final rule, we further stated in response to comments that we believe that we need to balance this goal with sharing risk for the new product (84 FR 60697). We noted that one goal of the post-TDAPA add-on payment adjustment is to support continued access to new renal dialysis drugs and biological products and to support ESRD facilities’ long-term planning and budgeting for such drugs after the TDAPA period. Additionally, we stated that our goal is also to incentivize efficient use of resources, consistent with the principles of prospective payment under the ESRD PPS. We explained that we believe applying a cost-sharing proportion of 65 percent to the post-TDAPA add-on payment adjustment would effectively achieve these goals, because it would provide a significant level of payment that supports access for beneficiaries and long-term planning for ESRD facilities, while incentivizing ESRD facilities to efficiently allocate resources by sharing a significant portion of the cost with ESRD facilities. Furthermore, we stated that this 65 percent cost-sharing factor would serve to further reduce the minimal cost-sharing burden of new renal dialysis drugs and biological products for beneficiaries, under the post-TDAPA add-on payment methodology. Lastly, we noted that for home dialysis machines that are capitalrelated assets that qualify for the TPNIES, our policy is to apply an offset to account for such capital-related assets in the ESRD PPS base rate. As we discussed previously, we considered applying an offset to the post-TDAPA PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 76393 add-on payment adjustment; however, we believe that considerations based on specific population needs could be less transparent than applying a simple 65percent risk-sharing percentage. Additionally, we noted that in the future, there could be multiple new renal dialysis drugs or biological products for which we would be calculating multiple offset adjustments, which would further increase complexity and reduce transparency. We solicited comments on whether there are other ways CMS could consider calculating an offset amount for the post-TDAPA payment adjustment. Alternatively, we sought comment on if there are other ways CMS could ensure any growth in postTDAPA add-on payment adjustment amounts is reasonable, such as not allowing increases to exceed inflation or other relevant metrics. We proposed to calculate the postTDAPA add-on payment adjustment annually, based on the latest available full calendar quarter of average sales price (ASP) data, which would be consistent with the current policy for determining the basis of payment for the TDAPA. We stated that under current policy, finalized in the CY 2020 ESRD PPS final rule (84 FR 60679), we pay the TDAPA based on 100 percent of ASP. If ASP is not available, we base the TDAPA payment adjustment on wholesale acquisition cost (WAC), and if WAC is not available, then we base payment on invoice pricing. As we stated in the CY 2020 ESRD PPS final rule, we continue to believe that after the TDAPA period, calculating the postTDAPA add-on payment adjustment for new renal dialysis drugs based on ASP, as compared to WAC or invoice pricing, would be the most appropriate choice for the ESRD PPS, and would strike the right balance in supporting ESRD facilities in their uptake of innovative, new renal dialysis drugs and biological products and limiting increases to Medicare expenditures. We proposed to address the annual calculation of the post-TDAPA add-on payment adjustment in the annual proposed and final ESRD PPS rules for future years. As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42472), under current TDAPA policy, if CMS stops receiving ASP during the TDAPA period, then CMS will stop paying the TDAPA after 2 calendar quarters. Similarly, we explained that if drug manufacturers were to stop submitting ASP data for products that are included in the calculation of the post-TDAPA add-on payment adjustment, and we had to revert to basing calculation of the post-TDAPA add-on payment E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76394 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations adjustment on WAC or invoice pricing, we believe we would be overpaying for the add-on payment adjustment. Therefore, we proposed to make payment of the post-TDAPA add-on payment adjustment conditional on receiving ASP data. Because the post TDAPA add-on payment adjustment would be calculated annually rather than quarterly, we proposed that if CMS does not receive the latest full calendar quarter of ASP data for a drug that would be included in the calculation of the post-TDAPA add-on payment adjustment, then CMS would not include that drug in the calculation of the post-TDAPA add-on payment adjustment for any future years. We also proposed that if CMS stops paying the TDAPA for a drug or biological product because CMS stops receiving the latest full calendar quarter of ASP data, then we would not include that drug or biological product in the calculation of the post-TDAPA add-on payment adjustment for the next CY or any future CY. Consistent with our policy for calculating the TDAPA, as discussed in section II.B.1.k of the proposed rule, we proposed that in situations when a manufacturer reports zero or negative sales, we would consider CMS to have received the latest full calendar quarter of ASP data, but we would calculate the post-TDAPA payment adjustment based on WAC, or if WAC is not available, on invoice pricing, in such circumstances. Finally, we proposed that for each of the 3 years for which this post-TDAPA add-on payment adjustment would be paid, we would update the amount of the post-TDAPA add-on payment adjustment by the productivity-adjusted ESRDB market basket update to account for estimated future input price changes faced by ESRD facilities. We solicited comment on whether it would be more appropriate to consider using the growth in the price proxy for the pharmaceuticals cost category in the ESRDB market basket, rather than the productivity-adjusted ESRDB market basket update. We also provided a detailed set of steps for calculating the amount of the proposed post-TDAPA add-on payment adjustment for CY 2024, which we calculated at $0.0961 for the proposed rule. We solicited comments on this proposed methodology for a post-TDAPA add-on payment adjustment and its appropriateness for CY 2024 and future years. We received public comments on our proposed methodology for calculating the post-TDAPA add-on payment adjustment. The comments on our proposal and our responses are set forth below. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Comment: Many commenters, including LDOs, drug manufacturers, and patient advocacy organizations, expressed concerns that the proposed methodology would not support access to new and innovative renal dialysis drugs and biological products. Commenters stated that the proposed amount would provide a level of funding that supports the provision of drugs and biological products currently paid for using the TDAPA to only a small proportion of patients and would not support expanded access to such drugs. One commenter stated that CMS policy must recognize that practice follows payment and provided an example of certain payment policy changes in the SNF PPS, specifically the recent transition from the SNF Resource Utilization Group payment system to the Patient-Driven Payment Model (83 FR 39162), which the commenter stated drove subsequent utilization patterns in that system by reducing incentives for overutilization of certain rehabilitative therapies. Response: We disagree with commenters who stated that the amount of the proposed post-TDAPA add-on payment adjustment would not support access to new and innovative renal dialysis drugs and biological products. Because the proposed methodology is based on the latest available price and utilization information, we believe it provides an adequate level of funding to maintain access to new renal dialysis drugs and biological products after the end of the TDAPA period. We note that the proposed amount of the postTDAPA add-on payment adjustment for CY 2024 reflects utilization of current TDAPA drugs by a small proportion of ESRD beneficiaries, amounting to less than 1 percent of all treatments. Although the payment per treatment is a relatively small amount, an ESRD facility’s aggregate payments under the proposed post-TDAPA add-on payment adjustment methodology would nonetheless help to support the utilization for new renal dialysis drugs and biological products at the level of utilization observed during the TDAPA period. We note that, as discussed later in this final rule, we are calculating the final amount of the post-TDAPA add-on payment adjustment for CY 2024 to be significantly higher than the CY 2024 ESRD PPS proposed rule, based on the latest available price and utilization data. Lastly, we appreciate the concerns that the commenter raised regarding utilization patterns as the result of payment policies, and we are acutely aware of the importance of establishing payment adjustments in the ESRD PPS PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 that are aligned with the principles of prospective payment. We anticipate that the post-TDAPA payment methodology that we are finalizing will provide an appropriate level of funding to support access to new renal dialysis drugs and biological products after the end of the TDAPA, without providing a direct incentive to use any particular new drug or biological product, which we anticipate could result in overutilization. Comment: MedPAC stated that although it strongly disagrees with the implementation of a post-TDAPA addon payment adjustment, it recognizes that CMS’s proposed per claim add-on payment approach provides better incentives for more judicious use of a new renal dialysis drug rather than a per use add-on payment approach. MedPAC reiterated that paying on a per unit basis for a drug incentivizes its use (to the extent clinically possible) and recommended that if CMS finalizes the post-TDAPA add-on payment adjustment, the agency should proceed with a per claim add-on payment. MedPAC also expressed support for the proposed 65 percent risk-sharing percentage as an incentive for price competition. Response: We appreciate MedPAC’s qualified support for the proposed methodology. We agree with MedPAC that the proposed per-treatment methodology would appropriately align incentives for ESRD facilities to be efficient with their resources, and as a result it would foster competition between new and existing renal dialysis drugs and biological products. We also agree that the proposed application of a risk-sharing percentage would provide a further incentive for price competition between drugs within an ESRD PPS functional category. As we discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42462), we anticipate that the proposed risk sharing percentage of 65 percent would be appropriate, as it would provide a significant level of payment that supports access for beneficiaries and long-term planning for ESRD facilities, while incentivizing ESRD facilities to allocate resources efficiently. Comment: Several commenters advocated for an alternative methodology that would calculate an add-on payment adjustment based on the average cost for patients that use the new renal dialysis drug or biological product. Commenters stated that the proposed methodology for the postTDAPA add-on payment adjustment, and the structure of the ESRD PPS overall, do not address the needs of the non-average patient. Several E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations commenters drew parallels to the comprehensive ambulatory payment classification (C–APC) complexity adjustment in the Hospital OPPS as an example of a payment policy that adjusts payment based on patient characteristics. Response: We appreciate the suggested methodology for which these commenters advocated but do not agree that such a methodology would be appropriate, because it would directly incentivize utilization of a particular drug or biological product, which can result in overutilization. As we discussed earlier in this final rule, we believe that the proposed methodology provides the most appropriate incentives for ESRD facilities to be efficient with resources, while providing an appropriate level of payment that supports access to new renal dialysis drugs and biological products. Additionally, we disagree with several of the premises that commenters offered with respect to the proposed methodology for calculating the postTDAPA add-on payment adjustment. Specifically, commenters stated that both the proposed post-TDAPA methodology and the ESRD PPS are designed to meet the needs of the average patient and do not meet the needs of the non-average patient. In fact, the ESRD PPS base rate is not constructed to address the needs of the average patient, but rather to provide a level of payment that reflects the average per-treatment costs of renal dialysis services. As we discussed in the CY 2011 ESRD PPS final rule (75 FR 49037), in response to concerns that bundling payment for drugs like EPO and oral medications would limit nephrologists from prescribing what is necessary, we stated that the ESRD PPS would establish a bundled payment system based on the average cost of care with adjustments that target more payment to more resource intensive ESRD patients. We further explained that in situations where costs for treating patients exceed an established threshold, the outlier policy would apply. Later in the same CY 2011 ESRD PPS final rule (75 FR 49047) we explained that the ESRD PPS provides an opportunity for ESRD facilities to make financially sound decisions while providing necessary care, recognizing that some patients may utilize less renal dialysis items and services while others may use more. In other words, while some patients cost more than average and others cost less, an ESRD facility’s aggregate payments under the ESRD PPS are reflective of the overall cost of providing renal dialysis services to its VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 patients. The ESRD PPS includes patient-level and facility-level adjustments that better align payment with resource use for facilities that incur higher costs due to their patient population or geographic location. We do not believe that the OPPS C– APC complexity adjustment is an appropriate comparison to the proposed post-TDAPA payment amount, which as we previously noted will be applied in a non-budget-neutral manner and is intended to provide a transitional level of payment that supports ESRD facilities’ long-term planning and budgeting and supports beneficiaries’ access to new renal dialysis drugs and biological products. In contrast, the OPPS C–APC complexity adjustment is budget neutral under the OPPS and is intended to provide increased payment when certain service combinations represent a complex, costly, or more resource-intensive version of the primary service. As an example, we believe a more appropriate payment mechanism to recognize the additional costs of treating ESRD patients with pruritus may be a patient-level adjustment under the ESRD PPS. As we discuss in section II.B.1.j of this final rule, we are collecting additional information on dialysis duration and may consider future revisions to the ESRD PPS case-mix adjustments, if appropriate. Comment: Several commenters responded to our comment solicitation on the methodology for applying the productivity-adjusted ESRDB market basket update, or an alternative update factor, to the proposed post-TDAPA add-on payment adjustment. Commenters generally advocated for applying a pharmaceutical price proxy, rather than the productivity-adjusted ESRDB market basket update, stating that a pharmaceutical price proxy would be more representative of anticipated future price growth for new renal dialysis drugs and biological products. Commenters requested clarification about whether CMS would recalculate the post-TDAPA add-on payment adjustment annually for each of the three years, in addition to applying an update factor as proposed. Several commenters requested that CMS calculate the post-TDAPA add-on payment adjustment at the end of the TDAPA period, and then annually update that amount based on an update factor such as a pharmaceutical price proxy. MedPAC expressed concern about a payment methodology in which the payment amount would only increase and suggested alternative approaches to update the amount of the PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 76395 post-TDAPA add-on payment adjustment annually. Response: We thank commenters for their comments regarding the proposed update methodology for the postTDAPA add-on payment adjustment. We proposed to use the most recent available price and utilization information to determine a pertreatment amount for each of the three years during which a post-TDAPA addon payment adjustment would apply. We are clarifying in this rule that we would annually recalculate the postTDAPA add-on payment adjustment, based on the most recent available price and utilization information at the time of rulemaking. Accordingly, the postTDAPA add-on payment adjustment amount could increase or decrease from year to year, depending on changes in pricing and utilization. We note that although we proposed to apply the productivity-adjusted ESRDB market basket update, we proposed to do so only for the purpose of updating the post-TDAPA add-on payment adjustment to reflect anticipated prices in the target year. We did not propose, and are not finalizing, the application of an update factor to update the amount of the post-TDAPA add-on payment adjustment from one payment year to the next. We appreciate the comments recommending the use of the pharmaceutical price proxy rather than the productivity-adjusted market basket update. We agree with commenters that a pharmaceutical price proxy would more effectively track the change in prices for new renal dialysis drugs and biological products than would the market basket update. We are finalizing that for each year that we calculate a post-TDAPA add-on payment adjustment, we will apply the projected growth in the ESRDB market basket price growth for pharmaceuticals, which reflects the weighted blend of the ESA and non-ESA price proxies in the 2020based ESRDB market basket, to reflect anticipated pricing for the target year. We refer readers to the CY 2023 ESRD PPS final rule (87 FR 67149) for a detailed discussion of the construction of this price proxy. Comment: Several commenters opposed the application of a 65 percent risk sharing percentage and urged CMS to instead calculate and apply an offset based on actual utilization of related drugs. Many commenters suggested that CMS limit the calculation of an offset to the post-TDAPA add-on payment adjustment that accounts for the actual spending for products that are in the same ESRD PPS functional category as the new renal dialysis drug or biological E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76396 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations product and are directly impacted by the drug or biological product. Response: As we discussed in the CY 2024 ESRD PPS proposed rule, we did not propose to calculate an offset based on utilization, because we are concerned that this approach would be more burdensome and less transparent than the proposed 65 percent risksharing percentage. We do not believe it would be appropriate to limit the calculation of an offset to just drugs and biological products in the same functional category, because we recognize that utilization of drugs in one functional category can affect the utilization of drugs in other functional categories. For example, utilization of drugs in the bone and mineral metabolism functional category can indirectly affect the incidence of itching among dialysis patients. However, if we were to apply a per-treatment offset based on changes in spending for all formerly separately billable drugs and biological products, it would be difficult to determine definitively which reductions in spending were related to a new renal dialysis drug or biological product. Comment: One commenter pointed out that the CY 2024 ESRD PPS proposed rule does not indicate whether the ESRD PPS outlier adjustment would apply to products for which a postTDAPA add-on payment adjustment is calculated. Response: We appreciate the request for clarification regarding outlier eligibility for drugs and biological products during the post-TDAPA period. Under current policy, after the end of the TDAPA period, a drug or biological product is considered an eligible outlier service only if it meets the requirements of § 413.237(a)(1). We are clarifying that any renal dialysis drug or biological product included in the calculation of the post-TDAPA addon payment adjustment would be considered an eligible ESRD outlier service only if it meets the requirements of § 413.237(a)(1). However, we are further clarifying that under current policy, Korsuva®, the only renal dialysis drug whose TDAPA period will end in CY 2024, will not be considered an eligible outlier ESRD service after the end of its TDAPA period, because it is a substitute for diphenhydramine hydrochloride, which was included in the composite rate prior to 2011, and therefore does not meet the requirements of § 413.237(a)(1) (that is, it would not have been, prior to January 1, 2011, separately billable under Medicare Part B). Final Rule Action: After considering the comments, we are finalizing as VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 proposed the methodology to calculate the amount of the post-TDAPA add-on payment adjustment, except that, as noted previously, we will apply the price growth of the pharmaceutical cost category, reflecting a weighted blend of the ESA and non-ESA price proxies in the 2020-based ESRDB market basket, to adjust the amount of the post-TDAPA add-on payment adjustment to reflect anticipated pricing for the target year rather than using the productivityadjusted ESRDB market basket update. Therefore, we will use the following calculation to determine the amount of the post-TDAPA add-on payment adjustment to be applied to each ESRD PPS treatment. • Step 1, using the most recent available 12 months of claims data, calculate the total expenditure of the new renal dialysis drug or biological product being paid for using the TDAPA under the ESRD PPS. Total expenditure is calculated by multiplying the latest available full calendar quarter of ASP data for the new renal dialysis drug or biological product by the quantity of units billed. If CMS does not receive the latest available calendar quarter of ASP data for a drug or biological product, then CMS would not apply the postTDAPA add-on payment adjustment for that drug or biological product. As we noted earlier, if the latest available full calendar quarter of ASP data reflects zero or negative sales, CMS will calculate the post-TDAPA add-on payment adjustment based on WAC, or if WAC is not available, invoice pricing. • Step 2, divide the total expenditure of the new renal dialysis drug or biological product from Step 1 by the total number of ESRD PPS treatments furnished during the same 12-month period as used in Step 1. The resulting quotient from Step 2 is the post-TDAPA add-on payment adjustment amount for each treatment, before applying the reduction factor to account for case-mix standardization, as described in Step 4. • Step 3, calculate the dollar amount of the total aggregate case-mix adjusted post-TDAPA add-on payment adjustment amount by multiplying the post-TDAPA add-on payment adjustment amount from Step 2 by the applicable patient-level adjustments for each ESRD PPS treatment furnished during the 12-month period. • Step 4, divide the aggregate casemix adjusted add-on payment adjustment amount from Step 3 by total expenditure from Step 1. The resulting quotient is the reduction factor applied to the post-TDAPA add-on payment adjustment amount to account for casemix standardization. PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 • Step 5, apply the reduction factor from Step 4 to the post-TDAPA add-on payment adjustment amount from Step 2. • Step 6, apply the 65 percent risksharing factor to the amount from Step 5 to calculate the case-mix adjusted post-TDAPA add-on payment adjustment amount. • Step 7, multiply the case-mix adjusted post-TDAPA add-on payment adjustment amount by the growth in the ESRDB market basket price proxy for pharmaceuticals to account for anticipated price growth to the target year. We are amending § 413.234 by revising § 413.234(c)(1)(i) and adding regulations at § 413.234(b)(1)(iii), (c)(1)(ii), (c)(3), and (g) that describe the post-TDAPA add-on payment adjustment and the calculation we will use to determine the post-TDAPA addon payment adjustment amount, as described previously. In addition, we are amending § 413.230 by adding reference to the post-TDAPA add-on payment adjustment in the calculation of the ESRD PPS per treatment payment amount. We will follow these steps to calculate the case-mix adjusted post-TDAPA addon payment adjustment amount for CY 2024 and future years, when appropriate. We will include in the calculation of the case-mix adjusted post-TDAPA add-on payment adjustment amount any new renal dialysis drugs and biological products in existing ESRD PPS functional categories that are eligible for payment using the TDAPA described in § 413.234(c). We will begin making payment under this new post-TDAPA add-on payment adjustment 8 calendar quarters after the beginning of the TDAPA payment period for the new renal dialysis drug or biological product. Payment of the post-TDAPA add-on payment adjustment will end no later than 12 calendar quarters after the end of the TDAPA payment period for the new renal dialysis drug or biological product. (b) Example of the Final Post-TDAPA Add-On Payment Adjustment Calculation for CY 2024 Following the methodology finalized in the previous section, we will apply a post-TDAPA add-on payment adjustment to all ESRD PPS treatments beginning April 1, 2024, when the TDAPA payment period for Korsuva® ends. We will calculate the amount of this post-TDAPA add-on payment adjustment based on the most recent available 12 months of utilization data for Korsuva® and the most recent E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 available 12 months of ESRD PPS claims data for this final rule. As we proposed, we will use updated data for this ESRD PPS final rule. We will apply the ESRD PPS patient-level adjustment factors for determining the amount of the postTDAPA add-on payment adjustment for each ESRD PPS claim. Based on the latest available data, which includes utilization of Korsuva® from July 2022 through June 2023, we estimate that total expenditure for Korsuva® is $11,948,389 and that 28,450,178 total ESRD PPS treatments were furnished during the same time period. In addition, as discussed earlier in this final rule, we are finalizing the application of the growth in the ESRDB market basket price proxy for pharmaceuticals to adjust the amount of the post-TDAPA add-on payment adjustment to reflect anticipated pricing for CY 2024. The ESRDB pharmaceutical price proxy used for this CY 2024 ESRD PPS final rule is 1.3 percent. Accounting for the existing ESRD PPS patient-level adjustment factors and the TPEAPA as discussed in section II.B.1.g of this final rule, the reduction to the post-TDAPA add on payment adjustment to account for casemix standardization for this time period is 0.901653. Accordingly, we will calculate a case-mix adjusted postTDAPA add-on payment adjustment for CY 2024 equal to (($11,948,389)/ (28,450,178)) × (0.901653) × (0.65) × (1.013) = $0.2493. Estimates for the impact of this post-TDAPA add-on payment adjustment for CY 2024 are included in section VII.D.5 of this final rule. (c) Considerations Related to Budget Neutrality for the Post-TDAPA Add-On Payment Adjustment As discussed in the CY 2024 ESRD PPS proposed rule and earlier in this final rule, the ESRD PPS includes other add-on payment adjustments based on the authority in section 1881(b)(14)(D)(iv) of the Act, which are not statutorily required to be budget neutral. In the case of existing add-on payment adjustments under the ESRD PPS, these generally account for costs that were not included in cost reports used for the construction of the ESRD PPS bundled payment. These include items that either did not exist at the time of the construction of the ESRD PPS bundled payment, like new drugs and equipment, or services that were not commonplace that the add-on payment adjustment is meant to encourage, like home dialysis training. In the proposed rule, we stated that we expect this increased payment would support ESRD facilities in providing the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 new renal dialysis drug or biological product to all beneficiaries for whom it is reasonable and medically necessary. We noted that we believe it is also important to support access to new renal dialysis drugs and biological products while minimizing the financial impact to beneficiaries, who incur a 20 percent coinsurance for renal dialysis services under the ESRD PPS. As discussed previously, we considered and proposed this new postTDAPA add-on payment adjustment in response to concerns that a sudden decrease in payment for certain new renal dialysis drugs and biological products after the end of the TDAPA period could negatively affect Medicare beneficiaries’ access to such new renal dialysis drugs and biological products. Although we have noted that the ESRD PPS base rate already includes money for renal dialysis drugs and biological products that fall within an existing ESRD PPS functional category, we stated that proposing a budget neutral payment adjustment would not be appropriate for the post-TDAPA add-on payment adjustment. Because we proposed to apply the post-TDAPA addon payment adjustment to every ESRD PPS treatment, budget neutralizing this final add-on payment adjustment would effectively undo the adjustment and leave aggregate payments at the same level they would have been without an adjustment, which as we previously noted could negatively affect beneficiaries’ access to such drugs and biological products. In contrast, applying this add-on payment adjustment in a non-budget neutral manner would increase aggregate ESRD PPS expenditures to a level that reflects the most recent 12 months’ utilization of the new renal dialysis drug or biological product, which we believe would support beneficiary access. By applying the post-TDAPA add-on payment adjustment in a non-budget neutral way, we would effectively maintain expenditures for these new renal dialysis drugs and biological products at 65 percent of the level of expenditures paid during the TDAPA period. We stated that we believe this approach would provide consistency and predictability in a way that would support beneficiaries’ continued access to new renal dialysis drugs and biological products, while appropriately reducing expenditures for such drugs after the TDAPA period ends both for the Medicare program and for individual beneficiaries, as discussed earlier in this section. Accordingly, we proposed that this post-TDAPA add-on payment adjustment would not be PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 76397 budget neutral. We invited comments on the budget neutrality aspect of this proposal. Comment: Several commenters expressed support for applying the postTDAPA add-on payment adjustment in a non-budget neutral way. These commenters agreed with CMS that calculating the post-TDAPA add-on payment budget neutrally would be counterproductive, as it would effectively undo the impact of the proposed adjustment. Response: We agree, and we thank the commenters for their support. Final Rule Action: After considering the comments we received, we are finalizing the application of the postTDAPA add-on payment adjustment as a non-budget neutral payment adjustment, beginning for CY 2024. j. Requirement of ‘‘Time on Machine’’ Hemodialysis Treatment Data as a Recordkeeping and Cost Reporting Requirement for Outpatient Maintenance Dialysis We proposed certain new recordkeeping and cost reporting requirements for outpatient maintenance dialysis at proposed § 413.198(b)(5). Specifically, we proposed to require patient-level reporting on resource use involved in furnishing hemodialysis treatment incenter in ESRD facilities that would serve to apportion composite rate costs for use in the case-mix adjustment. Importantly, this new data would be used to disaggregate facility-level composite rate costs (as obtained from the cost reports) and assign them to the patient-month level, which would enable a refined single-equation estimation methodology. The integrity of the ESRD PPS is dependent on our ability to monitor payment accuracy and make refinements to the payment system, as needed. Under this proposal, CMS would require ESRD facilities to report information on ESRD PPS claims for renal dialysis services about the duration of time in minutes that ESRD beneficiaries spend in center receiving hemodialysis treatment (hereafter referred to in this section as ‘‘time on machine’’). We would use time on machine data to help us evaluate and monitor the accuracy of our payments for patient-level adjustment factors. CMS would also evaluate whether the data could be used to inform future refinements to the existing patient-level adjustment factors set forth at § 413.235(a), which include patient age, body mass index (BMI), body surface area (BSA), and co-morbidities such as sickle cell anemia. Finally, CMS would review the data for its potential to E:\FR\FM\06NOR2.SGM 06NOR2 76398 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations identify any disparities from a health equity perspective that may support proposing in future rulemaking new patient-level adjustment factors, including potential social determinants of health (SDOH) factors. As described in section II.B.1.h of this final rule, we proposed the addition of § 413.198(b)(5), which states that ESRD facilities must submit data and information in the formats established by CMS for the purpose of estimating patient-level and facility level variation in resource use. Under this paragraph, we proposed to require ESRD facilities to report ‘‘time on machine’’ as when a patient the begins dialysis treatment and ends dialysis treatment. We proposed to require ESRD facilities to report this information using the D6 value code on ESRD PPS claims. (1) Background ddrumheller on DSK120RN23PROD with RULES2 (a) Statutory Authorities for Recordkeeping, Cost Reporting, and Case-Mix Adjustments Under the ESRD PPS Section 1881(b)(2)(B) of the Act generally directs the Secretary to prescribe in regulations any methods and procedures to determine the costs incurred by providers of services and renal dialysis facilities in furnishing covered services to individuals with ESRD, and to determine, on a costrelated or other economical and equitable basis, payment amounts for Medicare part B services furnished by such providers and facilities to individuals with ESRD. To that end, CMS promulgated § 413.198,38 which specifies certain recordkeeping and cost reporting requirements for ESRD facilities that meet the conditions for coverage under 42 CFR part 494.39 The recordkeeping and cost reporting requirements at § 413.198 enable CMS to determine the costs incurred in furnishing outpatient maintenance dialysis and support the two-equation payment model that is currently used as the basis for the ESRD PPS. Section 1881(b)(14)(D)(i) of the Act requires that the ESRD PPS include a payment adjustment based on case-mix that may consider patient weight, BMI, comorbidities, length of time on 38 We note that § 413.198 was promulgated prior to the establishment of the ESRD PPS. It was initially set forth in 1983 at 42 CFR 405.441 (48 FR 21254), to implement section 2145 of the Omnibus Budget Reconciliation Act of 1981 (Pub. L. 97–35). Section 405.441 was later redesignated in 1986 as 42 CFR 413.174 (51 FR 34790–01), and the requirements were moved again, from § 413.174 to § 413.198, in a reorganization of subpart H of part 413 (62 FR 43657). 39 Likewise, under section 1881 of the Act, CMS established related data and information requirements at 42 CFR 494.180(h). VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 dialysis, age, race, ethnicity, and other appropriate factors. We implemented this statutory requirement in § 413.235, which sets forth certain patient characteristics for which the per treatment ESRD PPS base rate may be adjusted, specifically where those patient characteristics result in higher costs for ESRD facilities. The patient characteristics at § 413.235(a) include: patient age, BSA, low BMI, onset of renal dialysis (new patient), and comorbidities. The Secretary is also authorized, under section 1881(b)(14)(D)(iv) of the Act, to apply such other payment adjustments under the ESRD PPS as the Secretary determines appropriate. Per § 413.196, we publish notice of any proposed changes to payment adjustments, including adjustments to the composite rate,40 in the Federal Register. We last updated the payment multipliers for the ESRD PPS patient-level adjustment factors in the CY 2016 ESRD PPS final rule (80 FR 68968, at 68973 through 68984), for age, BSA, low BMI, sex, four co-morbidity categories (that is, pericarditis; gastrointestinal tract bleeding with hemorrhage; hereditary hemolytic or sickle cell anemias; and myelodysplastic syndrome), and the onset of renal dialysis. We also established payment adjustments for pediatric patients and for facilities treating a low volume of patients with ESRD. Finally, the collection of data from ESRD claims, cost reports and record keeping, has been instrumental in identifying underserved populations and establishing that ESRD disproportionately affects African American/Black men relative to their share of the total population. The proposal to collect and evaluate time on machine data would provide additional information concerning resource use to enable CMS to identify, assess, and address potential health disparities. This proposal therefore may support the Secretary’s efforts to evaluate race and ethnicity data and provide recommendations for improving the quality of the data, as required under section 1809 of the Act, previously discussed in the CY 2011 ESRD PPS final rule (75 FR 49030 at 49108 through 49113). 40 As explained in the CY 2011 ESRD PPS final rule (75 FR 49030 at 49032), the composite rate is the method by which CMS determines prospectively the amounts of payments for renal dialysis services furnished by providers of services and by renal dialysis facilities to individuals in a facility and to such individuals at home. The composite rate is a single composite weighted formula that is combined with separately billable services under a single payment, adjusted to reflect patient differences in resource needs or case-mix. PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 In the CY 2024 ESRD PPS proposed rule (88 FR 42464 through 42472), we noted that, if the proposed requirement to collect time on machine data were to be finalized, we would issue corresponding guidelines. We stated that such guidance would provide instructions regarding the applicable administrative requirements for reporting a value code on an electronic claim, here value code D6, connected to the number of minutes of hemodialysis treatment provided in-center in an ESRD facility. We further noted that the National Uniform Billing Committee (NUBC) has approved and is prepared for ESRD facilities’ use of value code D6 on claim form CMS–1450 (UB–04) (OMB–0938–0997) to report the total number of minutes of hemodialysis provided during the billing period. (b) Case-Mix Adjustments Background and the Two-Equation ESRD PPS Model The ESRD PPS includes patient-level adjustments that adjust the ESRD PPS base rate for certain patient characteristics. The current ESRD PPS case-mix adjustments are derived from a case-mix adjustment model involving two equations. In the CY 2011 ESRD PPS final rule (75 FR 49083), we discussed the two-equation methodology used to develop the adjustment factors that would be applied to the ESRD PPS base rate to calculate each patient’s case-mix adjusted payment per treatment. The two-equation approach used to develop the ESRD PPS included a facility-based regression model for services historically paid for under the composite rate as indicated in ESRD facility cost reports, and a patientmonth-level regression model for services historically billed separately. One significant limitation, which in large part drove the development of the two-equation model, was that there was no way to reliably identify, using claims data, the costs for composite rate services—that is, items and services such as staff labor, dialysate, capitalrelated assets such as renal dialysis machines, and certain drugs and laboratory tests that are used in the provision of outpatient maintenance dialysis for the treatment of ESRD and that were included in the composite payment system established under section 1881(b)(7) of the Act and the basic case-mix adjusted composite payment system established under section 1881(b)(12) of the Act. In the CY 2016 ESRD PPS final rule, we updated the payment multipliers for the ESRD PPS patient-level adjustment factors for age, BSA, low BMI, sex, four co-morbidity categories (that is, E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 pericarditis; gastrointestinal tract bleeding with hemorrhage; hereditary hemolytic or sickle cell anemias; and myelodysplastic syndrome), and the onset of renal dialysis. We also established payment adjustments for pediatric patients and for ESRD facilities treating a low-volume of ESRD patients (80 FR 68968 at 68973 through 68984). In that CY 2016 ESRD PPS final rule, we discussed and responded to several public comments in which commenters expressed concerns about the continued use of the two-equation model (80 FR 68974 through 68976). One comment from MedPAC suggested that CMS develop a one-equation model for the ESRD PPS. In response, we noted that the ESRD PPS is not currently able to utilize a one-equation method, because ESRD facilities do not report charges associated with the components of renal dialysis treatment costs that vary across patients such as time on machine. In other words, patient-level claims provide line-item detail on the use of the formerly separately billable services but do not provide any information regarding variation across patients in the use of the formerly composite rate services. In addition, we stated that we believed that capturing the resource cost for furnishing renal dialysis services is complex since Medicare has historically paid an ESRD PPS base rate (that is, composite rate payment) to account for those costs that were never itemized on a claim but were reported through the cost report (80 FR 68975 through 68976). (c) Background on CMS Efforts To Explore the Use of ‘‘Time on Machine’’ Data To Refine the Case-Mix Adjustment Model Interested parties, including MedPAC, have long expressed concerns about the complexity of the two-equation model underpinning the ESRD PPS and have questioned the validity of assuming that the composite rate costs for all patients at an ESRD facility are the same. Interested parties have encouraged CMS to develop a patient cost model that is based on a single patient-level cost variable that accounts for all composite rate and formerly separately billable services. Additionally, interested parties have expressed concerns that the existing case-mix adjustors might not correlate well with the current cost of renal dialysis treatment and have encouraged CMS to explore a refinement. In response, CMS has explored the feasibility of collecting time on machine data on patient claims from ESRD facilities and the potential for using such data. These efforts include: a VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Technical Expert Panel (TEP) held on December 6, 2018, a Request for Information (RFI) published in the ESRD PPS CY 2020 ESRD PPS proposed rule (84 FR 38399), and more recently, an RFI published in the ESRD PPS CY 2022 proposed rule (86 FR 36322, 36399 through 36400). In addition, CMS issued sub-regulatory guidance in Transmittal 10368, from September 24, 2020, to begin collecting time on machine data, but it later rescinded that guidance. (i) Technical Expert Panel (TEP) December 2018 As we discussed in the CY 2020 ESRD PPS proposed rule (84 FR 38396 through 38400), a TEP was held on December 6, 2018, to discuss options for improving data collection to refine the ESRD PPS case-mix adjustment model. In that CY 2020 ESRD PPS proposed rule, we discussed the purpose of the TEP and the topics that were discussed, including several data collection options.41 In the CY 2020 ESRD PPS proposed rule, we noted that CMS’s data contractor’s pre-TEP analysis of CY 2016 cost report data showed that composite rate costs comprise nearly 90 percent of average total treatment costs, with capital, direct patient care labor, and administrative costs representing approximately 88 percent of total average composite rate cost per treatment. The data contractor provided examples of ways that longer duration of renal dialysis time might be associated with increased treatment costs, including utility costs, accelerated depreciation on equipment, and lower daily census counts, which, among other things, would result in increased per-treatment capital costs. The analysis suggested that additional labor hours for a patient with longer treatments on average could increase per-treatment labor costs, and that patients with increased use of dialysate and water treatment supplies or equipment likely have higher average per-treatment supply costs. We noted that, under current reporting practices, there are no data on the patient-and treatment-level variation in the cost of composite rate items and services. We explained that these findings underscore the importance of identifying variation in these costs to inform the development of a refined case-mix adjustment model. CMS published the findings from the December 2018 TEP in a report dated 41 The final TEP report from December 2018 and other materials can be found at: https:// www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/ESRDpayment/Educational_Resources. PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 76399 June 2019.42 The 2018 TEP report provided examples of ways that extended treatment duration could affect cost components. First, an imputed cost per treatment was calculated using a combination of treatment duration data from CROWNWeb43 (now the ESRD Quality Reporting System, or EQRS) and facility cost per-minute data from cost reports to infer differences in costs reported across patient-months. An average interquartile range of 34.6 minutes was observed from CROWNWeb duration data, indicating significant within-facility variation in dialysis treatment time. Significant variation in average imputed cost per hemodialysis sessions also was observed, with an across-facility interquartile range of $62.62. Overall, it was found that costs increased with longer treatment times, and this pattern was consistent for the individual cost report components as well. Facilities with a higher proportion of beneficiaries receiving treatments ≥ 4.5 hours duration were found to have higher average costs for each cost component, except for cost report drugs.44 CMS presented further discussion into collection of time on machine data for each dialysis session in the CY 2020 ESRD PPS proposed rule (84 FR 38396 through 38400), where we further identified this potential data set as a singular option that would provide sufficient data to develop a refined casemix adjustment model. If renal dialysis session time were reported for each renal dialysis treatment, cost report and treatment-level data could be integrated to infer differences in composite rate costs across patients. In this paradigm, patient-level differences in composite rate costs could be attributed to two discrete categories: differences due to renal dialysis treatment duration (measured in units of time); and differences unrelated to treatment duration. To alleviate concerns from interested parties, we noted that time on machine data would not be used to 42 The final TEP report from December 2018 is found directly at: https://www.cms.gov/medicare/ medicare-fee-for-service-payment/esrdpayment/ downloads/esrd-pps-tep-summary-report-june2019.pdf. 43 In 2008, CMS introduced an electronic Webbased data collection system, Consolidated Renal Operations in a Web-enabled Network (CROWNWeb) which was designed to collect clinical performance measures data from dialysis facilities (73 FR 20370, at 20372). CrownWeb is now ‘‘EQRS’’—that is, the ESRD Quality Reporting System (OMB Control Number 0938–1289). 44 Acumen LLC. ESRD PPS Case-Mix Adjustment Technical Expert Panel (TEP). Slide Presentation Slide 42. December 2018. See https://www.cms.gov/ Medicare/Medicare-Fee-for-Service-Payment/ ESRDpayment/Downloads/ESRD-PPS-TEPPresentation.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76400 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations directly adjust ESRD PPS payment, rather, it would be used to apportion composite rate costs (currently only observable at the facility level to the patient or treatment level) for use in the case-mix adjustment. Time on machine data would allow for a higher proportion of composite rate costs to be allocated to patients with longer renal dialysis treatment times, and ultimately inform CMS refinements to existing patient-level adjusters, including age and comorbidities. We further explained that, in the December 2018 TEP, the data contractor proposed two approaches to collect time on machine data: (1) Use existing data from Consolidated Renal Operations in a Web-Enabled Network (CROWNWeb) (now EQRS) on delivered renal dialysis minutes during the monthly session when a laboratory specimen is drawn to measure blood urea nitrogen (BUN); or (2) have ESRD facilities report time on machine data on Medicare claims. For the latter, we suggested that time on machine data could be reported by using a new HCPCS or revenue center code to indicate units of treatment time for each renal dialysis treatment or by updating the definition of the existing revenue center code for renal dialysis treatments so that the units correspond to treatment time instead of the number of treatments. We noted that ESRD facilities already reported to CMS a single monthly treatment time in CROWNWeb for in-facility treatments, indicating that ESRD facilities currently collect time on machine data.45 Moreover, we stated that we were aware that many ESRD facilities’ electronic health records (EHR) systems automatically collect this information for every renal dialysis treatment, minimizing additional burden of reporting this metric on claims. The December 2018 TEP participants preferred that the data be collected on Medicare claims (84 FR 38398). They did not support using the then-existing CROWNWeb data for time on machine data, as there were too many questions about its completeness and timeliness. They agreed that if time on machine data is collected on claims that it should be reported in actual minutes dialyzed and not, for example, in 15-minute increments. We explained that the TEP participants cautioned that reporting time on renal dialysis on the claims would place additional burden on ESRD 45 Centers for Medicare & Medicaid Services (CMS) End-Stage Renal Disease Quality Incentive Program (ESRD QIP) Payment Year (PY) 2021 Measure Technical Specifications. Page 23. Available at: https://www.cms.gov/files/document/ cy-2021-final-technical-specifications20201130.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 facilities. However, we stated that we believed that, for ESRD facilities with EHRs, the burden associated with the collection of renal dialysis treatment time is expected to be small and temporary, because the information is already being collected. We noted that collecting time on machine data could be difficult to accomplish for ESRD facilities that do not use EHRs. Lastly, we stated that some participants maintained that certain factors related to patient complexity—such as comorbidities and mental health status—that are associated with treatment costs are unrelated to treatment duration. (ii) Request for Information (RFI) in the CY 2020 ESRD PPS Proposed Rule In addition to presenting the findings from the December 2018 TEP, we solicited comments in the CY 2020 ESRD PPS proposed rule (84 FR 38399) on the option of collecting time on machine data. As discussed in the CY 2020 ESRD PPS final rule (84 FR 60648, 60782), commenters responding to the RFI opposed the use of time on machine data, maintaining that other factors were more directly related to cost of treatment. Commenters claimed that many subgroups of patients are challenged to stay on renal dialysis for the prescribed treatment time because of their physical status or other limitations, leading to more frequent treatment and/or higher costs related to patients’ special circumstances and comorbidities and not to treatment duration. Regarding patient-level factors contributing to high costs of care, commenters expressed that patient-level adjusters should be based on sound, empirical evidence of their contribution to cost of care and opposed the use of time on machine data as a single, patient-level factor to estimate variation in composite rate costs. Some commenters expressed the objection that use of this measure would not be productive because there was great homogeneity in treatment times across patients. (iii) CMS Sub-Regulatory Guidance in Transmittal 10368 (September 24, 2020) (Now Rescinded) In Transmittal 10368, published September 24, 2020, CMS instructed the MACs to implement a new value code D6, which reflects the total number of minutes of dialysis provided during the billing period. See Transmittal 10368, CR 11871 (Changes to the End Stage Renal Disease (ESRD) PRICER to Accept the New Outpatient Provider Specific File Supplemental Wage Index Fields, the Network Reduction Calculation and PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 New Value Code for Time on Machine), effective January 1, 2021. At the same time, CMS announced a new requirement for ESRD facilities to report value code D6 on ESRD claims, for infacility or home hemodialysis maintenance, training, or retraining treatments. Shortly after making these contractor directions public, CMS issued a Medicare Learning Network (MLN) Matters guidance document (MLN Matters No. MM11871) advising ESRD facilities of the new requirement to include treatment time on claims. However, after a large dialysis organization submitted a petition 46 pursuant to the HHS Good Guidance Practices Regulation,47 HHS issued a finding that notice-and-comment rulemaking was required for CMS to impose such a requirement. Consequently, CMS rescinded Transmittal 10368 and replaced it with Transmittal 10576, dated January 20, 2021, withdrawing the requirement for reporting time on the dialysis machine with value code D6. Although the guidance to report time on machine data was rescinded, the value code D6 for the time on machine in minutes remains approved by the NUBC and remains on CMS’s claim form CMS–1450 (UB–04) (OMB–0938–0997), in a deactivated status. (iv) Request for Information (RFI) in the CY 2022 ESRD PPS Proposed Rule CMS revisited the topic of time on machine in the 2020 TEP and discussed the case-mix adjusters.48 Interested parties continued expressing concerns that the existing case-mix adjustors might not align with resource-intensive patient-level services such as isolation rooms, behavioral issues, or neurocognitive issues. We sought additional public input in the ESRD PPS CY 2022 proposed rule, requesting information on the methodology used to calculate the case-mix adjustment (86 FR 36322, 36399 through 36400) and the methodology to collect data to reflect patient-level differences in composite rate costs, including the use of a value 46 The petition (dated December 23, 2020) is attached as Exhibit A to HHS’s petition response (January 8, 2021) which can be found at https:// www.hhs.gov/sites/default/files/davita-petitionresponse-and-exhibit.pdf. 47 The HHS ‘‘Good Guidance Practices’’ final rule appeared in the Federal Register on December 7, 2020 (85 FR 78770) and was later rescinded July 25, 2022 (87 FR 44002). 48 https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2021.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations code to collect time on machine on the claim.49 We received similar comments on this RFI to those expressed in response to the CY 2020 ESRD PPS proposed rule. As discussed in the CY 2022 ESRD PPS final rule, commenters cited concerns that apportioned composite rate costs (such as labor and capital related costs) from the cost reports, used in the casemix adjustments, were currently only observable at the facility-level and did not include patient or treatment-level variations. Like previously mentioned concerns regarding the collection of time on machine data, commenters suggested this data element would be burdensome and complex (especially for those dialyzing at home) and would not identify high-cost patients. They stated that what little variation might be identified would not be worth the burden of collecting the information. In addition, these commenters stated that ESRD facilities’ staffing is based on prescribed time, not on the actual time a patient is on the machine. They stated that the prescription approach is the most rational way to determine staffing levels, because ESRD facilities do not have time on machine in advance. According to these commenters, ESRD facilities would only have the prescribing physician’s prescription to use. A provider advocacy organization opposed the use of time on machine data for purposes of ESRD PPS primarily because certain patients benefit from shorter, more frequent dialysis, such as patients with catheterrelated access issues, non-compliant patients, patients with chronic pain or diarrhea, and patients suffering from certain comorbidities. They expressed significant concern that use of time on machine data for differentiating treatment cost variability creates inappropriate incentives for certain ESRD facilities to ‘‘game the system’’ by: (1) putting patients on renal dialysis longer than necessary; or (2) placing patients on the cheapest dialyzer and keeping them on it for all five possible hours of dialysis. Another small renal dialysis organization agreed, pointing out that most renal dialysis treatments, regardless of time, will have similar composite rate costs. In other words, they asserted that if a treatment is 3.5 49 We published a summary of the responses to the CY 2022 ESRD PPS RFI (86 FR 36322, 36399 through 36400) for the current case-mix methodology in the ESRD PPS CY 2022 final rule (86 FR 61874, 61997) and provided greater detail on CMS’s website at https://www.cms.gov/files/ document/cy-2022-esrd-pps-rfi-summarycomments.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 hours compared to 5 hours, the composite rate costs for those treatments will be very similar. The only difference in cost between those two treatments would be 1.5 hours more use of utilities, dialysate and bicarbonate solution, machine depreciation, and a small amount of labor to check on the patient. Most of the labor for renal dialysis treatments is putting the patient on and taking the patient off dialysis. Therefore, in both previously described scenarios, the commenter asserted that cost would remain the same. Further, they pointed out that some patients will not remain for their full renal dialysis treatment, and they generally cannot force a patient to remain for their full prescribed treatment time. Therefore, in their view, using actual treatment time for cost allocation is not realistic. A small renal dialysis organization within a large non-profit health system commented that reporting treatment times would be difficult and confusing and identified many factors that would need to be addressed by CMS, including: identifying renal dialysis start time, early removal from renal dialysis, inadvertent lack of time on machine information, data inclusion on a claim form, and staff training. They also expressed concern about the reporting of time on machine creating opportunities for ESRD facilities to game the system by having the renal dialysis run a few extra minutes to move into the next highest level. Several commenters recommended changes or removal of the case-mix adjusters, including refinement of the age and weight (BSA and BMI) adjustments and removal of the comorbidity adjustments, based on declining frequency of claims containing comorbidities. Some comments recommended removal of the comorbidity adjustments, because they report the adjustments are not utilized. They recommended CMS refine the age and weight (BSA and BMI) adjusters to better capture and designate higher cost patients. Many commenters expressed the belief that the comorbidity categories no longer protect beneficiary access and no longer correlate with increased costs. A non-profit renal dialysis association recommended that CMS minimize resources devoted to adjusters. The commenters suggested including only the minimum needed to deliver quality patient care, restore significant funding to the ESRD PPS base rate for the benefit and care of all beneficiaries, and focus retained adjusters only on those that are clearly linked to patient cost of care or clear barriers to access. Specifically, they recommended that CMS: retire the PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 76401 remaining comorbid case mix adjusters; revise the weight adjusters to maintain a low-BMI adjuster; create a high-BMI adjuster; eliminate the BSA adjuster; retire the age adjuster (which they believe is not methodologically sound and does not resonate with clinician or renal dialysis facility experience of care); maintain the adjuster for low volume facilities; consider expanding the adjuster to a second tier of facilities providing fewer than 6,000 treatments per year; eliminate the rural adjuster; and maintain the onset of renal dialysis adjuster to support the resource intensive needs of patients starting dialysis. Other commenters stated it would be too preliminary to eliminate the case-mix adjusters entirely, and instead they recommended that CMS initiate a discussion of the adjusters that are true drivers of high costs and how the use of adjusters can be operationalized for practical purposes. One payment adjustment that was universally supported by commenters was the onset adjustment. MedPAC recommended that CMS develop a one-equation regression model in place of the two-equation model currently used as the basis for the ESRD PPS. MedPAC also recommended that CMS consider removing the comorbidity adjustments and revise the body size adjustment. MedPAC further recommended that CMS address the inherent correlation between BSA and BMI by jointly estimating the association of BSA and BMI with treatment cost. Both BSA and BMI are calculated based on patient height and weight. MedPAC’s analyses found that BSA and BMI values are correlated such that patients with low BMI also tend to have low BSA, and that these variables have a joint effect on treatment costs that is different from the sum of independent effects as currently implemented. We reiterated in the CY 2022 ESRD PPS final rule our current inability to implement such a model given the absence of data on the charges associated with the components of renal dialysis treatment costs that vary across patients in the use of the formerly composite rate services. A non-profit renal dialysis association agreed with MedPAC. (2) Health Equity Considerations Supporting the Proposed Collection of Time on Machine Data In the CY 2024 ESRD PPS proposed rule (88 FR 42468), we stated that CMS prioritizes expansion of the collection, reporting, and analysis of standardized data as a key means to advance health E:\FR\FM\06NOR2.SGM 06NOR2 76402 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 equity.50 We explained that by increasing our understanding of the needs of those we serve, CMS aims to ensure all individuals have access to equitable care and coverage. We noted that CMS’s proposal to collect time on machine data supports these priorities. We stated that we believe the proposed data reporting requirements would support our ability to assess whether, and to what extent, our programs and policies may perpetuate or exacerbate systemic barriers to opportunities and benefits for underserved communities. As noted previously, as part of CMS’s December 2018 TEP and in the ESRD PPS CY 2020 final rule, CMS’s EQRS data (formerly collected under CROWNWeb) is reported once per patient-month. CMS’s proposal to collect time on machine data, which would require duration of treatment data reported for every renal dialysis treatment, would provide a more granular set of standardized data for analyzing (and potentially apportioning) composite rate costs for use in the casemix adjustment. We noted that we would also look to time on machine data as a source to monitor claims data and identify disparities in care that could be mitigated by potential future adjustments that would incentivize equitable care within the framework of the ESRD PPS. As we noted in the CY 2024 ESRD PPS proposed rule, ESRD PPS reform is an ongoing multi-year effort to refine payment adjustments and methodologies under the ESRD PPS. Section 1881(b)(2)(B) of the Act provides that the Secretary shall prescribe in regulations any methods and procedures to determine the amounts of payments to be made for part B services (which include renal dialysis services), on a cost-related basis or other economical and equitable basis. Section 1881(b)(14)(D) of the Act requires the ESRD PPS to include a payment adjustment based on case mix that may consider various patient characteristics and other appropriate factors. Since the establishment of the ESRD PPS in the CY 2011 ESRD PPS final rule (75 FR 49030), CMS has been engaged in ongoing monitoring and analysis of the ESRD PPS. CMS publishes these monitoring results regularly.51 CMS’s 50 https://www.cms.gov/about-cms/agencyinformation/omh/health-equity-programs/cmsframework-for-health-equity. 51 Since the implementation of the ESRD PPS in January 2011, CMS has monitored outcomes, through a claims-based monitoring program, for Medicare beneficiaries receiving outpatient maintenance dialysis. See https://www.cms.gov/ medicare/medicare-fee-for-service-payment/ esrdpayment/esrd-claims-based-monitoring. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 monitoring activities have involved analysis of ESRD facility cost reports and patient claims to determine the most accurate adjustments and methodologies as well as to identify trends in beneficiary health outcomes. Similarly, we noted that the proposal in the CY 2024 ESRD PPS proposed rule to collect more-detailed standardized data (that is, the proposed time on machine reporting) than is presently available for analysis supports our ability to evaluate potential disparities in health care provided to our beneficiaries. Presently, CMS adjusts the pertreatment ESRD PPS base rates to account for variation in the case mix, as set forth in § 413.235. These adjustments account for patient age, BSA, low BMI, onset of renal dialysis (new patient), and comorbidities (for example, sickle cell anemia), as specified by CMS. We explained in the CY 2024 ESRD PPS proposed rule that the data and information that inform these adjustments are derived from cost reports, which are submitted to CMS on the facility level. However, we noted that time on machine data would be provided to CMS at the patient level on patient claims. This change would shift CMS’s focus to a more patient-centered paradigm. We stated that we believe time on machine data would provide the insights we need to develop (and propose) potential amendments to the payment multipliers for the current, and potential future, patient-level adjustments, including new SDOH factors or health conditions (such as profound post-dialytic exhaustion) as patient-level adjustments. More immediately, however, time on machine data would significantly enhance CMS’s insight into whether our current payment adjusters are appropriately aligning with actual resource use for individuals and communities who are underserved or disadvantaged and who may have multiple patient-level characteristics that necessitate longer renal dialysis times. For example, CMS is aware of anecdotal evidence and published studies showing that patients with the comorbidity of sickle cell anemia may need a longer renal dialysis treatment time as well as additional resources from medical staff to attend to the manifestations of sickle cell that occur during dialysis. In fact, renal dialysis patients with sickle cell anemia may have frequent pain attacks during the actual renal dialysis treatment.52 Such 52 Benjamin Jacob et al. Management of the Dialysis Patient with Sickle Cell Disease (Seminars in Dialysis 14 July 2015, https://doi.org/10.1111/ sdi.12403). PO 00000 Frm 00060 Fmt 4701 Sfmt 4700 an attack, known as a vaso-occlusive pain crisis, precipitates a series of medical interventions involving intravenous fluids, analgesia, as well as the treatment of any precipitant and/or acute comorbid state.53 CMS would be able to use time on machine data for patients with sickle cell anemia to evaluate its alignment with the patientlevel adjuster for the corresponding comorbidity. In addition to re-evaluating and potentially updating the payment multiplier for the patient-level adjuster for the co-morbidity of sickle cell anemia, we noted that we anticipate that there could be other instances where patients need more time on renal dialysis to avoid uncomfortable postdialytic sequela, such as profound postdialytic exhaustion. In instances of profound post-dialytic exhaustion, for example, CMS would evaluate the forthcoming time on machine data for the potential correlations between additional hemodialysis treatment time and decreased incidence of profound post-dialytic exhaustions, which may have cost implications. We stated that we are aware there may be a need for a future patient-level payment adjuster associated with post-dialysis fatigue. (3) Requirement for Reporting Time on Machine Data To Evaluate Accuracy of Current Payment Adjusters Aligned With Resource Use In the CY 2024 ESRD PPS proposed rule (88 FR 42469), we proposed to require patient-level reporting on resource use involved (time on machine) in furnishing in-center hemodialysis treatment in ESRD facilities, which would serve as a proxy to apportion composite rate costs (capital, labor, and administrative costs, as well as drugs, laboratory tests, and supplies necessary to administer the dialysis treatment) for use in the casemix adjustment. This would allow us to more precisely estimate the average costs of the various earlier-mentioned components of a renal dialysis treatment that cannot currently be captured because payment for these items is bundled, and claims data do not contain detail on the use of these items and services. We stated that CMS would review the patient-level resource use data, including time on machine data, to evaluate and monitor the accuracy of the methods and procedures, including the payment methodology for the patient-level adjustment factors, 53 Derebail VK, Lacson EK Jr, Kshirsagar AV, Key NS, Hogan SL, Hakim RM, et al.: Sickle trait in African American hemodialysis patients and higher erythropoiesis-stimulating agent dose. J Am Soc Nephrol 25: 819–826, 2014. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations enhancing the integrity of the ESRD PPS. In addition, we stated that CMS would evaluate whether the data could be used to inform future refinements to the existing patient-level adjustment factors set forth at § 413.235(a), which may include age, BMI, BSA, and comorbidities such as sickle cell anemia. Finally, we stated that CMS would review the data for its potential to identify any disparities from a health equity perspective and to support the future proposal of any new patient-level adjustment factors, including potential SDOH factors. We noted that such data may also be used to inform potential future refinements to the facility-level adjustment factors, if appropriate. We stated that per § 413.196, we would publish notice of any proposed changes to payment adjustments, including adjustments to the composite rate, in the Federal Register. ddrumheller on DSK120RN23PROD with RULES2 (a) Changes to 42 § 413.198 We proposed to amend § 413.198 by adding language at § 413.198(b)(5) that would require each ESRD facility to submit data and information, under existing paragraph § 413.198(b)(3) describing allowable costs, of the types and in the formats established by CMS, for the purpose of estimating patientlevel and facility-level variation in resource use, such as data and information on the duration of hemodialysis treatment (that is, time on machine data) involved in furnishing hemodialysis treatment in center in an ESRD facility. For additional context, we noted that, under § 413.198(b)(3), allowable cost is the reasonable cost related to renal dialysis treatments. Reasonable cost includes all necessary and proper expenses incurred by the ESRD facility in furnishing the renal dialysis treatments, such as administrative costs, maintenance costs, and premium payments for employee health and pension plans. Reasonable cost includes both direct and indirect costs and normal standby costs. We also proposed to update § 413.198(a) by adding a reference to section 1881(b)(14) of the Act to acknowledge the statutory provisions for the ESRD PPS. (b) Additional Background Considerations for, and Comments and Responses Thereto on, the Proposed Reporting of Time on Machine Data As we noted in the CY 2024 ESRD PPS proposed rule, CMS reviewed past comments from its TEPs and RFIs and considered the approach of our nowrescinded sub-regulatory guidance in Transmittal 10368 and the complexities of reporting the number of minutes of VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 hemodialysis treatment on patient claims. With this background in mind, we further refined our proposed requirements at § 413.198(b)(5) in a way that would result in the reporting of the most useful, high value data. Considering past comments questioning the feasibility and accuracy of time on machine reporting for home dialysis patients, we proposed a reporting requirement that would only apply to patients receiving an in-center hemodialysis treatment. We explained that we believe this approach would ensure greater uniformity to the recording process and thus greater consistency in the data reported. CMS also considered past comments responding to its RFI in the CY 2020 ESRD PPS final rule (84 FR 60648, 60782) regarding patient-level factors that contribute to high costs of care. We stated that we agree with commenters that expressed that patient-level adjusters should be based on sound, empirical evidence of their contribution to cost of care. We noted in the CY 2024 ESRD PPS proposed rule that we agree that the payment multipliers for patient-level adjusters should be grounded in strong evidence, and we recognize that each patient will have unique needs, with some being more costly to treat and others with fewer costs, given their medical backgrounds. We emphasized and again clarified that time on machine data would not be directly used to determine payment for renal dialysis services, nor would higher payments be made for longer treatments. We also considered comments suggesting that a ‘‘time on machine’’ data element would not identify highcost patients and comments suggesting such a data element would not be productive as described earlier in this section. We stated that we agree with commenters that treatment times and costs may be similar across most patients based on our analysis and the comments of TEP participants. However, we would not expect to find that ESRD facilities are treating ESRD patients in a homogeneous fashion, but on a case-by-case basis determined by patient-centered plans of care. We noted that a review of CY 2016 cost report data, conducted as part of the December 2018 TEP,54 showed that overall costs of renal dialysis services (within the ESRD facility cost reports) increased with 54 As presented on Slide 42 from the December 2018 TEP, overall costs of renal dialysis services (within the ESRD facility cost reports) increased with longer treatment times. See https:// www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/ESRDpayment/Downloads/ESRD-PPSTEP-Presentation.pdf. PO 00000 Frm 00061 Fmt 4701 Sfmt 4700 76403 longer treatment times, and that this pattern was consistent for the individual cost report components. We stated in the CY 2024 ESRD PPS proposed rule that we anticipate that the data that would become available under the proposed requirement, if finalized, for reporting time on machine data would provide insight into meaningful, measurable variabilities in certain costs associated with patient-level characteristics. We stated that the significance of the time on machine data is dependent upon the collection of data from a preponderance of patient claims for infacility hemodialysis. We further noted that while most patient claims may come from patients with similar profiles and treatment plans, the needs of the more complex and resource-intensive patients can only be identified by CMS through the collection of patient-level data from across the ESRD PPS patient population. We stated that complex and resource-intensive patients are frequently encountered in the ESRD dialysis treatment setting, but it is not possible to obtain precise estimates of the higher costs of these patients’ hemodialysis treatments from currently reported data. We identified that cost reports and claims are the two data sources from which per treatment costs can be estimated. Since cost reports aggregate data at the facility level, we explained that patient-level differences in resource use are not detectable as higher medical needs, and related costs are masked by averages. Further, analysis of claims data from 2016 found that roughly 99 percent of ESRD facilities reported 10 or fewer distinct charge values across all patients and treatment modalities.55 Routinely collected, ESRD patient populationbased data on time on machine for each in-facility hemodialysis treatment would enable CMS to assess variation in the use of composite rate items and services at the patient level and to identify high-need and high-cost patients. In addition, the time on machine data set would enable CMS to further determine what trends or causal relationships may exist between certain patient-level characteristics and the 55 See page 9 of the December 2018 TEP Report at https://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/ESRDpayment/Downloads/ESRDPPS-TEP-Summary-Report-June-2019.pdf. See also Slide 27 from the December 2018 TEP Presentation at https://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/ESRDpayment/Downloads/ESRDPPS-TEP-Presentation.pdf. And see Slide 30 from the December 2019 TEP Presentation at https://www.cms.gov/files/ document/end-stage-renal-disease-prospectivepayment-system-technical-expert-panelpresentation-december-2019.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76404 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations number of minutes of hemodialysis treatment received by such patients. CMS would evaluate whether specific patient characteristics are associated with increased length of dialysis treatment, which contribute to cost. We also considered comments that the costs to ESRD facilities for providing dialysis treatment could be better measured by looking at costs based on prescribed time, and not on the actual time a patient is on the dialysis machine. The commenters stated their view that looking to prescribed time(s) would be the most rational way to determine staffing levels (and costs), because ESRD facilities plan for dialysis session length based on the prescribed time. Although CMS recognizes ESRD facilities’ labor practices to align staffing with the stated prescription times, CMS is concerned that, for some patients, their prescription times are not aligning with actual usage and thus may not be the best predictor of ESRD facilities’ costs. For example, we noted that we are aware that patients who experience severe itching or have certain psychological disorders may be less likely to receive dialysis for the full prescribed time. For such patients, only the collection of time on machine data for the number of minutes of hemodialysis treatment received would facilitate CMS’s understanding of their complex needs and the implications for the ESRD PPS. For such patients, a pattern of shorter treatment times may ultimately result in worse patient outcomes and higher patient costs to the ESRD facility as well as to Medicare. We stated that CMS is also aware that patients with certain characteristics, such as higher BSA quartiles, may be more likely to need longer dialysis times.56 Additionally, CMS has been made aware of instances in which ESRD facilities may avoid treating complex patients or patients with higher costs generally (thereby favoring average or lower cost patients). We noted that prescribed dialysis times would not provide insight into costs for dialysis sessions for patients whose individual needs or circumstances might necessitate a dialysis treatment time that differs in practice from the prescribed dialysis time. Therefore, identifying actual resource usage, as correlated with the needs, health outcomes, and patientlevel characteristics of complex patients would enable CMS to better align the 56 See slide 31 from the 2020 ESRD TEP presentation, which can be found here: https:// www.cms.gov/files/document/end-stage-renaldisease-prospective-payment-system-technicalexpert-panel-presentation-december-2020.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 payment multipliers with resource use within the ESRD PPS. We stated that we anticipate that our proposed requirement would generate the data we would need to evaluate a potential adjustment of the payment multipliers for patient level adjustments, thereby allowing us to counteract possible financial disincentives to serving those patients. We noted that we expect that such adjustments may thereby enhance access to renal dialysis services for such resource-intensive patients. We also believe that collecting time on machine data is preferable to collecting prescribed times, since we recognize that patients’ actual experiences do not always align with their doctors’ orders. We recognized that a new reporting requirement would require uniformity in its implementation across ESRD facilities. We noted that the proposed ‘‘time on machine’’ requirement is for the reporting of the number of minutes of hemodialysis treatment a beneficiary receives, and it refers to only the minutes (reported in whole minutes) spent dialyzing, while the patient is connected to the dialysis machine. We stated that we would address such details in operational guidance. We received numerous public comments on our proposal in the CY 2024 ESRD PPS proposed rule to require reporting of time on machine data from a broad array of interested parties. Commenters included professional associations, advocacy organizations, large dialysis organizations, independent and regional dialysis providers, individual physicians, other healthcare providers, and patients. The majority of the commenters generally opposed the requirement, but some commenters expressed support. Many commenters were supportive of CMS’s effort to develop a patient cost model and to pursue future refinements that would advance health equity in the ESRD PPS. However, commenters questioned the utility of time on machine data and expressed concern for the additional administrative burden collecting and reporting the data would entail. Commenters expressed concerns about the adverse effects on specific populations. The comments on our proposal and our responses are set forth below. Comment: Some commenters expressed support for establishing a patient cost model that is based on a single patient-level cost variable. MedPAC reiterated its support for collection of time on machine data, which the commission previously noted in their comments on the CY 2022 ESRD PPS proposed rule. MedPAC agreed PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 with CMS that these data could be used in the future to apportion composite rate costs (including labor and capitalrelated costs) that are currently only observable at the facility-level to the patient- or treatment- level for use in case-mix adjustment. One large dialysis organization expressed appreciation for CMS’s acknowledgement that the current two-equation payment model has intricacies that can be mitigated by moving toward a single patient-level cost variable. This commenter asserted that using a patient-level cost variable would more accurately align treatment cost to payment. Further, the commenter urged transparency and inclusion of the dialysis community in moving forward with the development of a patient-level cost variable. Response: CMS appreciates the support expressed by MedPAC and other commenters for moving toward a patient cost model. As we discussed in the CY 2024 ESRD PPS proposed rule and reiterate in this final rule, the proposed requirement for reporting time on machine data is the first step toward creating the kind of patient cost model that commenters acknowledged would have advantages over the current cost model. As we discuss later in this final rule, we intend to analyze time on machine data for the purposes of creating a patient-level cost variable for potential future refinement to the ESRD PPS case mix adjusters. We intend to undertake further rulemaking in subsequent years to address various considerations, including the methodology for allocating composite rate costs to patients for the development of a patient-level cost variable. Interested parties would have the opportunity to comment on the methodology used in CMS’s analysis to support such development at that time. We look forward to actively engaging with the public throughout that process in the future. Comment: Several commenters, including a network of dialysis organizations, State regional offices, a non-profit organization of ESRD networks, an individual commenter, a national organization of patients and kidney health care professionals, MedPAC, an ESRD facility, and patients advocated for evaluating disparities in the ESRD PPS, to refine case-mix adjusters in a way that would improve payment accuracy, promote health equity, and ensure quality of patient care. A national organization of patients and kidney health care professionals voiced support for aligning patient characteristics and co-morbidities more accurately to case-mix adjusters to E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations establish that patients are receiving patient-centered care. One commenter explained that his research has demonstrated that slower, longer dialysis sessions have a positive impact on patient health and mortality. In addition, several commenters described serious issues with shortened dialysis treatments contributing to reduced quality of care. One patient reported an incident in which they lost consciousness during treatment and no staff member responded. Several patients indicated they did not receive education regarding home modalities for years after beginning dialysis treatment. Two patients reported disregard and lack of education by physicians. Several patients reported additional quality of care issues, including starting dialysis treatment late or being removed from dialysis treatment early, being requested to move their treatment time frequently, being moved to another ESRD facility for treatment, and even being requested to skip dialysis treatment. Response: We appreciate the support for advancing health equity and quality of care through refinements to the ESRD PPS case mix adjusters. We believe that time on machine data, which we proposed to collect beginning January 1, 2025, would support CMS’s analysis of disparities and support potential future refinements to advance health equity. Time on machine data can help inform CMS’s understanding of the relationship between resource use and many of the issues reported by patients related to lack of staff time to address education or side effects of dialysis treatments. Monitoring time on machine data will enable CMS to address patient concerns about the possibility of being removed from treatment early or started late and receiving shortened treatments. Any potential new case-mix adjusters or changes to the case-mix adjusters would be the subject of separate rulemaking, and as we noted earlier in this final rule, interested parties would have the opportunity to comment on the methodology used in CMS’s analysis to support such development at that time. Comment: MedPAC recommended that CMS consider the collection of time on machine data for Medicare Advantage (MA) dialysis beneficiaries, as the share of dialysis beneficiaries enrolled in MA plans now exceeds 40 percent. Doing so, MedPAC explained, would enable the agency to identify, assess, and address potential health disparities among both FFS and MA beneficiaries. Response: We appreciate the recommendation from MedPAC to collect time on machine data for MA beneficiaries, but we note that the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 collection of data related to services provided to beneficiaries enrolled in MA is outside the scope of this final rule. Comment: Several commenters, including a coalition of dialysis organizations, a non-profit kidney care alliance, and a non-profit dialysis organization, raised various concerns about the validity and sufficiency of time on machine data for the purpose of measuring patient resource use. One large dialysis organization requested details about how CMS would validate the time on machine data it proposes to collect. Several commenters claimed that shorter time on machine does not correlate with lower costs, and that time on machine data is not an accurate predictor of facility-level composite rate costs, since time on machine does not capture the full scope of services rendered. Specifically, commenters noted that time on machine fails to capture services provided before and after the actual dialyzing time, such as time spent working with social workers. Commenters expressed concern that use of such data would misinform payment model refinements. Commenters also noted that patient characteristics such as pain, comorbidities, or an inability to adhere to the prescribed length of dialysis time, all contribute to variation in time on machine. A coalition of dialysis organizations asserted that the costs of all these patients would remain the same regardless of their time on machine. Several commenters expressed concern regarding the accuracy of data for patients that require the dialysis treatment to be suspended or for dialysis treatment to be ended early due to medical or other needs. One nonprofit treatment and research center expressed that some patients may have personal needs that require working with staff while they are not connected to a dialysis machine, that some patients may need to have dialysis treatment interrupted for a variety of needs, such as mechanical issues, bathroom breaks, and blood pressure issues; therefore, some patients do not complete the full dialysis treatment ordered by the physician. Various commenters, including a professional organization of nephrologists, a non-profit dialysis association, and a large dialysis organization, suggested that CMS exclude certain types of dialysis from the proposed reporting requirement because of concerns about data quality. Commenters suggested excluding time on machine data collection for home dialysis patients, AKI patients, and nocturnal dialysis patients. PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 76405 Furthermore, several commenters expressed their concern that underserved or disadvantaged populations would be allocated fewer resources because of inaccuracies in time on machine data. Specifically, commenters noted that pediatric patients require highly individualized prescription time due to patient size and blood volume, which would not be indicative of health disparities. Lastly, one large dialysis organization requested that CMS track disasters and remove any data related to shortened treatments from the data. Response: We appreciate the concerns that commenters raised regarding the validity and sufficiency of the data. Many of the concerns that commenters raised about potential issues of data quality can be addressed through CMS’s analysis of the data. We note that methodological considerations related to allocating costs based on time on machine data or any other data would be addressed in future notice and comment rulemaking. First, regarding the question about how CMS intends to validate the data, it is not clear whether the commenter is referring to validating that ESRD facilities are reporting accurate and complete information, or ensuring the statistical validity of aggregated data CMS uses for analysis. In the former case, as we noted in the CY 2024 ESRD PPS proposed rule, requiring reporting of time on machine data on a claim, by definition, would involve an attestation that the information submitted is correct and that the items represent expenses for medically necessary services. CMS reserves the right to request documentation from the provider validating the time on machine data, and to recoup payment if this documentation is not provided or supportable, as well as to take other administrative actions, as appropriate. We note that prescription data and historically reported monthly time on machine data is available in EQRS and can be used for the purposes of comparison. In the case of ensuring the statistical validity of data used for future analysis, we note that CMS has historically applied statistical trims to remove outlier values and erroneous data and could employ similar methods for future analyses. As commenters rightly pointed out, time on machine data does not account for costs that ESRD facilities incur before and after the time spent dialyzing. As we previously discussed in the CY 2020 ESRD PPS proposed rule (84 FR 38396 through 38400), patientlevel differences in composite rate costs could be attributed to two discrete E:\FR\FM\06NOR2.SGM 06NOR2 76406 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 categories: differences due to renal dialysis treatment duration (measured in units of time); and differences unrelated to treatment duration. The collection of time on machine data for each dialysis session would support the development of a patient-level cost model, with respect to the portion of composite rate costs that are attributable to dialysis duration. We would consider additional data and information to inform our allocation of costs that are not related to dialysis duration, such as time spent with social workers. Importantly, however, without a measure of dialysis duration, which we have proposed to collect as time on machine data reported on claims, it would not be possible to develop a comprehensive patient-level cost model in the future. We disagree with the commenter that the cost to care for patients is unchanged regardless of pain, comorbidities, or adherence to prescribed dialysis treatment schedule based on time on machine. CMS published the findings from the December 2018 TEP in a report dated June 2019.57 The 2018 TEP report provides clear evidence that in general, longer treatment duration is associated with higher costs. First, as discussed in the 2018 TEP report, an imputed cost per treatment was calculated using a combination of treatment duration data from CROWNWeb 58 (now EQRS) and facility cost per-minute data from cost reports to infer differences in costs across patientmonths. An average interquartile range of 34.6 minutes was observed from CROWNWeb duration data, indicating significant within-facility variation in dialysis treatment time. Significant variation in average imputed cost per hemodialysis sessions also was observed, with an across-facility interquartile range of $62.62. Overall, it was found that costs increased with longer treatment times, and this pattern was consistent for the individual cost report components as well. Facilities with a higher proportion of beneficiaries receiving treatments ≥4.5 hours duration were found to have higher average costs 57 The final TEP report from December 2018 is found directly at: https://www.cms.gov/medicare/ medicare-fee-for-service-payment/esrdpayment/ downloads/esrd-pps-tep-summary-report-june2019.pdf. 58 In 2008, CMS introduced an electronic Webbased data collection system, Consolidated Renal Operations in a Web-enabled Network (CROWNWeb) which was designed to collect clinical performance measures data from dialysis facilities (73 FR 20370, at 20372). CROWNweb is now ‘‘EQRS’’—that is, the ESRD Quality Reporting System (OMB Control Number 0938–1289). VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 for each cost component, except for cost report drugs.59 Lastly, we recognize that the unique needs of particular subpopulations such as pediatric patients, AKI patients, nocturnal patients, and patients with social needs may affect time on machine data. We intend to consider such patient characteristics when proposing a methodology for allocating composite rate costs in the future. We do not believe it would be appropriate to exclude these subpopulations from the analysis entirely, because doing so would result in refinements to the ESRD PPS that in no way account for the unique needs of these subpopulations. Rather, we intend to look for ways to analyze and understand the impacts of such patient characteristics on treatment duration. For example, because commenters have indicated time on machine may be shortened due to social factors, we would encourage ESRD facilities to use Z codes when submitting ESRD PPS claims as appropriate to note when social factors affect treatment time or other aspects of treatment. For instance, if a patient has transportation issues necessitating removal from treatment early, the ESRD facility could include Z59.82 (Transportation insecurity), or if the patient has difficulty in understanding the education provided related to the importance of completing treatments the ESRD facility could use Z55 (Problems related to education and literacy) to indicate the psychosocial need to be addressed. The coding of this type of information, when clinically appropriate, would support CMS’s efforts to understand the impact of social determinants of health, and other factors, on treatment duration and patient-level cost. Comment: Many commenters stated that collecting time on machine data would place a significant administrative burden on ESRD facilities, including for facilities that utilize EHR systems, but especially for smaller facilities and facilities that lack EHR capabilities. Commenters expressed that the timeconsuming task of reporting time on machine would add to ESRD facilities’ costs and would have a negative impact on time available for patient care during a prolonged period of workforce shortage. Several commenters suggested alternative data sources that CMS could consider using in order to avoid the 59 Acumen LLC. ESRD PPS Case-Mix Adjustment Technical Expert Panel (TEP). Slide Presentation Slide 42. December 2018. See https://www.cms.gov/ Medicare/Medicare-Fee-for-Service-Payment/ ESRDpayment/Downloads/ESRD-PPS-TEPPresentation.pdf. PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 burden associated with the proposed collection of time on machine on claims. Some commenters suggested that existing CrownWeb (now EQRS) clinical data on time on machine, collected once monthly in conjunction with blood urea nitrogen (BUN) laboratory testing, could be used instead, reducing the burden on providers to collect data for each treatment. A non-profit kidney care alliance indicated while time on machine data may be interesting, there may be superior alternatives as a proxy to apportion composite rate costs; however, they did not provide any alternatives to time on machine as a proxy. Some commenters encouraged the use of physician prescribed time, rather than actual time on machine, as it reflects how ESRD facilities are staffed. One commenter suggested defining time on machine as blood volume processed >0, as this would enable CMS to capture resources expended on sequential ultrafiltration. Several other commenters suggested limiting the scope of the proposed data collection to reduce burden. Some commenters suggested limiting time on machine data collection to a subset of dialysis facilities or treatments. MedPAC urged CMS to be mindful of the potential for increased administrative burden on ESRD facilities and consider collecting these data for a finite period of time, only as long as needed to explore refining the payment adjustment factors. Response: We acknowledge that collecting time on machine data will increase administrative burden for ESRD facilities, especially those for whom the collection of such data will have to be done manually. However, we do not agree that the proposed reporting requirement will substantially impact time available for patient care, as some commenters suggested. We anticipate that ESRD facilities will employ medical records technicians or similar nondirect-care staff to aggregate time on machine data and report it on claims. Furthermore, as we stated in the CY 2024 ESRD PPS proposed rule (88 FR 42466), for facilities that have already automated the collection of machinegenerated data directly into the patient electronic medical record, this burden should be minimal. CMS will work to provide timely operational guidance about the reporting requirement for time on machine information so that facilities may prepare their information technology (IT) or EHR systems or other processes to collect and report complete time on machine data by January 1, 2025. We have revised our burden estimate in the regulatory impact E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 analysis in section VII.D.2.a of this final rule to reflect the additional burden associated with aggregating time on machine data from the patient record and reporting it on the claim. We appreciate commenters’ suggestions regarding alternative sources of data. As we discuss earlier in this final rule, we believe time on machine is the most appropriate source of data for our proposed purpose. In contrast to the sources that commenters suggested, time on machine data would provide more comprehensive information about the actual quantity of dialysis that a patient receives each month. As we have previously noted, past analysis has demonstrated a statistically significant relationship between a patient’s total time on machine and resource utilization. In addition, we appreciate the suggestion to limit time on machine data collection to a subset of dialysis facilities to drive the revision of casemix adjusters. However, we believe this would be counterproductive, because analysis of a subset of facilities could skew the data and impact the accuracy of case-mix adjusters for the ESRD PPS in its entirety. We also appreciate the recommendation from MedPAC to limit the duration of data collection to the length of time necessary to develop methodology to use for case-mix adjustment. Without collection, review, and assessment of the time on machine data, we cannot provide an estimate of the length of time CMS will need to collect the data. We will consider the recommendation from MedPAC and the level of burden that reporting places on ESRD facilities in the future. We intend to monitor and potentially propose modifications to this policy, as appropriate, through future notice and comment rulemaking. (c) Using a Medicare Claims Data Field To Report Time on Machine Data In the CY 2024 ESRD PPS proposed rule (88 FR 42471), we proposed that ESRD facilities report the number of minutes of hemodialysis treatment received in center in an ESRD facility using the D6 value code on the Medicare 72X type of bill (TOB) that is part of CMS’s claim form CMS–1450 (UB–04) (OMB–0938–0997). While our proposal limited the time on machine reporting requirement to in-center claims, to address the concerns previously raised by interested parties about the burden and complexity of home dialysis reporting, we noted that time on machine for home dialysis data could nonetheless be voluntarily reported using the D6 value code on claims. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 This approach would address longstanding concerns, including such concerns raised by MedPAC and other interested parties, that CMS should move to a one-equation model. We stated that we agree with interested parties that a single-equation model, to be constructed at the patient level, would reduce the complexity of the current model, and would better align payment with costs. The current twoequation model’s payment adjusters are derived using weighted averages of the coefficients from the facility-level and patient-level equations. Because the composite rate items currently comprise roughly 90 percent of the payment, we stated that we are seeking a more detailed understanding of patients’ utilization of such treatment resources. We noted that we anticipate that the time on machine data would provide a useful proxy for these composite rate items. Furthermore, we noted that the proposal to collect time on machine data on patient claims would address past comments on whether such a reporting requirement could create perverse incentives for ESRD facilities to amend actual reported time on machine. Another past commenter expressed concern about whether an ESRD facility might have the renal dialysis run a few extra minutes to increase the payment. However, we noted that requiring the reporting of time on machine data on a claim, by definition, would involve an attestation that the information submitted is correct and that the items presented represent medically necessary expenses. The False Claims Act (31 U.S.C. 3729 to 3733) establishes civil liability for knowingly presenting a false or fraudulent claim to the government for payment. We noted that if the requirement to report time on machine information on claims is finalized, we would issue operational guidance in support of the requirement. We stated that such guidance would describe the applicable instructions for reporting a value code (in this case, the D6 60 value code) connected to the number of minutes of hemodialysis treatment provided to a patient in center. The majority of the commenters expressed concerns about the need for specific operational guidance and about exclusions and missing data. The comments on our proposal and our responses are set forth below. 60 Value code D6 on claim form CMS–1450 (UB– 04) (OMB–0938–0997), for reporting the total number of minutes of dialysis provided during the billing period. PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 76407 Comment: Several commenters, including a non-profit kidney care alliance, a coalition of dialysis providers, and large dialysis organizations requested clarification about the scope and specifications of the proposed reporting requirement. Commenters requested CMS to clarify its proposed definition of time on machine and how ESRD facilities would be expected to collect and report such data under the proposed requirement. A coalition of dialysis providers stated that there are inconsistencies in the methodology used across health care providers for the collection of time on machine data and that CMS will need to provide guidance to ensure data is accurately provided. Two large dialysis organizations recommended CMS define time on machine data collection using an approach like that used in the ESRD Measures Specification Manual associated with the ESRD QIP.61 One large dialysis organization recommended using ‘‘clock time’’ to measure time on machine. We note that the commenter did not specify a meaning for the term ‘‘clock time’’; however, we interpret this to mean the total number of minutes between the beginning of dialysis and the end of dialysis, without accounting for any interruptions. Clock time, the commenter suggested, could be utilized by all ESRD facilities, since it would not require networked electronic medical records. Another large dialysis organization requested confirmation that ESRD facilities would be required to report time on machine for all incenter dialysis treatments, including those provided under special circumstances for patients who normally perform dialysis treatments at home. Response: We appreciate these requests for clarification from the commenters. Although we intend to publish detailed operational guidance, we are taking the opportunity in this final rule to respond directly to the questions that commenters posed. First, while we appreciate the recommendation that we use the ESRD Measures Specification Manual as a guide to define data collection, we note that the manual does not define time on machine in a way that is useful for our purposes. Rather, for the purposes of this reporting requirement, we are clarifying that we generally define time on machine as the total number of minutes between the beginning of dialysis and the end of dialysis, without accounting for any interruptions, which 61 https://www.cms.gov/files/document/cy-2023final-technical-specifications-20230613.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76408 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations we believe one commenter referred to as ‘‘clock time’’, as noted earlier. We do not intend for ESRD facilities to track minutes for interruption during dialysis due to frequent alarms or when a patient is removed from dialysis treatment to go to the bathroom, nor do we expect facilities to subtract those minutes of interruption from the time on machine that is reported. We expect these episodes to be infrequent and timelimited, and generally not a significant driver of aggregate variation in total time on machine between patients. Thus, time on machine for each dialysis treatment can be calculated by subtracting the time the dialysis treatment started from the time the treatment ended. For each ESRD PPS claim, the ESRD facility should report in the D6 value code the total number of minutes across all treatments provided to the patient during the billing period, which is typically a month. Lastly, regarding the comment about in-center dialysis treatments provided under special circumstances for patients who normally perform dialysis treatments at home, we are clarifying that time on machine data must be reported for all dialysis treatments that are provided incenter, even if the patient usually uses a home modality. In such circumstances, the ESRD facility should be billing for in-center dialysis treatments on a separate claim from any home dialysis treatments, with the appropriate indicators to reflect that the treatment is being provided in-center. Comment: Several commenters requested clarification about how to report time on machine in various exceptional circumstances. One large dialysis organization stated that CMS should provide guidance regarding how to report time on machine during certain infrequent anomalous circumstances such as power outages, network failures, mechanical issues or failures, or emergency circumstances when treatments must be shortened. One large dialysis organization requested CMS to differentiate between when time on machine data is captured manually and when it is captured electronically. Commenters also expressed concern about whether ESRD facilities would be paid for treatments for which time on machine was missing and requested that payment should not be withheld for missing time on machine data (that is, claims with no D6 value). One large dialysis organization requested CMS consider allowing an error rate of ten percent of total treatments to allow for unforeseen circumstances. Response: We appreciate the concerns that commenters raised about VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 exceptional circumstances. We recognize that circumstances such as power outages, network failures, mechanical issues or failures, emergency circumstances, and human error can result in disruptions to standard workflows and consequently, missing time on machine data for individual dialysis treatments. We are clarifying that since data for time on machine is reported as an aggregate value for all dialysis treatment sessions in one month, we will not return claims that lack reporting of individual sessions. We will only return claims that have nothing reported in the D6 value code. Therefore, although we appreciate the suggestion to allow a ten percent error rate, we believe it is neither necessary nor appropriate to do so. At this time, we have not established any specific indicators to differentiate between time on machine that is collected manually versus electronically. Nor have we established any identifiers for circumstances when a patient needs to end his or her dialysis session earlier than the prescribed time; however, as we discussed earlier in this final rule, we believe additional information already reported on claims, such as ICD–10 codes, could provide relevant context for such circumstances. We may consider developing additional indicators to identify circumstances like the ones that commenters described, and we would discuss any such changes in future notice and comment rulemaking. (d) Use of Time on Machine Data for the ESRD PPS In our CY 2024 ESRD PPS proposed rule (88 FR 42470), we emphasized and again clarified that time on machine data would not be directly used to determine payment for renal dialysis services, nor would higher payments be made for longer treatments. Rather, we stated that time on machine data would allow for patient-specific calculation of costs for composite rate services, including labor costs, costs for the use of renal dialysis machines and related equipment, and costs for such items as dialysate and other essential supplies. We noted that, in this way, time on machine data would be used to disaggregate facility-level composite rate costs (as obtained from the cost reports) and assign them to the patient-month level, which would enable a refined, single-equation estimation methodology. The refined, singleequation regression analysis (currently under development) would still be used to determine the inclusion/exclusion and magnitude of payment multipliers PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 for patient-level case-mix flags that are associated with higher costs. We wrote that final payment adjustments would still only depend on existing patientlevel case-mix adjustors, rather than a factor directly derived from time on machine data. Several of the commenters expressed concerns about how the resultant time on machine data would be used in the model refinement process to potentially determine payment. The comments on our proposal and our responses are set forth below. Comment: Several commenters requested further clarification about how CMS intends to use the time on machine data. A not-for-profit dialysis organization expressed concern that reporting time on machine data would lead to a payment methodology based on minutes of dialysis provided. Response: In the proposed rule and this final rule, we have clearly stated how data collected from time on machine will be used. We will use time on machine data to help us evaluate and monitor the accuracy of our payments for patient-level adjustment factors. CMS will also evaluate whether the data could be used to inform future refinements to the existing patient-level adjustment factors set forth at § 413.235(a), which include patient age, BMI, BSA, and co-morbidities such as sickle cell anemia. Finally, CMS will review the data for its potential to identify any disparities from a health equity perspective that may support proposing, in future rulemaking, new patient-level adjustment factors, including potential SDOH factors. (e) Request for Information About Effective Date In the CY 2024 ESRD PPS proposed rule, we proposed a January 1, 2025, effective date for this new reporting requirement. We stated that we are aware that all ESRD facilities record the time a patient has received hemodialysis treatment into a patient’s medical record, and that, for most ESRD facilities, this time is automatically recorded into the patient’s EHR. We noted that we further understand that ESRD facilities can transfer data from EHRs into the patient-specific claims that are submitted to Medicare for payment. However, we recognized that some ESRD facilities with limited resources may need to make modifications to their record keeping and reporting systems to facilitate the transfer of a patient’s recorded hemodialysis treatment time in the patient’s medical record to the Medicare claim. Although we did receive a past comment indicating that a facility’s E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations implementation time would involve training staff on how to count and track time, we stated that we do not expect that the manual recording of a patient’s hemodialysis treatment time into their health record is widespread. Finally, we noted that ESRD facilities are already reporting extensive information from patient EHRs into Medicare institutional claim form CMS–1450 (UB–04) (OMB– 0938–0997), and we would not expect implementation to be overly burdensome to ESRD facilities. We stated that we recognize that some ESRD facilities would need to establish a new pathway from patient EHRs to the Medicare claim form, in addition to making simpler programming updates to add a field for the total number of minutes of dialysis provided during the billing period. Based on our findings in the TEP from December 2018, we noted that we anticipate that the implementation challenges that ESRD facilities might experience would be small and temporary, as a patient’s time receiving dialysis treatment is already collected for the patient’s medical record. We solicited comment on whether an earlier effective date, such as January 1, 2024, would be feasible and would provide ESRD facilities with adequate time to implement this new reporting requirement. The majority of the commenters expressed concerns about the ability to make the necessary changes to internal IT systems by a January 1, 2024, reporting requirement. The comments on our proposal and our responses are set forth below. Comment: Commenters expressed strong opposition to any start date earlier than January 1, 2025. A large dialysis organization expressed that making the necessary operational changes to report time on machine data would require considerable effort and would not be possible prior to January 1, 2025. Several commenters called for CMS to allow for at least one year before implementation for ESRD facilities, including large dialysis organizations, to program the new requirements into their IT and EHR systems, and to provide comprehensive guidance before finalizing this policy. A few commenters also suggested that operational guidance be issued in conjunction with the CY 2024 ESRD PPS final rule, and that implementation of the proposed time on machine reporting requirement be delayed until interested parties have an opportunity to comment on such guidance. Response: CMS understands the concerns that commenters raised regarding lead time needed to develop IT systems and processes in order to VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 collect and report accurate and complete time on machine data. As we noted in the CY 2024 ESRD PPS proposed rule, we have proposed an implementation date of January 1, 2025, for this reporting requirement to provide what we believe will be sufficient lead time for ESRD facilities to make these necessary changes to their systems and operations. Commenters indicated that it would take 1 year for ESRD facilities to update their systems after the provision of operational guidance due to systems updates and staff education. We believe that the 1 year implementation timeline strikes a balance between the need to collect this data and ESRD facilities’ need to make operational changes. We also appreciate the concerns of commenters who requested specific operational guidance, and the opportunity to comment on such guidance, before the effective date of the proposed reporting requirement. In this final rule, we have addressed many of the operational questions that commenters posed. Additionally, as we noted earlier in this final rule, we intend to issue detailed operational guidance no later than January 1, 2024. This operational guidance will address topics such as instructions for the collection and reporting of time on machine data, detailed billing requirements, including the types of ESRD PPS claims subject to required reporting of the D6 value code, and guidance on how to proceed when time on machine for a qualifying treatment is missing or otherwise unavailable. The proposed 1-year lead time between the issuance of detailed operational guidance and the effective date of the proposed reporting requirement will afford CMS the opportunity to engage in further dialogue with interested parties about such guidance during the CY 2025 rulemaking cycle. CMS has responded to specific concerns about operational guidance earlier in this section of this final rule. Further guidance will be provided by the MACs. Additionally, interested parties may reach out to CMS to request meetings to discuss and resolve specific concerns. Final Rule Action: We are finalizing our proposal to require the reporting of in-center hemodialysis duration on ESRD PPS claims, beginning January 1, 2025. Specifically, we are finalizing our proposal to require ESRD facilities to report ‘‘time on machine,’’ with certain changes to clarify that ESRD facilities are required to report the number of minutes between the start and end of hemodialysis treatment, without accounting for interruptions, a beneficiary receives during the billing PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 76409 period in center in an ESRD facility. We are finalizing our proposal to require ESRD facilities to report this information using the D6 value code on ESRD PPS claims. We are codifying this requirement in regulation at § 413.198(b)(5)(i). As discussed in section II.B.1.h of this final rule, we are finalizing the addition of § 413.198(b)(5), which states that ESRD facilities must submit data and information in the formats established by CMS for the purpose of estimating patient-level and facility level variation in resource use. (4) Technical Change to § 413.198 We proposed to fix a typographical error in § 413.198(b)(3)(iii), which currently refers to ‘‘luxury items or servicess’’. We proposed to change this to ‘‘luxury items or services’’. CMS did not receive any comments regarding correcting this typographical error in § 413.198(b)(3)(iii). We are finalizing our proposal to revise the typographical error in § 413.198(b)(3)(iii), which currently refers to ‘‘luxury items or servicess’’ to ‘‘luxury items or services’’. k. Clarification to TDAPA Average Sales Price (ASP) Policy In the CY 2020 ESRD PPS final rule, we finalized a conditional policy for TDAPA payment based on the availability of ASP data (84 FR 60679). In that final rule, we explained that if drug manufacturers were to stop submitting full quarters of ASP data for products that are eligible for the TDAPA, and we had to revert to basing the TDAPA on the wholesale acquisition cost (WAC) or invoice pricing, we believed we would be overpaying for the TDAPA for those products. We stated that we would no longer apply the TDAPA for a new renal dialysis drug or biological product if a drug manufacturer submits a full calendar quarter of ASP data into CMS within 30 days after the last day of the 3rd calendar quarter after the TDAPA is initiated for the product, but at a later point during the applicable TDAPA period specified in § 413.234(c)(1) or (2), stops submitting a full calendar quarter of ASP data into CMS. We explained that once we determine that the latest full calendar quarter of ASP is not available, we would stop applying the TDAPA for the new renal dialysis drug or biological product within the next 2calendar quarters. For example, we stated that if we began paying the TDAPA on January 1, 2021 for an eligible new renal dialysis drug or biological product, and a full calendar quarter of ASP data is made available to CMS by October 30, 2021 (30 days after E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76410 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations the close of the 3rd quarter of paying the TDAPA), but a full calendar quarter of ASP data is not made available to CMS as of January 30, 2022 (30 days after the close of the 4th quarter of paying the TDAPA), we would stop applying the TDAPA for the product no later than June 30, 2022 (2 quarters after the 4th quarter of paying the TDAPA). We adopted this conditional policy to avoid overpaying for the TDAPA on an ongoing basis and to ensure that TDAPA payment is based on the most appropriate data, that is, ASP. Specifically, we explained in the CY 2020 ESRD PPS proposed rule (84 FR 38349) and final rule (84 FR 60680) that we were concerned about (1) increases to Medicare expenditures due to the TDAPA for calcimimetics; (2) drug manufacturers not reporting ASP data for products eligible for TDAPA; and (3) our TDAPA policy potentially incentivizing drug manufacturers to withhold ASP data from CMS. In the CY 2024 ESRD PPS proposed rule (88 FR 42472), we discussed that our existing regulation at § 413.234(c) does not specifically address the application of the TDAPA conditional policy in situations in which the manufacturer of the new renal dialysis drug or biological product submitted ASP data to CMS and reported zero or negative sales. Zero or negative sales may occur for a variety of reasons, including no sales, recalls of a product, or repurchases of sold products. In the CY 2012 PFS final rule (76 FR 73296), CMS clarified that zero or negative values are valid for ASP, ASP units, and WAC. Therefore, when such a scenario occurs for separately payable Medicare Part B drugs, we consider the submission of zero or negative sales to fulfill the reporting requirements of manufacturer ASP data to CMS as set forth in sections 1927(b)(3)(A)(iii) and 1847A(f) of the Act. We noted that in situations when zero sales are submitted, CMS guidance 62 instructs the manufacturer to report ‘‘0.000’’ for the ASP and the number of ASP units. The payment allowance limits for drugs and biologicals that are not included in the ASP Medicare Part B Drug Pricing File or Not Otherwise Classified Pricing File, other than new drugs that are produced or distributed under a new drug application (or other application) approved by the U.S. FDA, are based either on the published WAC or invoice pricing (except under OPPS, where the payment allowance limit is 95 percent of the published average wholesale price (AWP)). In determining the payment limit based on WAC, the contractors follow the methodology specified in Publication 100–04, Chapter 17, section 20.4 Drugs and Biologicals, for calculating the AWP, but substitute WAC for AWP. The payment limit is 106 percent of the lesser of the lowest-priced brand or median generic WAC.63 Therefore, for purposes of the TDAPA conditional policy, in circumstances where a manufacturer submitted ASP data reflecting zero or negative sales during the TDAPA period, we clarified that we consider CMS to have received the latest full calendar quarter of ASP data, and we would not discontinue TDAPA payment under the conditional policy in § 413.234(c). Consistent with the pricing methodologies for separately payable Medicare Part B drugs, we would set the TDAPA payment amount based on WAC, or if WAC is not available, invoice pricing, for the quarter in which zero or negative sales were reported. Comment: We received two comments on our proposal to clarify the ASP data submission requirement. Both commenters, a coalition of dialysis organizations and a drug manufacturer, agreed with CMS that a submission reflecting zero or negative sales should not lead to a discontinuation of TDAPA payment. Both commenters supported this clarification. The comment from the coalition of dialysis organizations stated that this policy would support continued patient access to a drug or biological product that is in the TDAPA period. The comment from the drug manufacturer expressed further support for the use of WAC, or if WAC is not available, invoice pricing, when ASP data is not usable for the purposes of determining the TDAPA payment amount and post-TDAPA payment amount. Response: We thank commenters for their support and for their insight into the importance and impact of this policy. Final Rule Action: We are finalizing the clarification to the TDAPA ASP payment policy as proposed; for purposes of the TDAPA conditional policy, in circumstances where a manufacturer submitted ASP data reflecting zero or negative sales during the TDAPA period, we consider CMS to have received the latest full calendar quarter of ASP data, and we will not discontinue TDAPA payment under the 62 https://www.cms.gov/Medicare/Medicare-Feefor-Service-Part-B-Drugs/McrPartBDrugAvgSales Price/Downloads/ASP_Data_Collection_Validation_ Macro_User_Guide.pdf. 63 Medicare Claims Processing Manual Chapter 17, section 20.1.3 https://www.cms.gov/ Regulations-and-Guidance/Guidance/Manuals/ Downloads/clm104c17.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 conditional policy in § 413.234(c). Consistent with the pricing methodologies for separately payable Medicare Part B drugs, in such circumstances, we will set the TDAPA payment amount based on WAC, or if WAC is not available, invoice pricing, for the quarter in which zero or negative sales were reported. C. Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) Clarifications and Application for CY 2024 Payment 1. Background In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), CMS established the transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES) under the ESRD PPS, under the authority of section 1881(b)(14)(D)(iv) of the Act, to support ESRD facility use and beneficiary access to these new technologies. We established this add-on 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 TPNIES. In the CY 2020 ESRD PPS final rule (84 FR 60650), we established in § 413.236(b) that for dates of service occurring on or after January 1, 2020, we would 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 granted marketing authorization by the FDA on or after January 1, 2020; (3) is commercially available by January 1 of the particular CY, 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 CY; (5) is innovative, meaning it meets the substantial clinical improvement criteria specified in the Inpatient Prospective Payment System (IPPS) regulations at § 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). E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Regarding the innovation requirement in § 413.236(b)(5), in the CY 2020 ESRD PPS final rule (84 FR 60690), we stated that we would use the following criteria to evaluate substantial clinical improvement for purposes of the TPNIES under the ESRD PPS based on the IPPS substantial clinical improvement criteria in § 412.87(b)(1) and related guidance: A new technology represents an advance that substantially improves, relative to renal dialysis services previously available, the diagnosis or treatment of Medicare beneficiaries. First, CMS considers the totality of the circumstances 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. Second, 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 • 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; an improved quality of life; or (6) a VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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. Third, evidence from the following published or unpublished information sources from within the United States 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. Fourth, the medical condition diagnosed or treated by the new renal dialysis equipment or supply may have a low prevalence among Medicare beneficiaries. Fifth, the new renal dialysis equipment or supply may represent an advance that substantially improves, relative to services or technologies 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. In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), we also established a process modeled after IPPS’s process of determining if a new medical service or technology meets the substantial clinical improvement criteria specified in § 412.87(b)(1). As we discussed 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 payment adjustments similar to the IPPS New Technology Add-On Payment and to provide stakeholders with standard criteria for both inpatient and ESRD facility 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. We would 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 PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 76411 consideration of public comments, we would 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. In the CY 2020 ESRD PPS final rule, we also specified certain deadlines for the application requirements. We noted that we would only consider a complete application received by February 1 prior to the particular CY. In addition, we required that FDA marketing authorization for the equipment or supply must occur by September 1 prior to the particular CY. We also stated in the CY 2020 ESRD PPS final rule (84 FR 60690 through 60691) that we would establish a workgroup of CMS medical and other staff to review the materials submitted as part of the TPNIES application, public comments, FDA marketing authorization, and HCPCS application information and assess the extent to which the product provides substantial clinical improvement over current technologies. In the CY 2020 ESRD PPS final rule, we established § 413.236(d) to provide a payment adjustment for certain new and innovative renal dialysis equipment or supplies. We stated that the TPNIES is paid for two CYs. 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. Regarding the basis of payment for the TPNIES, in the CY 2020 ESRD PPS final rule, we finalized at § 413.236 that the TPNIES is based on 65 percent of the price established by the MACs, using the information from the invoice and other specified sources of information. In the CY 2021 ESRD PPS final rule (85 FR 71410 through 71464), we made several changes to the TPNIES eligibility criteria at § 413.236. First, we revised the definition of new at § 413.236(b)(2) as within 3 years beginning on the date of the FDA marketing authorization. Second, we changed the deadline for TPNIES applicants’ HCPCS Level II code application submission from September 1 of the particular CY to 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 CY. In addition, a copy of the applicable 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 E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76412 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations CMS website in order for the equipment or supply to be eligible for the TPNIES the following year. Third, we revised § 413.236(b)(5) to remove a reference to related guidance on the substantial clinical improvement criteria, as the guidance had already been codified. Finally, in the CY 2021 ESRD PPS final rule, we expanded the TPNIES policy to include certain capital-related assets that are home dialysis machines when used in the home for a single patient. We explained that capitalrelated assets 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). We noted that examples of capitalrelated assets for ESRD facilities are dialysis machines and water purification systems. We explained that, although we stated in the CY 2020 ESRD PPS proposed rule (84 FR 38354) that 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 are generally used for multiple patients, there were a number of other factors we considered that led us to consider expanding eligibility for these technologies in the CY 2021 ESRD PPS rulemaking. We explained that, following publication of the CY 2020 ESRD PPS final rule, we continued to study the issue of payment for capitalrelated 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 considered various HHS home dialysis initiatives, Executive Orders to transform kidney care, and how the risk of COVID–19 for particularly vulnerable ESRD beneficiaries could be mitigated by encouraging home dialysis. After closely considering these issues, we proposed a revision to § 413.236(b)(6) in the CY 2021 ESRD PPS proposed rule 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 § 413.235(b), and finalized the exception as proposed in the CY 2021 ESRD PPS final rule. We finalized the same determination process for TPNIES applications for capital-related assets that are home dialysis machines as for all other TPNIES applications; that we will consider whether the new home dialysis machine meets the eligibility VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 criteria specified in § 413.236(b) and announce the results in the Federal Register as part of our annual updates and changes to the ESRD PPS. In accordance with § 413.236(c), we will only consider, for additional payment using the TPNIES for a particular CY, an application for a capital-related asset that is a home dialysis machine received by February 1 prior to the particular CY. If the application is not received by February 1, the application will be denied and the applicant is able to reapply within 3 years beginning on the date of FDA marketing authorization to be considered for the TPNIES, in accordance with § 413.236(b)(2). In the CY 2021 ESRD PPS final rule, at § 413.236(f), we finalized a pricing methodology for capital-related assets that are home dialysis machines when used in the home for a single patient, which requires the MACs to calculate the annual allowance and the preadjusted per treatment amount. 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.64 We finalized that this amount would be updated on an annual basis so that it is consistent with how the ESRD PPS base rate is updated. We revised § 413.236(d) to reflect that we would pay 65 percent of the preadjusted per treatment amount minus the offset for capital-related assets that are home dialysis machines when used in the home for a single patient. We revised § 413.236(d)(2) to reflect 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 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. In summary, under the current eligibility requirements in § 413.236(b), CMS provides for a 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 within 3 years beginning on the date of the FDA marketing authorization; (3) is commercially available by January 1 of the particular CY, meaning the year in which the payment adjustment would take effect; (4) has a complete HCPCS Level II code application submitted in 64 The CY 2023 TPNIES offset amount was $9.79. CMS finalized a CY 2024 TPNIES offset amount of $10.00, as discussed in section II.B.1.e of this final rule. PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 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 DMEPOS items and services as specified in the HCPCS Level II coding guidance on the CMS website prior to the CY; (5) is innovative, meaning it meets the criteria specified in § 412.87(b)(1); and (6) is not a capital-related asset, except for capital-related assets that are home dialysis machines. 2. Clarifications Regarding CMS’s Evaluation of the TPNIES Eligibility Criteria This section of the final rule discusses clarifications to our policies for evaluating the TPNIES eligibility criteria under § 413.236(b). a. Sequential Order of CMS Review of the TPNIES Eligibility Criteria (§ 413.236(b)) As stated previously, we consider whether a new renal dialysis supply or equipment meets the TPNIES eligibility criteria as part of the annual ESRD PPS rulemaking and announce the results in ESRD PPS final rule. To qualify for the TPNIES, an applicant must meet each of the TPNIES eligibility criteria set forth in § 413.236(b)(1) through (6). An applicant that fails to demonstrate that it meets each of the six eligibility criteria is not eligible for the TPNIES. In the CY 2021 ESRD PPS final rule, we focused our analysis of the TPNIES eligibility criteria on those that were not met. That is, for the Theranova Dialyzer, we included our analysis of how the applicant did not meet the innovation criterion under § 413.236(b)(5), and for the Tablo® cartridge, we included our analysis of how the applicant did not meet the newness criterion under § 413.236(b)(2) and innovation criterion under § 413.236(b)(5) (85 FR 71444 through 71464). In the CY 2022 and CY 2023 ESRD PPS final rules, we expanded our analysis to include our determination as to whether the applicants met each of the six criteria. In doing so, we analyzed the TPNIES eligibility criteria in the sequence that is provided in § 413.236(b)(1) through (6) (86 FR 61889 through 61906 and 87 FR 67193 through 67216). In the CY 2024 ESRD PPS proposed rule (88 FR 42475 through 42476), we stated that we are clarifying that our analysis of the TPNIES eligibility criteria would continue to proceed in sequential order. Specifically, in the annual ESRD PPS proposed rule, we would continue to summarize the information from the application regarding each of the six eligibility criteria and include any questions or E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations concerns that we identify during our analysis of the application. Based on information provided by the applicant and from public comments during the annual ESRD PPS rulemaking cycle, we would continue to analyze the TPNIES eligibility criteria in sequential order in the annual ESRD PPS final rule. However, the change that we proposed is that once it has been established that one criterion has not been met, we would not discuss or make specific determinations on the subsequent criteria for that item in the annual ESRD PPS final rule. We noted that the criteria set forth in § 413.236(b) are intentionally listed in the order in which they appear. The first criterion is foundational in that an equipment or supply that is not a renal dialysis service would not be paid for under the ESRD PPS and therefore would not fit within the TPNIES payment pathway. As such, it would not be pertinent to evaluate the remaining TPNIES criteria for that item. TPNIES criteria two through four are objective and not subject to interpretation in that they each require date evidence to demonstrate newness, commercial availability, and the submission of a HCPCS application, respectively. The TPNIES innovation criterion under § 413.236(b)(5) requires the most significant CMS evaluation. We explained that, under our TPNIES policy and § 412.87(b)(1)(i), CMS is required to consider the totality of the circumstances 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. In doing so, we consider various nonobjective circumstances in our review of the TPNIES applications, including the state of the ESRD landscape and the particular challenges and vulnerabilities of patients with ESRD (86 FR 61905). We noted that we believe it is prudent to reserve our in-depth analysis of the TPNIES innovation criterion only for applications that provide the necessary evidence to demonstrate that they meet the earlier foundational and objective TPNIES criteria. As described previously in the background section of this final rule, the TPNIES innovation criterion in § 413.236(b)(5) incorporates the substantial clinical improvement criteria in the IPPS regulations at § 412.87(b)(1) for the new technology add-on payment (NTAP). This sequential approach for reviewing eligibility criteria is also in place for the NTAP pathway. The FY 2009 IPPS final VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 rule (73 FR 48561 through 48563) discussed the way in which CMS evaluates the NTAP eligibility criteria for new medical service or technology add-on payment applications. That is, we first determine whether a medical service or technology meets the newness criterion, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. The NTAP cost criterion is not applicable in analyzing TPNIES eligibility. However, consistent with our approach under NTAP, we stated that we believe that the most prudent use of CMS resources would be to reserve our analysis and determination regarding whether a new equipment or supply meets the TPNIES innovation criterion by representing a substantial clinical improvement over existing technologies until after we determine the new equipment or supply meets the earlier criteria. Under this proposal, we would first determine whether an equipment or supply meets the renal dialysis service criterion in § 413.236(b)(1) and present our analysis of this first criterion in the final rule. In instances where CMS determines that § 413.236(b)(1) has been met, we would proceed in assessing the newness criterion in § 413.236(b)(2) and present our analysis of this second criterion in the final rule. In instances where CMS determines that § 413.236(b)(2) has been met, we would proceed in assessing whether the commercial availability criterion in § 413.236(b)(3) has either been met or the applicant expects that it will be met by January 1 of the particular CY and present our analysis of this third criterion in the final rule. In instances where CMS determines that § 413.236(b)(3) has been met or the applicant expects that it will be met by January 1 of the particular CY, we would proceed in assessing the HCPCS Level II code application criterion in § 413.236(b)(4) and present our analysis of this fourth criterion in the final rule. In instances where CMS determines that § 413.236(b)(4) has been met, we would proceed in assessing the innovation criteria in §§ 413.236(b)(5) and 412.87(b)(1) and present our analysis of this fifth criterion in the final rule. In instances where CMS determines that § 413.236(b)(5) has been met, we would proceed in assessing the non-capitalrelated asset (except home dialysis machines) criterion in § 413.236(b)(6) and present our analysis of this sixth criterion in the final rule. In instances where CMS determines that PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 76413 § 413.236(b)(6), as well as each of the five preceding criteria in § 413.236(b)(1) through (5) as discussed previously have been met, the equipment or supply would qualify for and would be paid for under the ESRD PPS using the TPNIES per § 413.236(d) beginning in the year that is the subject of the rulemaking. In summary, we proposed to clarify that as CMS proceeds through the sequential analysis of the six TPNIES eligibility criteria in the ESRD PPS final rule for a particular equipment or supply, once we determine that the item has failed to demonstrate having met one of the eligibility criteria, the item would be ineligible for the TPNIES. We would limit our analysis in the final rule to the TPNIES criterion that is not met and any preceding criteria that have been determined to have been met. We would not include the analysis of the remaining criteria in the final rule. This policy would be effective January 1, 2024 and would apply to our analysis of TPNIES applications for CY 2025 payment. We received six comments regarding our proposed clarification of the sequential order of CMS review of the TPNIES eligibility criteria at § 413.236(b). These comments and CMS’s responses are set forth below. Comment: One commenter supported our proposal with the understanding that all criteria would be discussed in full in the annual ESRD PPS proposed rule. Other commenters requested CMS confirmation that we would continue to summarize the information from each TPNIES application, including any questions and concerns regarding each of the six eligibility criteria, in the annual CY ESRD PPS proposed rule. Commenters also requested clarification that in the annual CY ESRD PPS final rule, CMS would limit its analysis to the criterion not met as well as any preceding criteria that are met. Several other commenters expressed concern that our proposal would deny applicants CMS’s analysis of each criterion, eliminating the opportunity for the public to review the latter eligibility criteria and limiting applicants’ ability to correct deficiencies prior to the next TPNIES application cycle. Response: We thank the commenters for their input and confirm that we will continue to include our analysis of each TPNIES eligibility criterion in sequential order in the annual CY ESRD PPS proposed rule. We believe that identifying our comments or concerns with each of the eligibility criteria in the proposed rule provides the public with sufficient information and ample opportunity to review and respond to E:\FR\FM\06NOR2.SGM 06NOR2 76414 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 our analysis and provides the applicant with the opportunity to correct deficiencies, as needed. If a TPNIES applicant who is denied reapplies in a later application cycle, we will continue to provide a full analysis of all the eligibility criteria once again in the annual ESRD PPS proposed rule to allow the applicant an opportunity to correct any additional deficiencies for all the eligibility criteria, as needed. As stated in the CY 2024 ESRD PPS proposed rule (88 FR 42475), an applicant that fails to demonstrate that it meets each of the six eligibility criteria is not eligible for the TPNIES. Therefore, we believe that reviewing the TPNIES eligibility criteria in sequential order allows CMS to reserve our indepth analysis of the TPNIES innovation criterion only for applications that provide the necessary evidence to demonstrate that they meet the earlier foundational and objective TPNIES criteria. This approach is consistent with the way that NTAP applications are assessed in the annual IPPS rule. Final Rule Action: After consideration of the public comments received, we are finalizing our clarification regarding the sequential order of CMS review of the TPNIES eligibility criteria as proposed. In the annual ESRD PPS proposed rule, we will continue to summarize the information from the application regarding each of the six eligibility criteria and include any questions or concerns that we identify during our analysis of the application. As CMS proceeds through the sequential analysis of the six TPNIES eligibility criteria in the ESRD PPS final rule for a particular equipment or supply, once we determine that the item has failed to demonstrate having met one of the eligibility criteria, the item will be ineligible for the TPNIES. We will limit our analysis in the final rule to the TPNIES criterion that is not met and any preceding criteria and will not include the analysis of the remaining criteria in the final rule. This policy will be effective January 1, 2024 and will apply to our analysis of TPNIES applications for CY 2025 payment. b. Clarifications Regarding the TPNIES Newness Criterion (§ 413.236(b)(2)) As stated previously, applicants must meet the newness criterion in § 413.236(b)(2) to qualify for the TPNIES. CMS defines the TPNIES newness criterion at § 413.236(b)(2) as within 3 years beginning on the date of the FDA marketing authorization. In the CY 2024 ESRD PPS proposed rule (88 FR 42476), we clarified two distinct aspects of the criterion that are VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 consistent with our current TPNIES policies and would not represent any changes to the eligibility criteria: (1) the 3-year newness period and (2) FDA marketing authorization. First, with respect to the 3-year newness period, we stated in the CY 2021 ESRD PPS final rule that by defining new as within 3 years beginning on the date of the FDA marketing authorization, we limit eligibility for the TPNIES to new technologies but allow prospective TPNIES applicants 3 years beginning on the date of FDA marketing authorization in which to submit their applications (85 FR 71410 through 71464). To further clarify the timeframe during which a prospective TPNIES applicant is eligible to apply, in the CY 2024 ESRD PPS proposed rule (88 FR 42476), we proposed to modify our regulation to specify that the applicant would have 3 years from the date of FDA marketing authorization to apply for the TPNIES, based on the date the application is submitted. We noted that this modification is consistent with current policy, and while it is not a change in policy, we believe that clarifying the regulation text would help to eliminate any confusion about the 3year newness period. As indicated in § 413.236(c), February 1 prior to the particular CY is the annual TPNIES application submission deadline. We proposed to clarify that the 3-year newness period is only for submission of the complete application. An applicant does not have to ensure that CMS renders its determination through notice and comment rulemaking within the 3-year newness period. Specifically, we proposed to revise § 413.236(b)(2) to clarify that the equipment or supply is new if a complete application has been submitted to CMS under § 413.236(c) within 3 years of the date of the FDA marketing authorization. Second, with respect to the requirement in § 413.236(b)(2) that the equipment or supply must have FDA marketing authorization, we proposed to clarify that an equipment or supply with FDA Exempt status would not meet the newness criterion and therefore would not be eligible for the TPNIES. As described on the FDA website, the Medical Device Amendments of 1976 to the Federal Food, Drug, and Cosmetic Act established three regulatory classes for medical devices: Class I, Class II, and Class III. The three classes are based on the degree of control necessary to assure the various types of devices are safe and effective.65 Most Class 1 and some Class 65 Food & Drug Administration. Learn if a Medical Device Has Been Cleared by FDA for Marketing. PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 II devices, as noted on FDA’s website, are exempt from premarket notification (510(k)) requirements, subject to certain limitations.66 As we stated in the CY 2023 ESRD PPS final rule (87 FR 67202 through 67023), devices that receive FDA marketing authorization have met regulatory standards that provide a reasonable assurance of safety and effectiveness for the devices. For exempt devices, FDA has determined that a premarket notification is not required to provide a reasonable assurance of safety and effectiveness for the devices. However, generally a Class I or Class II device that is exempt from 510(k) requirements still must comply with certain regulatory controls (known as ‘‘general controls’’) to provide a reasonable assurance of safety and effectiveness for such devices. In limiting the TPNIES policy to items that have received FDA marketing authorization, we intended to exclude devices that lack FDA marketing authorization (87 FR 38511). In the absence of evidence that the renal dialysis equipment or supply is new, meaning a complete application has been submitted to CMS under § 413.236(c) within 3 years of the date of the FDA marketing authorization, the equipment or supply would not meet the TPNIES newness criterion under § 413.236(b)(2). We received 11 comments on our proposed clarifications regarding the TPNIES newness criterion at § 413.236(b)(2). These comments and CMS’s responses are set forth below. Comment: In general, commenters supported both TPNIES clarifications. Commenters supported our proposal to revise § 413.236(b)(2) to clarify that the equipment or supply is new if a complete application has been submitted to CMS under § 413.236(c) within 3 years of the date of the FDA marketing authorization and stated that basing the three-year newness period on the date of the TPNIES application submission, and not the date of CMS’s determination through notice and comment rulemaking would ensure that months of eligibility are not taken up by the determination process. With respect to our proposal that an equipment or supply with FDA Exempt status would not meet the newness criterion and therefore would not be Available at: https://www.fda.gov/medical-devices/ consumers-medical-devices/learn-if-medicaldevice-has-been-cleared-fda-marketing. Accessed on March 14, 2023. 66 Food & Drug Administration. Class I and Class II Device Exemptions. Available at: https:// www.fda.gov/medical-devices/classify-yourmedical-device/class-i-and-class-ii-deviceexemptions. Accessed on May 30, 2023. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations eligible for the TPNIES, one commenter stated that this policy would limit access to the TPNIES. The commenter stated that because exempt devices must still comply with general controls to provide a reasonable assurance of safety and effectiveness, these devices have no need to apply for FDA marketing authorization, and an FDA determination should not exclude these devices from the TPNIES. This commenter asserted that CMS should incentivize innovation in the ESRD space by allowing all relevant and appropriate technologies an opportunity to apply for the TPNIES. Response: We appreciate the commenters’ overall support for our clarifications regarding the TPNIES newness criterion. Regarding our proposed clarification that an equipment or supply with FDA Exempt status would not meet the newness criterion, we emphasize that for the purposes of the TPNIES, we rely on FDA marketing authorization to ensure that devices have met regulatory standards that provide a reasonable assurance of safety and effectiveness. While a Class I or Class II device that is exempt from 510(k) requirements still must comply with certain regulatory controls (known as ‘‘general controls’’) to provide reasonable assurance of safety and effectiveness for such devices, we do not believe devices with Exempt status offer the level of assurance that is provided with FDA marketing authorization. As such, we maintain that our original intent was to exclude devices that lack FDA marketing authorization (87 FR 38511). Final Rule Action: After considering public comments, we are finalizing as proposed our proposal to revise § 413.236(b)(2) to clarify that the equipment or supply is new if a complete application has been submitted to CMS under § 413.236(c) within 3 years of the date of the FDA marketing authorization. We are also finalizing as proposed our proposed clarification that an equipment or supply with FDA Exempt status would not meet the newness criterion and therefore would not be eligible for the TPNIES. In the absence of evidence that the renal dialysis equipment or supply is new, meaning a complete application has been submitted to CMS under § 413.236(c) within 3 years of the date of the FDA marketing authorization, the equipment or supply would not meet the TPNIES newness criterion under § 413.236(b)(2). We received one application for the TPNIES for CY 2024. A discussion of the application is presented below. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 3. CY 2024 TPNIES Application for Buzzy® Pro Pain Care LabsTM submitted an application for the TPNIES for Buzzy® Pro for CY 2024. Buzzy® Pro is one of several models of the Buzzy® device. The Buzzy® device is intended to control pain associated with needle procedures and for temporary relief of minor injuries. Buzzy® Pro is a palmsized external use vibration device used with unique ice packs and is intended to temporarily desensitize and physiologically block pain associated with dialysis cannulation. The applicant stated that dialysis cannulation pain affects 12 to 80 percent of dialysis patients and is a substantial contributor to reduced quality of life.67 68 The applicant further stated that cannulation pain is associated with fear of the cannulation process, the decision to undergo hemodialysis and sometimes the hemodialysis itself. The applicant described the steps for using Buzzy® Pro during dialysis: (1) thread the hands free strap or regular tourniquet through the ice pack and the device so that the ice pack is on the concave side of the device; (2) attach the device and the ice directly over the site; (3) activate the vibration toggle switch and leave in place 30 to 120 seconds; (4) during cannulation, move the device proximally so the dot on the side opposite the switch is 2 to 3 cm proximal to the cannulation site; (5) clean the site per cannulation protocol; and (6) remove the device after the painful part of procedure is completed. a. Renal Dialysis Service Criterion (§ 413.236(b)(1)) Regarding the first TPNIES eligibility criterion in § 413.236(b)(1), that the item has been designated by CMS as a renal dialysis service under § 413.171, pain management associated with dialysis cannulation is a service that is furnished to individuals for the treatment of ESRD and is essential for the delivery of maintenance dialysis. We consider Buzzy® Pro a renal dialysis service under § 413.171. b. Newness Criterion (§ 413.236(b)(2)) With respect to the second TPNIES eligibility criterion in § 413.236(b)(2), that the item is new, meaning within 3 years beginning on the date of the FDA 67 Kosmadakis G, Amara I, Costel G. Pain on arteriovenous fistula cannulation: A narrative review. Semin Dial 2021;34(4):275–84 doi: 10.1111/ sdi.12979 [published Online First: 20210507]. 68 Kosmadakis G, Amara B, Costel G, Lescure C. Pain associated with arteriovenous fistula cannulation: Still a problem. Nephrol Ther 2022;18(1):59–62 doi: 10.1016/j.nephro.2021.05.002 [published Online First: 20210618]. PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 76415 marketing authorization, the applicant stated that it is seeking 510(k) marketing authorization from the FDA for a new utility and design of Buzzy® created for dialysis fistulae sites, patented in 2022 under the name Buzzy® Pro. To be eligible for the TPNIES, the applicant must apply within 3 years of the FDA marketing authorization date and receive FDA marketing authorization by the HCPCS Level II deadline of July 3, 2023. The applicant submitted the indications for use portion of its FDA 510(k) application that identifies Buzzy® as all Buzzy® models: Mini Healthcare, XL Healthcare, Mini Personal, XL Personal and Pro to control pain associated with needle procedures including dialysis and the temporary relief of minor injuries. The applicant provided supplemental information in a document titled ‘‘510(k) Summary’’ that included a comparison table of the Predicate Device (K130631) to the Subject Device (K202993). The document indicated that only the Buzzy® Pro model is recommended for dialysis. The document also indicated that Buzzy® Pro is identical to the predicate device in terms of materials, vibration motor, circuitry, functionality, and intended use; differs only in shape but is comparable in size to the predicate device; and Buzzy® Pro is distinguished by its rectangular shape to offer users a more professional looking alternative to the bee-shape of the other device. In the CY 2024 ESRD PPS proposed rule, we stated that we would be interested in better understanding the way in which the Buzzy® Pro, that is the subject of this TPNIES application, differs from the other Buzzy® models and whether Buzzy® Pro is indicated for adult versus pediatric patients, or both. We noted that to satisfy the newness criterion, the FDA 510(k) marketing authorization must have been issued within 3 years covering the specific device and model that is the subject of the TPNIES application. We invited public comment on this issue in the proposed rule. Comment: The applicant submitted a comment to demonstrate that the device meets the newness criterion. With respect to our question regarding the way in which the Buzzy® Pro, which is the subject of this TPNIES application, differs from the other Buzzy® models, the applicant provided a table comparing Buzzy® Pro and predicate Buzzy® devices and stated that Buzzy® Pro is identical to the predicate devices in terms of materials, vibration motor, circuitry, functionality, curvature to fit the angle of the arm, and the mnemonic design with a ‘‘dot’’ to put near the E:\FR\FM\06NOR2.SGM 06NOR2 76416 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ‘‘shot.’’ The applicant stated that Buzzy® Pro is thinner, lighter, and has dual arms to attach to the cannulation site compared to the predicate device; and Buzzy® Pro offers users a more professional looking alternative to the bee-shape of the other device. With respect to FDA marketing authorization, the applicant indicated that Buzzy® Pro received FDA 510(k) approval on May 15, 2023, to control pain associated with needle procedures (for example, injections, vascular access, cannulation, lab draws, blood donation, dialysis, cosmetic and dental injections). Response: We appreciate the applicant’s clarification regarding Buzzy® Pro’s similarity to its predicate devices and confirmation of FDA marketing authorization. Based on the information provided by the applicant, we agree that Buzzy® Pro meets the newness criterion. c. Commercial Availability Criterion (§ 413.236(b)(3)) Regarding the third TPNIES eligibility criterion in § 413.236(b)(3), that the item is commercially available by January 1 of the particular CY, meaning the year in which the payment adjustment would take effect, the applicant stated that it expects Buzzy® Pro would be commercially available immediately after receiving FDA marketing authorization. Comment: The applicant submitted a comment indicating that as of May 15, 2023, Buzzy® Pro is commercially available. Response: Based on the information provided by the applicant, Buzzy® Pro meets the commercial availability criterion. ddrumheller on DSK120RN23PROD with RULES2 d. HCPCS Level II Application Criterion (§ 413.236(b)(4)) Regarding the fourth TPNIES eligibility criterion in § 413.236(b)(4) requiring that the applicant submit a complete HCPCS Level II code application by the HCPCS Level II application deadline of July 3, 2023, the applicant stated that it intends to apply by the deadline. Comment: The applicant submitted a comment indicating that the HCPCS Level II code application was submitted to CMS on July 1, 2023. Response: We appreciate the applicant’s confirmation of having submitted the HCPCS Level II code application and confirm that CMS received the application by the deadline. Therefore, we agree the applicant has met the HCPCS Level II application criterion. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 e. Innovation Criteria (§§ 413.236(b)(5) and 412.87(b)(1)) (1) Substantial Clinical Improvement Claims and Sources With regard to the fifth TPNIES eligibility criterion under § 413.236(b)(5), that the item is innovative, meaning it meets the substantial clinical improvement criteria specified in § 412.87(b)(1), the applicant presented two substantial clinical improvement claims. First, the applicant stated that Buzzy® Pro controls needle pain for dialysis. Specifically, per the applicant, Buzzy® Pro makes cannulation pain relief available to dialysis patients, which significantly improves clinical outcomes related to depression and discontinuation of dialysis due to needle pain. Second, the applicant stated that Buzzy® Pro reduces needle fear. With respect to the claim that Buzzy® Pro controls needle pain for dialysis, the applicant stated that currently, the most effective options for dialysis cannulation pain are the topical anesthetic, EMLA® and vapocoolant spray.69 Per the applicant, systematic reviews recommend against vapocoolant use due to lack of efficacy70 and EMLA® incurs $15 cost per use and takes 1 hour to become effective. The applicant asserted that the Buzzy® device has been shown to be superior to vapocoolant spray71 and equivalent to topical anesthetics EMLA® and LMX® at a fraction of the cost and time.72 73 The applicant stated that while ice is ¨ zbek O, Y(lmaz M, Duman I, O ¨ zbek 69 C ¸ elik G, O S, Apiliogullari S. Vapocoolant spray vs lidocaine/ prilocaine cream for reducing the pain of venipuncture in hemodialysis patients: a randomized, placebo-controlled, crossover study. Int J Med Sci 2011;8(7):623–7 doi: 10.7150/ ijms.8.623 [published Online First: 20111012]. 70 Hogan ME, Smart S, Shah V, Taddio A. A systematic review of vapocoolants for reducing pain from venipuncture and venous cannulation in children and adults. J Emerg Med 2014;47(6):736– 49 doi: 10.1016/j.jemermed.2014.06.028 [published Online First: 20140829]. 71 Baxter AL, Leong T, Mathew B. External thermomechanical stimulation versus vapocoolant for adult venipuncture pain: pilot data on a novel device. Clin J Pain 2009;25(8):705–10 doi: 10.1097/ AJP.0b013e3181af1236 [published Online First: 2009/11/19]. 72 Lescop K, Joret I, Delbos P, et al. The effectiveness of the Buzzy® device to reduce or prevent pain in children undergoing needle-related procedures: The results from a prospective, openlabel, randomised, non-inferiority study. Int J Nurs Stud 2021;113:103803 doi: 10.1016/ j.ijnurstu.2020.103803 [published Online First: 20201019]. 73 Potts DA, Davis KF, Elci OU, Fein JA. A Vibrating Cold Device to Reduce Pain in the Pediatric Emergency Department: A Randomized Clinical Trial. Pediatr Emerg Care 2017 doi: 10.1097/pec.0000000000001041 [published Online First: 2017/01/26]. PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 effective for reducing dialysis pain for both adults and children, it is messy and inferior. The applicant further stated that a Buzzy® device cannulation study in adults found that ice is only 10 percent of the effect, with the mechanical gate control neuromodulation (vibration) providing 90 percent of the pain relief.74 With respect to the claim that Buzzy® Pro reduces needle fear, the applicant stated that 25 to 47 percent of chronic kidney patients have needle fear.75 The applicant further stated that CDC recommends vibrating cold devices for needle fear in children, and cold devices with a buzzer for adults.76 The applicant also stated that meta-analyses demonstrate significant fear reduction with Buzzy® device,77 and a New Zealand study demonstrated improved adherence to Bicillin injections with fear reduced 50 percent after three uses of Buzzy® device.78 The applicant also stated that Buzzy® device is indicated by Health Canada to ‘‘control pain and fear from needles’’ and is used for fearful dialysis patients in the Netherlands. The applicant submitted 33 unique sources of evidence with its application in support of its claims of substantial clinical improvement. Thirty of the sources that were submitted examined the effect of external cold and vibration devices, including the Buzzy® device, though not Buzzy® Pro, during needle procedures other than dialysis cannulation. One article examined the effect of cryotherapy on pediatric pain management at the arteriovenous fistula site during hemodialysis.79 Because the 74 Abidin NH. Assessing The Effectiveness Of A Thermomechanical Device (Buzzy®) In Reducing Venous Cannulation Pain In Adult Patients. Middle East Journal of Anesthesiology 2018;25(1):61–67. 75 Duncanson E, Le Leu RK, Shanahan L, et al. The prevalence and evidence-based management of needle fear in adults with chronic disease: A scoping review. PLoS One 2021;16(6):e0253048 doi: 10.1371/journal.pone.0253048 [published Online First: 20210610]. 76 Easy to Read: Needle Phobia. Available at: https://www.cdc.gov/ncbddd/humandevelopment/ covid-19/needle-phobia/. Accessed March 9, 2023. 77 Ballard A, Khadra C, Adler S, Trottier ED, Le May S. Efficacy of the Buzzy® Device for Pain Management during Needle-Related Procedures: A Systematic Review and Meta-analysis. Clin J Pain 2019 doi: 10.1097/ajp.0000000000000690 [published Online First: 2019/03/05]. 78 Russell K, Nicholson R, Naidu R. Reducing the pain of intramuscular benzathine penicillin injections in the rheumatic fever population of Counties Manukau District Health Board. J Paediatr Child Health 2014;50(2):112–7 doi: 10.1111/ jpc.12400 [published Online First: 2013/10/19]. 79 Attia, A., Hassan, A. Effect of cryotherapy on pain management at the puncture site of arteriovenous fistula among children undergoing hemodialysis. International Journal of Nursing Sciences 2017; (4) 46–51. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations study did not examine the effect of external cold and vibration devices such as the Buzzy® device or more specifically the device that is the subject of this TPNIES application, Buzzy® Pro, in managing dialysis related pain or fear, it was not directly applicable to the applicant’s substantial clinical improvement claims. One article evaluated the effectiveness of distraction cards, in pediatrics in reducing pain and anxiety during intramuscular injection.80 Because the study did not examine the effect of external cold and vibration devices such as the Buzzy® device or the Buzzy® Pro device in managing dialysis-related pain or fear, it was not directly applicable to the applicant’s substantial clinical ddrumheller on DSK120RN23PROD with RULES2 80 Sahiner, N., Turkmen, A. The Effect of Distraction Cards on Reducing Pain and Anxiety During Intramuscular Injection in Children. Worldviews on Evidence-Based Nursing 2019; 1–6. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 improvement claims. One document labeled as Dutch guidelines was submitted in non-English text and thus, was not readily accessible to our review team. The applicant also submitted a list of references, referred to as a literature review, that pertained to the applicant’s products, among which, the Buzzy® device was listed as relieving or reducing needle pain and fear and for needle procedures and for musculoskeletal pain. In a document titled ‘‘Summary of Clinical Evidence—relief of needle pain and fear,’’ the applicant presented the study objectives and key features of 29 81 of the 30 submitted sources that 81 The following source was not included in the summary table: Redfern RE, Chen JT, Sibrel S, Effects of Thermomechanical Stimulation during Vaccination on Anxiety, Pain, and Satisfaction in Pediatric Patients: A Randomized Controlled Trial. J Pediatr Nurs.2018.38: 1–7. PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 76417 examined the effect of external cold and vibration devices, including the Buzzy® device, though not Buzzy® Pro, during needle procedures other than dialysis cannulation. The document identified several additional sources that were not submitted by the applicant. Finally, the applicant submitted a document titled ‘‘Buzzy Fear reduction rationale and table’’ that duplicated information already captured in the ‘‘Summary of Clinical Evidence—relief of needle pain and fear’’ document. Table 10 lists the 29 sources that were both identified by the applicant in the ‘‘Summary of Clinical Evidence—relief of needle pain and fear’’ document and that were submitted. We have not included sources that were mentioned by the applicant, but not submitted to us. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 76418 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 10: Applicant's Substantial Clinical Improvement Sources Buzzy ddrumheller on DSK120RN23PROD with RULES2 (2) 0: Anxiety reduction F: Systematic Review and Metaanalysis N=l138 P: 2-17 0: Pain relief and anxiety reduction for pediatric needle procedures F: Systematic review and metaanalysis N=l479 P: 2-18 y/o Multiple devices 0: Pain relief for cannulation in pediatrics F: RCT: Buzzy compared to LMX topical anesthetic N=l73 P: 18 months - 17 y/o Buzzy M-stim only 0: Pain relief and first stick vascular access success in pediatric emergency F: RCT: Buzzy v. Vapocoolant N=81 P: 4-18 y/o Buzzy VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 ( 1) Self-Reported pain reduction 1.11; 95% [CI]: -1.52 to -0.70; P<0.0001) Of 4 studies only assessing lab draws, IV catheter/venipuncture procedures (SMD: -1.30; 95% CI: -1.84 to -0.76 P<0.00001) (2) (Pain reduction -1.11; 95% confidence interval [CI]: -1.52 to 0.70; P<0.0001), anxiety reduction (SMD -1.37; 95% CI: -1.77 to 0.96; P<0.00001 Meta-regression demonstrated a significant negative correlation of pain score with age. For children at 8.5 years, cold vibration reduced the pain score by 0.13 averagely for every increment in year compared with controls (MD -0.13; 95% CI: -0.25, -0.01 There were no statistically significant differences among treatment groups based on the observational measures of pain or the self-report measures of pain. Findings support the use of both mechanical vibration and topical anesthetic as effective in children Vascular access success more likely w/ Buzzy: (odds ratio, 3.05; 95% CI, 1.03- 9.02), p=.040); Self-reported pain scores lower with Buzzy: (-2; 95% CI, -4 to 0) than with vapocoolant (p=.029). Parent reported pain scores lower with Buzzy (-2; 95% CI -4 to -2) than va ocoolant =.005. Frm 00076 Fmt 4701 Sfmt 4725 Ballard A Khadra C, Adler S, Doyon- Trottier E, Le May S. Efficacy of the Buzzy Device for Pain Management during Needle-Related Procedures: A Systematic Review and Metaanalysis. Clin J Pain. 2019 June; 35(6):532-543. Su HC, Hsieh CW, Lai NM, Chou PY, Lin PH, Chen KH. Using vibrating and cold device for pain relievers in children: a systematic review and metaanalysis ofrandomized controlled trials. J Pediatr Nurs. 2021 Mar 15; 61:23-33. Bahorski JS, Hauber RP, Hanks C, Johnson M, Mundy K, Ranner D, Stoutamire B, Gordon G. Mitigating procedural pain during venipuncture in a pediatric population: A randomized factorial study. Int J Nurs Stud. 2015 Oct;52 10 :1553-64. Baxter AL, Cohen LL, McElvery HL, Lawson ML, von Baeyer CL. An integration ofvibration and cold relieves venipuncture pain in a pediatric emergency department. Pediatr Emerg Care. 2011 Dec;27(12):1151-6. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.013</GPH> (1) 0: Pain relief and anxiety reduction for pediatric needle procedures F: Systematic review and metaanalysis N=ll38 P: 3 -18 y/o Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations (1) 0: Pain relief in adult vascular access F: RCT: Buzzy v. Vapocoolant N=31 P: 18+ Years Hospital employees Buzzy (2) 0: Pain relief with cannulation on the dorsum of hand F: Crossover trial rated with VAS N=31 P: Adult healthcare workers (1) 0: Pain and anxiety relief in vascular access procedures in children F: RCT: Buzzy, Buzzy + Cartoons, Cartoons alone, Control/nothing. N=150 P: Mean age 9.4 years (1) In a crossover trial, Buzzy reduced angiocath placement pain (mean 9.9 mm, 95% [CI] 0.82-19, P=0.035, SD 16) compared to vapocoolant (mean 7.9 mm, 95% [CI]-1.8-17.7, P=0.1, SD 16.9) 76419 Baxter AL, Leong T, Mathew B. External thermomechanical stimulation versus vapocoolant for adult venipuncture pain: pilot data on a novel device. Clin J Pain. 2009 Oct;25(8):705-10. (2) Each 20mm of pre-procedural fear increased the likelihood of a successful intervention pain relief (odds ratio 2, P=0.043). Buzzy (2) 0: Fear reduction using Buzzy v. Cartoons v. Nothing v. Buzzy+ Cartoons F: RCT N=150 P: Pediatric 5-12 years (1) Pain: "Buzzy was highly effective in children younger than 9 (p=0.04). Also, a significant efficacy was recorded in the Buzzy and Cartoon group (p=0.04) for the nurse's perception of the child's pain, and in the Buzzy group for the mother's perception of the child's pain (p=0.002)." Anxiety: "Particularly, the difference was statistically significant in the Buzzy (p=0.03) and the Buzzy and animated Cartoon groups (p=0.02) for nurses' perception of the child's anxiety, and in the Buzzy group for mothers' perception of anxiety (p=0.03)." Bergomi P, Scudeller L, Pintaldi S, Dal Molin A. Efficacy ofNonpharmacological methods of pain management in children undergoing venipuncture in a pediatric outpatient clinic: A randomized controlled trial of audio-visual distraction and External Cold and Vibration. J Pediatr Nurs. 2018 Sep-Oct; 42: e66-e72. (2) (Children's Emotional Manifestation Scale for anxiety: per nursing and mother evaluation) Nothing -0.26 v. Buzzy-0.86 P=.03. Nothing -0.26 v. Buzzy+ Cartoons -0.89 P=.02 Nothing -0.26 v. Cartoons alone .073 P=.09). Buzzy ddrumheller on DSK120RN23PROD with RULES2 children during vascular access F: RCT: Buzzy, Bubbles, and Control N=96 P: 3 -6 y/o VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Pain scores were lower in the groups of Buzzy and blowing soap bubbles than the control group. There was no statistical difference between Self Report, Parent Report, Nurse Report, or Researcher Report between Buzzy and Bubbles. The differences between Buzzy or Bubbles and Control was significant for all P=.0000. Frm 00077 Fmt 4701 Sfmt 4725 Binay S, Bilsin E, Gen;eker GO, Kahraman A, Bal-Y1lmaz H. Comparison ofthe Effectiveness of Two Different Methods of Decreasing Pain During Phlebotomy in Children: A Randomized Controlled Trial. J Perianesth Nurs. 2019 Feb 20 S 1089-9472(18)30414-3. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.014</GPH> 0: Pain reduction comparison in Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 0: Superiority trial of pain relief during vascular access F: RCT: Buzzy, Handheld computer distraction N=200 P: 4-12 y/o Buzzy No significant difference between a handheld computer distraction and Buzzy, median (IQR) = 3.0 (1.04.8) and 2.0 (1.0--4.8), respectively, P = 0.72. 0: Pain relief during pediatric vascular access F: RCT: Virtual Reality (VR) versus Buzzy N=121 P: 7 - 12 y/o Buzzy Buzzy resulted in lower pain than VR and significantly better than control, P = 000). Buzzy n=40; 1.5 +/- .2SD versus VR n=41; 2 +/.2SD, p<.0001). 0: Pain Relief for vascular access with Buzzy, Buzzy + Distraction, Distraction, and Control F: RCT: 4 arm trial N=218 P: 6 - 12 y/o Buzzy All groups using Buzzy had significantly reduced pain (P < 0.001) compared to the control group. Lowest pain measured w/Buzzy in combination w/DistrAction Cards. ( 1) 0: Pain relief during vascular access in pediatric patients F: RCT: [Buzzy v. control] N=120 P: 6 - 12 y/o Buzzy (1) Lower pain (p < .001) and anxiety (p < .001 w/ Buzzy) compared to the control group. (2) 0: Pain and anxiety relief with lab draws F: RCT using Child Pain Scale N=120 P: 6-12 Jo (1) 0: Pain, stress cortisol level, and fear relief during vascular access comparing Buzzy, Jet Lidocaine, Bubbles and aromatherapy F: RCT N=195, 39 x 5 groups P: 5 -10 y/o (2) (Lower pain (p < .001) and anxiety with Buzzy. CAPS Parent reported 1.61(Buzzy) v. 3.36 (Control) (p < .001)) Buzzy ddrumheller on DSK120RN23PROD with RULES2 (2) 0: Pain, stress cortisol level, and fear relief during vascular access comparing Buzzy, Jet Lidocaine, Bubbles and aromatherapy F: RCT N=195, 39 x 5 groups P: 5 -10 y/o VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Cozzi G, Crevatin F, Dri V, Bertossa G, Rizzitelli P, Matassi D, Minute M, Ronfani L, Barbi E. Distraction Using Buzzy or Handheld Computers During Venipuncture. Pediatr Emerg Care. 2018 Dec 27. Gen;eker GO, Binay S, Bilsin E, Kahraman A, Yilmaz HB. Effects of Virtual Reality and External Cold and Vibration on Pain in 7- to 12-year- old Children During Phlebotomy: A Randomized Controlled trial. J Perianesth Nurs. 2018 Mar 17. Inal S., Kelleci M. The Effect of External Thermomechanical Stimulation and Distraction on Reducing Pain Experienced by Children During Blood Drawing. Pediatr Emerg Care. 2020 Feb;36 2 :66-69. Inal S, Kelleci M. Relief ofpain during blood specimen collection in pediatric patients. MCN Am J Matern Child Nurs. 2012 Sep;37(5):339-45. PMID: 22895207. PO 00000 "A significant difference was found between the intervention and control groups in terms of levels of pain during and after phlebotomy in favor of the Buzzy group (p<0.05)." Kii<;iik Alemdar D, Yaman Akta~ Y. The use of the Buzzy, Jet lidocaine, bubble-blowing and aromatherapy for reducing pediatric pain, stress and fear associated with phlebotomy. J PediatrNurs. 2019 Jan 30 S0882-5963(18)30352- X. (2) ("children in the Buzzy group were less frightened during phlebotomy (CFS 1.33 v. 2.66 p < 0.05)." "There was a significant difference between intervention and control groups fear levels in favor of the Buzzy group during hlebotom < 0.05 ." Frm 00078 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.015</GPH> 76420 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Buzzy 0: Pain relief during vascular access in children with cognitive impairment F: RCT: Buzzy v. Control N=70 P: Median age - 9 y/o Buzzy 0: Efficacy of Buzzy for pain reduction in children F: RCT N=72 P: 3 -10 y/o Buzzy Buzzy pain 3.65 vs Magic Glove 4.67 (p=.039). (1) 0: Effect of Buzzy, distraction cards, and balloons in reducing pain and anxiety in children receiving procedure requiring vascular access F:RCT N=180 P: 7 -12 y/o Buzzy (1) Lowest pain scores with Buzzy (1.90±1.34) vs Distracting cards (3.17±2.13) vs Balloon inflating (2.83±1.41) vs control (4.15±1.29), (p=0.012) (2) 0: Fear reduction with venipuncture F: RCT with CFS N=180 P: pediatrics 9.3 +/- 1.9 years ddrumheller on DSK120RN23PROD with RULES2 0: Effect of vibration on outpatient vascular access in children F: Retrospective review N=64 P: 4-18 y/o VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Buzzy PO 00000 Pain was less than expected in 44/50 Buzzy patients and 0/50 control, and more than expected in no Buzzy patients and 6/50 control (P<.000), with overall less pain (1.04 v 5.32) and greater satisfaction. (95.3 v 2.12) P<.001. There was no difference in pulse, state, or trait anxiety before or after cannulation. "Reported no or mild procedural pain in 32 cases (91.4%) in the Buzzy group and in 22 cases (61.1 %) in the no-intervention group (p = 0.003)." (2) (Fear with Children's Fear Scale lowest with Buzzy (0.61) versus control (3 .17), one way ANOVA with 4 arms p=.13 "clinically significant rather than statistically significant." - p <.0001 if Buzzy compared to control, p=.003 if compared to Balloon inflatin CFS 1.19. "21 of the 26 [phlebotomists'] (80.8%) responses provided indicated that the device made the procedure easier; the other 5 claimed that it had no effect." Frm 00079 Fmt 4701 Sfmt 4725 Pald~ <;::etin S, <;::evik K. Effects of Vibration and Cold Application on Pain and Anxiety During Intravenous Catheterization. J Perianesth Nurs. 2019 Aug:34(4):701-709. Schreiber S, Cozzi G, Rutigliano R, Assandro P, Tubaro M, Cortellazzo Wiel L, Ronfani L, Barbi E. Analgesia by cooling vibration during venipuncture in children with cognitive difficulties. Acta Paediatr. 2016 Jan;105 1 : el2-6. Susam V. Friedel M, Basile P, Ferri P, Bonetti L. Efficacy of the Buzzy System for pain relief during venipuncture in children: a randomized controlled trial. Acta Biomed. 2018 Jul 18;89(6S :6-16. Tork HM Comparison of the Effectiveness ofBuzzy, Distracting Cards and Balloon Inflating on Mitigating Pain and Anxiety During Venipuncture in a Pediatric Emergency Department. Am J Nursing Science 2017 Feb;6(2):26- 32. Whelan HM, Kunselman AR, Thomas NJ, Moore J, Tamburro RF. The impact of a locally applied vibrating device on outpatient venipuncture in children. Clin Pediatr (Phila). 2014Oct;53 12 :1189-95. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.016</GPH> 0: Pain and anxiety in adults during cannulation using Buzzy or control. F: RCT N=lO0 P: Mean age: 49.6 +/- 13.8y 76421 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations (1) 0: Effect of vibration in reducing needle pain in children F: Systematic review N=264 P: 0 - 18 y/o Buzzy (2) 0: Identify, evaluate and synthesize evidence of the effectiveness of vibratory stimulation to reduce needle-related procedural pain in children aged 18 years and younger. F: Systematic Review N=n/a P: 0-18 y/o 0: Effect of the Use of Buzzy during Phlebotomy on Pain and Individual Satisfaction in Blood Donors F: Abstract N=90 P: Adult men Buzzy (1) 0: Pain relief during intraoral injections using FLACC F: RCT N=50 P: 5-10 y/o Buzzy (2) 0: Oral dental injections F: RCTFLACC N=50 P: 5-10 years ddrumheller on DSK120RN23PROD with RULES2 0: Pain and anxiety relief for Buzzy cannulation F: RCT VAS anxiety VAS pain N=176 P: 7-12 y/o VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 ( 1) "The effect size for the Buzzy tended to be higher than that for the other devices." "Buzzy self-rated pain (n=): -0.94, [95% CI]: -1.54, 0.35) p<.00001. [With Buzzy] the effect on the child's anxiety (SMD: -1.03, 95% CI: -1.85 to - 0.20 p<.00001) was significant." (2) Comparison devices DentalVibe and Vibrational Anesthesia Device used primarily or exclusively for Dental procedures. "The effect size for the Buzzy tended to be higher than that for the other devices. Overall, vibratory stimulation was significantly effective: self-rated pain: -0.55, 95% confidence interval [95% CI]: -0.92 to -0.18) observer-rated pain outcomes (SMD: -0.47, 95% CI: -0.76 to 0.18 ." "Results indicate that the use of the Buzzy device was an effective method of reducing the pain of phlebotomy and increasing phlebotomy satisfaction in healthy adult male blood donors." [N=90, Pain 20.93 +/- 15.1 versus 35.23 +/- 19.3, p=.004, satisfaction Buzzy 76.0 +/- 23.7 v. 55.26 +/34.8 control, =.031 (1) Conclusion: "Buzzy® can reduce pain and anxiety during local anesthetic delivery for various dental procedures". 1.4 Buzzy, 3.96 Conventional using FLACC, p<.05 (2) "Buzzy® can reduce pain and anxiety during local anesthetic delivery for various dental procedures." FLACC 1.4 Buzzy, 3 .96 Conventional, <.05 (WBFS pain Buzzy 2.75, Control 5.7 p=0.000, VAS pain Buzzy 1.66, Control 4.09 p=.000; VAS anxiety Buzzy 0.94, Control 2.09 p=.000; VAS observer anxiety Buzzy 0.92, Control 2.14 p=.000.). Frm 00080 Fmt 4701 Sfmt 4725 Ueki S, Yamagami Y, Makimoto K. Effectiveness of vibratory stimulation on needle-related procedural pain in children: a systematic review. JBI Database System Rev Implement Rep. 2019 Jul; 17(7): 1428-1463. Yilmaz D., Reper Y., Gozler. Effect of the Use ofBuzzy during Phlebotomy on Pain and Individual Satisfaction in Blood Donors. Pain Management Nursing. 2017 Aug;18(4):260267.PMID:28601479. Suohu T, Sharma S, Marwah N, et al. A Comparative Evaluation of Pain Perception and Comfort of a Patient Using Conventional Syringe and Buzzy System. Int J Clin Pediatr Dent 2020;13(1):2730. Canbulat N, Ayhan F, Inal S. Effectiveness of external cold and vibration for procedural pain relief during peripheral intravenous cannulation in pediatric patients. Pain Manag Nurs. 2015 Feb;16 1 :33-9. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.017</GPH> 76422 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Buzzy "According to all raters, the Buzzy® group had the lowest mean CFS score, followed by the VR, DC, and control groups (p < 0.05)." 0: Pain, fear and anxiety from vaccination F: Systematic Review 27 articles N=n/a P: 4 - 15 years Buzzy "This review found consistent evidence for reduction in pain, distress and/or fear with interventions that combined cooling and vibrating together ... " [pooled data not reported]. 0: Anxiety and pain reduction with Buzzy (In subjects who reported higher pre procedure anxiety, the experimental [Buzzy] group reported lower pain (0.84 ± 0.50) than the control group (3.92± 0.58). 0: Pain relief with flu vaccination F: RCT VAS, IO-point satisfaction scale N=497 P: Adult employees influenza vaccine clinic Buzzy 0: Reduction in fear and pain with Bicillin injections F: Observational prospective interventional trial N=118 P: Teens and Adults Buzzy (pain 0.87 v 1.12 p=.035, better than previous experiences 62% Buzzy 23.9% control p<.0001.) "Buzzy can be used in adult patients to reduce pain during immunization and is especially effective in those with high levels ofanxie " (Nonadherent group offered Buzzy, LA bicillin, or both; overall pain and fear reduced 50%, Special needle phobia clinic able to be disbanded.) 0: To investigate the effect of the Buzzy application on pain and satisfaction during injections. F: RCT N=65 P: Average age 52 Buzzy ddrumheller on DSK120RN23PROD with RULES2 cannulation F: RCT Buzzy v control N=105 P: Elective Surgical Adults VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 (Pain 74% reduced, satisfaction 95 v. 84. P<.001 both favor Buzzy). Frm 00081 Fmt 4701 Sfmt 4725 Erdogan B, Ozdemir AA. The Effect of Three Different Methods on Venipuncture Pain and Anxiety in Children: Distraction Cards, Virtual Reality and Buzzy (Randomized Controlled Trial). J Pediatr Nurs. Ma -Jun 2021;58:e54-e62. Lee VY, Caillaud C, Fong J, Edwards KM. Improving vaccine-related pain, distress or fear in healthy children and adolescents-a systematic search ofpatient-focused interventions. Hum Vaccin Immunother. 2018;14 11 :2737-2747. Redfern RE, Micham J, Sievert D, Chen JT. Effects of Thermomechanical Stimulation During Intravenous Catheter Insertion in Adults: A Prospective Randomized Study. J lnfus Nurs. 2018 Se t/Oct;41 5 :294-300. Redfern RE, Micham J, Seegert S, Chen JT. Influencing Vaccinations: A Buzzy Approach to Ease the Discomfort of a Needle Stick - a prospective, Randomized Controlled Trial. Pain Management Nursing, 2019 A r;20 2 :164-169. Russell K, Nicholson R, Naidu R. Reducing the pain of intramuscular benzathine penicillin iryections in the rheumatic fever population of Counties Manukau District Health Board. J Paediatr Child Health. 2014 Feb;50 2 :112-7. Sahin M. Effect ofBuzzy® application on pain and iryection satisfaction in adult patients receiving intramuscular injections. Pain Management Nurs2018 Dec:19(6):645. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.018</GPH> 0: Pain and anxiety relief for vascular access with Child Fear Score F: RCT Virtual Reality v. Distraction cards v. Buzzy v control N=l42 P: 7-12 y/o 76423 76424 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 0: Immunization pain and fear reduction Buzzy v. control with TdAP F: RCT Children Fear Scale N=104 P: 7-year-olds Buzzy Buzzy: 0.58 +/- 0.63 v. 1.96 +/1.13 p=.001 Finding: The experimental group showed significantly lower pain and anxiety levels than the control group during immunization. Conclusions/implications for practice: The combined stimulation of skin with external cold and vibration can be used to reduce pain and anxiety during pediatric immunization. Sahiner NC, Inal S, Akbay AS. The effect of combined stimulation of external cold and vibration during immunization on pain and anxiety levels in children. J Perianesth Nurs. 2015 Jun;30(3 ):228-35. 0: Buzzy Bubbles Shotblocker or nothing for IM injections F: RCT4 arm N=l60 P: 5-10 years Buzzy Results: A significant difference was found between the intervention and control groups in terms of levels of pain and fear during IM injection. Pain and fear were notably less in the group of children receiving the Buzzy intervention. Discussion: The Buzzy intervention should be used when children are undergoing IM injections to reduce their levels of ain and fear. Yilmaz G, Almdar DK Using Buzzy, Shotblocker, and Bubble Blowing in a Pediatric Emergency Department to Reduce the Pain and Fear Caused by Intramuscular lryection: A Randomized Controlled Trial. J Emerg Nurs. 2019 Sep;45(5):502-51 l. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.019</GPH> ddrumheller on DSK120RN23PROD with RULES2 BILLING CODE 4120–01–C Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 (2) CMS Assessment of Substantial Clinical Improvement Claims and Sources As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42484 through 42485), we summarized our specific concerns regarding application of the substantial clinical improvement criteria under §§ 413.236(b)(5) and 412.87(b)(1) in connection with the submission. As stated previously, the applicant must demonstrate that the equipment or supply meets at least one of the following three substantial clinical improvement criteria in order to be eligible for the TPNIES: (1) the item offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatment; (2) the item offers the ability to diagnose a medical condition in the 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; or (3) the item significantly improves clinical outcomes relative to services or technologies previously available. The applicant stated that Buzzy® Pro makes dialysis cannulation pain relief available to dialysis patients, which significantly improves clinical outcomes related to depression and discontinuation of dialysis due to needle pain. Therefore, in the proposed rule, we noted our belief that the applicant was targeting the clinical outcomes criterion (previously noted number (3)). The applicant also stated that Buzzy® Pro reduces needle fear. In the proposed rule, we also noted that we did not identify evidence within the application or the submitted materials documenting improved clinical outcomes related to depression or dialysis adherence but would be interested in reviewing such evidence. With respect to the submitted evidence, we noted that it did not appear that the studies reflected the use of (1) Buzzy® Pro, the device that is the subject of the TPNIES application, nor (2) Buzzy® Pro in the context of dialysis cannulation. Specifically, the applicant submitted an application for Buzzy® Pro, indicating that Buzzy® Pro is a new VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 design created for dialysis fistulae sites, patented in 2022. However, the sources submitted were dated prior to the 2022 new design patent date for dialysis fistulae sites. As such, we stated that it appeared that the sources submitted reflected the use of a predecessor Buzzy® device. In addition, while the applicant’s ‘‘Summary of Clinical Evidence’’ document presented sources as evaluating Buzzy® Pro’s efficacy in managing vascular access pain or fear, we noted that none of these sources appear to evaluate vascular access in the context of dialysis cannulation. The studies evaluated pain and fear in the context of other types of needle procedures, including vaccine or medication injections, blood specimen collection, and intravenous catheter insertion. We noted that it was unclear whether findings of pain or fear reduction from the use of the Buzzy® device in nondialysis needle procedures could be extrapolated to dialysis cannulation pain or fear. There are several unique features to dialysis cannulation that may limit generalizability. These include the need for regular punctures several times per week, the maintenance of cannulation for several hours during dialysis treatments, the use of substantially larger needle sizes in dialysis, and complications that are associated with frequent vascular access cannulation, such as infections and thrombosis. As such, we questioned whether outcomes could reasonably be extrapolated as applicable to patients undergoing dialysis cannulation. As identified in the table, most of the studies provided in support of the applicant’s claims reflect pediatric patient experiences. We noted that pediatric patients comprise a small proportion, just 0.14 percent, of the total Medicare ESRD patient population (87 FR 67222). As such, we noted that the data that was heavily weighted towards the pediatric population may have limited generalizability to the nonpediatric majority of the ESRD patient population. While the applicant stated that the Buzzy® devices are less expensive than topical anesthetic, we noted that cost is PO 00000 Frm 00083 Fmt 4701 Sfmt 4700 76425 not an eligibility criterion for the TPNIES. We also noted that it was unclear whether a single Buzzy® Pro device and its components (for example, tourniquet and ice pack) are intended for single versus multiple patient use in the ESRD facility setting. To the extent that the device or its components are intended for use among multiple patients, we noted that we would be interested in data that examines the risk of infection associated with the use of Buzzy® Pro in the dialysis patient population. Additionally, we noted that we were not aware of any data that examines the risk of harm to the dialysis access site or any other adverse events associated with use of the Buzzy® Pro in the dialysis patient population, including access and bloodstream infections and thromboses but would be interested in the results of such data. In addition, the applicant stated that currently, the most effective options for dialysis cannulation pain are topical anesthetics and vapocoolant spray. We noted that we would be interested in studies comparing the use of Buzzy® Pro to topical anesthetics or vapocoolant and that demonstrate that Buzzy® Pro significantly improves clinical outcomes of dialysis patients relative to existing available treatments. We invited public comments on whether the Buzzy® Pro meets the substantial clinical improvement criteria for the TPNIES. Comment: We received a comment from the applicant in support of a TPNIES approval for Buzzy® Pro. The applicant stated that there are seven literature-supported parameters by which Buzzy® Pro meets the substantial clinical improvement criteria, any one of which independently would satisfy the standard. The applicant presented the following table highlighting the ways in which Buzzy® significantly improves clinical outcomes relative to renal dialysis services previously available. 82 Russell K, Nicholson R, Naidu R. Reducing the pain of intramuscular Benzathine penicillin injections in the rheumatic fever populations of Counties Manukau District Health Board. J Paediatr Child Health 2014;50(2):112–7 doi: 10.1111/ jpc.12400 [published Online First: 2013/10/19]. E:\FR\FM\06NOR2.SGM 06NOR2 76426 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Buzzy® Pro Areas of Substantial Clinical Improvement Criterion + Source Specific Improvement Peer-reviewed publications of Buzzy 1. A more rapid beneficial resolution of the disease 5 minutes for pain management compared to lh 10 process treatment (412.87(b)(l)(ii)(C)(4)) minutes with EMLA saves 169 hours/year 2. Improved quality oflife (412.87(b)(l)(ii)(C)(6)) a. Decreased pain compared to vapocoolant spray b. Faster equivalent pain relief with EMLA c. Decreased fear compared to other interventions d. Pain relief access for patients with buttonholes 3. Reduction in at least one clinically significant a. 25% reduction in severe vasovagal symptoms adverse event (412.87(b)(l)(ii)(C)(l)) b. Vasodilation with potential reduction of vessel wall trauma. Publications of impact of pain and depression addressed by improved availability+ pain control 4. Decrease in the number of future hospitalizations Adherence to regular cannulation reduces (412.87(b)(1 )(ii)(C)(3)) hospitalization - Buzzv improves adherence. 82 5. Improved quality oflife (412.87(b)(l)(ii)(C)(6)) Increased feelings of control are correlated with reduced depression. 83 Baxter AL, Cohen LL, McElvery HL, Lawson ML, von Baeyer CL. An integration of vibration and cold relieves venipuncture pain in a pediatric emergency department. Pediatr Emerg Care 2011;27(12):1151–6 doi: 10.1097/ PEC.0b013e318237ace4. 84 Baxter AL, Leong T, Mathew B. External thermomechanical stimulation versus vapocoolant for adult venipuncture pain: pilot data on a novel device. Clin J Pain 2009;25(8):705–10 doi: 10.1097/ AJP.0b013e3181af1236 [published Online First: 2009/11/19]. 85 Bahorski JS, Hauber RP, Hanks C, et al. Mitigating procedural pain during venipuncture in a pediatric population: A randomized factorial study. Int J Nurs Stud 2015;52(10):1553–64 doi: 10.1016/j.ijnurstu.2015.05.014 [published Online First: 20150610]. 86 Lescop K, Joret I, Delbos P, et al. The effectiveness of the Buzzy(®) device to reduce or prevent pain in children undergoing needle-related procedures: The results from a prospective, openlabel, randomised, non-inferiority study. Int J Nurs VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 The applicant stated that Buzzy® decreases fear as compared to other interventions, citing multiple metaanalyses indicating that Buzzy® reduces fear and anxiety in pediatric venipuncture 89 90 and that Buzzy® was also effective in adult venipuncture patients with needle fear or anxiety.91 92 The applicant referred to a generic recommendation for ‘‘buzzing devices’’ Stud 2021;113:103803 doi: 10.1016/ j.ijnurstu.2020.103803 [published Online First: 20201019]. 87 Potts DA, Davis KF, Elci OU, Fein JA. A Vibrating Cold Device to Reduce Pain in the Pediatric Emergency Department: A Randomized Clinical Trial. Pediatr Emerg Care 2019;35(6):419– 25 doi: 10.1097/pec.0000000000001041 [published Online First: 2017/01/26]. 88 Baxter AL, Cohen LL, Tsze D. Buzzy versus EMLA: Abstract omits clinical noninferiority and time and cost savings: A commentary on Lescop et al. (2021). Int J Nurs Stud 2021;121:104011 doi: 10.1016/j.ijnurstu.2021.104011 [published Online First: 20210626]. 89 Ballard A, Khadra C, Adler S, Trottier ED, Le May S. Efficacy of the Buzzy Device for Pain Management during Needle-Related Procedures: A Systematic Review and Meta-analysis. Clin J Pain 2019 doi: 10.1097/ajp.0000000000000690 [published Online First: 2019/03/05]. 90 Su HC, Hsieh CW, Lai NM, Chou PY, Lin PH, Chen KH. Using Vibrating and Cold Device for Pain Relieves in Children: A Systematic Review and Meta-analysis of Randomized Controlled Trials. J Pediatr Nurs 2021;61:23–33 doi: 10.1016/ j.pedn.2021.02.027 [published Online First: 20210316]. 91 Baxter AL, Leong T, Mathew B. External thermomechanical stimulation versus vapocoolant for adult venipuncture pain: pilot data on a novel device. Clin J Pain 2009;25(8):705–10 doi: 10.1097/ AJP.0b013e3181af1236 [published Online First: 2009/11/19]. 92 Redfern RE, Micham J, Sievert D, Chen JT. Effects of Thermomechanical Stimulation During Intravenous Catheter Insertion in Adults: A Prospective Randomized Study. J Infus Nurs 2018;41(5):294–300 doi: 10.1097/ nan.0000000000000294. PO 00000 Frm 00084 Fmt 4701 Sfmt 4700 for adult needle fear on the CDC website.93 The applicant stated that 43 percent of dialysis patients experienced pain despite EMLA use 94 and that Buzzy® patients like the sense of control of being able to hold the device in the right spot for the best pain relief. In support of the claim that Buzzy® reduces at least one clinically significant adverse event, the applicant stated that vibration over 150Hz results in vasodilation, which can reduce the likelihood of a needle side-walling a vein, causing pain or vasovagal stimulation.95 The applicant referred to a recent study presented in 2023, which found that in 360 teenagers who received vaccination,96 Buzzy® reduced severe vasovagal symptoms 25 percent and improved vasodilation, potentially reducing vessel wall trauma. The applicant also provided responses to CMS’s concerns identified in the CY 2024 proposed rule. In response to the CMS concern regarding a lack of evidence documenting improved clinical outcomes related to depression or dialysis adherence, the applicant stated that increased feelings of control are correlated with reduced depression. The applicant specified that 93 https://www.cdc.gov/ncbddd/ humandevelopment/covid-19/needle-phobia/ healthcare-providers.html Accessed September 8, 2023. 94 https://www.youtube.com/ watch?v=1moJgluvS7c&t=350s Accessed September 8, 2023. 95 Skoglund CR. Vasodilatation in human skin induced by low-amplitude high-frequency vibration. Clin Physiol 1989;9(4):361–72. 96 Smith MJ, Broder KR, Chung RJ, et al. Preventing Post-Vaccination Presyncope and Syncope in Adolescents Using Simple Clinic-Based Interventions: a Randomized-Controlled Trial. Pediatric Academic Societies Meeting. Washington, DC, 2023. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.020</GPH> ddrumheller on DSK120RN23PROD with RULES2 With respect to the more rapid beneficial resolution of the disease process treatment, the applicant stated that chronic patients consider a reduction in their procedural time a clinically significant improvement. With respect to improved quality of life, the applicant stated that Buzzy® devices have been shown to be clinically superior to vapocoolant spray for pain relief in adults and children,83 84 and that vapocoolant spray lacks efficacy and is associated with potential risks of frostbite or triggering a sickle cell crisis. The applicant stated that EMLA is effective for cannulation pain but requires 60 minutes to become effective and is associated with potential risks, including petechiae and skin breakdown from the occlusive dressing used after applying the cream. The applicant stated that Buzzy® is equivalent to the topical anesthetics EMLA and LMX by patient and parent report and at a fraction of the time.85 86 87 88 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 0: Dialysis pain Randomized crossover trial N= 41 Scale: NRS (0-10) 0: Dialysis: Randomized crossover trial N= 41 Scale: VAS (0-100) 0: Dialysis: Open crossover design N=38 0: Dialysis: Randomized controlled N=90 NRS 0-10 0: Dialysis: Prospective crossover N=32 0: Dialysis: Open Crossover Trial N=34NRS ddrumheller on DSK120RN23PROD with RULES2 0: Dialysis Randomized Crossover trial N= 74 NRS STAI anxie 97 Borsbo B, Gerdle B, Peolsson M. Impact of the interaction between self-efficacy, symptoms and catastrophising on disability, quality of life and health in with chronic pain patients. Disability and rehabilitation 2010;32(17):1387–96 doi: 10.3109/ 09638280903419269 [published Online First: 2010/ 06/02]. 98 Davison SN, Jhangri GS. The impact of chronic pain on depression, sleep, and the desire to withdraw from dialysis in hemodialysis patients. J VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 applicant stated that because Buzzy® Pro received FDA 510(k) approval on May 15, 2023, there are no studies specific to Buzzy® Pro. In response to the CMS concern that it is unclear whether findings of pain or fear reduction from the use of the Buzzy® device in non-dialysis needle procedures could be extrapolated to dialysis cannulation pain or fear, the applicant asserted that because emergency department venipuncture studies typically involve anxiety, they are appropriate comparators for dialysis, where anxiety is common. The applicant further noted that many dialysis studies do not find a benefit the first time an intervention is attempted. The applicant also stated that adult dialysis cannulation studies that use vapocoolant and topical anesthetic do not evaluate anxiety, and the only studies evaluating anxiety and dialysis cannulation used lavender oil as a comparator. In response to the CMS interest in studies comparing the use of Buzzy® Pro to topical anesthetics or vapocoolant and that demonstrate that Buzzy® Pro significantly improves clinical outcomes of dialysis patients relative to existing available treatments, the applicant provided the following two summary tables and stated that the numbers given in the tables allow relative comparison between interventions and the pain reported with dialysis cannulation and adult emergency department trials of Buzzy®. The first table summarizes studies of pain or anxiety relief specific to dialysis cannulation and identifies the significant differences in bold text. The second table summarizes Buzzy® outcomes including pain, anxiety, and vasovagal symptom relief in various types of cannulations and identifies the significant differences in bold text. BILLING CODE 4120–01–P Vapocoolant or Lidocaine spray or Placebo Vapocoolant orEMLAor Placebo Vapocoolant -2.29 (95%CI -4.17 to -0.43) Lidocaine Spray NS Khosravi BMC Anesthesiol 2023(1):69[14] EMLA-18.1 (10.7 +/- 10.6 <;elik G. Int J Med Sci 2011;8(7):623-7[15] Vapocoolant Or Placebo Orno treatment EMLAor Valsalva or Control EMLAor Ice Cubes x 5 minutes Lavender Oil or Placebo or Control Lavender Oil or Placebo Vapocoolant 2.98+/-1.53 Placebo 4.04+/-1.82 No treatment 4.45+/-1.31 Lee 2023 Appl Nurs Res June;71: 151674[16] EMLA-4.13(-5.44 - (-2.82)) VM -2.9(-4.2-(-1.59)) Babamohamadi H, Ev Based Complem med 2022:8383021 e. 17 Kortobi L. Saudi J Kidney Dis Trans 202;31(3):597-603[18] vc -14.4 14+/-12.4 Control 28.8+/17.9 "Significant reduction in pain in favor of [ice cubes]." Lavender 2.91+/-1.69 No intervention 4.59 Placebo 4.18+/-1.66 Ghods A. Comp Tuer Med 2015;23(3):325-330[19] No difference first time Lavender -2.68 (p=.002) Anxie correlated w/ ain Sahin s. Pain Mgmt Nursing 2021;22(4):519-515[20] Pain Symptom Manage 2005;30(5):465–73 doi: 10.1016/j.jpainsymman.2005.05.013. 99 Masia ` -Plana A, Juvinya`-Canal D, Sun˜er-Soler R, Sitjar-Sun˜er M, Casals-Alonso C, Mantas-Jime´nez S. Pain, Anxiety, and Depression in Patients Undergoing Chronic Hemodialysis Treatment: A Multicentre Cohort Study. Pain Manag Nurs 2022;23(5):632–39 doi: 10.1016/j.pmn.2022.03.005 [published Online First: 20220422]. 100 Russell K, Nicholson R, Naidu R. Reducing the pain of intramuscular benzathine penicillin PO 00000 Frm 00085 Fmt 4701 Sfmt 4725 injections in the rheumatic fever population of Counties Manukau District Health Board. J Paediatr Child Health 2014;50(2):112–7 doi: 10.1111/ jpc.12400 [published Online First: 2013/10/19]. 101 Lee K, Kim D, Lee H, Lee E. The effect of using vapocoolant spray for pain reduction in arteriovenous fistula cannulation among patients undergoing hemodialysis: A randomized control trial. Appl Nurs Res 2023;71:151674 doi: 10.1016/ j.apnr.2023.151674 [published Online First: 20230317]. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.021</GPH> because studies of patients with chronic pain with or without depression have identified self-efficacy as a primary component of effective interventions 97 and because chronic pain and depression are common in dialysis patients,98 99 a fast intervention that allows self-adjustment and relief optimization should be more appropriate and effective among patients receiving dialysis than among patients undergoing single, small gauge, and less risky cannulations. The applicant stated that adherence to regular cannulation reduces hospitalization.100 The applicant also stated that needle fatigue can lead to nonadherence to a treatment plan and that nonadherence increases healthcare costs, emergency department visits, disease complications, and in extreme cases, the likelihood of death.101 In response to the CMS concern that the sources submitted reflected the use of a predecessor Buzzy® device, the 76427 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 4-arm Buzzy trial pain relief vibration v. cold v. combination BuzzyMstim only NOICEv. LMX4 Buzzy v. Vapocoolant 0: Pain relieffor cannulation F: Vibration v cold v sham v both N: 184 18-65 years of age 0: Pain relief for cannulation F: RCT: Buzzy compared to LMX topical anesthetic N=l 73 18 months - 17 lo 0: Pain relief and first stick vascular access success in pediatric emergency F: RCT: Buzzy v. Vapocoolant N=81 4 - 18 y/o 0: Pain relief and cannulation Buzzy Vapocoolant success in vascular access F: Crossover trial N=30 P: adults 0: Pain relief during vascular Buzzy Control access in pediatric patients F: RCT: [Buzzy v. control] N=120 P: 6 - 12 lo 0: Pain and anxiety in adults during cannulation using Buzzy or control. F:RCT N=IO0 P: Mean age: 49.6 +/- 13.8y Buzzy Control ddrumheller on DSK120RN23PROD with RULES2 0: Venipuncture pain with anxious adults F:RCT N=105 P: adults mean 63Y 0: Pain and Individual Satisfaction in Blood Donation phlebotomy F: Abstract N=90 P: Adult men Buzzy v Control Buzzy Control Vasovagal symptoms with vaccination F:RCT N=340 10-14 Buzzy+ Video v. Standard care BILLING CODE 4120–01–C In response to the CMS concern that the data heavily weighted towards the pediatric population may have limited generalizability to the non-pediatric majority of the ESRD patient VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Buzzy v. + cold: 33.92 Buzzy alone: 34.18 Sham+ cold: 39.16 Sham no cold: 43.21 P=.016 overall v. sham Abadin N. M East J Anesthesiology 2018 25(1) Findings support the use of both mechanical vibration and topical anesthetic as effective Bahorski JS, Hauber RP, et al. Int J Nurs Stud. 2015 Oct;52(10): 1553-64[21] Self-report (-2; 95% CI, -4 to 0) (p=.029) Parent report (-2; 95% CI -4 to -2 (p=.005) Favor BUZZY Vascular access success more likely w/ Buzzy: (odds ratio, 3.05; 95% CI, 1.03- 9.02), =.040 Buzzy -9.9 mm, 95% [CI] 0.8219, P=0.035, SD 16) 100% first stick success Vapocoolant: NS pain reduction, 95% [CI]-1.8-17.7, P=0.1, SD 16.9) 7.14% cannulation failure va ocoolant Lower pain (p < .001) and anxiety (p < .001 w/ Buzzy) compared to the control group. Baxter AL, Cohen LL, McElvery HL, Lawson ML, von Baeyer CL. Pediatr Emerg Care. 2011 Dec;27(12):11516[22] Frm 00086 Inal S, Kelleci M. MCN Am J Matern Child Nurs. 2012 Sep;37(5):339-45.[24] Pain: BUZZY 1.04 c:5.32 Pain less than expected: BUZZY 44/50 C 0/50 Pain more than expected: BUZZY 0/50 C 6/50 (P<.000) Satisfaction BUZZY (95.3 v 2.12 P<.001. Pain with high needle anxiety: Buzzy: 0.84+/- .5 Control: 3.92+/- 0.58 Paki~ <;etin S, <;evik K. J Perianesth Nurs. 2019 Aug:34(4):701-709[25 26] BUZZY 20.93 +/- 15.1 Control 35.23 +/- 19.3, p=.004 Satisfaction (p =.031)] Buzzy 76.0 +/- 23.7 Control 55.26 +/- 34.8 BUZZY 36% presyncope Control 48% presyncope 25% reduction (p=.02) Yilmaz D., Reper Y., Gozler. Pain Management Nursing. 2017 Aug;18(4):260- 267.[27] population, the applicant referred to materials submitted with its application and asserted that these demonstrate significant pain and fear reduction with the Buzzy® device, superiority to PO 00000 Baxter AL, Leong T, Mathew B. Clin J Pain. 2009 Oct;25(8):705-10[23] Fmt 4701 Sfmt 4700 Redfern RE J infusion nursing 2018 41(5):295[26] Smith M. PAS 2023 (A) NCT04772755[28] vapocoolant, and equivalency to topical anesthetics but in a shorter period of time. The applicant stated that five independent peer reviewed studies on adult venipuncture using Buzzy® E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.022</GPH> 76428 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations demonstrate the following: vibration is the primary active ingredient; improved efficacy in patients with needle fear; superiority to vapocoolant spray; and pain reduction and improved satisfaction. In response to our clarification that cost is not a TPNIES eligibility criterion, the applicant acknowledged our clarification but stated that cost is a barrier to the use of EMLA. The applicant compared the cost of EMLA at $6.48 per cannulation to the cost of Buzzy® at $0.375 per cannulation. The applicant concluded that increased access to pain relief is a substantial clinical benefit that is not currently available due to cost. In response to the CMS question as to whether a single Buzzy® Pro device and its components (for example, tourniquet and ice pack) are intended for single versus multiple patient use in the ESRD facility setting, the applicant stated that Buzzy® and Buzzy® Pro are made of medical grade plastic in accordance with ISO–13485 and MDSAP standards and can be disinfected with chlorhexidine, alcohol swabs, or any hospital grade cleanser in accordance with the requirements applied to a stethoscope or blood pressure cuff. The applicant further noted that the ice packs are medical grade, intended for a single patient, but can be reused hundreds of times. Per the applicant, the straps are also intended for singlepatient use but can be used multiple times in a home setting. The applicant stated that infection control varies widely based on regional idiosyncrasies and may involve the use of an infection control bag around the ice pack; not using the ice pack; using an infection control bag around both the device and the ice pack; having patients bring their own ice pack; giving the ice pack to the patient following the procedure; or discarding the ice pack. In response to the CMS interest in data that examines the risk of infection associated with the use of Buzzy® Pro in the dialysis patient population and the CMS interest in data that examines the risk of harm to the dialysis access site or any other adverse events associated with use of the Buzzy® Pro in the dialysis patient population, including access and bloodstream infections and thromboses, the applicant stated that to date, with conservatively over 114,000,000 needle procedures, there are no reported instances of Buzzy® being associated with a vascular access mishap. Per the applicant, the standard risks of vascular damage may be reduced because of the vasodilation. The applicant also stated that because the device goes proximal to VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 the cannulation site when it is being cleaned and accessed, there is never a time when Buzzy® is placed on the area of recent cannulation. The applicant also stated that Buzzy® has been used for dialysis in the Netherlands for four years with only positive reports of efficacy, efficiency, and safety. The applicant also provided additional information explaining the pain transmission process and its belief that that Buzzy® Pro’s mechanical stimulation is an innovative approach in pain management. Specifically, the applicant stated that pain is transmitted to the spine on fast pain nerves and that local mechanisms to reduce pain transmission from skin to spine include lidocaine, cold spray or ice. Per the applicant, as cold travels to the brain on slow C-fibers it activates pain inhibition, which is most effective when applied at temperatures ranging from 0– 4C, for a duration of 30 seconds or more, and when applied proximal or distant to the area of pain. The applicant also identified the mechanical stimulation of the fibers which transmit touch sensations as a mechanism for reducing pain, noting that optimal stimulation occurs between 180 and 250Hz. Per the applicant, Buzzy® units provide mechanical stimulation using a 200 Hz vibration motor. The applicant also presented a new substantial clinical improvement claim, asserting that Buzzy® Pro offers a treatment option for a patient population unresponsive to, or ineligible for currently available treatment options. Specifically, the applicant stated that cost and time are barriers to patients accessing the currently available treatment options for dialysis cannulation pain control and asserted that Buzzy® Pro addresses these barriers. As stated previously, the applicant compared the cost of EMLA at $6.48 per cannulation to the cost of Buzzy® at $0.375 per cannulation and concluded that Buzzy® addresses the cost barrier to patients accessing dialysis cannulation pain relief. The applicant also asserted that the time requirement for using EMLA reduces the likelihood of its use in busy dialysis clinics or if the patient comes in late. The applicant stated that because patients prescribed EMLA for home application prior to treatment at the dialysis clinic often misuse the product, they are unresponsive to EMLA. Per the applicant, Buzzy® works on contact and can easily be applied by the patient. The applicant stated that given the short, 30 to 60 second duration of pain relief obtained from vapocoolant spray, needle pain is a barrier to receiving treatment in the home setting. The PO 00000 Frm 00087 Fmt 4701 Sfmt 4700 76429 applicant also stated that the pain from the mechanical pressure of the dialysis needle inside the vessel cannot be treated with EMLA or vapocoolant spray. The applicant stated that because Buzzy® Pro works proximally to the pain, it is effective for patients who otherwise are unable to access pain control. We also received several comments from patient advocates supporting the applicant’s two substantial clinical improvement claims that Buzzy® Pro reduces pain and anxiety associated with dialysis. A few commenters offered anecdotal experience regarding the use of Buzzy® Pro in the context of dialysis cannulation and stated that Buzzy® Pro’s benefits are supported by peerreviewed scientific literature. Commenters stated that Buzzy® Pro would promote patient choice by providing fast onset dialysis cannulation pain relief without the hassles and expense of topical anesthetics. One commenter suggested that the In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (CAHPS) Survey should be updated to capture patient experience with dialysis cannulation pain. Response: We appreciate the applicant and other commenters’ input regarding whether Buzzy® Pro meets the TPNIES innovation criterion at § 413.236(b)(5) and substantial clinical improvement criteria at § 412.87(b)(1). While the applicant stated that there are seven literature-supported parameters by which Buzzy® Pro meets the substantial clinical improvement criteria, it was not clear to us to which parameters or sources of literature the applicant was referring. In response to our request for evidence of improved clinical outcomes related to depression or dialysis adherence, the applicant stated that because increased feelings of control are correlated with reduced depression, an intervention that allows for selfadjustment and relief should be more effective among patients receiving dialysis than patients undergoing other types of needle cannulations. However, the applicant did not provide direct evidence that interventions to reduce pain in dialysis populations would subsequently reduce depression or that Buzzy® Pro specifically reduces depression. In addition, while the applicant stated that adherence to regular cannulation reduces hospitalization, the evidence cited by the applicant does not pertain to improved dialysis adherence or reductions in hospitalizations. We are not aware of evidence demonstrating E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76430 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations that the use of Buzzy® Pro is associated with the clinical outcome of improved dialysis adherence. Therefore, our request for evidence of improved clinical outcomes related to depression or dialysis adherence associated with the use of Buzzy® Pro in the dialysis patient population has not been sufficiently addressed. We appreciate the applicant’s confirmation that the evidence submitted pertained to studies of the predicate device, Buzzy® and that there are no studies specific to Buzzy® Pro. We also appreciate the applicant’s responses to our concern about the absence of evidence that evaluates Buzzy® Pro’s efficacy in managing pain or fear in the context of dialysis cannulation rather than in the context of non-dialysis needle procedures. The applicant asserted that emergency department venipuncture studies typically involve anxiety and are therefore appropriate comparators for dialysis, where anxiety is common. We do not believe that the presence of anxiety renders emergency department venipuncture a suitable proxy for dialysis cannulation. In addition, the applicant did not address the unique features of dialysis or the differences between venipuncture and dialysis cannulation that may limit generalizability, including the use of substantially larger needle sizes in dialysis, repeated cannulations thrice weekly, continued cannulation throughout a dialysis session, and complications associated with frequent vascular access cannulation such as infections and thrombosis. As such, we do not believe it is possible to extrapolate outcomes achieved with Buzzy® Pro in the context of nondialysis needle procedures to dialysis cannulation. We also appreciate the comments from patient advocates offering anecdotal experience with Buzzy® Pro in the context of dialysis cannulation but would be especially interested in additional detail, including the numbers of patients involved and the specific outcomes that they experienced from Buzzy® Pro. While some commenters asserted that Buzzy® Pro’s benefits for the renal dialysis patient population are supported by peer-reviewed scientific literature, because such sources were not provided by the commenters, we were unable to verify these assertions. While Buzzy® Pro may demonstrate similar results to that of its predicate devices, our primary concern regarding the lack of direct evidence that Buzzy® results in pain or fear reduction in the context of dialysis cannulation pain or fear has not been sufficiently addressed. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 In response to our request for studies comparing Buzzy® Pro to topical anesthetics or vapocoolant spray and that demonstrate that Buzzy® Pro significantly improves clinical outcomes of dialysis patients relative to existing available treatments, the applicant’s first summary table reflects outcomes specific to dialysis but does not reflect experiences with Buzzy® Pro. While the second table reflects outcomes specific to Buzzy®, it does not capture experience in the dialysis setting. Not all studies included in the summary tables shown previously in this rule were provided with the application or public comment. However, none of the studies appear to specifically examine Buzzy® Pro’s efficacy in improving clinical outcomes of dialysis patients as compared to topical anesthetics or vapocoolant spray. Regarding our concern that data in support of the applicant’s claims may have limited generalizability to the nonpediatric majority of the ESRD patient population, the applicant reiterated references from its application to independent peer reviewed studies on adult venipuncture using Buzzy®. These studies compared Buzzy® to no intervention and Buzzy® to vapocoolant or cold interventions. We also note that the applicant referred to a source labeled ‘‘Abedin et. al.,’’ but we did not receive the study or the complete citation for this source. Because the studies did not compare Buzzy® to lidocaine and did not take place in the dialysis setting, the applicant has not sufficiently addressed our concern about the generalizability of these studies. Regarding the applicant’s additional evidence since the application submission, we acknowledge the reference to the 1989 study pertaining to vasodilation in human skin and the 2023 study pertaining to the prevention of post-vaccine syncope. While these studies were not submitted to us, similarly to the evidence previously submitted, it does not appear that they assessed the efficacy of Buzzy® Pro in the context of dialysis cannulation. We appreciate the applicant’s clarification regarding use among single vs. multiple patients in the ESRD facility setting and confirmation that to date, there are no reported instances of Buzzy® being associated with a vascular access mishap. However, because the applicant did not specify the percentage of the 114,000,000 needle procedures performed with Buzzy® that pertained to dialysis cannulation, our concern about the lack of data examining the risk of harm to the access site or any other adverse events associated with the use PO 00000 Frm 00088 Fmt 4701 Sfmt 4700 of Buzzy® Pro in the renal dialysis patient population has not been sufficiently addressed. For the reasons noted previously, we do not believe that there is sufficient evidence to demonstrate that Buzzy® Pro significantly improves clinical outcomes relative to renal dialysis services previously available. With respect to the applicant’s new substantial clinical improvement claim that Buzzy® Pro offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments, we acknowledge that patients may appreciate the option of a rapid acting form of dialysis cannulation pain relief. While the applicant stated that Buzzy® offers a more rapid beneficial resolution of the disease process treatment than currently available options, the applicant did not provide additional evidence demonstrating the clinical superiority of Buzzy® Pro over topical lidocaine in the context of dialysis cannulation. Although the applicant stated that lidocaine requires an hour to take full effect, it did not provide evidence that Buzzy® Pro is superior to lidocaine after shorter time frames in the dialysis setting, that shorter timeframes do not provide adequate pain control with topical lidocaine, or that patients are unable to apply lidocaine an hour before their scheduled dialysis treatment. With respect to the applicant’s assertion that the higher cost of EMLA as compared to Buzzy® is a barrier to pain relief, we note that because topical lidocaine is included in the pain management category of drugs/ biological products included in the ESRD PPS, dialysis facilities would be expected to provide it when determined necessary for the treatment of graft site pain. While cost may be a practical barrier to access for some patients, we do not equate this barrier with either unresponsiveness or ineligibility. In summary, based on the information provided, we are not able to conclude that there is sufficient evidence to demonstrate that Buzzy® Pro offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments. Finally, we note that the comment suggesting that the CAHPS Survey should be updated to capture patient experience with dialysis cannulation pain is beyond the scope of this proposed rule. In accordance with TPNIES policy and § 412.87(b)(1)(i), we consider the totality of the circumstances when making a determination that a new renal dialysis equipment or supply represents E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 an advance that substantially improves, relative to renal dialysis services previously available, the diagnosis or treatment of Medicare beneficiaries. In addition, per § 412.87(b)(1)(iii), CMS considers a range of evidence from published or unpublished information sources, including other appropriate information sources not otherwise listed under § 412.87(b)(1)(iii). After carefully reviewing the application, the information submitted by the applicant addressing our concerns raised in the CY 2024 ESRD PPS proposed rule, and comments submitted by the public, we have determined that Buzzy® Pro has not shown that it represents an advance that substantially improves, relative to renal dialysis services previously available, the treatment of Medicare beneficiaries. For the reasons discussed previously, we conclude that Buzzy® Pro does not meet the TPNIES innovation criteria under § 413.236(b)(5) and § 412.87(b)(1). f. Capital-Related Assets Criterion (§ 413.236(b)(6)) With respect to the sixth TPNIES eligibility criterion under § 413.236(b)(6), limiting capital-related assets from being eligible for the TPNIES, except those that are home dialysis machines, we note that Buzzy® Pro does not meet the definition of a capital-related asset under § 413.236(a)(2), because it is not an asset that the ESRD facility has an economic interest in through ownership that is subject to depreciation.102 Comment: The applicant submitted a comment indicating that Buzzy® Pro is not an asset that the ESRD facility has an economic interest in through ownership that is subject to depreciation. Response: We agree that Buzzy® Pro does not meet the definition of a capitalrelated asset under § 413.236(a)(2). Final Rule Action: After a consideration of all the public comments received, we have determined that the evidence and public comments submitted are not sufficient to demonstrate that Buzzy® Pro meets all eligibility criteria to qualify for the TPNIES for CY 2024. As a result, Buzzy® Pro will not be paid for using the TPNIES per § 413.236(d). We note that in the CY 2021 ESRD PPS final rule (85 FR 71412), CMS indicated that entities would have 3 years beginning on the date of FDA marketing authorization in which to submit their 102 See also CMS Provider Reimbursement Manual, Chapter 1, section 104.1. Available at: https://www.cms.gov/Regulations-and-Guidance/ Guidance/Manuals/Paper-Based-Manuals-Items/ CMS021929. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 applications for the TPNIES. Based on the Buzzy® Pro FDA marketing authorization date of May 15, 2023, the applicant may be eligible to apply for the TPNIES for CYs 2025, 2026, or 2027, and CMS would review any new information provided for the applicable rulemaking cycle. 4. Other Public Comments on the TPNIES We received several comments regarding the TPNIES policies, including the length of the TPNIES payment period and suggestions for new payment adjustments. Commenters urged CMS to extend the TPNIES payment period to at least three years to allow for two full years of data collection, and then increase the ESRD PPS base rate to account for the new technology. Commenters suggested that CMS issue an RFI seeking public feedback on a post-TPNIES add-on payment adjustment and adopt a postTPNIES payment adjustment in future rulemaking. Commenters suggested revisions to existing TPNIES policies, such as extending the TPNIES to all capitalrelated assets, expanding the TPNIES for home dialysis devices that are acquired through operating leases, removing the TPNIES offset amount, and developing further guidance explaining the way in which CMS evaluates TPNIES applicants’ substantial clinical improvement data. Commenters suggested that we clarify the way in which MACs determine and provide payment rates for items approved for the TPNIES. Commenters suggested that these rates should be provided no later than March 31 of the first year of TPNIES eligibility and that MACs should provide clear and timely TPNIES claims processing guidance to the dialysis facilities. Finally, we received comments suggesting that CMS develop a Transitional Laboratory Add-on Payment Adjustment (TLAPA) to incentivize innovation in laboratory services for beneficiaries with ESRD. While we are not providing detailed responses to these comments in this final rule because they are out of scope of the proposed rule, we thank the commenters for their input and will potentially consider the recommendations for future rulemaking. D. Continuation of Approved Transitional Add-On Payment Adjustments for New and Innovative Equipment and Supplies for CY 2024 In this section of the final rule, we identify any items previously approved for the TPNIES and for which payment PO 00000 Frm 00089 Fmt 4701 Sfmt 4700 76431 is continuing for CY 2024. As described in the CY 2023 ESRD PPS final rule, payment for the one item approved for the TPNIES, the Tablo® Hemodialysis System, as described by HCPCS code E1629, expires on December 31, 2023 (87 FR 67216). As such there are no items previously approved for the TPNIES for which payment is continuing in CY 2024. Comment: Several commenters requested that CMS extend the TPNIES payment period for the Tablo® Hemodialysis System beyond the December 31, 2023, end date to December 31, 2024. Commenters stated that implementation difficulties with the first CMS-approved TPNIES application resulted in lower than anticipated uptake of the Tablo® System. Commenters stated that MACs demonstrated variable levels of understanding about the Capital Related Assets (CRA) for the TPNIES and that providers lacked clear guidance on what information ESRD facilities were to include on their claims. The commenters stated that these challenges contributed to claim denials and an administrative burden on ESRD facilities. Response: CMS did not propose to extend the 2–CY TPNIES payment period as established in § 413.236(d)(1) in the CY 2024 ESRD PPS proposed rule, and we are not finalizing any such change in this final rule. However, we acknowledge the commenters’ concerns pertaining to TPNIES claims processing related matters and have issued Change Request 12347 to the MACs outlining the way in which the CRA for the TPNIES is calculated for claims processing purposes.103 In addition, in August 2022, CMS instructed MACs to adjust ESRD claims following CMS deployment of a corrected ESRD Pricer and to ensure that their systems were properly set up to suspend the claim for manual pricing. CMS provided a Medicare Learning Network (MLN) article instructing providers on how to submit Tablo® Systems claims.104 This article was supplemented with an MLN Connects newsletter reminding 103 Change Request 12347. Implementation of the Capital Related Assets Adjustment (CRA) for the Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) Under the End Stage Renal Disease Prospective Payment System (ESRD PPS). https://www.cms.gov/ files/document/r11533otn.pdf. 104 MLN Matters Article. Implementation of the Capital Related Assets (CRA) Adjustment for the Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) Under the End Stage Renal Disease Prospective Payment System (ESRD PPS). https://www.cms.gov/ files/document/mm12347-implementation-capitalrelated-assets-cra-adjustment-transitional-addpayment-adjustment-new.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 76432 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations providers to submit the invoice for the CRA for the TPNIES to their MAC and report the appropriate revenue code and HCPCS code with modifier on the claim for treatments in which the CRA for the TPNIES was used. Providers were also reminded to address any issues returned to them by their MAC and resubmit the effected claims.105 E. Continuation of Approved Transitional Drug Add-On Payment Adjustments for CY 2024 Under § 413.234(c)(1), a new renal dialysis drug or biological product that is considered included in the ESRD PPS base rate is paid the TDAPA for 2 years. In December 2021, CMS approved Korsuva® (difelikefalin) for the TDAPA under the ESRD PPS, effective April 1, 2022. Implementation instructions are specified in CMS Transmittal 11295,106 dated March 15, 2022, and available at: https://www.cms.gov/files/document/ r11295CP.pdf. In July 2023, after the CY 2024 ESRD PPS proposed rule appeared in the Federal Register on June 30, 2023, CMS approved Jesduvroq (daprodustat) for the TDAPA under the ESRD PPS, effective October 1, 2023. Implementation instructions are specified in CMS Transmittal 12157, dated July 27, 2023, and available at: https://www.cms.gov/files/document/ r12157cp.pdf. Table 11 identifies the two new renal dialysis drugs for which the TDAPA payment period as specified in § 413.234(c)(1) will continue in CY 2024: Korsuva® (difelikefalin) that was approved for the TDAPA effective in CY 2022, and Jesduvroq (daprodustat) that was approved for the TDAPA effective in CY 2023. Table 11 also identifies the products’ HCPCS coding information as well as the payment adjustment effective dates and end dates. TABLE 11: Continuation of Approved Transitional Drug Add-On Payment Adjustments Long Descriptor J0879 Injection, difelikefalin, 0.1 microgram, (for ESRD on dialysis) Daprodustat, oral, 1 mg, (for ESRD on dialysis) J0889 III. Calendar Year (CY) 2024 Payment for Renal Dialysis Services Furnished to Individuals With Acute Kidney Injury (AKI) ddrumheller on DSK120RN23PROD with RULES2 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 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 105 MLN Connects Newsletter. ESRD: Submitting Dialysis Claims the Include Capital Related Assets Eligible for the TPNIES https://www.cms.gov/ VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Payment Adjustment Effective Date 4/1/2022 Payment Adjustment End Date 10/1/2023 9/30/2025 3/31/2024 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 to implement subsection (r) of section 1834 of the Act and the amendments to section 1861(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 2024 Payment for Renal Dialysis Services Furnished to Individuals With AKI training-education/medicare-learning-network/ newsletter/2023-09-14-mlnc#_Toc145581414. 106 CMS Transmittal 11295 rescinded and replaced CMS Transmittal 11278, dated February 24, 2022. PO 00000 Frm 00090 Fmt 4701 Sfmt 4700 The CY 2024 ESRD PPS proposed rule, titled ‘‘Medicare Program; EndStage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, and End-Stage Renal Disease Treatment Choices Model’’ (88 FR 42430–42544), referred to as the ‘‘CY 2024 ESRD PPS proposed rule,’’ appeared in the June 30, 2023 version of the Federal Register, with a comment period that ended on August 25, 2023. In that proposed rule, we proposed to update the AKI dialysis payment rate for CY 2024. We received 10 public comments on our proposal. In this final rule, we provide a summary of each proposed provision, a summary of public comments received and our responses to them, and the policies we are finalizing for CY 2024 payment for renal dialysis services furnished to individuals with AKI. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.023</GPH> HCPCSCode Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations C. Annual Payment Rate Update for CY 2024 1. CY 2024 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 update, geographic wage adjustments, and any other discretionary adjustments, for such year. We note that ESRD facilities can 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.1.d of this final rule, the ESRD PPS base rate is $271.02, which reflects the application of the CY 2024 wage index budgetneutrality adjustment factor of 0.999534 and the CY 2024 ESRDB market basket percentage increase of 2.4 percent reduced by the productivity adjustment of 0.3 percentage point, that is, 2.1 percent. Accordingly, we are finalizing a CY 2024 per treatment payment rate of $271.02 (($265.57 × 0.999534) × 1.021 = $271.02) for renal dialysis services furnished by ESRD facilities to individuals with AKI. This final payment rate is further adjusted by the wage index, as discussed in the next section of this final rule. ddrumheller on DSK120RN23PROD with RULES2 2. Geographic Adjustment Factor Under section 1834(r)(1) of the Act and regulations at § 413.372, the amount of payment for AKI renal 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 ESRDB market basket percentage increase and reduced by the 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.1.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 ESRD 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 wageadjusted, per-treatment-AKI dialysis payment rate. We also apply the wage index policies regarding the 0.600 wage index floor (87 FR 67161 through 67166) and the 5 percent cap on wage index decreases (87 FR 67159 through 67161) VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 to AKI dialysis payments to ESRD facilities. We received 10 public comments on our proposal to update the payment rate for renal dialysis services furnished to individuals with AKI. Commenters included a coalition of dialysis organizations, a non-profit dialysis organization, a trade association, a renal product development company, and multiple large dialysis organizations. The comments on our proposal and our responses are set forth below. Comment: Some commenters expressed support for the CY 2024 proposed payment rate for individuals with AKI, which is to say the commenters supported increasing payments for AKI by the proposed productivity-adjusted ESRDB market basket update of 1.7 percent. Many commenters requested that CMS allow for AKI patients to select home dialysis modalities by eliminating the current prohibition. Some commenters also expressed concerns that the proposed market basket increase is insufficient to account for inflation. One commenter suggested that any forecast error adjustment applied to the ESRD PPS should also be applied to payments for AKI patients. Response: We appreciate the commenters’ support for the proposed CY 2024 productivity-adjusted ESRDB market basket update of 1.7 percent. We acknowledge the request for AKI patients to select home dialysis modalities, and we thank commenters for their input. We note that currently, CMS will only pay for renal dialysis services at an ESRD facility for patients with AKI, and we did not propose to change this policy in the CY 2024 ESRD PPS proposed rule. Current AKI dialysis payment policy was implemented under the CY 2017 ESRD PPS final rule (81 FR 77866 through 77872, and 77965). Over the years, we have received several comments regarding the site of renal dialysis services for Medicare beneficiaries with AKI. We have solicited comments in the recent past, including in the CY 2022 ESRD PPS proposed rule (86 FR 36322, 36408), when we requested information regarding potentially modifying the site of renal dialysis services for patients with AKI and payment for AKI in the home setting. CMS continues to believe that this population requires close medical supervision by qualified staff during their dialysis treatment. We recognize commenters’ concerns that the proposed ESRDB market basket update is insufficient given inflation. As discussed in section II.B.1.a.(2)(c) of this final rule, we believe the final CY 2024 ESRDB market basket update using the PO 00000 Frm 00091 Fmt 4701 Sfmt 4700 76433 2020-based ESRDB adequately reflects the average change in the price of goods and services ESRD facilities purchase to provide renal dialysis services and is technically appropriate to use as the ESRD PPS payment update factor, which determines the payment rate for renal dialysis services furnished to patients with AKI at ESRD facilities. We appreciate the commenter’s suggestion that any forecast error adjustment applied to payments under the ESRD PPS should also be applied to payments for AKI patients. As discussed in section II.B.1.a.(2)(e) of this final rule, we are not finalizing a forecast error adjustment for the ESRD PPS for several reasons, but we will consider this suggestion for potential future rulemaking. Final Rule Action: We are finalizing our proposal to base the AKI payment rate on the finalized ESRD PPS base rate, adjusted by the ESRD facility’s wage index. Specifically, the final CY 2024 ESRD PPS base rate is $271.02 as finalized in section II.B.1.d of this final rule. Accordingly, we are finalizing a CY 2024 per treatment payment rate of $271.02 for renal dialysis services furnished by ESRD facilities to individuals with AKI. Additionally, we are finalizing our proposal to apply the updated the ESRD PPS wage index for CY 2024 payments for renal dialysis services furnished by ESRD facilities to individuals with AKI as finalized in section II.B.1.b of this final rule. IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP) A. Background For a detailed discussion of the 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 previous ESRD QIP rules at: 75 FR 49030; 76 FR 628; 76 FR 70228; 77 FR 67450; 78 FR 72156; 79 FR 66120; 80 FR 68968; 81 FR 77834; 82 FR 50738; 83 FR 56922; 84 FR 60648; 85 FR 71398; 86 FR 61874; and 87 FR 67136. We have also codified many of our policies for the ESRD QIP at §§ 413.177 and 413.178. B. Updates to the Regulation Text for the ESRD QIP 1. Revision to the Definition of ‘‘Minimum Total Performance Score (mTPS)’’ at § 413.178(a)(8) In the CY 2019 ESRD PPS final rule, we codified a number of key terms used in the ESRD QIP at § 413.178(a) of our regulations (83 FR 56980 through 56982). One of these terms is ‘‘minimum total performance score’’ (mTPS), which we defined at § 413.178(a)(8) ‘‘with E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76434 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations respect to a payment year’’ 107 as ‘‘the total performance score that an ESRD facility would receive if, during the baseline period, it performed at the 50th percentile of national ESRD facility performance on all clinical measures and the median of national ESRD facility performance on all reporting measures.’’ In the CY 2024 ESRD PPS proposed rule, we stated that we have recently reevaluated this definition and determined that it should be revised to more accurately capture how we calculate the median of national ESRD facility performance on reporting measures (88 FR 42487). We noted that, although we use data prior to the performance period to calculate these medians, the data may not be from the same time period, or ‘‘baseline period’’ (see § 413.178(a)(2)) used to calculate the 50th percentile of national ESRD facility performance on the clinical measures. Instead, our policy has been to calculate the median of national ESRD facility performance on the ESRD QIP reporting measures using the most recently available data prior to the applicable performance period for the payment year. If there were no data available prior to the first performance period of a new reporting measure, as was the case for the Clinical Depression Screening and Follow-Up reporting measure, we would use a proxy median for purposes of including the reporting measure in our calculation of the mTPS. We stated that we selected the values for these proxy medians based on the availability of previous measure data, a facility’s familiarity with similar measures or requirements, and considerations regarding a facility’s ability to comply with new reporting measure requirements during the initial performance periods for a new reporting measure. In the CY 2024 ESRD PPS proposed rule, we proposed to update the definition of ‘‘minimum total performance score’’ at § 413.178(a)(8) so that it accurately captures these policies (88 FR 42487). We also proposed that, with respect to the adoption of future reporting measures, including the reporting measures proposed in the CY 2024 ESRD PPS proposed rule, if there is an insufficient quantity of data available prior to the first performance period of a new reporting measure, we will set a proxy median of zero for the reporting measure until we have sufficient data to calculate the median. We stated our belief that this proposal 107 In the CY 2023 ESRD PPS final rule, we revised § 413.178(a)(8) to exempt PY 2023 (87 FR 67229). VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 will provide facilities with additional predictability and transparency regarding our calculation of the mTPS for a payment year. We noted that, although many facilities score much higher than zero during the initial performance periods of a new reporting measure, we believe that setting the proxy median at zero where we do not have sufficient data available will account for the possibility that new reporting measures may have different reporting requirements. For example, a new reporting measure may require a facility to report new or additional data in CMS’s ESRD Quality Reporting System (EQRS) to be eligible for scoring on the reporting measure. Additionally, a new reporting measure may require that a facility reconsider its internal processes to comply with the reporting requirements and be eligible for scoring. In the proposed rule, we stated that we believe that using a median of zero for new reporting measures would ensure that the mTPS is calculated based on the worst-case scenario, rather than assuming a median higher than what may be observed once data are available. We noted that setting the proxy median at zero until we have sufficient data available to calculate the median would allow the timely inclusion of a new reporting measure in the ESRD QIP measure set, as well as our calculation of the mTPS, while also encouraging facilities to report the new or additional data that may be specified by that reporting measure so that they are able to receive credit for reporting. We welcomed public comment on this proposal. The comments we received and our responses are set forth below. Comment: A few commenters expressed support for the proposed update to the definition of mTPS, as it will allow for timely inclusion of new reporting measures and encourage facilities to report data. Response: We thank commenters for their support. Final Rule Action: After considering public comments, we are finalizing our proposal as proposed. 2. Codification of the ESRD QIP Measure Adoption, Retention, and Removal Policies In the CY 2013 ESRD PPS final rule (77 FR 67475), we finalized a policy to retain measures from prior program years for each successive program year, unless otherwise proposed and finalized. In the CY 2019 ESRD PPS final rule (83 FR 56983 through 56985), we finalized eight measure removal factors for the ESRD QIP, and we refer readers to that final rule for details. We PO 00000 Frm 00092 Fmt 4701 Sfmt 4700 also finalized a policy to retain a measure for certain specified reasons, such as when a particular measure addresses a gap in quality so significant that removing the measure could result in poor quality or when a measure addresses a statutorily-required topic, even if one or more of the measure removal factors applies. In the CY 2013 ESRD PPS final rule (77 FR 67475), we also finalized that we would generally remove an ESRD QIP measure using notice and comment rulemaking unless we determined that the continued collection of data on the measure raised patient safety concerns. In that case, we stated that we would promptly remove the measure, immediately notify ESRD facilities and the public through the usual communication channels (including listening sessions, memos, email notification, and website postings), and publish the justification for the removal in the Federal Register during the next rulemaking cycle. In the CY 2024 ESRD PPS proposed rule, we proposed to revise § 413.178(c) such that it incorporates these measure adoption, retention, and removal policies (88 FR 42487). We proposed that existing § 413.178(c)(1) through (5) would be consolidated and renumbered as § 413.178(c)(1)(i) through (v), and we would add a new § 413.178(c)(1)(vi), which would codify our policy to adopt measures for the ESRD QIP beyond those that address the topics described at § 413.178(c)(1)(i) through (v). We also proposed to codify at § 413.178(c)(2) our policies regarding the use of endorsed measures. We proposed to codify at § 413.178(c)(3) our policy regarding the updating of measure specifications. Additionally, we proposed to codify at § 413.178(c)(4) our policy regarding measure retention. Finally, we proposed to codify at § 413.178(c)(5) our policies regarding measure removal. We stated our belief that these proposals will make it easier for interested parties to find these policies and will further align the ESRD QIP regulations with the regulations we have codified for other quality reporting programs. We welcomed public comment on these proposals. The comments we received and our responses are set forth below. Comment: A few commenters expressed support for the proposals to codify existing measure adoption, retention, and removal policies, noting that these updates will provide transparency for evaluating measures. Response: We thank the commenters for their support. Final Rule Action: After considering public comments, we are finalizing our proposals as proposed. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations C. Updates to Requirements Beginning With the PY 2026 ESRD QIP 1. PY 2026 ESRD QIP Measure Set ddrumheller on DSK120RN23PROD with RULES2 In the CY 2024 ESRD PPS proposed rule, we proposed to remove the Ultrafiltration Rate reporting measure and the Standardized Fistula Rate clinical measure beginning with PY 2026 (88 FR 42499 through 42500). We also proposed to add the Facility VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Commitment to Health Equity reporting measure to the ESRD QIP measure set beginning with PY 2026 (88 FR 42489 through 42494). The previously finalized and proposed new measures are summarized in Table 12 of the proposed rule (88 FR 42488). We describe the previously finalized measures and the measures we are finalizing in this final rule in Table 12. The technical specifications for each of PO 00000 Frm 00093 Fmt 4701 Sfmt 4700 76435 these measures can be found in the CMS ESRD Measures Manual for the 2023 Performance Period.108 BILLING CODE 4120–01–P 108 https://www.cms.gov/files/document/esrdmeasures-manual-v80.pdf. 109 In previous years, we referred to the consensus-based entity by corporate name. We have updated this language to refer to the consensusbased entity more generally. E:\FR\FM\06NOR2.SGM 06NOR2 76436 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 12: Previously Finalized and Newly Finalized Measures for the PY 2026 ESRD QIP Measure Set ConsensusBased Entity109 (CBE) # 0258 2496 Based on CBE#2979 NIA 2978 1454 1463 Based on CBE#0418 Based on CBE#1460 NIA NIA 2988 3636 NIA Measure Title and Description In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CARPS) Survey Administration, a clinical measure Measure assesses patients' self-reported experience of care through percentage of patient responses to multiple survey questions. 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 clinical 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: 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 reporting 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 clinical measure* Facility reports in ESRD Quality Reporting System (EQRS) one of four conditions for each qualifying patient treated during performance period. National Healthcare Safety Network (NHSN) Bloodstream Infection (BSI) in Hemodialysis Patients, a clinical measure The Standardized Infection Ratio (SIR) ofBSis 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 CDC. Percentage of Prevalent Patients Waitlisted (PPPW), a clinical measure Percentage of patients at each 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. COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP), a reporting measure** Percentage of HCP who are up to date on their COVID-19 vaccination course. Facility Commitment to Health Equity, a reporting measure*** Facilities will receive two points each for attesting to five different domains of commitment to advancing health equity for a total often points. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00094 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.024</GPH> ddrumheller on DSK120RN23PROD with RULES2 *We are finalizing our proposal to update the Clinical Depression Screening and Follow-Up measure beginning with PY 2026, as discussed in section IV.C.4 of this fmal rule. **We are fmalizing our proposal to update the COVID-19 Vaccination Coverage Among HCP reporting measure beginning with PY 2026, as discussed in section IV.C.3 of this fmal rule. ***Weare fmalizing our proposal to add the Facility Commitment to Health Equity reporting measure beginning with PY 2026, as discussed in section IV.C.2 of this final rule. Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 2. Adoption of the Facility Commitment to Health Equity Reporting Measure Beginning With the PY 2026 ESRD QIP a. Background ddrumheller on DSK120RN23PROD with RULES2 In the CY 2024 ESRD PPS proposed rule, we stated that significant and persistent disparities in healthcare outcomes exist in the U.S. (88 FR 42489). For example, belonging to a racial or ethnic minority group, being a member of the lesbian, gay, bisexual, transgender, and queer (LGBTQ+) community, being a member of a religious minority, living in a rural area, being a person with a disability or disabilities, or being near or below the poverty level, is often associated with worse health outcomes.110 111 112 113 114 115 116 117 118 119 Numerous studies have shown that among Medicare beneficiaries, individuals who are racial and ethnic minorities often receive lower quality 110 Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 305(7), 675–681. Available at: doi:10.1001/jama.2011.123. 111 Lindenauer PK, Lagu T, Rothberg MB, et al. (2013). Income Inequality and thirty-Day Outcomes After Acute Myocardial Infarction, Heart Failure, and Pneumonia: Retrospective Cohort Study. BMJ, 346. Available at: https://doi.org/10.1136/bmj.f521. 112 Trivedi AN, Nsa W, Hausmann LRM, et al. (2014). Quality and Equity of Care in U.S. Hospitals. N Engl J Med, 371(24), 2298–2308. Available at: doi: 10.1056/NEJMsa1405003. 113 Polyakova, M, Udalova V, Kocks, G, Genadek K, Finlay K, Finkelstein AN. (2021). Racial Disparities In Excess All-Cause Mortality During The Early COVID–19 Pandemic Varied Substantially Across States. Health Affairs, 40(2), 307–316. Available at: https://doi.org/10.1377/ hlthaff.2020.02142. 114 Rural Health Research Gateway. (2018). Rural Communities: Age, Income, and Health Status. Rural Health Research Recap. Available at: https:// www.ruralhealthresearch.org/assets/2200–8536/ rural-communities-age-income-health-statusrecap.pdf. 115 HHS Office of Minority Health. (2020). Progress Report to Congress, 2020 Update on the Action Plan to Reduce Racial and Ethnic Health Disparities. Department of Health and Human Services. Available at: https://minorityhealth. hhs.gov/report-congress-minority-health. 116 Heslin KC, Hall JE. (2021). Sexual Orientation Disparities in Risk Factors for Adverse COVID–19– Related Outcomes, by Race/Ethnicity—Behavioral Risk Factor Surveillance System, United States, 2017–2019. MMWR Morb Mortal Wkly Rep, 70(5), 149. doi: 10.15585/mmwr.mm7005a1. 117 Poteat TC, Reisner SL, Miller M, Wirtz AL. (2020). COVID–19 Vulnerability of Transgender Women With and Without HIV Infection in the Eastern and Southern U.S. medRxiv. doi: 10.1101/ 2020.07.21.20159327. 118 Vu M, Azmat A, Radejko T, Padela AI. (2016). Predictors of Delayed Healthcare Seeking Among American Muslim Women. Journal of Women’s Health, 25(6), 586–593. doi: 10.1089/ jwh.2015.5517. 119 Nadimpalli SB, Cleland CM, Hutchinson MK, Islam N, Barnes LL, Van Devanter N. (2016). The Association Between Discrimination and the Health of Sikh Asian Indians. Health Psychology, 35(4), 351–355. https://doi.org/10.1037/hea0000268. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 hospital care, report lower experiences of care, and experience more frequent hospital readmissions and procedural complications.120 121 122 123 124 125 Readmission rates in the Hospital Readmissions Reduction Program have shown to be higher among Black and Hispanic Medicare beneficiaries with common conditions, including congestive heart failure and acute myocardial infarction.126 127 128 129 130 Data indicate that, even after accounting for factors such as socioeconomic conditions, members of racial and ethnic minority groups reported experiencing lower quality healthcare.131 Evidence of differences in 120 CMS Office of Minority Health. (2020). Racial, Ethnic, and Gender Disparities in Healthcare in Medicare Advantage. Baltimore, MD: Centers for Medicare & Medicaid Services. Available at: . 121 CMS Office of Minority Health. (Updated August 2018). Guide to Reducing Disparities in Readmissions. Baltimore, MD: Centers for Medicare & Medicaid Services. Available at: https:// www.cms.gov/About-CMS/Agency-Information/ OMH/Downloads/OMH_Readmissions_Guide.pdf. 122 Singh JA, Lu X, Rosenthal GE, Ibrahim S, Cram P. (2014). Racial Disparities in Knee and Hip Total Joint Arthroplasty: An 18-year analysis of national Medicare data. Ann Rheum Dis., 73(12), 2107–15. Available at: doi:10.1136/annrheumdis2013–203494. 123 Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. (2019). Racial Disparities in Readmission Rates among Patients Discharged to Skilled Nursing Facilities. J Am Geriatr Soc., 67(8), 1672–1679. Available at: https://doi.org/10.1111/ jgs.15960. 124 Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 305(7), 675–681. Available at: doi:10.1001/jama.2011.123. 125 Tsai TC, Orav EJ, Joynt KE. (2014). Disparities in Surgical 30-day Readmission Rates for Medicare Beneficiaries by Race and Site of Care. Ann Surg., 259(6), 1086–1090. Available at: doi: 10.1097/ SLA.0000000000000326. 126 Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK. (2011). Readmission Rates for Hispanic Medicare Beneficiaries with Heart Failure and Acute Myocardial Infarction. Am Heart J., 162(2), 254–261 e253. Available at: https://doi.org/10.1016/ j.ahj.2011.05.009. 127 Centers for Medicare & Medicaid Services. (2014). Medicare Hospital Quality Chartbook: Performance Report on Outcome Measures. Available at: https://www.hhs.gov/guidance/ document/medicare-hospital-quality-chartbookperformance-report-outcome-measures. 128 CMS Office of Minority Health. (Updated August 2018). Guide to Reducing Disparities in Readmissions. Baltimore, MD: Centers for Medicare & Medicaid Services. Available at: https:// www.cms.gov/About-CMS/Agency-Information/ OMH/Downloads/OMH_Readmissions_Guide.pdf. 129 Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA. (2013). Chronic Obstructive Pulmonary Disease Readmissions at MinorityServing Institutions. Ann Am Thorac Soc., 10(6), 680–684. Available at: https://doi.org/ 10.1513/AnnalsATS.201307-223OT. 130 Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 305(7), 675–681. Available at: doi:10.1001/jama.2011.123. 131 Nelson AR. (2003). Unequal Treatment: Report of the Institute of Medicine on Racial and Ethnic Disparities in Healthcare. The Annals of thoracic PO 00000 Frm 00095 Fmt 4701 Sfmt 4700 76437 quality of care received by people from racial and ethnic minority groups show worse health outcomes, including a higher incidence of diabetes complications such as retinopathy.132 Additionally, inequities in the drivers of health affecting these groups, such as poverty and healthcare access, are interrelated and influence a wide range of health and quality-of-life outcomes and risks.133 In the CY 2022 ESRD PPS proposed rule (86 FR 36362 through 36369), we requested information on our Equity Plan for Improving Quality in Medicare (also referred to as the CMS Framework for Health Equity),134 which outlines our commitment to close health equity gaps through improved data collection, measurement, and analysis of disparities across programs and policies. The request for information requested public comment regarding the potential stratification of quality measure results by race and ethnicity and the potential creation of a hospital or facility equity score in CMS quality reporting and value-based purchasing programs, including the ESRD QIP. In the CY 2024 ESRD PPS proposed rule, we stated that we received many responses to that request for public comment (88 FR 42489), and we referred readers to the CY 2022 ESRD PPS final rule for summaries of those comments (86 FR 61934 through 61937). We noted in the CY 2022 ESRD PPS final rule the value of these comments in the continuing development of our health equity quality measurement efforts, and we stated that we would take the comments surgery, 76(4), S1377–S1381. doi: 10.1016/s0003– 4975(03)01205–0. 132 Peek, ME, Odoms-Young, A, Quinn, MT, Gorawara-Bhat, R, Wilson, SC, & Chin, MH. (2010). Race and Shared Decision-Making: Perspectives of African-Americans with diabetes. Social Science & Medicine, 71(1), 1–9. Available at: doi:10.1016/ j.socscimed.2010.03.014. 133 Department of Health and Human Services. (2021). Healthy People 2020: Disparities. Available at: www.healthypeople.gov/2020/about/foundationhealth-measures/Disparities. 134 Centers for Medicare and Medicaid Services. (2022). CMS Framework for Health Equity 2022– 2032. Available at: https://www.cms.gov/files/ document/cms-framework-health-equity-2022.pdf. Centers for Medicare & Medicaid Services. (2021). Paving the Way to Equity: A Progress Report. Available at: https://www.cms.gov/files/document/ paving-way-equity-cms-omh-progress-report.pdf. Accessed on February 20, 2023. See also, Centers for Medicare & Medicaid Services Office of Minority Health. (2021). The CMS Equity Plan for Improving Quality in Medicare. 2015–2021. Available at: https://www.cms.gov/About-CMS/ Agency-Information/OMH/OMH_Dwnld-CMS_ EquityPlanforMedicare_090615.pdf#:∼:text=The %20Centers%20for%20Medicare %20%26%20Medicaid %20Services%20%28CMS%29,evidence%20base %2C%20identifying%20opportunities%2C%20and %20gathering%20stakeholder%20input. Accessed on February 20, 2023. E:\FR\FM\06NOR2.SGM 06NOR2 76438 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 into account for future development and expansion of our health equity quality measurement efforts. The Agency for Healthcare Research and Quality (AHRQ) and The Joint Commission have independently concluded that facility leadership plays an important role in promoting a culture of quality and safety.135 136 137 AHRQ research shows that facility boards can influence quality and safety in a variety of ways; not only through strategic initiatives, but also through more direct interactions with frontline workers.138 The Joint Commission found that a leader who is committed to prioritizing and making patient safety visible through every day actions is a critical part of creating a true culture of safety, which in turn fosters an organizational culture in which patients are treated with dignity and respect.139 Because CMS is also working toward the goal of all patients receiving high-quality healthcare, regardless of individual characteristics, we are also committed to supporting healthcare organizations in building a culture of safety and equity that focuses on educating and empowering their workforce to recognize and eliminate health disparities. This includes patients receiving the right care, at the right time, in the right setting for their condition(s), regardless of those characteristics. We believe that strong and committed leadership from dialysis facility executives and board members is essential and can play a role in shifting organizational culture and advancing equity goals for dialysis facilities. 135 Agency for Healthcare Research and Quality. Leadership Role in Improving Patient Safety. Patient Safety Primer, September 2019. Available at: https://psnet.ahrq.gov/primer/leadership-roleimproving-safety. 136 Joint Commission on Accreditation of Healthcare Organizations, USA. The essential role of leadership in developing a safety culture. Sentinel Event Alert. 2017 (Revised June 2021). Available at: https://www.jointcommission.org/-/ media/tjc/documents/resources/patient-safetytopics/sentinel-event/sea-57-safety-culture-andleadership-final2.pdf. 137 See information on launch of new ‘‘Health Care Equity Certification’’ in July 2023 from Joint Commission on Accreditation of Healthcare Organizations, USA, available at: https:// www.jointcommission.org/our-priorities/healthcare-equity/health-care-equity-prepublication/. 138 Agency for Healthcare Research and Quality. Leadership Role in Improving Patient Safety. Patient Safety Primer, September 2019: Available at: https://psnet.ahrq.gov/primer/leadership-roleimproving-safety. 139 Joint Commission on Accreditation of Healthcare Organizations, USA. The essential role of leadership in developing a safety culture. Sentinel Event Alert. 2017 (Revised June 2021). Available at: https://www.jointcommission.org/-/ media/tjc/documents/resources/patient-safetytopics/sentinel-event/sea-57-safety-culture-andleadership-final2.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Studies demonstrate that hospital leadership can positively influence culture for better quality, patient outcomes, and experience of care.140 141 142 A systematic review of 122 published studies showed that strong leadership that prioritized safety, quality, and the setting of clear guidance with measurable goals for improvement resulted in a high-performing hospital with better patient outcomes.143 We believe this conclusion also applies to dialysis facilities, and that the commitment of dialysis facility leadership to health equity would result in a reduction of health disparities in the ESRD population. Our belief that a leadership commitment to health equity can lead to a reduction of health disparities is also supported by research conducted by the Institute for Healthcare Improvement (IHI), which studied 23 health systems throughout the U.S. and Canada. The IHI’s research showed that health equity must be a priority championed by leadership teams to improve both patient access to needed healthcare services and outcomes among populations that have been disadvantaged by the healthcare system.144 This IHI study specifically identified concrete actions to make advancing health equity a core strategy, including establishing this goal as a leader-driven priority alongside organizational development structures and processes.145 Based upon these findings, we believe that dialysis facility leadership can be instrumental in setting specific, measurable, attainable, realistic, and time-based (SMART) goals to assess progress towards achieving equity goals and ensuring high-quality 140 Bradley EH, Brewster AL, McNatt Z, et al. (2018) How Guiding Coalitions Promote Positive Culture Change in Hospitals: A Longitudinal Mixed Methods Interventional Study. BMJ Qual Saf., 27(3), 218–225. doi:10.1136/bmjqs-2017–006574. 141 Smith SA, Yount N, Sorra J. (2017). Exploring Relationships Between Hospital Patient Safety Culture and Consumer Reports Safety Scores. BMC Health Services Research, 17(1), 143. doi:10.1186/ s12913–017–2078–6. 142 Keroack MA, Youngberg BJ, Cerese JL, Krsek C, Prellwitz LW, Trevelyan EW. (2007). Organizational Factors Associated with High Performance in Quality and Safety in Academic Medical Centers. Acad Med., 82(12), 1178–86. doi: 10.1097/ACM.0b013e318159e1ff. 143 Millar R, Mannion R, Freeman T, et al. (2013). Hospital Board Oversight of Quality and Patient Safety: A Narrative Review and Synthesis of Recent Empirical Research. The Milbank quarterly, 91(4), 738–70. doi:10.1111/1468–0009.12032. 144 Mate KS and Wyatt R. (2017). Health Equity Must Be a Strategic Priority. NEJM Catalyst. Available at: https://catalyst.nejm.org/doi/full/ 10.1056/CAT.17.0556. 145 Mate KS and Wyatt R. (2017). Health Equity Must Be a Strategic Priority. NEJM Catalyst. Available at: https://catalyst.nejm.org/doi/full/ 10.1056/CAT.17.0556. PO 00000 Frm 00096 Fmt 4701 Sfmt 4700 care at dialysis facilities is accessible to all. Based on this well-developed body of evidence, in the proposed rule we proposed to adopt an attestation-based structural reporting measure, Facility Commitment to Health Equity, for the ESRD QIP beginning with PY 2026 (88 FR 42490). The first pillar of our strategic priorities 146 reflects our deep commitment to improvements in health equity by addressing the health disparities that underly our health system. In line with this strategic pillar, we developed this structural measure to assess facility commitment to health equity across five domains (see Table 13) using a suite of organizational competencies aimed at achieving health equity for all patients, including but not limited to patients who belong to racial and ethnic minority groups, people with disabilities, members of the LGBTQ+ community, individuals with limited English proficiency, rural populations, religious minorities, and people facing socioeconomic challenges. We believe these elements are actionable focus areas, and assessment of dialysis facility leadership commitment to them is foundational. We proposed to adopt the measure under section 1881(h)(2)(A)(iv) of the Act, which gives the Secretary broad authority to specify measures for the ESRD QIP (88 FR 42490). We noted that disparities in health equity are tied to worse patient outcomes in the ESRD community. For example, individuals from racial and ethnic minority groups and with lower incomes are less likely to receive recommended care for CKD risk factors and are also less likely to reduce CKD risk through recommended treatment goals.147 148 149 150 146 Brooks-LaSure, C. (2021). My First 100 Days and Where We Go From Here: A Strategic Vision for CMS. Centers for Medicare & Medicaid. Available at: https://www.cms.gov/blog/my-first100-days-and-where-we-go-here-strategic-visioncms. 147 United States Renal Data System. 2021 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, 2021. We note that, following publication of the CY 2024 ESRD PPS proposed rule, the USRDS has published its 2022 annual report, which is available at: https:// usrds-adr.niddk.nih.gov/2022. 148 Benjamin O, Lappin SL. End-Stage Renal Disease. [Updated 2021 Sep 16]. In: Stat Pearls [internet]. Treasure Island (FL): StatPearls Publishing; 2022. Available from: https://www.ncbi. nlm.nih.gov/books/NBK499861/. 149 Norris, K.C., Williams, S.F., Rhee, C.M., Nicholas, S.B., Kovesdy, C.P., et al. (2017). Hemodialysis Disparities in African Americans: The Deeply Integrated Concept of Race in the Social Fabric of Our Society. Seminars in Dialysis 30(3):213–223. doi:10.1111/sdi.12589. 150 CMS (2021). Chronic Kidney Disease Disparities: Educational Guide for Primary Care. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Consequently, some groups are more likely to progress from CKD to ESRD and less likely to be under the care of a nephrologist before starting dialysis.151 Individuals from racial and ethnic minority groups with ESRD are more likely to have 30-day hospital readmissions when compared to nonHispanic White patients.152 We stated that we believe that this measure is an appropriate measure of ESRD quality of care because it would improve facilities’ awareness of the tie between their structural practices and their patient outcomes by reporting these data, thus informing facility practices such that their patients attain better outcomes. We also stated our belief that the proposed measure would incentivize facilities to collect and utilize their data to identify their own critical equity gaps, implement plans to address said gaps, and ensure that they dedicate resources to addressing those gaps. Facilities could analyze data to understand, for example, whether there are any demographic factors (such as race, national origin, primary language, and ethnicity), or social drivers of health (such as housing status and food security) that may be affecting access to care or contributing to poor outcomes in ddrumheller on DSK120RN23PROD with RULES2 Available at: https://www.cms.gov/files/document/ chronic-kidney-disease-disparities-educationalguide-primary-care.pdf. 151 Norton, J. M., Moxey-Mims, M. M., Eggers, P. W., Narva, A. S., Star, R. A., Kimmel, P. L., & Rodgers, G. P. (2016). Social Determinants of Racial Disparities in CKD. Journal of the American Society of Nephrology: JASN, 27(9), 2576–2595. https:// doi.org/10.1681/ASN.2016010027. 152 CMS (2014). Health Disparities Among Aged ESRD Beneficiaries, 2014. Available at: https:// www.cms.gov/About-CMS/Agency-Information/ OMH/Downloads/ESRD-Infographic.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 their patient populations and, in turn, develop appropriate solutions to improve access and outcomes. Thus, the measure aims to support facilities in leveraging available data, pursuing focused quality improvement activities, and promoting efficient and effective use of their resources. While the measure does not require facilities to take specific actions, we expect that any solution a facility might develop to address a gap it identifies would comply with all applicable Federal nondiscrimination laws. We also note that the measure is intended to promote health equity for all patients and is not intended to create a conflict between a CMS requirement and a State’s civil rights laws. The five questions of the structural measure are adapted from the CMS Office of Minority Health’s Building an Organizational Response to Health Disparities framework, which focuses on data collection, data analysis, culture of equity, and quality improvement.153 We have already adopted this measure for the Hospital Inpatient Quality Reporting (IQR) Program, and we refer readers to the FY 2023 IPPS/LTCH PPS final rule (87 FR 49191 through 49201) for a discussion of the measure in that program. In the proposed rule, we stated that, other than replacing the term ‘‘hospital’’ with the term ‘‘facility,’’ the measure is identical to the Hospital IQR Program measure. The Facility Commitment to Health Equity measure 153 Centers for Medicare & Medicaid Services. (2021). Building an Organizational Response to Health Disparities [Fact Sheet]. U.S. Department of Health and Human Services. Available at: https:// www.cms.gov/About-CMS/Agency-Information/ OMH/Downloads/Health-Disparities-Guide.pdf. PO 00000 Frm 00097 Fmt 4701 Sfmt 4700 76439 is aligned with the Meaningful Measures Area of ‘‘Equity of Care’’ and the Meaningful Measures 2.0 goal to ‘‘Leverage Quality Measures to Promote Equity and Close Gaps in Care’’ because it seeks to assess structural health equity issues that could inform facility practices such that their patients attain better outcomes. This measure also supports the Meaningful Measures 2.0 objective to ‘‘[c]ommit to a patientcentered approach in quality measure and value-based incentives programs to ensure that quality and safety measures address healthcare equity’’ because the measure would incentivize facilities to identify their own healthcare equity gaps from a structural perspective. b. Overview of Measure The Facility Commitment to Health Equity reporting measure assesses dialysis facility commitment to health equity using a suite of equity-focused organizational competencies aimed at achieving health equity for all populations, including those that have been disadvantaged, marginalized, and underserved by the healthcare system. As previously noted, this includes, but is not limited to: racial and ethnic minority groups, people with disabilities, members of the LGBTQ+ community, individuals with limited English proficiency, rural populations, religious minorities, and people facing socioeconomic challenges. Table 13 includes the five attestation domains and the elements within each of those domains for which we had proposed a facility would report an affirmative attestation in order for the facility to receive points for that domain. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 76440 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 13: Proposed Facility Commitment to Health Equity Measure's Five Attestations Attestation Elements: Select all that apply (Note: Affirmative attestation of all elements within a domain would be required for the facility to receive a point for the domain in the numerator) Domain 1: Equity is a Strategic Priority Facility commitment to reducing healthcare disparities is strengthened when equity is a key organizational priority. Please attest that your facility has a strategic plan for advancing health equity and that it includes all the following elements. (A) Our facility strategic plan identifies priority populations who currently experience health disparities. (B) Our facility strategic plan identifies health equity goals and discrete action steps to achieving these goals. (C) Our facility strategic plan outlines specific resources which have been dedicated to achieving our equity goals. (D) Our facility strategic plan describes our approach for engaging key stakeholders, such as community-based organizations. Domain 2: Data Collection Collecting valid and reliable demographic and social determinant of health data on patients served in a facility is an important step in identifying and eliminating health disparities. Please attest that your facility engages in the following activities. (A) Our facility collects demographic information (such as self-reported race, national origin, primary language, and ethnicity data) and/or social determinant of health information on the majority of our patients. (B) Our facility has training for staff in culturally sensitive collection of demographic and/or social determinant of health information. (C) Our facility inputs demographic and/or social determinant of health information collected from patients into structured, interoperable data elements using certified EHR technology. Domain 3: Data Analysis Effective data analysis can provide insights into which factors contribute to health disparities and how to respond. Please attest that your facility engages in the following activities. (A) Our facility stratifies key performance indicators by demographic and/or social determinants of health variables to identify equity gaps and includes this information on facility performance dashboards. Domain 4: Quality Improvement Health disparities are evidence that high-quality care has not been delivered equitably to all patients.* Engagement in quality improvement activities can improve quality of care for all patients. (A) Our facility participates in local, regional, or national quality improvement activities focused on reducing health disparities. Domain 5: Leadership Engagement Leaders and staff can improve their capacity to address disparities by demonstrating routine and thorough attention to equity and setting an organizational culture of equity. Please attest that your facility engages in the following activities. (A) Our facility senior leadership, including chief executives and the entire facility** board of trustees, annually reviews our strategic plan for achieving health equity. * After publication of the 2022 MUC List, we clarified the language in Domain 4: "Health disparities are evidence that high quality care has not been delivered equitably to all patients." ** After publication of the 2022 MUC List, we identified that Domain 5 incorrectly referred to the "hospital board of trustees" instead of the "facility board of trustees," and therefore updated the language in Domain 5 to be more applicable to the ESRD QIP. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00098 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.025</GPH> ddrumheller on DSK120RN23PROD with RULES2 (B) Our facility senior leadership, including chief executives and the entire facility board of trustees, annually reviews key performance indicators stratified by demographic and/or social factors. Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 BILLING CODE 4120–01–C c. Measure Calculation The Facility Commitment to Health Equity measure consists of five attestation-based questions, each representing a separate domain of commitment. For a facility to affirmatively attest ‘‘yes’’ to a domain, and receive points for that domain, the facility would need to determine that it engages in all of the activities that are included as elements under the domain. A facility that engages in all of the activities for a domain would report an affirmative attestation by answering ‘‘yes’’ to the attestation-based question for that domain. There is no option for a facility to answer ‘‘yes’’ in response to an attestation-based question for a domain if the facility engages in some, but not all, of the activities included as domain elements, and there is also no option for a facility to answer ‘‘no’’ in response to any attestation-based question for a domain. The measure would be expressed as a fraction, and a facility can score either 0, 2, 4, 6, 8, or 10 for the performance period, depending on the number of domains to which a facility positively attests. In the proposed rule, we proposed that the measure denominator would be ‘‘ten,’’ with each domain being represented as two points out of that total ten points, and that the numerator would be calculated as two points for each ‘‘yes’’ answer the facility reports which are then summed together (88 FR 42493). We stated that we chose to award facilities two points for each affirmative response to an attestation-based question so that the maximum number of points a facility could receive for the measure is ten, which is the same maximum number of points that a facility can receive on other ESRD QIP measures. For example, for Domain 1 (‘‘Facility commitment to reducing healthcare disparities is strengthened when equity is a key organizational priority’’), a facility would evaluate and determine whether its strategic plan satisfies all of the elements described in (A) through (D) (see Table 13). If the facility’s plan satisfies all four of these elements, the facility would respond ‘‘yes’’ to the attestation-based question for Domain 1 and receive two (2) points for that response. If the facility determined that its strategic plan satisfies elements (A) and (B) but not (C) and (D), the facility would not be able to respond ‘‘yes’’ to Domain 1 and would not receive any points for that domain. The numerator is calculated as the sum of the points the facility earns for responding ‘‘yes’’ to the attestation- VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 based questions. For example, a facility that responds ‘‘yes’’ to all five attestation-based questions would receive the maximum 10 points (two points for each of the five ‘‘yes’’ responses). A facility that responds ‘‘yes’’ to three of the attestation-based questions would receive six points. We proposed that the Facility Commitment to Health Equity reporting measure would be added to the Reporting Measure Domain (88 FR 42493). We noted that technical specifications for the measure can be found in the ESRD QIP CY 2024 Technical Measure Specifications, which are available at: https:// www.cms.gov/medicare/qualityinitiatives-patient-assessmentinstruments/esrdqip/061_technical specifications. Consistent with case minimums we have adopted for our other ESRD QIP reporting measures, we proposed that facilities must have 11 qualifying patients and a CCN open date before September 1 of the performance period that applies to the program year in order to be eligible for scoring on the Facility Commitment to Health Equity reporting measure. d. Data Submission and Reporting In the proposed rule, we proposed to require facilities to submit data needed to calculate the Facility Commitment to Health Equity measure once on an annual basis using CMS’s ESRD Quality Reporting System (EQRS) beginning with PY 2026 (88 FR 42494). We proposed that the deadline for submission would be the end of the EQRS December data reporting month for the applicable performance period, which is consistent with current reporting deadlines for other ESRD QIP measures. For example, for the PY 2026 ESRD QIP, facilities would need to report data on the measure by the end of the December data reporting month in CY 2024. As described in Table 17 of the proposed rule (88 FR 42504) and reproduced in Table 18 of this final rule, we proposed performance standards for the Facility Commitment to Health Equity reporting measure. We also proposed a 12-month performance period for the measure, and note that we did not receive any comments on this aspect of the measure proposal. We further proposed that facilities would be required to follow the submission and reporting requirements for web-based measures for the ESRD QIP posted on the QualityNet website: https:// qualitynet.cms.gov/esrd/esrdqip. PO 00000 Frm 00099 Fmt 4701 Sfmt 4700 76441 e. Review by the Measure Applications Partnership The Facility Commitment to Health Equity measure was included as a measure under consideration for the ESRD QIP on the publicly available ‘‘List of Measures Under Consideration for December 1, 2022’’ (MUC List), a list of measures under consideration for use in various Medicare quality programs.154 The CBE-convened Measure Applications Partnership (MAP) Health Equity Advisory Group reviewed the MUC List and the Facility Commitment to Health Equity measure (MUC2022–027) in detail on December 6–7, 2022.155 The Health Equity Advisory Group expressed concern that this is more of a ‘‘checklist’’ measure that may not directly address health inequities at a systemic level, but the advisory group generally agreed that a structural measure such as this one represents progress toward improving equitable care.156 In addition, on December 8 through 9, 2022, the MAP Rural Health Advisory Group reviewed the 2022 MUC List, and the MAP Hospital Workgroup reviewed the 2022 MUC List on December 13 through 14, 2022.157 The MAP Hospital Workgroup recognized that reducing health care disparities would represent a substantial benefit to overall quality of care, but expressed reservations about the measure’s link to clinical outcomes; the MAP Hospital Workgroup members voted to conditionally support the measure for rulemaking pending: (1) endorsement by a consensus-based entity (CBE); (2) committing to look at outcomes in the future; (3) providing more clarity on the measure and supplementing interpretations with 154 Centers for Medicare & Medicaid Services. 2022. List of Measures Under Consideration for December 1, 2022. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https:// mmshub.cms.gov/measure-lifecycle/measureimplementation/pre-rulemaking/lists-and-reports. 155 Centers for Medicare & Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. 156 Centers for Medicare & Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. 157 Centers for Medicare & Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. Rural Health Advisory Group. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https:// mmshub.cms.gov/measure-lifecycle/measureimplementation/pre-rulemaking/lists-and-reports. E:\FR\FM\06NOR2.SGM 06NOR2 76442 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations results; and (4) verifying attestation provided by the accountable entities.158 Thereafter, the MAP Coordinating Committee deliberated on January 24 through 25, 2023 and ultimately voted to conditionally support the Facility Commitment to Health Equity measure for rulemaking with the same conditions.159 f. Consensus-Based Entity Endorsement Although section 1881(h)(2)(B)(i) of the Act generally requires that measures specified by the Secretary for the ESRD QIP be endorsed by the entity with a contract under section 1890(a) of the Act, section 1881(h)(2)(B)(ii) of the Act states that in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. We reviewed CBE-endorsed measures and were unable to identify any other CBE-endorsed measures on this topic, and therefore we believe the exception in section 1881(h)(2)(B)(ii) of the Act applies. g. Public Display ddrumheller on DSK120RN23PROD with RULES2 In the proposed rule, we proposed to publicly display the facility-specific results for the Facility Commitment to Health Equity reporting measure on an annual basis through our Care Compare website at: https://www.medicare.gov/ care-compare/. We stated that we anticipate making the first public report available in January 2026. We invited public comment on this proposal. The comments we received and our responses are set forth below. Comment: Several commenters expressed support for the Facility Commitment to Health Equity measure. A few of these commenters appreciated the Facility Commitment to Health Equity measure as a step towards requiring demonstration of equitable policies and practices. One commenter 158 Centers for Medicare & Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. 159 Centers for Medicare & Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 noted that the measure will help facilities assess commitment to health equity by focusing on relevant organizational competencies. One commenter, emphasizing the importance of strong, diverse, and committed leadership in advancing health equity goals at the facility level, stated that the measure would incentivize facilities to identify and address equity gaps. One commenter noted that the measure is a low burden first step to address inequity, supports Meaningful Measures 2.0, and focuses on SMART goals which are the basis for measuring improvement in health outcomes. Response: We thank commenters for their support of our proposal to adopt the Facility Commitment to Health Equity reporting measure. We agree that the measure assesses a facility’s commitment to health equity and is intended to encourage facilities to understand their own health equity gaps so they can improve patient outcomes. Comment: A few commenters expressed support for public reporting of the measure. Response: We thank the commenters for their support. Comment: A few commenters who supported the adoption of the Facility Commitment to Health Equity measure also offered suggestions for possible expansion of the measure. A few commenters recommended expanding the scope of the measure to specifically ensure that facilities identify and address equity in access to home dialysis. One commenter recommended that the measure eventually be expanded to capture a greater depth of information that would provide more meaningful data to CMS and patients. The commenter also recommended that CMS include health equity requirements as part of the Conditions for Coverage for the Medicare program, which could potentially be used to require that facilities collect and stratify data on certain demographic elements. One commenter encouraged CMS take actions to further enable nurses to support health equity efforts, noting their critical role in patient engagement while balancing administrative burden. Response: We thank commenters for their suggestions, which we will consider as we continue to develop potential future policies on this topic. Comment: One commenter expressed support for the Facility Commitment to Health Equity measure but recommended that CMS ensure that there are no unintended consequences, such as disincentivizing facilities from operating in areas that may have greater health disparities. PO 00000 Frm 00100 Fmt 4701 Sfmt 4700 Response: We appreciate the commenter’s support and will monitor this measure, as we do all ESRD QIP measures, for any unintended or adverse outcomes associated with implementation. Comment: Several commenters stated that it was unclear how the Facility Commitment to Health Equity measure would result in a reduction of social inequities. A few commenters expressed concern that the measure lacks followup and does not require facilities to take specific action upon identifying health equity gaps. A few commenters expressed concern that, without additional requirements for facilities to make changes based on identified health equity gaps, the Facility Commitment to Health Equity measure may only serve as a checklist measure rather than incentivizing change at the systemic level. One commenter expressed concern that the Facility Commitment to Health Equity measure is not relevant to the ESRD QIP because the measure was developed for the hospital setting. One commenter expressed concern that the measure would not promote meaningful action in patient care because it is not clinical. Response: We believe this measure is an important foundational measure for improving health equity for the facility’s entire patient population, which may include patients that have been underserved by the healthcare system. As we discussed in section IV.C.2.a. of the proposed rule, there is substantial research showing differences in care and experiences among underserved populations (88 FR 42489 through 42491). The measure is intended to encourage facilities to analyze their own data to understand whether there are demographic factors or other social drivers of health that may be contributing to the health outcomes experienced by their patients so they can develop solutions to improve those outcomes for all of their patients. We believe that adopting the measure for dialysis facilities will help improve access to care and outcomes for the ESRD population by making facilities more aware of certain potential opportunities for improvement. We also believe that a commitment to health equity by dialysis facility leadership can foster organizational competencies aimed at achieving health equity for the facility’s patients. Although the Facility Commitment to Health Equity reporting measure is not a clinical measure, the measure could improve facility awareness of the tie between its structural practices and its patient outcomes, which we believe will lead to improved clinical outcomes for patients. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Comment: Although commenters appreciated the importance of a commitment to health equity and expressed support for CMS’s efforts to address health equity, a few commenters expressed concern that the Facility Commitment to Health Equity measure needs to be developed further prior to inclusion in the ESRD QIP so that it is more meaningful to the ESRD population and care setting. One commenter requested that CMS engage with stakeholders in the ESRD community to improve the measure so that it is more applicable to the dialysis facility setting. Response: The Facility Commitment to Health Equity measure is a structural measure that is designed to apply across multiple healthcare settings. The five measure domains (that is, equity is a strategic priority, data collection, data analysis, quality improvement, and leadership engagement) apply to dialysis facilities. Specifically, dialysis facilities collect data and analyze data for quality improvement purposes. Facilities also establish organizational plans that define practices and policies that impact health equity. We believe strong and committed leadership from dialysis facility leadership is essential and can play a role in advancing equity goals for facilities. Although we appreciate commenters’ desire that the measure be tailored further to the ESRD population and setting, we believe that the measure sufficiently addresses a facility’s leadership and its commitment to health equity in a way that encompasses the needs of that population and setting. The measure is intended to provide information to facilities on the level of unmet need among their patients by encouraging facilities to identify and address potential health equity gaps. We believe this measure is an important step toward assessing facility leadership commitment and a fundamental step toward closing the gap in equitable care for the facility’s patients. We will continue to monitor the measure as it is implemented to ensure that it is meaningful to the ESRD community. Comment: A few commenters recommended that CMS submit the measure to the CBE for review and endorsement to ensure that it is useful and meaningful for the ESRD population and care setting. Response: While we recognize the value of CBE endorsement review, and plan to submit this measure for CBE endorsement in the future, measures of health equity are a priority for CMS, and we believe it is important to implement this measure as soon as possible. We note that under section 1881(h)(2)(B)(ii) VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 of the Act the Secretary may specify a measure that is not endorsed by a CBE as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. We reviewed CBE-endorsed measures and were unable to identify any other CBEendorsed measures on this topic, and therefore, we believe the exception in section 1881(h)(2)(B)(ii) of the Act applies. We believe the Facility Commitment to Health Equity measure establishes an important foundation to prioritize the achievement of health equity among facilities. Comment: A few commenters expressed concern regarding the reporting burden associated with the proposed measure requirements and recommended that CMS weigh the potential impact on patient health outcomes against this new administrative burden. A few commenters stated that certain types of facilities, such as rural and small facilities, may lack the resources to implement this measure and, as a result, could be unfairly penalized. One commenter stated that compliance with the new measure will require substantial training and additional staff support. One commenter expressed concern that the reporting requirements associated with the proposed measure would take resources away from patient care. Response: We recognize the commenters’ concerns about burden of new measure requirements in the ESRD QIP and believe that our data submission requirements pose minimal burden on facilities given that facilities will have 14 months to report the measure with respect to each performance period. We believe this measure reporting timeline will provide facilities with ample time to submit data in a timely manner. We also believe the benefits of this measure outweigh the burden of reporting it. Comment: One commenter requested that facilities receive full credit for attestation, regardless of whether the facility negatively or positively attests to each given domain. The commenter noted that this would be consistent with other reporting measures in the ESRD QIP measure set, which award points for reporting the data, rather than the results of the reported data. Response: We believe this measure is an important step towards assessing leadership commitment to health equity and a fundamental step towards identifying and closing gaps in quality outcomes. We also believe that a facility should not receive the maximum 10 points on the measure for a performance PO 00000 Frm 00101 Fmt 4701 Sfmt 4700 76443 year if it cannot affirmatively attest to all five domains. We believe that the proposed scoring methodology is consistent with the scoring methodology we have adopted for the MedRec reporting measure, which requires that facilities report that medication reconciliation was performed and documented by an eligible professional during the reporting period in order to be awarded the maximum number of points for the measure (83 FR 57009 and 57011). Comment: One commenter recommended removing the term ‘‘priority’’ from Domain 1 to avoid implying that there are populations who are not priorities. Response: We agree with the commenter that a facility’s entire patient population should have access to high quality ESRD care. However, we disagree with commenter that the term ‘‘priority’’ should be removed, as we believe the element focuses on populations that the facility may identify as having experienced health disparities at that particular facility. A facility has discretion to identify its own priority populations and develop its own solutions to support its equity goals. Therefore, we are finalizing the reference to ‘‘priority populations’’ in Domain 1 as proposed. Comment: Several commenters recommended that CMS update the measure specifications in Domain 2 so that facilities without certified EHR technology are able to positively attest to all domains, noting that dialysis facilities are not required to use certified EHR technology and may not have it available. These commenters expressed concern that public reporting of measure results for facilities that do not positively attest to all domains because they are without access to certified EHR technology could lead the public to misinterpret the results as a lack of commitment to health equity. A few commenters recommended that CMS revise the language to remove the reference to certified EHR technology to provide flexibility regarding the type of data technology used while retaining the requirement to input the data into structured fields. One commenter requested clarification regarding whether it will accept Electronic Data Interchange (EDI) in the EQRS for this measure. Response: We thank commenters for their feedback. Although the majority of dialysis facilities use some type of EHR technology, we acknowledge that dialysis facilities are not currently required to use EHR technology certified by the Office of the National Coordinator for Health Information E:\FR\FM\06NOR2.SGM 06NOR2 76444 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 Technology (ONC) to comply with the requirements of the ESRD QIP. We agree with commenters that the proposed language in Domain 2 may prevent facilities from affirmatively attesting to Domain 2 if they can only affirmatively attest to the elements in (A) and (B). Therefore, we are finalizing a revision to the elements of Domain 2 so that facilities can affirmatively attest to that domain if they use EHR technology that is not certified by ONC. This updated language is provided in Table 14 below and states, ‘‘(C) Our facility inputs demographic and/or social determinant of health information collected from patients into structured, interoperable data elements using EHR technology.’’ Although we encourage facilities to use certified health IT to promote interoperability and health information exchange across the healthcare system, we are not requiring dialysis facilities to use certified EHR technology for purposes of reporting this measure. We note that EHR technology may include EDI, and therefore EDI may be accepted as part of the EHR technology requirements included under Domain 2. Comment: One commenter noted the relatively short timeframe for implementation and potential for error in data collection and reporting due to the complexity of the new data collection and reporting requirements. One commenter expressed concern regarding the element under Domain 3 that the facility have facility performance dashboards to affirmatively attest to that domain beginning with PY 2024, noting that such dashboards require thoughtful development to ensure that they are appropriately designed for lower patient volumes and account for potential clinically-related factors. Response: We believe that facilities should have sufficient time to implement any structural processes they need to report the measure. However, to the extent a facility may need to implement new data collections or update its systems to enable it to affirmatively attest to Domain 3 or any other domain, a facility will have until two months after the end of each 12month performance period to submit its attestations for that performance period VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 in EQRS. In addition, a facility can report an affirmative attestation for a domain as long as it satisfies the elements of the domain at any time during the applicable performance period. Comment: One commenter stated that all facilities participating in the ESRD Network Program should meet the Domain 4 requirement that facilities engage in quality activities and recommended that all dialysis facilities receive automatic credit for this domain. Response: We believe it is necessary for each dialysis facility to review its health equity practices under each domain and attest to each domain separately, including Domain 4. If a facility participates in quality improvement activities focused on reducing health disparities as part of a facility’s participation in an ESRD Network, then a facility may affirmatively attest under Domain 4. Comment: A few commenters observed that the language in Domain 5 does not apply to many individual dialysis facilities, as they are part of national groups and therefore do not have facility-level CEOs or boards of trustees. A few commenters also requested clarification as to whether the Facility Commitment to Health Equity measure requirements would apply to each individual dialysis facility separately, or whether they would apply to the larger organization which includes the individual dialysis facility. One commenter expressed concern regarding the potential burden imposed on small facilities if compliance with the Facility Commitment to Health Equity measure would be required at the facility level and recommended that small facilities be exempt from Facility Commitment to Health Equity reporting requirements, or that CMS allow such facilities that are part of a larger organization to use the organization’s strategic plan to satisfy measure requirements. One commenter expressed concern that facility-level analysis of disparities may be insufficient to identify and address gaps in the dialysis setting as these facilities serve more geographically homogenous populations than other types of healthcare facilities, such as hospitals. PO 00000 Frm 00102 Fmt 4701 Sfmt 4700 Response: We thank commenters for their feedback and are finalizing a modified version of the Domain 5 elements. Whereas the originally proposed language for Domain 5 required that facilities attest to leadership engagement at the facility level only, we agree that facilities should be able to attest to leadership engagement under Domain 5 if their senior leadership engages in the Domain 5 elements and that engagement applies to the facility, regardless of whether those senior leaders operate at only the facility or at a larger organization that includes the facility. Accordingly, we are finalizing that the referenced facility senior leadership could be, but are not required to be, the facility’s own chief executives or its board of trustees. Regarding commenters’ requests for clarification as to whether the measure requirements would apply to each individual dialysis facility separately, or whether they would apply to the larger organization which includes the individual dialysis facility, we note that we proposed for the Facility Commitment to Health Equity reporting measure to apply to individual facilities. For all five measure domains, an individual facility may attest to both facility-level efforts as well as activities that are implemented by the individual facility as part of a larger organization’s policies. For individual facilities that are part of larger organizations, we note that this may include leadership engagement at the larger organizational level as well as leadership engagement at the individual facility level. Specifically, the reporting measure would require facilities to review their own activities in relation to the five measure domains to identify ways to address disparities within the patient population they serve. We believe this revision will apply more broadly to accommodate the unique organization structures across facilities. The elements of the Facility Commitment to Health Equity Measure, including the revised language for Domains 2 and 5, are provided in Table 14. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76445 TABLE 14: Facility Commitment to Health Equity Measure's Finalized Five Attestations Attestation Elements: Select all that apply (Note: Affmnative attestation of all elements within a domain would be required for the facility to receive a point for the domain in the numerator) Domain 1: Equity is a Strategic Priority Facility commitment to reducing healthcare disparities is strengthened when equity is a key organizational priority. Please attest that your facility has a strategic plan for advancing health equity and that it includes all the following elements. (A) Our facility strategic plan identifies priority populations who currently experience health disparities. (B) Our facility strategic plan identifies health equity goals and discrete action steps to achieving these goals. (C) Our facility strategic plan outlines specific resources which have been dedicated to achieving our equity goals. (D) Our facility strategic plan describes our approach for engaging key stakeholders, such as community-based organizations. Domain 2: Data Collection Collecting valid and reliable demographic and social determinant of health data on patients served in a facility is an important step in identifying and eliminating health disparities. Please attest that your facility engages in the following activities. (A) Our facility collects demographic information (such as self-reported race, national origin, primary language, and ethnicity data) and/or social determinant of health information on the majority of our patients. (B) Our facility has training for staff in culturally sensitive collection of demographic and/or social determinant of health information. (C) Our facility inputs demographic and/or social determinant of health information collected from patients into structured, interoperable data elements using EHR technology.* Domain 3: Data Analysis Effective data analysis can provide insights into which factors contribute to health disparities and how to respond. Please attest that your facility engages in the following activities. (A) Our facility stratifies key performance indicators by demographic and/or social determinants of health variables to identify equity gaps and includes this information on facility performance dashboards. Domain 4: Quality Improvement Health disparities are evidence that high-quality care has not been delivered equitably to all patients. Engagement in quality improvement activities can improve quality of care for all patients. (A) Our facility participates in local, regional, or national quality improvement activities focused on reducing health disparities. Domain 5: Leadership Engagement Leaders and staff can improve their capacity to address disparities by demonstrating routine and thorough attention to equity and setting an organizational culture of equity. Please attest that your facility engages in the following activities. (A) Our facility senior leadership, such as, but not limited to, chief executives and the entire facility board of trustees, annually reviews our strategic plan for achieving health equity.** * After consideration of public comments, we are refining the language in Domain 2 to remove the requirement that EHR technology must be "certified" to affmnatively attest to the elements of that domain. ** After consideration of public comments, we are refining the language in Domain 5 to provide flexibility regarding the type of leadership that may be engaged in these efforts. BILLING CODE 4120–01–C VerDate Sep<11>2014 00:42 Nov 04, 2023 Comment: One commenter expressed concern regarding the Facility Jkt 262001 PO 00000 Frm 00103 Fmt 4701 Sfmt 4700 Commitment to Health Equity measure, stating that the measure essentially E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.026</GPH> ddrumheller on DSK120RN23PROD with RULES2 (B) Our facility senior leadership, such as, but not limited to, chief executives and the entire facility board of trustees, annually reviews key performance indicators stratified by demographic and/or social factors. 76446 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations served as a back-door mandate to require that facilities perform a specific activity and did not provide facilities with flexibility to achieve the ultimate goal of the measure. Response: We disagree with the commenter. We believe this measure is an important foundation for improving health equity in the provision of ESRD care. We believe that each of the domains provides flexibility for facilities to affirmatively attest without imposing overly narrow or prescriptive requirements. Although facilities will be required to affirmatively attest to each of the elements for a domain to receive points for that domain, a facility has the discretion to determine what activities will satisfy each element. We encourage facilities to analyze their own data to improve their awareness of whether there is a tie between their structural practices and the outcomes experienced by their patients, with the goal of attaining better outcomes for all of their patients. Final Rule Action: After considering public comments, we are finalizing the adoption of the Facility Commitment to Health Equity reporting measure with language refinements to the elements in Domains 2 and 5 as described in Table 14 of this final rule, beginning with PY 2026. ddrumheller on DSK120RN23PROD with RULES2 3. Modification of the COVID–19 Vaccination Coverage Among Healthcare Personnel (HCP) Measure Beginning With PY 2026 a. Background On January 31, 2020, the Secretary of the Department of Health and Human Services declared a public health emergency (PHE) for the United States in response to the global outbreak of SARS–COV–2, a novel (new) coronavirus that causes a disease named ‘‘coronavirus disease 2019’’ (COVID– 19).160 Subsequently, the COVID–19 Vaccination Coverage Among Healthcare Personnel (HCP) measure was adopted across multiple quality reporting programs including the ESRD QIP (87 FR 67244 through 67248), the Hospital IQR Program (86 FR 45374), the Inpatient Psychiatric Facility Quality Reporting Program (86 FR 42633 through 42640), the Hospital Outpatient Quality Reporting Program (86 FR 63824 through 63833), the PPS-Exempt Cancer Hospital Quality Reporting Program (86 FR 45428 through 45434), the Ambulatory Surgical Center Quality 160 U.S. Dept of Health and Human Services, Office of the Assistant Secretary for Preparedness and Response. (2020). Determination that a Public Health Emergency Exists. Available at: https:// aspr.hhs.gov/legal/PHE/Pages/2019-nCoV.aspx. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Reporting Program (86 FR 63875 through 63883), the Long-Term Care Hospital Quality Reporting Program (86 FR 45438 through 45446), the Skilled Nursing Facility Quality Reporting Program (86 FR 42480 through 42489), and the Inpatient Rehabilitation Facility Quality Reporting Program (86 FR 42385 through 42396). COVID–19 has continued to spread domestically and around the world with more than 103.9 million cases and 1.13 million deaths in the United States as of June 19, 2023.161 In recognition of the ongoing significance and complexity of COVID– 19, the Secretary renewed the PHE on April 21, 2020, July 23, 2020, October 2, 2020, January 7, 2021, April 15, 2021, July 19, 2021, October 15, 2021, January 14, 2022, April 12, 2022, July 15, 2022, October 13, 2022, January 11, 2023, and February 9, 2023.162 While the PHE expired on May 11, 2023, HHS has stated that the public health response to COVID–19 remains a public health priority with a whole of government approach to combatting the virus, including through vaccination efforts.163 As we stated in the CY 2023 ESRD PPS final rule (87 FR 67244) and in our Revised Guidance for Staff Vaccination Requirements,164 vaccination is a critical part of the nation’s strategy to effectively counter the spread of COVID–19. We continue to believe it is important to incentivize and track HCP vaccination through quality measurement across care settings, including dialysis facilities, to protect health care workers, patients, and caregivers, and to help sustain the ability of HCP in each of these care settings to continue serving their communities. Prior to the publication of the CY 2023 ESRD PPS final rule on November 7, 2022, the FDA had 161 CDC. COVID Data Tracker. Accessed June 19, 2023. Available at: https://covid.cdc.gov/coviddata-tracker/#datatracker-home. We note that we have updated in this final rule the number of cases and deaths provided in the proposed rule, which stated that ‘‘COVID–19 has continued to spread domestically and around the world with more than 103.9 million cases and 1.1 million deaths in the United States as of March 27, 2023.’’ (88 FR 42494). 162 U.S. Dept. of Health and Human Services. Office of the Assistant Secretary for Preparedness and Response. (2023). Renewal of Determination that a Public Health Emergency Exists. Available at: https://aspr.hhs.gov/legal/PHE/Pages/COVID199Feb2023.aspx. 163 U.S. Dept. of Health and Human Services. Fact Sheet: COVID–19 Public Health Emergency Transition Roadmap. February 9, 2023. Available at: https://www.hhs.gov/about/news/2023/02/09/factsheet-covid-19-public-health-emergency-transitionroadmap.html. 164 Centers for Medicare & Medicaid Services. Revised Guidance for Staff Vaccination Requirements QSO–23–02–ALL. October 26, 2022. Available at: https://www.cms.gov/files/document/ qs0-23-02-all.pdf. PO 00000 Frm 00104 Fmt 4701 Sfmt 4700 approved or issued emergency use authorizations (EUAs) for COVID–19 vaccines for adults manufactured by Pfizer-BioNTech,165 Moderna,166 and Janssen.167 The populations for which all three vaccines were authorized at that time included individuals 18 years of age and older, and the PfizerBioNTech vaccine was authorized for ages 12 and older. The FDA issued an approval for the Pfizer-BioNTech vaccine, now marketed as Comirnaty, on August 23, 2021.168 Additionally, the FDA issued approval for the Moderna vaccine, marketed as Spikevax, on January 31, 2022169 and an EUA for the Novavax adjuvanted vaccine on July 13, 2022.170 The FDA also issued EUAs for single booster doses of the thenauthorized COVID–19 vaccines. As of November 19, 2021,171 172 173 a single 165 Food and Drug Administration. (December 2020). FDA Takes Key Action in Fight Against COVID–19 By Issuing Emergency Use Authorization for First COVID–19 Vaccine. Available at: https:// www.fda.gov/news-events/press-announcements/ fda-takes-key-action-fight-against-covid-19-issuingemergency-use-authorization-first-covid-19. 166 Food and Drug Administration. (December 2020). FDA Takes Additional Action in Fight Against COVID–19 By Issuing Emergency Use Authorization for Second COVID–19 Vaccine. Available at: https://www.fda.gov/news-events/ press-announcements/fda-takes-additional-actionfight-against-covid-19-issuing-emergency-useauthorization-second-covid. 167 Food and Drug Administration. (February 2021). FDA Issues Emergency Use Authorization for Third COVID–19 Vaccine. Available at: https:// www.fda.gov/news-events/press-announcements/ fda-issues-emergency-use-authorization-thirdcovid-19-vaccine. 168 Food and Drug Administration. (August 2021). FDA Approves First COVID–19 Vaccine. Available at: https://www.fda.gov/news-events/pressannouncements/fda-approves-first-covid-19vaccine. 169 Food and Drug Administration. (January 2022). Coronavirus (COVID–19) Update: FDA Takes Key Action by Approving Second COVID–19 Vaccine. Available at: https://www.fda.gov/newsevents/press-announcements/coronavirus-covid-19update-fda-takes-key-action-approving-secondcovid-19-vaccine. 170 Food and Drug Administration. (July 2022). Coronavirus (COVID–19) Update: FDA Authorizes Emergency Use of Novavax COVID–19 Vaccine, Adjuvanted. Available at: https://www.fda.gov/ news-events/press-announcements/coronaviruscovid-19-update-fda-authorizes-emergency-usenovavax-covid-19-vaccine-adjuvanted. 171 Food and Drug Administration. (September 2021). FDA Authorizes Booster Dose of PfizerBioNTech COVID–19 Vaccine for Certain Populations. Available at: https://www.fda.gov/ news-events/press-announcements/fda-authorizesbooster-dose-pfizer-biontech-covid-19-vaccinecertain-populations. 172 Food and Drug Administration. (October 2021). Coronavirus (COVID–19) Update: FDA Takes Additional Actions on the Use of a Booster Dose for COVID–19 Vaccines. Available at: https:// www.fda.gov/news-events/press-announcements/ coronavirus-covid-19-update-fda-takes-additionalactions-use-booster-dose-covid-19-vaccines. 173 Food and Drug Administration. (November 2021). Coronavirus (COVID–19) Update: FDA Expands Eligibility for COVID–19 Vaccine Boosters. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations booster dose of each COVID–19 vaccine was authorized for all eligible individuals 18 years of age and older. EUAs were subsequently issued for a second booster dose of the PfizerBioNTech and Moderna vaccines in certain populations in in March 2022.174 FDA first authorized the use of a booster dose of bivalent or ‘‘updated’’ COVID– 19 vaccines from Pfizer-BioNTech and Moderna in August 2022.175 Since the publication of the CY 2024 ESRD PPS proposed rule, the 2023–2024 updated Pfizer-BioNTech, Moderna, and Novavax COVID–19 vaccines were recommended by CDC for use in the United States.176 The 2023–2024 updated COVID–19 vaccine more closely targets the XBB lineage of the Omicron variant and could restore protection against severe COVID–19 that may have decreased over time. We stated in the CY 2023 ESRD PPS final rule that HCP are at risk of carrying COVID–19 infection to patients, experiencing illness or death themselves as a result of contracting COVID–19, and transmitting COVID–19 to their families, friends, and the general public (87 FR 67244). While the impact of COVID–19 vaccines on asymptomatic infection and transmission is not yet fully known, there is now robust data available on COVID–19 vaccine effectiveness across multiple populations against symptomatic infection, hospitalization, and death. Two-dose COVID–19 vaccines from Pfizer-BioNTech and Moderna were found to be 88 percent and 93 percent effective against hospitalization for COVID–19, respectively, over 6 months for adults over age 18 without immunocompromising conditions.177 During a SARS–COV–2 surge in the spring and summer of 2021, 92 percent of COVID–19 hospitalizations and 91 percent of COVID–19-associated deaths were reported among persons not fully vaccinated.178 Real-world studies of population-level vaccine effectiveness indicated similarly high rates of effectiveness in preventing SARS–COV– 2 infection among frontline workers in multiple industries, with a 90 percent effectiveness in preventing symptomatic and asymptomatic infection from December 2020 through August 2021.179 Vaccines have also been highly effective in real-world conditions preventing COVID–19 in HCP with up to 96 percent effectiveness for fully vaccinated HCP, including those at risk for severe infection and those in racial and ethnic groups disproportionately affected by COVID–19.180 In the presence of high community prevalence of COVID–19, residents of nursing homes with low staff vaccination coverage had higher rates of COVID–19 cases and COVID–19 related deaths than those among residents of nursing homes with high staff vaccination coverage.181 Overall, data demonstrate that COVID–19 vaccines are effective and prevent severe disease, including hospitalization and death. Available at: https://www.fda.gov/news-events/ press-announcements/coronavirus-covid-19update-fda-expands-eligibility-covid-19-vaccineboosters. 174 Food and Drug Administration. (March 2022). Coronavirus (COVID–19) Update: FDA Authorizes Second Booster Dose of Two COVID–19 Vaccines for Older and Immunocompromised Individuals. Available at: https://www.fda.gov/news-events/ press-announcements/coronavirus-covid-19update-fda-authorizes-second-booster-dose-twocovid-19-vaccines-older-and. 175 Food and Drug Administration. (August 2022). Coronavirus (COVID–19) Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent COVID–19 Vaccines for Use as a Booster Dose. Available at: https://www.fda.gov/news-events/pressannouncements/coronavirus-covid-19-update-fdaauthorizes-moderna-pfizer-biontech-bivalent-covid19-vaccines-use. We note that, as of September 12, 2023, the bivalent COVID–19 vaccines are no longer FDA authorized. FDA. (September 11, 2023). FDA Takes Action on Updated mRNA COVID–19 Vaccines to Better Protect Against Currently Circulating Variants. Available at: https:// www.fda.gov/news-events/press-announcements/ fda-takes-action-updated-mrna-covid-19-vaccinesbetter-protect-against-currently-circulating. The bivalent COVID–19 vaccines have been replaced with the updated 2023–2024 (XBB-variant) COVID– 19 vaccines. 176 CDC. (October 4, 2023). Stay Up to Date with COVID–19 Vaccines. Available at: https:// www.cdc.gov/coronavirus/2019-ncov/vaccines/stayup-to-date.html. 177 CDC. (September 24, 2021). Morbidity and Mortality Weekly Report (MMWR). Comparative Effectiveness of Moderna, Pfizer-BioNTech, and Janssen (Johnson & Johnson) Vaccines in Preventing COVID–19 Hospitalizations Among Adults Without Immunocompromising Conditions—United States, March–August 2021. Available at: https://cdc.gov/ mmwr/volumes/70/wr/mm7038e1.htm?s_ cid=mm7038e1_w. 178 CDC. (September 10, 2021). Morbidity and Mortality Weekly Report (MMWR). Monitoring Incidence of COVID–19 Cases, Hospitalizations, and Deaths, by Vaccination Status—13 U.S. Jurisdictions, April 4–July 17, 2021. Available at: https://www.cdc.gov/mmwr/volumes/70/wr/ mm7037e1.htm. 179 CDC. (August 27, 2021). Morbidity and Mortality Weekly Report (MMWR). Effectiveness of COVID–19 Vaccines in Preventing SARS–COV–2 Infection Among Frontline Workers Before and During B.1.617.2 (Delta) Variant Predominance— Eight U.S. Locations, December 2020–August 2021. Available at: https://www.cdc.gov/mmwr/volumes/ 70/wr/mm7034e4.htm. 180 Pilishivi, T. et al. (December 2022). Effectiveness of mRNA Covid–19 Vaccine among U.S. Health Care Personnel. New England Journal of Medicine. 2021 Dec 16;385(25):e90. Available online at: https://pubmed.ncbi.nlm.nih.gov/ 34551224/. 181 McGarry BE et al. (January 2022). Nursing Home Staff Vaccination and Covid-19 Outcomes. New England Journal of Medicine. 2022 Jan 27;386(4):397–398. Available online at: https:// pubmed.ncbi.nlm.nih.gov/34879189/. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00105 Fmt 4701 Sfmt 4700 76447 As SARS–COV–2 persists and evolves, our COVID–19 vaccination strategy must remain responsive. When we finalized adoption of the COVID–19 Vaccination Coverage Among HCP measure in the CY 2023 ESRD PPS final rule, we stated that HCP should be counted as vaccinated if they received COVID–19 vaccination any time from when it first became available in December 2020 (87 FR 67247). We noted that a completed vaccination course, defined for purposes of the measure as the primary vaccination series, may require one or more doses depending on the specific vaccine used, and that the NHSN application automatically calculates the total value for ‘‘Any completed COVID–19 vaccine series.’’ We also stated that, as vaccination protocols continue to evolve, we would continue to work with the CDC to update relevant measure specifications as necessary. Since we finalized the COVID–19 Vaccination Coverage Among HCP measure in the CY 2023 ESRD PPS final rule, new variants of SARS–COV–2 have emerged around the world and within the United States. Specifically, the Omicron variant (and its related subvariants) is listed as a variant of concern by the CDC because it spreads more easily than earlier variants.182 Vaccine manufacturers initially responded to the Omicron variant by developing bivalent COVID– 19 vaccines, which included a component of the original virus strain to provide broad protection against COVID–19 and a component of the Omicron variant to provide better protection against COVID–19 caused by the Omicron variant.183 These booster doses of the bivalent COVID–19 vaccines were shown to increase immune response to SARS–COV–2 variants, including Omicron, particularly in individuals who are more than 6 months removed from receipt of their primary series.184 We noted in the proposed rule that the FDA issued EUAs for booster doses of two bivalent COVID–19 vaccines, one from Pfizer-BioNTech185 and one from 182 Food and Drug Administration. (August 2021). Variants of the Virus. Available at: https:// www.cdc.gov/coronavirus/2019-ncov/variants/ index.html. 183 Food and Drug Administration. (November 2022). COVID–19 Bivalent Vaccine Boosters. 184 Oster Y et al. (May 2022). The effect of a third BNT162b2 vaccine on breakthrough infections in health care workers: a cohort analysis. Clin Microbiol Infect. 2022 May;28(5):735.e1–735.e3. Available online at: https://pubmed.ncbi.nlm. nih.gov/35143997/. 185 Food and Drug Administration. (November 2022). Pfizer-BioNTech COVID–19 Vaccines. Available at: https://www.fda.gov/emergency- E:\FR\FM\06NOR2.SGM Continued 06NOR2 76448 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 Moderna,186 and strongly encouraged anyone who is eligible to consider receiving a booster dose with a bivalent COVID–19 vaccine to provide better protection against currently circulating variants.187 Since the publication of the CY 2024 ESRD PPS proposed rule, an updated 2023–2024 formulation of COVID–19 vaccine has been approved that more closely targets the XBB lineage of the Omicron variant and could restore protection against severe COVID–19 that may have decreased over time.188 Updated COVID–19 vaccine doses are associated with a greater reduction in infections among HCP and their patients relative to those who only received primary series vaccination,189 190 with a rate of breakthrough infections among HCP who received only a two-dose regimen of 21.4 percent compared to a rate of 0.7 percent among boosted HCP.191 Data from the existing COVID–19 Vaccination Coverage Among HCP measure demonstrate clinically significant variation in booster dose vaccination rates across facilities. We believe that vaccination remains the most effective means to prevent the worst consequences of COVID–19, including severe illness, hospitalization, and death. Given the availability of vaccine efficacy data, EUAs and Biologics License Application approvals issued by the FDA for updated 2023– 2024 formulations of the vaccine, the continued presence of SARS–COV–2 in the United States, and variance among preparedness-and-response/coronavirus-disease2019-covid-19/pfizer-biontech-covid-19-vaccines. 186 Food and Drug Administration. (November 2022). Moderna COVID–19 Vaccines. Available at: https://www.fda.gov/emergency-preparedness-andresponse/coronavirus-disease-2019-covid-19/ moderna-covid-19-vaccines. 187 Food and Drug Administration. (August 2022). Coronavirus (COVID–19) Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent COVID–19 Vaccines for Use as a Booster Dose. Available at: https://www.fda.gov/news-events/pressannouncements/coronavirus-covid-19-update-fdaauthorizes-moderna-pfizer-biontech-bivalent-covid19-vaccines-use. 188 CDC. (October 4, 2023). Stay Up to Date with COVID–19 Vaccines. Available at: https:// www.cdc.gov/coronavirus/2019-ncov/vaccines/stayup-to-date.html. 189 Prasad N et al. (May 2022). Effectiveness of a COVID–19 Additional Primary or Booster Vaccine Dose in Preventing SARS-CoV–2 Infection Among Nursing Home Residents During Widespread Circulation of the Omicron Variant—United States, February 14–March 27, 2022. Morbidity and Mortality Weekly Report (MMWR). 2022 May 6;71(18):633–637. Available online at: https:// pubmed.ncbi.nlm.nih.gov/35511708/. 190 Oster Y et al. (May 2022). The effect of a third BNT162b2 vaccine on breakthrough infections in health care workers: a cohort analysis. Clin Microbiol Infect. 2022 May;28(5):735.e1–735.e3. Available online at: https://pubmed.ncbi.nlm. nih.gov/35143997/. 191 Ibid. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 rates of updated vaccinations, it is important to modify the COVID–19 Vaccination Coverage Among HCP measure to reflect recent updates that explicitly specify for HCP to receive primary series and updated vaccine doses in a timely manner. As the COVID–19 pandemic persists, we continue to believe that monitoring and surveillance is important and provides patients, beneficiaries, and their caregivers with information to support informed decision making. In the CY 2024 ESRD PPS proposed rule, we proposed to modify the COVID–19 Vaccination Coverage Among HCP measure to replace the term ‘‘complete vaccination course’’ with the term ‘‘up to date’’ in the HCP vaccination definition (88 FR 42496). We also proposed to update the numerator to specify the time frames within which an HCP is considered up to date with recommended COVID–19 vaccines, including updated vaccine doses, beginning with PY 2026. As we stated in the CY 2023 ESRD PPS final rule (87 FR 67245), the COVID–19 Vaccination Coverage Among HCP measure is a process measure that assesses HCP vaccination coverage rates. Unlike outcome measures, process measures do not assess a particular outcome. b. Overview of Updated Measure The COVID–19 Vaccination Coverage Among HCP measure is a process measure developed by the CDC to track COVID–19 vaccination coverage among HCP in settings such as dialysis facilities, and the measure is reported via the CDC’s NHSN. We refer readers to the CY 2023 ESRD PPS final rule (87 FR 67245 through 67246) for more information on the initial review of the measure by the Measure Applications Partnership (MAP). We included an updated version of the measure on the Measures Under Consideration (MUC) list for the 2022– 2023 pre-rulemaking cycle for consideration by the MAP. In December 2022, the MAP’s Hospital Workgroup discussed the modified measure. The Hospital Workgroup stated that the revision of the current measure captures up-to-date vaccination information in accordance with CDC recommendations updated since its initial development. Additionally, the Hospital Workgroup appreciated that the respecified proposed measure of the target population is broader and simplified from seven categories of HCP to four.192 192 Centers for Medicare & Medicaid Services. MAP 2022–2023 Preliminary Analysis Worksheet. 2022. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is PO 00000 Frm 00106 Fmt 4701 Sfmt 4700 During review, the Health Equity Advisory Group highlighted the importance of COVID–19 measures and questioned whether the measure excludes individuals with contraindications to FDA authorized or approved COVID–19 vaccines, and whether the measure will be stratified by demographic factors. The measure developer confirmed that HCP with contraindications to the vaccines are excluded from the measure denominator, but the measure would not be stratified since the data are submitted at an aggregate rather than an individual level. The Rural Health Advisory Group expressed concerns about data collection burden, citing that collection is performed manually and that small rural facilities may not have employee health software.193 The measure developer acknowledged the challenge of getting adequate documentation and emphasized the goal to ensure the measure does not present a burden on the provider. The developer also noted that the model used for this measure is based on the Influenza Vaccination Coverage Among HCP measure (CBE #0431), and it intends to utilize a similar approach to the modified COVID–19 Vaccination Coverage Among HCP measure if the COVID–19 vaccination strategy becomes seasonal. The revised measure received conditional support for rulemaking from both the MAP workgroups pending testing indicating the measure is reliable and valid, and endorsement by the consensus-based entity (CBE).194 The MAP noted that the previous version of the measure received endorsement from the CBE (CBE #3636) 195 and that the CDC intends to submit the updated measure for endorsement. (1) Measure Specifications This reporting measure includes at least one week of data collection a month for each of the three months in now available at: https://mmshub.cms.gov/sites/ default/files/map-preliminary-recommendations2022-2023.xlsx. 193 Centers for Medicare & Medicaid Services. MAP 2022–2023 Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. 194 In previous years, we referred to the consensus-based entity by corporate name. We have updated this language to refer to the consensusbased entity more generally. 195 We note that the reference provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now as follows: Centers for Medicare & Medicaid Services. Measure Specifications for Hospital Workgroup for the 2022 MUC List. Available at: https://mmshub.cms.gov/sites/default/ files/map-hospital-measure-specifications-manual2022.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 a quarter. The denominator is the number of HCP eligible to work in the facility for at least one day during the reporting period, excluding persons with contraindications to COVID–19 vaccination that are described by the CDC. Facilities report the following four categories of HCP to NHSN: 1. Employees: includes all persons who receive a direct paycheck from the reporting facility (that is, on the facility’s payroll), regardless of clinical responsibility or patient contact. 2. Licensed independent practitioners (LIPs): This includes physicians (MD, DO), advanced practice nurses, and physician assistants only who are affiliated with the reporting facility but are not directly employed by it (that is, they do not receive a direct paycheck from the reporting facility), regardless of clinical responsibility or patient contact. Post-residency fellows are also included in this category if they are not on the facility’s payroll. 3. Adult students/trainees and volunteers: This includes all medical, nursing, or other health professional students, interns, medical residents, and volunteers aged 18 or over who are affiliated with the healthcare facility, but are not directly employed by it (that is, they do not receive a direct paycheck from the facility), regardless of clinical responsibility or patient contact. 4. Other contract personnel: Contract personnel are defined as persons providing care, treatment, or services at the facility through a contract who do not fall into any of the previously discussed denominator categories. This also includes vendors providing care, treatment, or services at the facility who may or may not be paid through a contract. Facilities are required to enter data on other contract personnel for submission in the NHSN application, but data for this category are not included in the COVID–19 Vaccination Coverage Among HCP measure.196 The denominator excludes denominatoreligible individuals with contraindications as defined by the CDC.197 There are no changes to the denominator exclusions. The numerator of the modified measure is the cumulative number of HCP in the denominator population who are considered up to date with 196 For more details on the reporting of other contract personnel, we refer readers to the NHSN COVID–19 Vaccination Protocol, Weekly COVID–19 Vaccination Module for Healthcare Personnel available at: https://www.cdc.gov/nhsn/pdfs/hps/ covidvax/protocol-hcp-508.pdf. 197 CDC. (2022). Contraindications and precautions. Available at: https://www.cdc.gov/ vaccines/covid-19/clinical-considerations/interimconsiderations-us.html#contraindications. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 recommended COVID–19 vaccines. Facilities would refer to the definition of up to date as of the first day of the applicable reporting quarter, which can be found at https://www.cdc.gov/nhsn/ pdfs/hps/covidvax/UpToDateGuidance508.pdf. In the proposed rule, we provided the example that HCP would be considered up to date during the applicable performance period for the ESRD QIP if they met one of the following criteria: 1. Individuals who received an updated bivalent 198 booster dose, or 2a. Individuals who received their last booster dose less than 2 months ago, or 2b. Individuals who completed their primary series 199 less than 2 months ago. We note that since publication of the proposed rule, the CDC’s definition for up to date vaccination has evolved. HCP would be considered up to date during the applicable performance period for the ESRD QIP if they met the following criteria: 1. Individuals who received an updated 200 vaccine dose. We refer readers to https:// www.cdc.gov/nhsn/pdfs/hps/covidvax/ 198 In the CY 2024 ESRD PPS proposed rule, we noted that the updated (bivalent) Moderna and Pfizer-BioNTech boosters targeted the most recent Omicron subvariants. The updated (bivalent) boosters were recommended by the CDC on September 2, 2022. As of the CY 2024 ESRD PPS proposed rule, we also noted that the original, monovalent mRNA vaccines are no longer authorized as a booster dose for people ages 12 years and older. Since the proposed rule was published, the bivalent COVID–19 vaccines are no longer FDA authorized. FDA. (September 11, 2023). FDA Takes Action on Updated mRNA COVID–19 Vaccines to Better Protect Against Currently Circulating Variants. Available at: https:// www.fda.gov/news-events/press-announcements/ fda-takes-action-updated-mrna-covid-19-vaccinesbetter-protect-against-currently-circulating. The bivalent COVID–19 vaccines have been replaced with the updated 2023–2024 (XBB-variant) COVID– 19 vaccines. 199 Although in the CY 2024 ESRD PPS proposed rule we indicated that completing a primary series means receiving a two-dose series of a COVID–19 vaccine or a single dose of Janssen/J&J COVID–19 vaccine (88 FR 42496), we note that the Janssen/J&J COVID–19 vaccine is no longer being used in the United States. For further information, please see CDC. (2023). Janssen (Johnson & Johnson) COVID– 19 Vaccine. Available at: https://www.cdc.gov/ vaccines/covid-19/info-by-product/janssen/ index.html. 200 The 2023–2024 updated Pfizer-BioNTech, Moderna, and Novavax COVID–19 vaccines were recommended by CDC for use in the United States. The 2023–2024 updated COVID–19 vaccine more closely targets the XBB lineage of the Omicron variant and could restore protection against severe COVID–19 that may have decreased over time. Individuals are also considered up to date if they received a bivalent vaccine or a Novavax vaccine within the last 2 months, or if they received a Novavax vaccine after completing a primary series. For further details, please see: https://www.cdc.gov/ coronavirus/2019-ncov/vaccines/stay-up-todate.html. PO 00000 Frm 00107 Fmt 4701 Sfmt 4700 76449 UpToDateGuidance-508.pdf for more details on the measure specifications. We noted in the proposed rule that the updated COVID–19 Vaccination Coverage Among HCP measure would remain a reporting measure. The updates to measure weighting for PY 2026 and PY 2027 are discussed further in sections IV.C.6 and IV.D.7 of this final rule. (2) Consensus-Based Entity Endorsement The current version of the measure in the ESRD QIP received CBE endorsement (CBE #3636, ‘‘Quarterly Reporting of COVID–19 Vaccination Coverage among Healthcare Personnel’’) on July 26, 2022. Although section 1881(h)(2)(B)(i) of the Act generally requires that measures specified by the Secretary for the ESRD QIP be endorsed by the entity with a contract under section 1890(a) of the Act, section 1881(h)(2)(B)(ii) of the Act states that in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. In developing the CY 2024 ESRD PPS proposed rule, we reviewed CBEendorsed measures and were unable to identify any other CBE-endorsed measures on this topic; therefore, we believe the exception for non-CBEendorsed measures applies. The CDC, as the measure developer, is pursuing endorsement for the modified version of the measure. c. Data Submission and Reporting We refer readers to the CY 2023 ESRD PPS final rule (87 FR 67246) for information on data submission and reporting for the measure. We did not propose any changes to the existing data submission requirements. We invited public comment on this proposal. The comments we received and our responses are set forth below. Comment: Several commenters expressed support for the proposal to modify the COVID–19 Vaccination Coverage Among HCP reporting measure. Several of these commenters noted that vaccination is a critical tool to protect the health of HCP and patients. One commenter expressed support for the proposed modification, noting that continued tracking of up-todate vaccination status is important to help facilities prepare for infectious E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76450 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations threats. One commenter expressed support for the proposed update because it will align the requirements between agencies. Response: We thank the commenters for their support. We agree that vaccination plays a critical part of HHS’s strategy to effectively counter the spread of COVID–19. We continue to believe it is important to incentivize and track rates of vaccination among HCP through quality measurement across care settings, including the dialysis facility setting, to protect healthcare workers, patients, and caregivers, and to help sustain the ability of HCP in each of these care settings to continue serving their communities. Comment: Several commenters expressed concern regarding the reporting burden associated with the proposed changes, recommending that CMS weigh the potential impact on patient health outcomes against potential administrative burden for facilities. A few commenters recommended that the measure exclude staff who are not directly employed by the facility to reduce tracking burden. One commenter noted that the reporting burden associated with the measure was disproportionate to its weight as part of the ESRD QIP measure set. Response: We acknowledge commenters’ concerns regarding reporting burden associated with the specifications of this measure specifically around the definition of HCP. We note that given the highly infectious nature of the virus that causes COVID–19, we believe it is important to encourage all eligible personnel within the facility, regardless of patient contact, role, or employment type, to receive the COVID–19 vaccination to prevent outbreaks within the facility which may affect resource availability and have a negative impact on patient access to care. We note that the proposed updates to the COVID–19 Vaccination Coverage Among HCP reporting measure do not include a change to the definition of HCP, and that facilities have been reporting the COVID–19 Vaccination Coverage among HCP measure since January 1, 2022. With regard to the commenter’s concern about the proportionality of the measure’s reporting burden to its measure weight within the ESRD QIP, we note that the burden associated with a given measure is only one of several factors taken into consideration when determining the weight of the measure within the ESRD QIP. We take numerous factors into account when determining appropriate domain and measure weights, including clinical evidence, opportunity for improvement, clinical significance, and VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 patient and provider burden (83 FR 56995 through 56996). Comment: One commenter also supported aligning reporting with that for Influenza Vaccination Coverage Among HCP if the COVID–19 vaccination strategy becomes seasonal. One commenter recommended requiring annual reporting at the end of the respiratory season. Response: We thank the commenter for this suggestion. As we stated in the CY 2024 ESRD PPS proposed rule (88 FR 42497), the model used for this measure is based on the Influenza Vaccination Coverage Among HCP measure (CBE #0431), and the measure developer intends to utilize a similar approach with respect to the modified version of the measure if the COVID–19 vaccination strategy becomes seasonal. For that reason, we may consider aligning reporting for the COVID–19 Vaccination Coverage Among HCP reporting measure with the Influenza Vaccination Coverage Among HCP measure in the future. We continue to monitor COVID–19 as part of our public health response and will consider information we collect to inform any potential action that may address seasonality in future rulemaking. Comment: One commenter recommended that the measure get CBE review and endorsement prior to inclusion in the ESRD QIP. Response: The current version of the measure received CBE endorsement (CBE #3636, ‘‘Quarterly Reporting of COVID–19 Vaccination Coverage among Healthcare Personnel’’) on July 26, 2022. As we stated in the CY 2024 ESRD PPS proposed rule (88 FR 42497 through 42498), in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. For this CY 2024 ESRD PPS rule cycle, we reviewed CBE-endorsed measures. While the current, CBE-endorsed version of the measure is available, the modified version of the measure more completely accounts for the availability of booster and bivalent doses which were not yet developed when the current version of the measure was adopted. Having given due consideration to CBE-endorsed measures, we believe the exception for non-CBE-endorsed measures under section 1881(h)(2)(B)(ii) of the Act applies. The measure steward, CDC, has PO 00000 Frm 00108 Fmt 4701 Sfmt 4700 submitted the modified measure to the CBE for endorsement and it is currently under review. Comment: A few commenters expressed concern regarding the COVID–19 Vaccination Coverage Among HCP reporting measure, stating that facilities should not be held responsible for a HCP’s decision to get vaccinated because those decisions are beyond the facility’s control. Response: We understand the commenters’ concern that there are many factors outside of a facility’s control that could affect vaccination coverage among a facility’s HCP; however, we believe that all facilities face such concerns and that public reporting of these data can help patients and their caregivers identify which facilities have better vaccination coverage among their HCP. We wish to emphasize that the measure does not require that HCP actually receive the COVID–19 vaccine. The COVID–19 Vaccination Coverage Among HCP measure only requires reporting of vaccination rates. Comment: A few commenters recommended removing the COVID–19 Vaccination Coverage Among HCP reporting measure from the ESRD QIP measure set. One commenter believed that the measure should be removed because the PHE has ended and CMS has also ended staff vaccination requirements related to COVID–19 vaccination. One commenter stated that the measure should be removed because it is outside the scope of the ESRD QIP. Response: As commenters noted, the PHE for COVID–19 expired on May 11, 2023.201 However, the expiration of the PHE for COVID–19 has no bearing on this measure because vaccination continues to be an essential tool in preventing COVID–19 transmission, and we believe that monitoring and surveillance of vaccination rates through measure performance is important and provides patients, beneficiaries, and their caregivers with information to support informed decision making. Final Rule Action: After considering public comments, we are finalizing our proposal to modify the COVID–19 Vaccination Coverage Among Healthcare Personnel (HCP) Measure. 201 U.S. Dept. of Health and Human Services. Fact Sheet: COVID–19 Public Health Emergency Transition Roadmap. February 9, 2023. Available at: https://www.hhs.gov/about/news/2023/02/09/factsheet-covid-19-public-health-emergency-transitionroadmap.html. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 4. Conversion of the Clinical Depression Screening and Follow-Up Reporting Measure to a Clinical Measure Beginning With the PY 2026 ESRD QIP In the CY 2015 ESRD PPS final rule, we finalized the adoption of the Clinical Depression Screening and Follow-Up reporting measure, beginning in PY 2018 (79 FR 66200 through 66203). As we noted in the CY 2015 ESRD PPS final rule, depression is a highly prevalent condition in patients with ESRD, which impacts many aspects of a patient’s life and is associated with higher rates of mortality in the ESRD population. Adoption of a measure that assesses whether facilities screen patients for depression, and develop follow-up plans when appropriate, was and still is an opportunity to improve the health of patients with ESRD. In the CY 2024 ESRD PPS proposed rule, we proposed to convert the Clinical Depression Screening and Follow-Up reporting measure to a clinical measure and to adopt a new methodology for scoring that measure as a clinical measure (88 FR 42498). We stated our belief that this proposed update would help to ensure that the measure is scored in a manner that more closely aligns with current clinical guidelines for depression screening and follow-up because it narrows the number of conditions on which a facility can earn points. Clinical guidelines indicate that providers should both screen for depression and develop a follow-up plan for patients who test positive for depression.202 Screening for depression is an important aspect of ESRD patient care, especially because ESRD and depression may present with similar symptoms, including but not limited to fatigue, poor appetite, headaches, and lack of focus.203 Developing a follow-up plan for patients who screen positive for depression is equally important because ESRD patients may not be aware that they can seek treatment or that such treatment could be beneficial.204 Under the specifications of the current Clinical 202 KDOQI clinical practice guidelines for cardiovascular disease in dialysis patients√ Volume 45, SUPPLEMENT 3, 16–153, April 2005. https:// doi.org/10.1053/j.ajkd.2005.01.019. 203 PCORI Evidence Update. Treating Depression When You’re on Dialysis (for Patients). July 2021. Available at: https://www.pcori.org/sites/default/ files/PCORI-Evidence-Update-for-Patients-TreatingDepression-When-Youre-on-Dialysis.pdf. 204 Michael J Fischer, Elani Streja, Jui-Ting Hsiung, Susan T Crowley, Csaba P Kovesdy, Kamyar Kalantar-Zadeh, Wissam M Kourany, Depression screening and clinical outcomes among adults initiating maintenance hemodialysis, Clinical Kidney Journal, Volume 14, Issue 12, December 2021, Pages 2548–2555, https://doi.org/ 10.1093/ckj/sfab097. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Depression Screening and Follow-Up reporting measure, facilities are required to report one of six conditions with respect to each eligible patient, and we calculate the measure rate for the facility as the percentage of eligible patients for which the facility reports one of those six conditions. The six conditions are as follows: • Screening for clinical depression is documented as being positive, and a follow-up plan is documented. • Screening for clinical depression is documented as positive, and a followup plan is not documented, and the facility possesses documentation stating the patient is not eligible. • Screening for clinical depression is documented as positive, the facility possesses no documentation of a followup plan, and no reason is given. • Screening for clinical depression is documented as negative, and a followup plan is not required. • Screening for clinical depression is not documented, but the facility possesses documentation stating the patient is not eligible. • Screening for clinical depression is not documented, and no reason is given. In the proposed rule, we did not propose to revise any of these conditions. However, we proposed that we would convert the measure to a clinical measure and award credit to facilities only if they report one of the following four of those six conditions: • Screening for clinical depression is documented as being positive, and a follow-up plan is documented. • Screening for clinical depression is documented as positive, and a followup plan is not documented, and the facility possesses documentation stating the patient is not eligible. • Screening for clinical depression is documented as negative, and a followup plan is not required. • Screening for clinical depression is not documented, but the facility possesses documentation stating the patient is not eligible. In the proposed rule, we noted that if a facility selects one of the other two conditions (that is, ‘‘Screening for clinical depression is documented as positive, the facility possesses no documentation of a follow-up plan, and no reason is given’’ and ‘‘Screening for clinical depression is not documented, and no reason is given’’), the facility would not receive credit in the numerator (88 FR 42498). We stated that we believe this proposed update is important because it would assess facility performance on both the clinical depression screening and the follow-up plan, to the extent that one is needed, and would also incentivize facilities to PO 00000 Frm 00109 Fmt 4701 Sfmt 4700 76451 report the reason for either not documenting that they screened for clinical depression, or why they do not possess documentation of a follow-up plan. We believe that the performance score calculation methodology changes we proposed to the Clinical Depression Screening and Follow-Up reporting measure would have a greater impact on fostering care coordination among providers and improving patient outcomes by incentivizing the documentation of depression screenings and follow-up plans, or alternatively requiring facilities to provide a reason why no screening or follow-up plan was documented. This measure update would also align with our efforts under the Meaningful Measures Framework, which identifies high-priority areas for quality measurement and improvement to assess core issues most critical to high-quality healthcare and improving patient outcomes.205 In 2021, we launched Meaningful Measures 2.0 to promote innovation and modernization of all aspects of quality, and to address a wide variety of settings, stakeholders, and measure requirements.206 We are addressing healthcare priorities and gaps with Meaningful Measures 2.0 by leveraging quality measures to increase efficiency, reduce burden, and close gaps in care. In the CY 2024 ESRD PPS proposed rule, we noted that the proposed updates to the Clinical Depression Screening and Follow-Up measure would support these efforts and would align with several Meaningful Measures Areas, including ‘‘Seamless Care Coordination’’ and ‘‘Behavioral Health,’’ as we believe that incentivizing the documentation of follow-up plans would encourage care coordination efforts to support the behavioral health outcomes of ESRD patients (88 FR 42499). We stated that the proposed modifications would also align with the Meaningful Measures 2.0 goal to ‘‘Leverage measures to drive outcome improvement through public reporting and payment programs’’ because we believe that converting the Clinical Depression Screening and Follow-Up reporting measure to a clinical measure would help to drive outcome improvement through the ESRD QIP. Additionally, in the 205 Centers for Medicare & Medicaid Services. Meaningful Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-InitiativesPatient-Assessment-Instruments/QualityInitiatives GenInfo/CMS-Quality-Strategy. 206 Centers for Medicare & Medicaid Services. (2021). Meaningful Measures 2.0: Moving from Measure Reduction to Modernization. Available at: https://www.cms.gov/meaningful-measures-20moving-measure-reduction-modernization. We note that Meaningful Measures 2.0 is still under development. E:\FR\FM\06NOR2.SGM 06NOR2 76452 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 proposed rule we stated that this proposed measure update would align with efforts to develop a Universal Foundation 207 that would help implement the vision outlined in our National Quality Strategy 208 and is fundamental to achieving several of the agency’s quality and value-based care goals.209 We noted that our proposal to update the Clinical Depression Screening and Follow-Up measure would help to align the measure that is used in the ESRD QIP with the measure identified for use across multiple programs as part of the Behavioral Health domain of the Universal Foundation measure set.210 We also proposed to convert the Clinical Depression Screening and Follow-Up measure from a reporting measure to a clinical measure beginning with PY 2026, and to move that measure to the Care Coordination Measure Domain beginning with that payment year (88 FR 42499). We proposed to convert the Clinical Depression Screening and Follow-Up measure from a reporting measure to a clinical measure because we believe that our proposed update to the performance score calculation aligned with that of a clinical measure. We proposed to move the Clinical Depression Screening and Follow-Up measure from the Reporting Measure Domain to the Care Coordination Measure Domain because the updated clinical measure would no longer be appropriate for inclusion under the Reporting Measure Domain. We note that we did not propose to change eligibility requirements for the measure. We discuss our updates to measure domains and weights for PY 2026 in section IV.C.6 of this final rule. We welcomed public comment on our proposal. The comments we received and our responses are set forth below. 207 Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, Fleisher, L. Aligning Quality Measures across CMS—The Universal Foundation. The New England Journal of Medicine, February 1, 2023. Available at: https://www.nejm.org/doi/full/ 10.1056/NEJMp2215539. 208 Schreiber M, Richards AC, Moody-Williams J, Fleisher LA. The CMS National Quality Strategy: a person-centered approach to improving quality. Centers for Medicare and Medicaid Services, June 6, 2022 (https://www.cms.gov/blog/cms-nationalquality-strategy-person-centered-approachimproving-quality). 209 Jacobs D, Fowler E, Fleisher L, Seshamani M. The Medicare value-based care strategy: alignment, growth, and equity. Health Affairs, July 21, 2022 (https://www.healthaffairs.org/content/forefront/ medicare-value-based-care-strategy-alignmentgrowth-and-equity). 210 Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, Fleisher, L. Aligning Quality Measures across CMS—The Universal Foundation. The New England Journal of Medicine, February 1, 2023. Available at: https://www.nejm.org/doi/full/ 10.1056/NEJMp2215539. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Comment: Several commenters expressed support for the proposal to convert the Clinical Screening and Follow-Up reporting measure to a clinical measure. A few of these commenters expressed support for the proposed update because it will help to better identify and treat clinical depression in ESRD patients. One commenter noted that the proposed change will better align the measure with current clinical guidelines for depression screening and follow-up. Response: We thank commenters for their support. Comment: Several commenters expressed concern regarding the reporting burden associated with the proposed changes, recommending that CMS weigh the potential impact on patient health outcomes against potential administrative burden. Response: Although we would be converting the Clinical Depression Screening and Follow-Up measure from a reporting measure to a clinical measure and changing the methodology to score it as a clinical measure, we did not propose any changes that would change the reporting process or burden associated with the Clinical Depression Screening and Follow-Up measure. Although facilities would be scored differently and would be required to provide follow-up documentation or a reason no screening or follow-up has been documented to receive credit on the measure, they would continue to report data for this measure to EQRS in the same manner. We believe converting this measure to a clinical measure is important because it will assess facility performance on the measure in a way that is more meaningful to patient health outcomes, and that the potential beneficial impact on patient health outcomes outweighs the potential burden to facilities that may need to update their clinical depression screening and follow-up practices to receive credit for the measure. However, we will continue to monitor for potential unintended consequences. Comment: Several commenters expressed concern regarding the ability of current facility staff to effectively support patients with clinical depression, noting that many facilities are under-resourced. A few commenters recommended establishing supports (such as allowing co-located mental health providers to bill Medicare) prior to converting the measure. A few commenters expressed concern regarding the meaningfulness of the Clinical Depression Screening and Follow-Up clinical measure, noting that many ESRD patients live in areas where there is a shortage of mental health care PO 00000 Frm 00110 Fmt 4701 Sfmt 4700 professionals and therefore would likely have difficulty accessing appropriate follow-up care following a positive depression screen. Response: We thank the commenters for their feedback. We believe the updated scoring methodology has the potential to foster better care coordination and improve patient outcomes because it awards points facilities if they report that they documented follow-up plans for eligible patients who screened positive for clinical depression. As a documented outline of care for a positive depression screening, a follow-up plan may take into account a patient’s ability to access follow-up care. However, we acknowledge that there might be circumstances, such as a lack of community resources, that may be beyond the facility’s control, and the measure does not require the facility to ensure that the patient completed a follow-up plan. Comment: A few commenters expressed concern about potential lack of patient privacy at facilities impacting the ability to engage effectively with the patient’s care team to support mental health care needs. One commenter expressed concern that patients may feel pressured to participate in clinical depression screening surveys due to the proposed measure updates, and that a positive result on the screening may lead to patient stigma and impact future care. Response: We appreciate commenters’ concern and agree that protecting patient privacy is imperative. We note that the updated Clinical Depression Screening and Follow-Up clinical measure does not impose additional or new requirements on facilities that would interfere with a patient’s right to privacy, and such information would be part of the patient’s medical record and subject to same privacy protections as the patient’s other medical information. The measure does not require patients to participate in a screening, and we have no reason to believe that facilities would pressure their patients into participating. Consistent with existing measure guidance, a patient would be considered ‘‘not eligible’’ for purposes of the measure if the patient’s medical records document that the patient declined to participate in a clinical depression screening and would, therefore, be excluded from the measure cohort.211 However, we will continue to monitor for potential unintended consequences. 211 https://www.cms.gov/files/document/esrdmeasures-manual-v81.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Comment: One commenter expressed concerns regarding the timing of screening, stating that this would require screening all patients during the first quarter and stated that this is not clinically appropriate for some patients and not feasible for others due to fluctuating first dates of dialysis, hospitalizations, and other reasons. The commenter recommended including a denominator exclusion for ‘‘patient stopped treatment at the facility prior to scheduled screening’’ prior to adoption of this measure as a clinical measure. Response: Facilities are required to report measure data before the close of the clinical month of December in EQRS each year, so patient screening may take place at any time during the 12-month period of performance. We note that, to be eligible for the measure, a patient must be treated at a facility for at least 90 days. However, a facility is not precluded from screening its patients during that initial 90-day period, and we would encourage facilities to do so as part of their overall patient health assessments. Therefore, we do not think the suggested denominator exclusion is necessary. Comment: A few commenters recommended removing the Clinical Depression Screening and Follow-Up measure from the ESRD QIP altogether. A few commenters recommended moving the measure to Dialysis Facility Compare because it would more effectively provide beneficiaries with useful information about facility performance on the measure. A few commenters expressed the belief that the measure should be removed from the ESRD QIP because it is topped out. Response: We believe that the Clinical Depression Screening and Follow-Up measure remains an important part of the ESRD QIP measure set and that the public reporting of facility performance scores on the measure provides patients and caregivers with helpful information. Including the Clinical Depression Screening and Follow-Up measure in the ESRD QIP also incentivizes facilities to improve their performance on the measure, which we believe will ultimately result in better patient outcomes. Although we acknowledge that the measure, in its current iteration as a reporting measure with six conditions, may be topped out, we proposed to update the conditions needed to receive credit and to convert the measure to a clinical measure. Under our previously adopted methodology (79 FR 66174), a clinical measure is considered to be topped out if national measure data show (1) statistically indistinguishable performance levels at the 75th and 90th VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 percentiles; and (2) a truncated coefficient of variation (TCV) of less than or equal to 0.1. To determine whether a clinical measure is topped out, we initially focus on the top distribution of facility performance on each measure and note if their 75th and 90th percentiles are statistically indistinguishable. Then, to ensure that we properly account for the entire distribution of scores, we analyze the truncated coefficient of variation (TCV) for the measure. As PY 2026 would be the first year that the Clinical Depression Screening and Follow-Up clinical measure would be included in the ESRD QIP, we do not have the clinical national measure performance data necessary to perform a topped-out analysis at this time. Final Rule Action: After considering public comments, we are finalizing our proposals to update the Clinical Depression Screening and Follow-Up measure and to convert it to a clinical measure beginning with PY 2026 as proposed. 5. Removal of Two Measures From the ESRD QIP Measure Set, Beginning With PY 2026 In the CY 2024 ESRD PPS proposed rule, we stated that we have undertaken efforts to review the existing ESRD QIP measure set to ensure continued clinical impact and effectiveness of the measures on facility performance (88 FR 42499). Based on that analysis and our evaluation of the Program’s measures, we proposed to remove the Ultrafiltration Rate reporting measure and the Standardized Fistula Rate clinical measure beginning with PY 2026. a. Removal of the Ultrafiltration Rate Reporting Measure From the ESRD QIP Measure Set Beginning With PY 2026 In the CY 2017 ESRD PPS final rule, we adopted the Ultrafiltration Rate reporting measure (81 FR 77912 through 77915). 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. 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. 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 PO 00000 Frm 00111 Fmt 4701 Sfmt 4700 76453 both in the short and longer term. When we added this measure to the ESRD QIP, we believed the documentation of the ultrafiltration measurements would ultimately contribute to the quality of the patient’s ESRD treatment (81 FR 77912 through 77915). In the CY 2024 ESRD PPS proposed rule, we noted that more recent studies have indicated that the Ultrafiltration Rate reporting measure may not result in the intended patient outcomes (88 FR 42499). For example, a patient’s body size may be a confounding, possibly explanatory factor for the relationship between higher UFR and increased mortality.212 Additionally, although the Ultrafiltration Rate reporting measure captures a patient’s UFR measurements reported monthly, the mortality risks associated with high UFR may be due to the frequency or number of HD sessions with high UFR.213 We stated our belief that these findings show that the documentation of a patient’s ultrafiltration measurements through the current Ultrafiltration Rate reporting measure may not necessarily indicate the quality of a patient’s ESRD treatment and tracking the ultrafiltration rate as a quality indicator may influence decision-making regarding dialysis treatment. Therefore, a facility’s performance on the measure may not accurately reflect the quality of care provided. Accordingly, in the proposed rule we proposed to remove this measure from the ESRD QIP measure set under measure removal factor 2 (performance or improvement on a measure does not result in better or the intended patient outcomes) beginning with the PY 2026 ESRD QIP (88 FR 42499). We welcomed public comment on our proposal. The comments we received and our responses are set forth below. Comment: Several commenters expressed support for our proposal to remove the Ultrafiltration Rate reporting measure from the ESRD QIP measure set. A few commenters agreed that the measure should be removed because UFR measurement may not necessarily reflect the quality of a patient’s HD session. A few commenters expressed support for removing the measure because it would enable a more individualized approach to clinical 212 John T. Daugirdas and Daniel Schneditz. Seminars in Dialysis: Hemodialysis Ultrafiltration Rate Targets Should Be Scaled to Body Surface Area Rather than to Body Weight. 2017. 213 Jose E. Navarrete, Ajai Rajabalan, Jason Cobb, and Janice P. Lea. Proportion of Hemodialysis Treatments with High Ultrafiltration Rate and the Association with Mortality. Kidney360 3: 1359– 1366, 2022. doi: https://doi.org/10.34067/ KID.0001322022. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76454 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations decision-making regarding fluid management and allow flexibility to provide care that is specific to a patient’s individual case. A few commenters expressed support for removing the measure because they believe that the measure is topped out. Response: We thank commenters for their support. Although we do not believe that the measure is topped out, we do agree with commenters that the Ultrafiltration Rate reporting measure is appropriate for removal because the measure may not reflect quality of care provided and removing the measure from the ESRD QIP measure set would support a more individualized approach to fluid management. Comment: Several commenters noted the importance of fluid management and recommended ways to continue encouraging facilities to monitor patient-level UFR data. A few commenters recommended that CMS expand the Ultrafiltration Rate reporting measure to collect data on patient symptoms experienced during and between treatments as well to better understand the relationship between UFR and patient outcomes. One commenter recommended that CMS convert the Ultrafiltration Rate reporting measure to a clinical measure. One commenter recommended that the measure be modified to address the confounding factors associated with high UFR. Response: We thank commenters for their recommendations. Given the importance of fluid management to ESRD treatment, we encourage facilities to continue monitoring patient UFR data to ensure patient safety and improve HD care for ESRD patients. Although we are removing the Ultrafiltration Rate reporting measure because we do not believe that performance or improvement on the measure itself results in better patient outcomes, we may consider alternative measures which address confounding factors associated with high UFR in future rulemaking. Comment: Several commenters expressed concern regarding the proposed removal of the Ultrafiltration Rate reporting measure, stating that high UFR is associated with health complications and the measure incentivizes patient safety. One commenter posited that the decline in hospitalization events and ED visits for ESRD patients on hemodialysis between 2019 and 2020 could be attributed to the implementation of the Ultrafiltration Rate reporting measure in 2019. The commenter noted that most HD machines are designed to facilitate the tracking of patient UFR data, and that it VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 is important for staff to review and analyze this patient data to address symptoms and/or medical complications. One commenter noted there was no clinical support for high UFR. Response: We encourage facilities to continue monitoring patient UFR data to ensure patient safety and improve hemodialysis (HD) care for ESRD patients. Although we are removing the Ultrafiltration Rate reporting measure because we believe that performance or improvement on the measure itself does not result in better patient outcomes, we believe that facilities will continue to monitor patient UFR data as part of a patient’s ESRD treatment. Comment: A few commenters expressed concern regarding the reporting burden associated with the proposed changes, recommending that CMS weigh the potential impact on patient health outcomes against potential administrative burden. One commenter specifically expressed concern regarding the burden impact on rural facilities due to the lack of resources. Response: We do not believe that removing a measure from the ESRD QIP will impose additional burden on facilities. Final Rule Action: After considering public comments, we are finalizing our proposal to remove the Ultrafiltration Rate reporting measure from the ESRD QIP measure set beginning with PY 2026 as proposed. b. Removal of the Standardized Fistula Rate Clinical Measure From the ESRD QIP Measure Set In the CY 2018 ESRD PPS final rule, we adopted the Standardized Fistula Rate clinical measure (82 FR 50774 through 50777). Along with the LongTerm Catheter Rate clinical measure, we stated that the two vascular access measures, when used together, consider arteriovenous (AV) fistula use as a positive outcome and prolonged use of a tunneled catheter as a negative outcome. With the growing recognition that some patients may exhaust their options for an AV fistula, or have comorbidities that may limit the success of AV fistula creation, pairing the measures accounts for all vascular access options. The Standardized Fistula Rate measure adjusts for patient factors where fistula placement may be either more difficult or not appropriate and acknowledges that in certain circumstances an AV graft may be the best access option by accounting for that possibility in the current measure specifications. In the CY 2018 ESRD PPS final rule, we stated that this paired PO 00000 Frm 00112 Fmt 4701 Sfmt 4700 incentive structure that relies on both measures reflects consensus best practice and supports maintenance of the gains in vascular access success achieved via the Fistula First/Catheter Last Project over the last decade (82 FR 50777). In the CY 2024 ESRD PPS proposed rule, we noted that since the CY 2018 ESRD PPS final rule, there have been several changes to what many experts consider to be best practices with respect to vascular access in ESRD patients due to improvements in the care of ESRD patients overall, changes in patient demographics, and increasing patient longevity (88 FR 42500). Guidance published in 2019 by the National Kidney Foundation’s Kidney Disease Outcome Quality Initiative (KDOQI) reflects updated best practices.214 The KDOQI’s 2019 guidance notes that prior guidelines and initiatives have emphasized a ‘‘fistula first’’ approach to vascular access choice due to the AV fistula’s associations with better short-term results compared with other vascular access types.215 However, the 2019 guidance also notes that more recent data have challenged these associations because of the high complication rates of AV fistula maturation failure requiring intervention. The guidance also encourages a more holistic, long-term approach to dialysis access that strives to preserve patient vasculature and avoid unnecessary procedures and complications. Therefore, following reevaluation of this Fistula First approach, the KDOQI’s 2019 guidance concludes that the Fistula First approach should no longer be considered a clinical best practice. Instead, the KDOQI’s 2019 guidance concludes that a patientcentered approach to hemodialysis vascular access that is based on a consideration of the patient’s needs and dialysis access eligibility is preferred. Providers should consider what would be most appropriate for the individual patient, including that AV fistula may not always be most appropriate based on the individual patient’s needs. After considering these evolving best practices and the KDOQI’s 2019 guidance, in the proposed rule we stated that we have determined that the Standardized Fistula Rate Clinical Measure does not provide patients and their healthcare providers the necessary 214 Lok CE, Huber TS, Lee T, et al; KDOQI Vascular Access Guideline Work Group. KDOQI clinical practice guideline for vascular access: 2019 update. Am J Kidney Dis. 2020;75(4)(suppl 2):S1– S164. 215 KDOQI clinical practice guidelines for vascular access. Am J Kidney Dis. 2006;48:S176– S247. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations level of flexibility to choose the most suitable AV access (88 FR 42500). We noted our belief that patients, in consultation with their healthcare providers, should have the flexibility to choose AV access (either AV fistula or AV graft) where appropriate to their specific patient characteristics and treatment plans. This determination should be based on the healthcare provider’s best clinical judgment that considers the vessel characteristics, patient comorbidities, health circumstances, and patient preference. Accordingly, we proposed to remove the Standardized Fistula Rate clinical measure from the ESRD QIP measure set beginning with PY 2026 under measure removal factor 3 (a measure no longer aligns with current clinical guidelines or practice). We stated in the proposed rule that we continue to consider both AV fistula and AV graft as preferable forms of vascular access to a long-term catheter, and that evidence shows that long-term catheters should only be used when all other AV access options have been exhausted (88 FR 42500).216 We also expressed our continued belief that it is important to track the use of long-term catheters, minimize their use where possible, and incentivize best practices for vascular access. For those reasons, we did not propose to remove the LongTerm Catheter Rate clinical measure. In the proposed rule, we also proposed to remove the reference to the Vascular Access Type Measure Topic and to assign the total weight of that topic (12 percent) solely to the LongTerm Catheter Rate clinical measure (88 FR 42500), as described in Table 15 of the proposed rule. We proposed to assign the total weight to the Long-Term Catheter Rate clinical measure because we believe this continues to be an important measure of facility performance tied to improved patient outcomes. We noted our belief that our proposal to assign the total 12 percent weight to the Long-Term Catheter Rate clinical measure reflected our view that long-term catheter use is the leastfavored vascular access treatment option and should be avoided where more clinically preferable vascular access treatment options would be appropriate. We welcomed public comment on our proposal. The comments we received and our responses are set forth below. Comment: Many commenters expressed support for the proposed removal of the Standardized Fistula 216 Lok CE, Huber TS, Lee T, et al; KDOQI Vascular Access Guideline Work Group. KDOQI clinical practice guideline for vascular access: 2019 update. Am J Kidney Dis. 2020;75(4)(suppl 2):S1– S164. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Rate clinical measure from the ESRD QIP. Several of these commenters noted that removing the Standardized Fistula Rate clinical measure would enable clinicians to support the vascular access care treatment options that are most appropriate for their individual patients. Several commenters stated that the continued focus on long-term catheter rates through the Long-Term Catheter Rate clinical measure will sufficiently address reduction of catheters. One commenter stated that removing the measure will reduce costs by not incentivizing clinicians to perform procedures that may be unnecessary, painful, or have a low likelihood of success. One commenter expressed the belief that the measure should be removed because it is topped out. Response: We thank commenters for their support. Although we do not believe that the measure is topped out, we do agree with commenters that the Standardized Fistula Rate clinical measure is appropriate for removal because the measure no longer aligns with current clinical guidelines or best practices and that removing the measure will support a more individualized approach to vascular access care. Comment: Although a few commenters expressed support for the proposed removal, the commenters recommended that CMS continue to monitor AV fistula and AV graft rates. Response: We thank the commenters for their support, and we will continue to monitor trends in ESRD patient data and quality of care. Comment: One commenter did not support removal of the measure. The commenter stated that they believe there is strong evidence that AV fistula utilization is associated with better outcomes and is superior to AV grafts and tunneled catheters. This commenter recommended lowering the performance standard for the Standardized Fistula Rate clinical measure and stated that this would indirectly make the use of AV grafts less punitive without removing the measure while still allowing individualized care for each patient. This commenter expressed concern that removal of the measure will further incentivize the use of AV grafts instead of AV fistula due to higher costs associated with grafts because of more frequent procedures. This commenter expressed concern that these new incentives will cause significant reductions in fistula utilization with adverse consequences. Response: We agree with the commenter that AV fistulas are the preferred vascular access treatment option in cases where it is appropriate based on the individual patient’s needs, PO 00000 Frm 00113 Fmt 4701 Sfmt 4700 76455 and we continue to consider both AV fistula and AV graft as preferable forms of vascular access to a long-term catheter. Although we will continue to monitor trends in AV fistula and AV graft utilization, we believe that removing the Standardized Fistula Rate clinical measure will provide flexibility to determine which vascular access treatment option is most appropriate based on the patient’s specific characteristics and treatment plans. Comment: A few commenters expressed concern regarding the increased weight of the Long-Term Catheter Rate clinical measure in the ESRD QIP. One commenter noted that, particularly among small or rural facilities, long-term catheter rates may be impacted by factors beyond a facility’s control, such as physician availability, surgeon appointment openings, and operating room availability. One commenter recommended that CMS update the Long-Term Catheter Rate clinical measure to account for the increased prevalence of two-step fistula placements, which may impact longterm catheter rates. One commenter recommended several patient exclusions be added to the denominator of the Long-Term Catheter Rate clinical measure to account for different situations in which AV fistula or AV graft placement is not appropriate based on the patient’s clinical case or individual preferences. The commenter stated that such exclusions would help to make the measure more patientcentered and meaningful, reflecting that the ‘‘right’’ vascular access is different for every patient. Response: We appreciate commenters’ concern. However, we believe the LongTerm Catheter Rate clinical measure continues to be an important measure of facility performance tied to improved patient outcomes. The increased weight of the Long-Term Catheter Rate clinical measure reflects our view that long-term catheter use is the least-favored vascular access treatment option and should be avoided where more clinically preferable vascular access treatment options would be appropriate. Although we acknowledge that long-term catheter usage may be appropriate in certain circumstances depending on a particular patient’s clinical case, we believe the Long-Term Catheter Rate clinical measure continues to align with current clinical guidelines and incentivizes best practices in vascular access treatment for ESRD patients. However, we will also continue to monitor the impact of our updated policy, as well as trends in the use of two-step fistula placements. E:\FR\FM\06NOR2.SGM 06NOR2 76456 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Comment: A few commenters expressed concern regarding the reporting burden associated with the proposed changes, recommending that CMS weigh the potential impact on patient health outcomes against potential administrative burden. One commenter specifically expressed concern with the burden impact on rural facilities due to the lack of resources. Response: We do not believe that removing a measure from the ESRD QIP will impose additional burden on facilities. Final Rule Action: After considering public comments, we are finalizing our proposal to remove the Standardized Fistula Rate clinical measure from the ESRD QIP measure set beginning with PY 2026 as proposed. 6. Revisions To Measure Domains and To Measure Weights Used To Calculate the Total Performance Score (TPS) Beginning With the PY 2026 ESRD QIP In the CY 2023 ESRD PPS final rule (87 FR 67251 through 67254), we finalized revisions to the ESRD QIP measure domains beginning with PY 2025. Specifically, we added the Reporting Measure Domain and updated measure domains and measure weights across five measure domains: Patient & Family Engagement, Care Coordination, Clinical Care, Safety, and Reporting. The measure domains and weights we finalized in the CY 2023 ESRD PPS final rule were depicted in Table 14 of the CY 2024 ESRD PPS proposed rule (88 FR 42501) and are depicted in this final rule in Table 15. ICH CARPS measure 15.00 SHR clinical measure SRR clinical measure PPPW measure 12.00 12.00 6.00 Kt/V Dialysis Adequacy Comprehensive Measure Vascular Access Type Measure Topic 11.00 12.00 NHSN BSI clinical measure 10.00 Clinical Depression Screening and Follow-Up reporting measure Hypercalcemia reporting measure Ultrafiltration Rate reporting measure MedRec reporting measure NHSN Dialysis Event reporting measure COVID-19 HCP Vaccination reporting measure 1.67 As discussed previously, we are finalizing our proposals that beginning with PY 2026, the Clinical Depression Screening and Follow-Up reporting measure will be converted to a clinical measure and included in the Care Coordination Measure Domain, the Standardized Fistula Rate clinical measure will be removed from the Clinical Care Measure Domain, the Ultrafiltration Rate reporting measure will be removed from the Reporting Measure Domain, and the Facility Commitment to Health Equity reporting measure will be added to the Reporting Measure Domain. To accommodate the new numbers of measures in the Care Coordination Measure Domain, Clinical Care Measure Domain, and Reporting Measure Domain, in the CY 2024 ESRD PPS proposed rule, we proposed to update the individual measure weights in each of these domains (88 FR 42501). VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 1.67 1.67 1.67 1.67 1.67 We stated our belief that these proposed updates to the individual measure weights would help to ensure that a facility’s individual measure performance has an appropriately proportionate impact on a facility’s TPS, while also further incentivizing improvement on clinical measures. For example, for the Care Coordination Measure Domain, we proposed to update the measure weights for the SHR clinical measure and the SRR clinical measure to accommodate the inclusion of the proposed Clinical Depression Screening and Follow-Up clinical measure. We stated that we believe these newly proposed measure weights would strike an appropriate balance between the importance of facility performance on the SHR clinical measure and the SRR clinical measure on measuring patient outcomes, while also reflecting the impact of the PO 00000 Frm 00114 Fmt 4701 Sfmt 4700 proposed Clinical Depression Screening and Follow-Up clinical measure on patient quality of care. Additionally, we noted in the proposed rule that the Vascular Access Type Measure Topic is currently weighted at 12 percent and includes both the Standardized Fistula Rate clinical measure and the LongTerm Catheter Rate clinical measure. We proposed to remove the Standardized Fistula Rate clinical measure and the Vascular Access Type Measure Topic, and we also proposed to weight the Long-Term Catheter Rate clinical measure at 12 percent. We noted our belief this proposal would incentivize improvement and reflect the impact of facility performance on the Long-Term Catheter Rate clinical measure (as the sole vascular access type measure) on patient outcomes. We also stated that we continue to believe that patient outcomes improve when E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.027</GPH> ddrumheller on DSK120RN23PROD with RULES2 TABLE 15: Previously Finalized PY 2026 ESRD QIP Measure Domains and Weights Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 they receive the most clinically appropriate vascular access treatment option, and that long-term catheters should only be used when other vascular access treatment options are not feasible. Consistent with our approach in the CY 2023 ESRD PPS final rule (87 FR 67251 through 67253), we proposed to assign individual measure weights to reflect the proposed updated number of measures in the Reporting Measure Domain so that each measure is weighted equally (88 FR 42501 through 42502). In light of these proposed updates to measures within the Reporting Measure Domain, we stated that we would weight each measure equally at 2 percent, which is consistent with our previously finalized approach to weight each measure in the Reporting Measure Domain equally. We note that although we proposed to change the number of measures in three of the domains and the weights of certain individual measures in those domains, we did not propose to change the weights of the five domains themselves because we believe the updates to individual measures and measure weights do not significantly impact the measure domains themselves such that updating the weights of the measure domains would be required to accommodate the updated individual measure weights. In the CY 2024 ESRD PPS proposed rule, the previously finalized and newly proposed measures weights that would be included in each domain, along with the proposed new measure weights, for PY 2026 were depicted in Table 15 (88 FR 42502). We welcomed public comment on these proposals. The comments we VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 received and our responses are set forth below. Comment: A few commenters expressed concern regarding the proposed updates to the individual measure weights within the Clinical Care Measure Domain. One commenter expressed concern regarding the proposed updates to the weight of the Long-Term Catheter Rate clinical measure, recommending that CMS reweight the Long-Term Catheter Rate clinical measure at 9 percent and the STrR clinical measure at 10 percent within the Clinical Care Measure Domain. One commenter stated that because catheters are clinically appropriate for some patients, the measure weight for the Long-Term Catheter Rate clinical measure should not be updated and the remaining weight should be distributed among the other measure domains. Response: We appreciate commenters’ concerns. However, we believe that the Long-Term Catheter Rate clinical measure continues to be an important measure of facility performance tied to improved patient outcomes and that the increased weight would incentivize improvement and reflect the impact of facility performance on the Long-Term Catheter Rate clinical measure (as the sole vascular access type measure) on patient outcomes. The increased weight of the Long-Term Catheter Rate clinical measure reflects our view that long-term catheter use is the least-favored vascular access treatment option and should be avoided where more clinically preferable vascular access treatment options would be appropriate. We will also take commenters’ recommendations regarding specific measure weights into PO 00000 Frm 00115 Fmt 4701 Sfmt 4700 76457 consideration for future rulemaking, but believe that the proposed weights are appropriate at this time to incentivize quality improvement in clinical measures. Comment: One commenter recommended that CMS increase the weight of the Reporting Measure Domain, noting the burden of complying with reporting measure requirements. Response: We take numerous factors into account when determining appropriate domain and measure weights, including clinical evidence, opportunity for improvement, clinical significance, and patient and provider burden (83 FR 56995 through 56996). We also consider (1) the number of measures and measure topics in a domain; (2) how much experience facilities have had with the measures and measure topics in a domain; and (3) how well the measures align with CMS’s highest priorities for quality improvement for patients with ESRD (79 FR 66214). We assign weights to the measure domains based on the clinical value and meaningfulness of the measures to patients, and the burden of complying with individual measure requirements. We believe that the Reporting Measure Domain weights are appropriate to incentivize the provision of high quality health care for all ESRD QIP measures. Final Rule Action: After considering public comments, we are finalizing our proposals to update the measure domains and measure weights for the PY 2026 ESRD QIP as proposed, and therefore, provide the newly finalized ESRD QIP measure domains and measure weights in Table 16. E:\FR\FM\06NOR2.SGM 06NOR2 76458 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 16: Newly Finalized ESRD QIP Measure Domains and Weights for PY 2026 ICH CARPS measure 15.00 SHR clinical measure SRR clinical measure PPPW measure Clinical Depression Screening and Follow-Up 9.00 9.00 6.00 6.00 Kt/V Dialysis Adequacy Comprehensive Measure Long-Term Catheter Rate clinical measure STrR clinical measure 11.00 12.00 12.00 NHSN BSI clinical measure 10.00 Facility Commitment to Health Equity measure** 2.00 Hypercalcemia reporting measure 2.00 MedRec reporting measure 2.00 NHSN Dialysis Event reporting measure 2.00 COVID-19 HCP Vaccination reporting measure 2.00 *We are fmalizing our proposal to convert the Clinical Depression Screening and Follow-Up measure from a reporting measure to a clinical measure beginning with PY 2026, as discussed in section IV.C.4 of this fmal rule. **We are fmalizing our proposal to add the Facility Commitment to Health Equity reporting measure beginning with PY 2026, as discussed in section IV.C.2 of this fmal rule. ddrumheller on DSK120RN23PROD with RULES2 Section 1881(h)(4)(A) of 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 determined appropriate by the Secretary, 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 VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 the achievement and improvement standards that we have established for clinical measures used in the ESRD QIP. We define the terms ‘‘achievement threshold,’’ ‘‘benchmark,’’ ‘‘improvement threshold,’’ and ‘‘performance standard’’ in our regulations at § 413.178(a)(1), (3), (7), and (12), respectively. For reporting measures, performance standards are the levels of data submission and completion of other actions specified by CMS that are used to award points to an ESRD facility on the measure (§ 413.178(a)(12)). In the CY 2023 ESRD PPS final rule (87 FR 67259 through 67260), we set the performance period for the PY 2026 PO 00000 Frm 00116 Fmt 4701 Sfmt 4700 ESRD QIP as CY 2024 and the baseline period as CY 2022. In the proposed rule, we estimated the performance standards for the PY 2026 clinical measures in Table 16 using data from CY 2021, which was the most recent data available (88 FR 42502). For certain measures previously suppressed for the PY 2023 performance period due to significant impacts on the measure related to the COVID–19 public health emergency (87 FR 67225 through 67237), we used CY 2019 data. We are updating these performance standards for all measures, using CY 2022 data, in this final rule, in Table 17. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.028</GPH> 7. Performance Standards for the PY 2026 ESRD QIP Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76459 TABLE 17: Performance Standards for the ESRD QIP Clinical Measures for PY 2026 Measure Achievement Threshold (15th Percentile of National Performance) Median (50th Percentile of National Performance) Benchmark (90th Percentile of National Performance) Vascular Access Type (VAT) 18.35%* 11.04%* 4.69%* Long-Term Catheter Rate 94.33%* 97.61%* 99.42%* Kt/V Comprehensive 34.27* 26.50 16.19 Standardized Readmission Ratio• NHSNBSI 0.734 0.248 0 Standardized Hospitalization Ratiob 166.60 129.14 87.98 Standardized Transfusion Ratiob 48.29 26.19 8.86 PPPW 8.12%* 16.73%* 33.90%* Clinical Depression** 87.10% 94.29% 100.00% ICH CARPS: Nephrologists' 58.20%* 67.90%* 79.15%* Communication and Caring 54.87% 63.22% 72.83% ICH CARPS: Quality of Dialysis Center Care and Operations ICH CARPS: Providing Information to 74.49%* 81.09%* 87.80%* Patients 49.33%* 62.22%* 76.57%* ICH CARPS: Overall Rating of Nephrologists ICH CARPS: Overall Rating of Dialysis 51.01% 64.86% 78.86% Center Staff ICH CARPS: Overall Rating of the 54.58% 69.42% 84.09% Dialysis Facility *Values are the same final performance standards for those measures for PY 2025. In accordance with our longstanding policy, we are using those numerical values for those measures for PY 2026 because they are higher standards than the PY 2026 numerical values for those measures. **We are fmalizing our proposal to update the Clinical Depression Screening and Follow-Up measure beginning in PY 2026, as discussed in section IV.C.4 of this fmal rule. •Rate calculated as a percentage of hospital discharges bRate per 100 patient-years Data sources: VAT measure: 2022 EQRS; SRR, SHR: 2022 Medicare claims; STrR: 2022 Medicare claims; Kt/V: 2022 EQRS; Hypercalcemia: 2022 EQRS; NHSN: 2022 CDC; ICH CARPS: CMS 2022; PPPW: 2022 EQRS and 2022 Organ Procurement and Transplantation Network (OPTN); Clinical Depression: 2022 EQRS. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 requirements for successful reporting of the Facility Commitment to Health Equity reporting measure. We address comments regarding our proposed reporting requirements for the Facility PO 00000 Frm 00117 Fmt 4701 Sfmt 4700 Commitment to Health Equity reporting measure in section IV.C.2 of this final rule. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.029</GPH> ddrumheller on DSK120RN23PROD with RULES2 In addition, we summarize in Table 18 our requirements for successful reporting on our previously finalized reporting measures for the PY 2026 ESRD QIP and our proposed 76460 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 18: Requirements for Successful Reporting of the Previously Finalized and Newly Proposed ESRD QIP Reporting Measures for PY 2026 Reporting Frequency Monthly Data Elements • Date of the medication reconciliation. • Type of eligible professional who completed the medication reconciliation: o physician, o nurse, o advanced registered nurse practitioner (ARNP), o physician assistant (PA), o pharmacist, or o pharmacy technician personnel • Name of eligible professional NHSN Dialysis Monthly Three types of dialysis events reported: Event • IV antimicrobial start; • positive blood culture; and • pus, redness, or increased swelling at the vascular access site. Hypercalcemia Monthly Total uncorrected serum or plasma calcium lab values At least one week of data each Cumulative number of HCP eligible to work in the COVID-19 Vaccination month, submitted quarterly facility for at least one day during the reporting period Coverage Among and who received an up to date vaccination course HCP* against SARS-CoV-2. Facility Annually Domains to which facility must attest affirmatively: Commitment to • Equity is a Strategic Priority Health Equity** • Data Collection • Data Analysis • Quality Improvement • Leadership Engagement * We are fmalizing our proposal to update the COVID-19 Coverage Among HCP reporting measure beginning with PY 2026, as discussed in section IV.C.3 of this fmal rule. **Weare fmalizing our proposal to add the Facility Commitment to Health Equity reporting measure beginning with PY 2026, as discussed in section IV.C.2 of this fmal rule. 8. Eligibility Requirements for the PY 2026 ESRD QIP ddrumheller on DSK120RN23PROD with RULES2 Our previously finalized minimum eligibility requirements for scoring the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 ESRD QIP measures are described in Table 18a of the CY 2024 ESRD PPS proposed rule (88 FR 42505), and provided in Table 19a. PO 00000 Frm 00118 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.030</GPH> Measure MedRec Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76461 TABLE 19a: Previously Finalized Eligibility Requirements for Scoring on ESRD QIP Measures Measure Kt/V Comprehensive (Clinical) VAT: Long-term Catheter Rate (Clinical) VAT: Standardized Fistula Rate (Clinical)* Hypercalcemia (Reporting) Minimum data requirements 11 qualifying patients NIA Small facility adjuster 11-25 qualifying patients 11 qualifying patients NIA 11-25 qualifying patients 11 qualifying patients NIA 11-25 qualifying patients 11 qualifying patients NIA NHSN BSI (Clinical) 11 qualifying patients NHSN Dialysis Event (Reporting) 11 qualifying patients Before September 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. Before September 1 of the performance period that applies to the program year. SRR (Clinical) STrR (Clinical) SHR (Clinical) ICH CARPS (Clinical) 11 index discharges 10 patient-years at risk 5 patient-years at risk Facilities with 30 or more survey-eligible patients during the calendar year preceding the performance period must submit survey results. Facilities would not receive a score if they do not obtain a total of at least 30 completed surveys during the performance period 11 qualifying patients NIA NIA NIA 11-41 index discharges 10-21 patient-years at risk 5-14 patient-years at risk Before October 1 prior to the performance period that applies to the program year. NIA Before September 1 of the performance period that applies to the program year. Before September 1 of the performance period that applies to the program year. Before September 1 of the performance period that applies to the program year. NIA Depression Screening and Follow-Up (Reporting)** Ultrafiltration (Reporting)*** 11 qualifying patients MedRec (Reporting) 11 qualifying patients 11-25 qualifying patients NIA NIA NIA NIA 11 qualifying patients 11-25 qualifying patients Before September 1 of NIA the performance period that applies to the program year. * We are finalizing our proposal to remove the Standardized Fistula Rate clinical measure beginning in PY 2026, as discussed in section IV.C.5 of this fmal rule, and removed from Table 19b. **Weare finalizing our proposal to update the Clinical Depression Screening and Follow-Up measure and convert it to a clinical measure beginning with PY 2026, as discussed in section IV.C.4 of this final rule. ***Weare fmalizing our proposal to remove the Ultrafiltration Rate reporting measure beginning in PY 2026, as discussed in section IV.C.5 of this fmal rule, and removed from Table 19b. ****Weare finalizing our proposal to update the COVID-19 Vaccination Coverage Among HCP measure beginning with PY 2026, as discussed in section IV.C.3 of this final rule. NIA BILLING CODE 4120–01–C VerDate Sep<11>2014 00:42 Nov 04, 2023 In the CY 2024 ESRD PPS proposed rule, we proposed to add eligibility Jkt 262001 PO 00000 Frm 00119 Fmt 4701 Sfmt 4700 requirements for the new Facility Commitment to Health Equity reporting E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.031</GPH> ddrumheller on DSK120RN23PROD with RULES2 PPPW (Clinical) COVID-19 Vaccination Coverage Among HCP (Reporting)**** CCN open date 76462 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 measure, as well as other proposed updates to the ESRD QIP measure set beginning with the PY 2026 ESRD QIP, as reflected in Table 18b in the proposed rule (88 FR 42504 through 42506). We welcomed public comment on these proposals. The comments we received and our responses are set forth below. Comment: One commenter expressed continued concern regarding the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 potential to unfairly penalize small facilities due to eligibility requirements and encouraged CMS to engage with the community to better support small facilities. Response: We acknowledge the commenter’s concern and will continue to monitor the impact of all ESRD QIP measures on small facilities to ensure they are not unfairly penalized due to eligibility requirements associated with a given measure. PO 00000 Frm 00120 Fmt 4701 Sfmt 4700 Final Rule Action: After considering public comments, we are finalizing our proposals as proposed. Since we are finalizing our proposal for the new measure as proposed, as well as finalizing other proposed updates to the ESRD QIP measure set beginning with the PY 2026 ESRD QIP, our newly finalized minimum eligibility requirements for scoring the ESRD QIP measures are described in Table 19b. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76463 TABLE 19b: Eligibility Requirements for Scoring on ESRD QIP Measures Beginning with PY2026 Measure Kt/V Comprehensive (Clinical) VAT: Long-term Catheter Rate (Clinical) Hypercalcemia (Reporting) Minimum data requirements 11 qualifying patients NIA Small facility adjuster 11-25 qualifying patients 11 qualifying patients NIA 11-25 qualifying patients 11 qualifying patients NIA NHSN BSI (Clinical) 11 qualifying patients NHSN Dialysis Event (Reporting) 11 qualifying patients Before September 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. Before September 1 of the performance period that applies to the program year. SRR (Clinical) STrR (Clinical) SHR (Clinical) ICH CARPS (Clinical) 11 index discharges 10 patient-years at risk 5 patient-years at risk Facilities with 30 or more survey-eligible patients during the calendar year preceding the performance period must submit survey results. Facilities would not receive a score if they do not obtain a total of at least 30 completed surveys during the performance period 11 qualifying patients NIA NIA NIA 11-41 index discharges 10-21 patient-years at risk 5-14 patient-years at risk Before October 1 prior to the performance period that applies to the program year. NIA Before September 1 of the performance period that applies to the program year. Before September 1 of the performance period that applies to the program year. NIA Depression Screening and Follow-Up (Clinical)* MedRec (Reporting) 11 qualifying patients CCN open date 11-25 qualifying patients NIA NIA NIA ddrumheller on DSK120RN23PROD with RULES2 11 qualifying patients BILLING CODE 4120–01–C 9. Payment Reduction Scale for the PY 2026 ESRD QIP Under our current policy, a facility does not receive a payment reduction VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 for a payment year in connection with its performance under the ESRD QIP if it achieves a 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 PO 00000 Frm 00121 Fmt 4701 Sfmt 4700 § 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 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.032</GPH> 11-25 qualifying patients Before September 1 of NIA NIA the performance period that applies to the program year. Before September 1 of Facility Commitment to 11 qualifying patients Health Equity the performance (Reporting)*** period that applies to the program year. *Weare finalizing our proposal to update the Clinical Depression Screening and Follow-Up measure beginning with PY 2026, as discussed in section IV.C.4 of this fmal rule. **Weare fmalizing our proposal to update the COVID-19 Vaccination Coverage Among HCP measure beginning with PY 2026, as discussed in section IV.C.3 of this fmal rule. ***Weare fmalizing our proposal to add the Facility Commitment to Health Equity reporting measure beginning with PY 2026, as discussed in section IV.C.2 of this fmal rule. PPPW (Clinical) COVID-19 Vaccination Coverage Among HCP (Reporting)** 76464 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations national ESRD facility performance on all reporting measures. Under our current policy, which is codified at § 413.177 of our regulations, we 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 mTPS (76 FR 634 through 635). In the proposed rule, we stated that for PY 2026, we estimated using available data that a facility must meet or exceed a mTPS of 52 to avoid a payment reduction (88 FR 42507). We noted that the mTPS estimated in the proposed rule is based on data from CY 2021 and CY 2019 instead of the PY 2026 baseline period (CY 2022) because CY 2022 data were not yet available. We presented the estimated payment reduction scale in Table 19 of the CY 2024 ESRD PPS proposed rule (88 FR 42507). We stated our intention to update the mTPS for PY 2026, as well as the payment reduction ranges for that payment year, in this CY 2024 ESRD PPS final rule. We have now finalized the payment reductions that will apply to the PY 2026 ESRD QIP using updated CY 2022 data. The mTPS for PY 2026 will be 53, and the finalized payment reduction scale is shown in Table 20. TABLE 20: Updated Payment Reduction Scale for PY 2026 Based on the Most Recently Available Data Reduction(%} D. Updates to Requirements Beginning With the PY 2027 ESRD QIP 1. PY 2027 ESRD QIP Measure Set ddrumheller on DSK120RN23PROD with RULES2 Under our current policy, we generally retain all measures once adopted for a payment year for VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 l00-53 0% 52-43 0.5% 42-33 1.0% 32-23 1.5% 22-0 2.0% subsequent payment years. In the proposed rule, we proposed to add the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure to the ESRD QIP measure set beginning with PY PO 00000 Frm 00122 Fmt 4701 Sfmt 4700 2027. As discussed in sections IV.D.2 and IV.D.3 of this final rule, we are finalizing these measure proposals and provide the finalized PY 2027 ESRD QIP measure set in Table 21. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.033</GPH> Total nerformance score Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76465 TABLE 21: Newly Finalized PY 2027 ESRD QIP Measure Set ConsensusBased Entity (CBE) # 0258 2496 Based on CBE#2979 NIA 2978 1454 1463 Based on CBE#0418 Based on CBE#1460 NIA NIA 2988 3636 NIA NIA In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CARPS) Survey Administration, a clinical measure Measure assesses patients' self-reported experience of care through percentage of patient responses to multiple survey questions. 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 clinical 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: 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 reporting 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 clinical measure Facility reports in End Stage Renal Disease Quality Reporting System (EQRS) one of four conditions for each qualifying patient treated during performance period. NHSN Bloodstream Infection (BSI) in Hemodialysis Patients, a clinical measure The Standardized Infection Ratio (SIR) ofBSis 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 CDC. Percentage of Prevalent Patients Waitlisted (PPPW), a clinical measure Percentage of patients at each 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. COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP), a reporting measure Percentage of HCP who are up to date on their COVID-19 vaccination course. Facility Commitment to Health Equity, a reporting measure Facilities will receive two points each for attesting to five different domains of commitment to advancing health equity for a total often points. Screening for Social Drivers of Health, a reporting measure* Percentage of patients at a dialysis facility who are 18 years or older screened for all five health-related social needs (HRSNs) (food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety). Screen Positive Rate for Social Drivers of Health, a reporting measure** Percentage of patients at a dialysis facility who are 18 years or older screened for all five HRSNs, and who screen positive for one or more of the following five HRSNs: Food insecurity, housing instability, transportation problems, utility difficulties, or interpersonal safety. * We are finalizing our proposal to add the Screening for Social Drivers of Health reporting measure beginning with PY 2027, as discussed in section IV.D.2 of this final rule. ** We are finalizing our proposal to add the Screen Positive Rate for Social Drivers of Health reporting measure beginning with PY 2027, as discussed in section IV.D.3 of this final rule. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00123 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.034</GPH> ddrumheller on DSK120RN23PROD with RULES2 NIA Measure Title and Description 76466 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations BILLING CODE 4120–01–C ddrumheller on DSK120RN23PROD with RULES2 2. Adoption of the Screening for Social Drivers of Health Reporting Measure Beginning With PY 2027 Our commitment to supporting facilities in building equity into their health care delivery practices is, in part, focused on empowering their workforce to recognize and eliminate health disparities that disproportionately impact their patients who have healthrelated social needs (HRSNs). HRSNs are significant risk factors associated with worse health outcomes as well as increased health care utilization.217 We believe that the identification of HRSNs among facility patients has two significant benefits. First, research has shown that certain HRSNs disproportionately impact populations that have historically been underserved by the healthcare system and screening helps identify individuals who may have HRSNs.218 Due to the association between chronic condition risk and HRSNs, screening for these needs could serve as evidence-based building blocks for supporting ESRD facilities in addressing persistent disparities and tracking progress towards closing the health equity gap in the ESRD population. Second, we believe HRSN screening by facilities could enable them to engage in meaningful collaboration with other healthcare providers and community-based organizations as part of a more holistic approach to addressing health equity gaps that negatively impact their ESRD patients, which may also eventually result in implementing and evaluating related innovations in health and social care delivery among these facilities, healthcare providers and communitybased organizations. In the FY 2023 IPPS/LTCH PPS final rule (87 FR 49191 through 49220), we finalized the adoption of two evidencebased measures in the Hospital Inpatient Quality Reporting (IQR) Program, the Screening for Social Drivers of Health and the Screen Positive Rate for Social Drivers of Health measures. These two Social Drivers of Health measures support identification of specific risk factors for 217 Centers for Medicare & Medicaid Services. (2021). A Guide to Using the Accountable Health Communities Health-Related Social Needs Screening Tool: Promising Practices and Key Insights. June 2021. Available at: https:// innovation.cms.gov/media/document/ahcmscreeningtool-companion. Accessed: November 23, 2021. 218 American Hospital Association. (2020). Health Equity, Diversity & Inclusion Measures for Hospitals and Health System Dashboards. December 2020. Accessed: January 18, 2022. Available at: https://ifdhe.aha.org/system/files/media/file/2020/ 12/ifdhe_inclusion_dashboard.pdf. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 inadequate healthcare access and adverse health outcomes among patients. These measures also encourage hospitals to systematically collect HRSN data. We have also finalized a policy requiring that all Special Needs Plans (SNPs) include one or more questions on housing stability, food security, and access to transportation in their Health Risk Assessment (HRA) using questions from a list of screening instruments specified in sub-regulatory guidance (87 FR 27726 through 27740), as well as adopted the Screening for Social Drivers of Health measure in the Merit-based Incentive Payment System (87 FR 70054 and 70055). In the CY 2024 ESRD PPS proposed rule, we stated that advancing health equity by addressing the health disparities that underlie the country’s health system is one of our strategic pillars and a Biden-Harris Administration priority (88 FR 42509).219 We noted our belief that the Screening for Social Drivers of Health reporting measure aligns with The CMS Quality Strategy Goals for effective care coordination and prevention and treatment of chronic conditions.220 We stated that the Screening for Social Drivers of Health reporting measure would enable facilities to identify patients with HRSNs, who are known to experience the greatest risk of poor health outcomes. Improvement in risk identification has the potential to reduce healthcare access barriers, address the disproportionate expenditures attributed to populations with greatest risk, and improve the facility’s quality of care through the facility taking steps to mitigate poor health outcomes by improving their care coordination efforts.221 222 223 224 These 219 Brooks-LaSure, C. (2021). My First 100 Days and Where We Go From Here: A Strategic Vision for CMS. Centers for Medicare & Medicaid. Available at: https://www.cms.gov/blog/my-first100-days-and-where-we-go-here-strategic-visioncms. 220 Centers for Medicare & Medicaid Services. (2021) CMS National Quality Strategy. Available at: https://www.cms.gov/Medicare/Quality-InitiativesPatient-Assessment-Instruments/Value-BasedPrograms/CMS-Quality-Strategy. 221 Baker, M.C., Alberti, P.M., Tsao, T.Y., Fluegge, K., Howland, R.E., & Haberman, M. (2021). Social Determinants Matter for Hospital Readmission Policy: Insights From New York City. Health Affairs, 40(4), 645–654. Available at: https:// doi.org/10.1377/hlthaff.2020.01742. 222 Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. (2020). Social Determinants of Health Improve Predictive Accuracy of Clinical Risk Models for Cardiovascular Hospitalization, Annual Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 13 (6) 290–299. Available at: https://doi.org/10.1161/ CIRCOUTCOMES.120.006752. 223 Hill-Briggs, F. (2021, January 1). Social Determinants of Health and Diabetes: A Scientific PO 00000 Frm 00124 Fmt 4701 Sfmt 4700 data could help facilities improve their care coordination efforts, including by understanding what HRSNs might be contributing to poor patient outcomes so that facilities can direct resources, as appropriate, toward referring their patients to resources that might be able to help them resolve their HRSNs. a. Background Health disparities manifest primarily as worse health outcomes in population groups where access to care is inequitable.225 226 227 228 229 Such differences persist across geography and healthcare settings irrespective of improvements in quality of care over time.230 231 232 Assessment of HRSNs is an essential mechanism for capturing the interaction between social, community, and environmental factors associated with health status and health Review. Diabetes Care. Available at: https:// pubmed.ncbi.nlm.nih.gov/33139407/. 224 Jaffrey, J.B., Safran, G.B., Addressing Social Risk Factors in Value-Based Payment: Adjusting Payment Not Performance to Optimize Outcomes and Fairness. Health Affairs Blog, April 19, 2021. Available at: https://www.healthaffairs.org/do/ 10.1377/forefront.20210414.379479/full/. 225 Seligman, H.K., & Berkowitz, S.A. (2019). Aligning Programs and Policies to Support Food Security and Public Health Goals in the United States. Annual Review of Public Health, 40(1), 319– 337. Available at: https://pubmed.ncbi.nlm.nih.gov/ 30444684/. 226 The Physicians Foundation. (2020). Survey of America’s Patients, Part Three. Available at: https:// physiciansfoundation.org/wp-content/uploads/ 2020/10/2020-Physicians-Foundation-SurveyPart3.pdf. 227 Office of the Assistant Secretary for Planning and Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors and Performance Under Medicare’s Value-Based Purchasing Program (Second of Two Reports). Available at: https:// aspe.hhs.gov/pdf-report/second-impact-report-tocongress. 228 Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity of Care in U.S. Hospitals. New England Journal of Medicine. 2014; 371(24):2298– 2308. 229 Billioux, A., Verlander, K., Anthony, S., & Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 230 Office of the Assistant Secretary for Planning and Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors and Performance Under Medicare’s Value-Based Purchasing Program (Second of Two Reports). Available at: https:// aspe.hhs.gov/pdf-report/second-impact-report-tocongress. 231 Hill-Briggs, F. (2021, January 1). Social Determinants of Health and Diabetes: A Scientific Review. Diabetes Care. Available at: https:// pubmed.ncbi.nlm.nih.gov/33139407/. 232 Khullar, D., MD. (2020, September 8). Association Between Patient Social Risk and Physician Performance American academy of Family Physicians. Addressing Social Determinants of Health in Primary Care team-based approach for advancing health equity. Available at: https:// www.aafp.org/dam/AAFP/documents/patient_care/ everyone_project/team-based-approach.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 outcomes.233 234 235 Growing evidence demonstrates that specific social risk factors are directly associated with patient health outcomes as well as healthcare utilization, costs, and performance in quality reporting and payment programs.236 237 Significant and persistent health disparities in the United States result in adverse health outcomes for people with ESRD.238 239 The COVID–19 pandemic has illuminated the detrimental interaction between HRSNs, adverse health outcomes, and health care utilization in the United States.240 241 Emerging evidence has shown that specific social risk factors are directly associated with health outcomes and health care utilization and costs.242 243 244 245 Of particular concern 233 Institute of Medicine. (2014). Capturing Social and Behavioral Domains and Measures in Electronic Health Records: Phase 2. Washington, DC: The National Academies Press. Available at: https://doi.org/10.17226/18951. 234 Alley, D. E., C. N. Asomugha, P. H. Conway, and D. M. Sanghavi. (2016). Accountable Health Communities—Addressing Social Needs through Medicare and Medicaid. The New England Journal of Medicine 374(1):8–11. Available at: https:// doi.org/10.1056/NEJMp1512532. 235 CDC. CDC COVID–19 Response Health Equity Strategy: Accelerating Progress Towards Reducing COVID–19 Disparities and Achieving Health Equity. July 2020. Available at: https://www.cdc.gov/ coronavirus/2019-ncov/community/health-equity/ cdc-strategy.html. Accessed November 17, 2021. 236 Zhang Y, Li J, Yu J, Braun RT, Casalino LP. (2021). Social Determinants of Health and Geographic Variation in Medicare per Beneficiary Spending. JAMA Network Open. 2021;4(6):e2113212. doi:10.1001/ jamanetworkopen.2021.13212. 237 Khullar, D., Schpero, W.L., Bond, A.M., Qian, Y., & Casalino, L.P. (2020). Association Between Patient Social Risk and Physician Performance Scores in the First Year of the Merit-based Incentive Payment System. JAMA, 324(10), 975–983. https:// doi.org/10.1001/jama.2020.13129. 238 United States Renal Data System. 2021 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, 2021. We note that, following publication of the CY 2024 ESRD PPS proposed rule, the USRDS has published its 2022 annual report, which is available at: https:// usrds-adr.niddk.nih.gov/2022. 239 Weinhandl, E.D., Wetmore, J.B., Peng, Y., Liu, J., Gilbertson, D.T., et al., (2021). Initial Effects of COVID–19 on Patient with ESKD. Journal of the American Society of Nephrology 32: 1444–1453. doi: https://doi.org/10.1681/ASN.2021010009. 240 CDC. CDC COVID–19 Response Health Equity Strategy: Accelerating Progress Towards Reducing COVID–19 Disparities and Achieving Health Equity. July 2020. Available at: https://www.cdc.gov/ coronavirus/2019-ncov/community/health-equity/ cdc-strategy.html. Accessed November 17, 2021. 241 Weinhandl, E.D., Wetmore, J.B., Peng, Y., Liu, J., Gilbertson, D.T., et al., (2021). Initial Effects of COVID–19 on Patient with ESKD. Journal of the American Society of Nephrology 32: 1444–1453. doi: https://doi.org/10.1681/ASN.2021010009. 242 Hill-Briggs, F. (2021, January 1). Social Determinants of Health and Diabetes: A Scientific Review. Diabetes Care. Available at: https:// care.diabetesjournals.org/lookup/doi/10.2337/ dci20-0053. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 among people with ESRD are HRSNs that have an effect on treatment outcomes, including inadequate access to healthy foods, unstable housing, limited transportation, and community safety concerns.246 247 We believe that improvement in care coordination between ESRD facilities, hospitals, and community-based organizations would yield better health outcomes for people with ESRD, and subsequently lead to improvements in quality performance for dialysis and other health care providers. We believe that the Screening for Social Drivers of Health reporting measure would help inform facilities of the impact of HRSNs in people with ESRD by assessing the proportion of adult patients who are screened for social drivers of health in five core domains: food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety. In the CY 2023 ESRD PPS proposed rule, we sought public comment on the potential future inclusion of the Screening for Social Drivers of Health measure in the ESRD QIP (87 FR 38554 through 38556). For a summary of the comments we received, as well as our responses, we refer readers to the CY 2023 ESRD PPS final rule (87 FR 67265 through 67268). In the CY 2023 ESRD PPS final rule, we stated that we were considering whether to incorporate measures that assess screening for health-related social needs into the ESRD QIP measure set (87 FR 67264). In the CY 2024 ESRD PPS proposed rule, we proposed to adopt the Screening for Social Drivers of Health reporting measure under section 1881(h)(2)(A)(iv) of the Act, which gives the Secretary broad authority to specify measures for the ESRD QIP (88 FR 42510). As discussed previously, disparities in health equity are tied to worse patient outcomes in the ESRD community. While widespread interest in addressing HRSNs exists, action is 243 Dean, E.B., French, M.T., Mortensen, K. (2020). Health Services Research 55 (Supplement 2): 883–893. doi: 10.1111/1475–6773.13283. 244 Berkowitz, S.A., Kalkhoran, S., Edwards, S.T., Essien, U.R., Baggett, T.P. (2018). Unstable Housing and Diabetes-Related Emergency Department Visits and Hospitalization: A Nationally Representative Study of Safety-Net Clinic Patients. Diabetes Care 41: 933–939. https://doi.org/10.2337/dc17-1812. 245 National Academies of Sciences, Engineering, and Medicine 2019. Dialysis Transportation: The Intersection of Transportation and Healthcare. Washington, DC: The National Academies Press. https://doi.org/10.17226/25385. 246 Ibid. 247 CMS (2021). Chronic Kidney Disease Disparities: Educational Guide for Primary Care. Available at: https://www.cms.gov/files/document/ chronic-kidney-disease-disparities-educationalguide-primary-care.pdf. PO 00000 Frm 00125 Fmt 4701 Sfmt 4700 76467 inconsistent, specifically in ESRD facilities. Therefore, we believe it is appropriate to require facilities to report data on this measure because the intent of the proposed measure is to incentivize facilities to collect and utilize their data to identify the impact of HRSNs in their ESRD patient population, including whether there is a relationship between those HRSNs and the outcomes experienced by their patients with those HRSNs. Screening data collected by the facility could inform their provision of care such that they improve the outcomes experienced by patients with HRSNs. Facilities could analyze their screening data to understand whether there are any HRSNs that may be affecting their patients’ access to care or contributing to poor outcomes in their patient populations and, in turn, develop appropriate solutions to improve access and outcomes. While the measure does not require facilities to take specific actions following an HRSN screening, we expect that any solution a facility might develop to address a gap it identifies would comply with all applicable Federal non-discrimination laws. We also noted that the measure is intended to promote health equity for all patients and is not intended to create a conflict between a CMS requirement and a State’s civil rights laws. Under our Meaningful Measures Framework,248 the Screening for Social Drivers of Health reporting measure, along with the Screen Positive Rate for Social Drivers of Health reporting measure discussed in section IV.D.3 of this final rule, addresses the quality priority of ‘‘Work with Communities to Promote Best Practices of Healthy Living’’ through the Meaningful Measures Area of ‘‘Equity of Care.’’ Additionally, consistent with Meaningful Measures 2.0, these measures address the ‘‘healthcare equity’’ priority area and align with our commitment to introduce plans to close health equity gaps and promote equity through quality measures, including to ‘‘develop and implement measures that reflect social and economic determinants.’’ 249 Development and proposal of these measures also aligns with our strategic pillar to advance 248 Centers for Medicare & Medicaid Services. Meaningful Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-InitiativesPatient-Assessment-Instruments/QualityInitiatives GenInfo/CMS-Quality-Strategy. 249 Centers for Medicare & Medicaid Services. Meaningful Measures 2.0: Moving from Measure Reduction to Modernization. Available at: https:// www.cms.gov/meaningful-measures-20-movingmeasure-reduction-modernization. We note that Meaningful Measures 2.0 is still under development. E:\FR\FM\06NOR2.SGM 06NOR2 76468 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 health equity by addressing the health disparities that underlie our health system.250 We also believe these measures address the quality priority ‘‘Promoting Effective Prevention and Treatment of Chronic Disease’’ through the Meaningful Measures Area ‘‘Management of Chronic Conditions,’’ by improving a facility’s ability to assess and implement effective care coordination for its patients. For example, data demonstrate that an overwhelming majority of people with ESRD travel outside their homes for dialysis three times per week, round trip, and that transportation challenges contribute to shortened treatment episodes and adverse health outcomes.251 252 Identification of patients with transportation difficulties could encourage facilities to provide information to these patients about available community-based transportation services that could help these patients with their transportation needs. We also believe that the measures would encourage facilities to incorporate HRSN screening into their routine care, which would in turn improve their ability to understand the full needs of their patients, including those who may need additional care coordination but might be reluctant to otherwise seek assistance due to concerns about personal stigmatization. Growing evidence demonstrates that specific social risk factors are directly associated with patient health outcomes as well as healthcare utilization, costs, and performance in quality reporting and payment programs.253 254 In 2017, CMS’s Center for Medicare and Medicaid Innovation (CMMI) launched the Accountable Health Communities (AHC) Model to test the impact of systematically identifying and 250 Brooks-LaSure, C. (2021). My First 100 Days and Where We Go From Here: A Strategic Vision for CMS. Available at: https://www.cms.gov/blog/ my-first-100-days-and-where-we-go-here-strategicvision-cms. 251 Ibid. 252 United States Renal Data System. 2021 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, 2021. We note that, following publication of the CY 2024 ESRD PPS proposed rule, the USRDS has published its 2022 annual report, which is available at: https:// usrds-adr.niddk.nih.gov/2022. 253 Zhang Y, Li J, Yu J, Braun RT, Casalino LP. (2021). Social Determinants of Health and Geographic Variation in Medicare per Beneficiary Spending. JAMA Network Open. 2021;4(6):e2113212. doi:10.1001/ jamanetworkopen.2021.13212. 254 Khullar, D., Schpero, W. L., Bond, A. M., Qian, Y., & Casalino, L. P. (2020). Association Between Patient Social Risk and Physician Performance Scores in the First Year of the Merit-based Incentive Payment System. JAMA, 324(10), 975–983. https:// doi.org/10.1001/jama.2020.13129. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 addressing the HRSNs of communitydwelling Medicare and Medicaid beneficiaries (through screening, referral, and community navigation on their health outcomes and related healthcare utilization and costs).255 256 257 258 The CMS Innovation Center developed the AHC Model based on evidence that addressing HRSNs through enhanced linkages between health systems and community-based organizations can improve health outcomes and reduce costs.259 HRSNs are significant risk factors associated with adverse health outcomes and increased health care utilization, including excessive emergency department (ED) visits and avoidable hospitalizations.260 261 Unmet HRSNs, such as food insecurity, inadequate or unstable housing, and inadequate transportation may increase risk for onset of chronic conditions, such as ESRD, and accelerate exacerbation of related adverse health outcomes.262 263 264 The AHC Model had 255 Centers for Medicare & Medicaid Services. (2021). A Guide to Using the Accountable Health Communities Health-Related Social Needs Screening Tool: Promising Practices and Key Insights. June 2021. Accessed: November 23, 2021. Available at: https://innovation.cms.gov/media/ document/ahcm-screeningtool-companion. 256 Alley, D. E., C. N. Asomugha, P. H. Conway, and D. M. Sanghavi. 2016. Accountable Health Communities—Addressing Social Needs through Medicare and Medicaid. The New England Journal of Medicine 374(1):8–11. Available at: https:// doi.org/10.1056/NEJMp1512532. 257 Billioux, A., Verlander, K., Anthony, S., & Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 258 Centers for Medicare & Medicaid Services. (2021). Accountable Health Communities Model. Accountable Health Communities Model | CMS Innovation Center. Accessed November 23, 2021. Available at: https://innovation.cms.gov/ innovation-models/ahcm. 259 RTI International. (2020). Accountable Health Communities (AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/ 2020/ahc-first-eval-rpt. 260 Billioux, A., Verlander, K., Anthony, S., & Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 261 Alley, D. E., C. N. Asomugha, P. H. Conway, and D. M. Sanghavi. 2016. Accountable Health Communities—Addressing Social Needs through Medicare and Medicaid. The New England Journal of Medicine 374(1):8–11. Available at: https:// doi.org/10.1056/NEJMp1512532. 262 Office of the Assistant Secretary for Planning and Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors and Performance Under Medicare’s Value-Based Purchasing Program (Second of Two Reports). Available at: https:// aspe.hhs.gov/pdf-report/second-impact-report-tocongress. 263 Hill-Briggs, F. (2021, January 1). Social Determinants of Health and Diabetes: A Scientific Review. Diabetes Care. Available at: https://care. PO 00000 Frm 00126 Fmt 4701 Sfmt 4700 a 5-year period of performance that began in May 2017 and concluded in April 2022, with beneficiary screening beginning in the summer of 2018 following an implementation period.265 266 Evaluation of the AHC Model data is still underway, and the most recent evaluation was published in the second AHC Model evaluation report on May 18, 2023.267 While social risk factors may have a significant impact on health outcomes, the mechanisms by which this connection emerges are complex and multifaceted.268 269 270 271 The persistent interactions between individuals’ HRSNs, medical providers’ practices/ behaviors, and community resources significantly impact healthcare access, quality, and ultimately costs, as described in the CMS Equity Plan for Improving Quality in Medicare.272 273 In diabetesjournals.org/lookup/doi/10.2337/dci200053. 264 Laraia, B.A. (2013). Food Insecurity and Chronic Disease. Advances in Nutrition, 4: 203– 212, doi: 10.3945/an.112.003277. 265 RTI International. (2020). Accountable Health Communities (AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/ 2020/ahc-first-eval-rpt. 266 We note that the model officially concluded in April 2022 but many awardees are continuing with no-cost extensions to continue utilizing unspent cooperative agreement funding and all awardees will conclude by April 2023. 267 RTI International. (2023). Accountable Health Communities (AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/ 2023/ahc-second-eval-rpt. 268 Kaiser Family Foundation. (2021). Racial and Ethnic Health Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-andethnic-health-inequities-and-medicare/. Accessed November 23, 2021. 269 Khullar, D., MD. (2020, September 8). Association Between Patient Social Risk and Physician Performance American academy of Family Physicians. (2020). Addressing Social Determinants of Health in Primary Care team-based approach for advancing health equity. 270 Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. (2020). Social Determinants of Health Improve Predictive Accuracy of Clinical Risk Models for Cardiovascular Hospitalization, Annual Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 13 (6) 290–299. Available at: https://doi.org/10.1161/ CIRCOUTCOMES.120.006752. 271 The Physicians Foundation. (2021). Viewpoints: Social Determinants of Health. Available at: https://physiciansfoundation.org/wpcontent/uploads/2019/08/The-PhysiciansFoundation-SDOH-Viewpoints.pdf. Accessed December 8, 2021. 272 Centers for Medicare & Medicaid Services. (2021). Paving the Way to Equity: A Progress Report. Accessed January 18, 2022. Available at: https://www.cms.gov/files/document/paving-wayequity-cms-omh-progress-report.pdf. 273 Centers for Medicare & Medicaid Services Office of Minority Health. (2021). The CMS Equity Plan for Improving Quality in Medicare. 2015–2021. Available at: https://www.cms.gov/About-CMS/ Agency-Information/OMH/OMH_Dwnld-CMS_ EquityPlanforMedicare_090615.pdf#:∼:text= The%20Centers%20for%20Medicare%20%26% 20Medicaid%20Services%20% E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations their 2018 survey of 8,500 physicians, The Physicians Foundation found almost 90 percent of physician respondents reported their patients had a serious health problem linked to poverty or other social conditions.274 Additionally, associations between disproportionate health risk, hospitalization, and adverse health outcomes have been highlighted and magnified by the COVID–19 pandemic.275 276 The following five core domains were selected to screen for HRSNs among Medicare and Medicaid beneficiaries under the AHC Model: (1) food insecurity; (2) housing instability; (3) transportation needs; (4) utility difficulties; and (5) interpersonal safety. These domains were chosen based upon literature review and expert consensus utilizing the following criteria: (1) availability of high-quality scientific evidence linking a given HRSN to adverse health outcomes and increased healthcare utilization, including hospitalizations and associated costs; (2) ability for a given HRSN to be screened and identified in the inpatient setting prior to hospital discharge, addressed by community-based services, and potentially improve healthcare outcomes, including reduced hospital re-admissions; and (3) evidence that a 76469 given HRSN is not systematically addressed by healthcare providers.277 In addition to established evidence of their association with health status, risk, and outcomes, these five domains were also selected because they can be assessed across the broadest spectrum of individuals in a variety of settings.278 279 280 These five evidence-based HRSN domains informed our development of the Screening for Social Drivers of Health reporting measure, as well as a second measure, Screen Positive Rate for Social Drivers of Health reporting measure. These domains are described in Table 22. Domain Description Food Insecurity Food insecurity is defined as limited or uncertain access to adequate quality and quantity of food at the household level. It is associated with diminished mental and physical health and increased risk for chronic conditions. 2810282 Individuals experiencing food insecurity often have inadequate access to healthier food options which can impede self-management of chronic diseases like diabetes and heart disease, and require individuals to make personal trade-offs between food purchases and medical needs, including prescription medication refills and preventive health services. 283 ,284 Food insecurity is associated with high-cost healthcare utilization including emergency department (ED) visits and hospitalizations. 285 ,286 ,287 Housing Instability Housing instability encompasses multiple conditions ranging from inability to pay rent or mortgage, frequent changes in residence including temporary stays with friends and relatives, living in crowded conditions, and actual lack of sheltered housing in which an individual does not have a personal residence. 2880289 Population surveys consistently show that people from some racial and ethnic minority groups constitute the largest proportion of the U.S. population experiencing unstable housing. 290 Housing 28CMS%29,evidence %20base%2C%20identifying%20 opportunities%2C%20and%20gathering%20 stakeholder%20input. 274 The Physicians Foundation. (2019). Viewpoints: Social Determinants of Health. Available at: https://physiciansfoundation.org/wpcontent/uploads/2019/08/The-PhysiciansFoundation-SDOH-Viewpoints.pdf. Accessed December 8, 2021. 275 CDC. (2020). CDC COVID–19 Response Health Equity Strategy: Accelerating Progress Towards Reducing COVID–19 Disparities and Achieving Health Equity. July 2020. Available at: https:// www.cdc.gov/coronavirus/2019-ncov/community/ health-equity/cdc-strategy.html. Accessed November 17, 2021. 276 Kaiser Family Foundation. (2021). Racial and Ethnic Health Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and- VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 ethnic-health-inequities-and-medicare/. Accessed November 23, 2021. 277 Billioux, A., Verlander, K., Anthony, S., & Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 278 Billioux, A., Verlander, K., Anthony, S., & Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 279 Centers for Medicare & Medicaid Services. (2021). Accountable Health Communities Model. Accountable Health Communities Model | CMS Innovation Center. Accessed November 23, 2021. Available at: https://innovation.cms.gov/ innovation-models/ahcm. PO 00000 Frm 00127 Fmt 4701 Sfmt 4725 280 Kamyck, D., Senior Director of Marketing. (2019). CMS releases standardized screening tool for health-related social needs. Activate Care. Available at: https://blog.activatecare.com/news. 281 Berkowitz SA, Seligman HK, Meigs JB, Basu S. Food insecurity, healthcare utilization, and high cost: a longitudinal cohort study. Am J Managed Care. 2018 Sep;24(9):399–404. PMID: 30222918; PMCID: PMC6426124. 282 Hill-Briggs, F. (2021, January 1). Social Determinants of Health and Diabetes: A Scientific Review. Diabetes Care. Available at: https:// pubmed.ncbi.nlm.nih.gov/33139407/. 283 Seligman, H.K., Berkowitz, S.A. (2019). Aligning Programs and Policies to Support Food Security and Public Health Goals in the United States. Annual Review of Public Health, 40(1), 319– 337. Available at: https://pubmed.ncbi.nlm. nih.gov/30444684/. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.035</GPH> ddrumheller on DSK120RN23PROD with RULES2 TABLE 22: Five Core HRSN Domains Used in the Screening for Social Drivers of Health Reporting Measure and the Screen Positive Rate for Social Drivers of Health Reporting Measure 76470 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Domain Description instability is associated with higher rates of chronic illnesses, injuries, and complications and more frequent utilization of high-cost healthcare services. 291 ,292 Transportation Needs Unmet transportation needs include limitations that impede transportation to destinations required for all aspects of daily living. 293 Groups disproportionately affected include older adults (aged >65 years), people with lower incomes, people with impaired mobility, residents of rural areas, and people from some racial and ethnic minority groups. Transportation needs contribute to postponement of routine medical care and preventive services which ultimately lead to chronic illness exacerbation and more frequent utilization of high-cost healthcare services including emergency medical services, EDs, and hospitalizations. 294,295 ,296,297 Utility Difficulties Inconsistent availability of electricity, water, oil, and gas services is directly associated with housing instability and food insecurity. 298 Specifically, interventions that increase or maintain access to such services have been associated with individual and population-level health improvements. 299 Interpersonal Safety Interpersonal safety affects individuals across the lifespan, from birth to old age, and is directly linked to mental and physical health. Assessment for this domain includes screening for exposure to intimate partner violence, child abuse, and elder abuse. 300 Exposure to violence and social isolation are reflective of individual-level social Domain Description VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Available at: https://www.huduser.gov/portal/sites/ default/files/pdf/2020-AHAR-Part-1.pdf. 291 Larimer, M. E. (2009). Health Care and Public Service Use and Costs Before and After Provision of Housing for Chronically Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. Available at: https://doi.org/10.1001/ jama.2009.414. 292 Baxter, A., Tweed, E., Katikireddi, S., Thomson, H. (2019). Effects of Housing First approaches on health and well-being of adults who are homeless or at risk of homelessness: systematic review and meta-analysis of randomized controlled trials. Journal of Epidemiology and Community Health, 73; 379–387. Available at: https:// jech.bmj.com/content/jech/73/5/379.full.pdf. 293 National Academies of Sciences, Engineering, and Medicine 2006. Executive Summary: CostBenefit Analysis of Providing Non-Emergency Medical Transportation. Washington, DC: The National Academies Press. Available at: https:// doi.org/10.17226/23285. 294 National Academies of Sciences, Engineering, and Medicine 2006. Executive Summary: CostBenefit Analysis of Providing Non-Emergency Medical Transportation. Washington, DC: The National Academies Press. Available at: https:// doi.org/10.17226/23285. 295 Hill-Briggs, F. (2021, January 1). Social Determinants of Health and Diabetes: A Scientific Review. Diabetes Care. Available at: https:// pubmed.ncbi.nlm.nih.gov/33139407/. 296 Billioux, A., Verlander, K., Anthony, S., Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. PO 00000 Frm 00128 Fmt 4701 Sfmt 4700 NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 297 Shier, G., Ginsburg, M., Howell, J., Volland, P., Golden, R. (2013). Strong Social Support Services, Such as Transportation And Help For Caregivers, Can Lead To Lower Health Care Use And Costs. Health Affairs, 32(3), 544–551. Available at: https:// doi.org/10.1377/hlthaff.2012.0170. 298 Baxter, A., Tweed, E., Katikireddi, S., Thomson, H. (2019). Effects of Housing First approaches on health and well-being of adults who are homeless or at risk of homelessness: systematic review and meta-analysis of randomized controlled trials. Journal of Epidemiology and Community Health, 73; 379–387. Available at: https:// jech.bmj.com/content/jech/73/5/379.full.pdf. 299 Wright, B. J., Vartanian, K. B., Li, H. F., Royal, N., Matson, J. K. (2016). Formerly Homeless People Had Lower Overall Health Care Expenditures After Moving into Supportive Housing. Health Affairs, 35(1), 20–27. Available at: https://doi.org/10.1377/ hlthaff.2015.0393. 300 Billioux, A., Verlander, K., Anthony, S., Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 301 Henry M., de Sousa, T., Roddey, C., Gayen, S., Bednar, T.; Abt Associates. The 2020 Annual Homeless Assessment Report (AHAR) to Congress; Part 1: Point-in-Time Estimates of Homelessness, January 2021. U.S. Department of Housing and Urban Development. Accessed November 24, 2021. Available at: https://www.huduser.gov/portal/sites/ default/files/pdf/2020-AHAR-Part-1.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.037</GPH> 284 National Academies of Sciences, Engineering, and Medicine 2006. Executive Summary: CostBenefit Analysis of Providing Non-Emergency Medical Transportation. Washington, DC: The National Academies Press. Available at: https:// doi.org/10.17226/23285. 285 Hill-Briggs, F. (2021, January 1). Social Determinants of Health and Diabetes: A Scientific Review. Diabetes Care. Available at: https:// pubmed.ncbi.nlm.nih.gov/33139407/. 286 Berkowitz SA, Seligman HK, Meigs JB, Basu S. Food insecurity, healthcare utilization, and high cost: a longitudinal cohort study. Am J Managed Care. 2018 Sep;24(9):399–404. PMID: 30222918; PMCID: PMC6426124. 287 Dean, E. B., French, M. T., Mortensen, K. (2020a). Food insecurity, health care utilization, and health care expenditures. Health Services Research, 55(S2), 883–893. Available at: https:// doi.org/10.1111/1475–6773.13283. 288 Larimer, M. E. (2009). Health Care and Public Service Use and Costs Before and After Provision of Housing for Chronically Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. Available at: https://doi.org/10.1001/ jama.2009.414. 289 Hill-Briggs, F. (2021). Social Determinants of Health and Diabetes: A Scientific Review. Diabetes Care. Available at: https://pubmed.ncbi.nlm. nih.gov/33139407/. 290 Henry M., de Sousa, T., Roddey, C., Gayen, S., Bednar, T.; Abt Associates. The 2020 Annual Homeless Assessment Report (AHAR) to Congress; Part 1: Point-in-Time Estimates of Homelessness, January 2021. U.S. Department of Housing and Urban Development. Accessed November 24, 2021. ER06NO23.036</GPH> ddrumheller on DSK120RN23PROD with RULES2 relations and living conditions that are directly associated with injury, psychological distress, and death in all age groups. 301 ,302 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations The Screening for Social Drivers of Health reporting measure assesses screening of the same HRSNs. In the proposed rule, we proposed that facilities would be able to choose a screening tool for purposes of this measure or otherwise screen their patients using a method of their choosing in order to give facilities the flexibility to accommodate the population they serve and their individual needs (88 FR 42513).303 304 We noted that the 10-item AHC HealthRelated Social Needs Screening Tool that AHC Model participants used to identify HRSNs in the five core domains (described in Table 22) among community-dwelling Medicare, Medicaid, and dually eligible beneficiaries was tested across varied care-delivery sites in diverse geographic locations across the U.S.305 306 Facilities may wish to consider using that tool because it has been found to be both reliable and valid, including high interrater reliability and concurrent and predictive validity.307 Moreover, the screening tool can be implemented in a variety of places where patients seek healthcare, including dialysis facilities.308 However, as stated previously, we did not propose to require facilities to use this tool, or any other specific tool, for purposes of the Screening for Social Drivers of Health reporting measure. b. Overview of Measure The Screening for Social Drivers of Health measure assesses the percentage of patients age 18 and older that a dialysis facility screens for food (1) Cohort The cohort for the Screening for Social Drivers of Health reporting measure is all patients, aged 18 years and older, who are treated at the facility during the applicable performance period and not eligible to be excluded from the measure. (2) Numerator The numerator is calculated as the number of patients who are 18 years or older who are treated at the facility during the applicable performance period and are not eligible to be excluded from the measure, and are (3) Denominator The denominator is calculated as the number of patients at the dialysis facility and who are 18 years or older on the first day of the performance period. The following patients are excluded from the denominator: (1) Patients who opt-out of screening; and (2) patients who are unable to complete the screening and have no legal guardian or caregiver who is able to complete the screening on their behalf. c. Measure Calculation The Screening for Social Drivers of Health measure is calculated as the number of patients at a dialysis facility who are 18 years or older who are treated at the facility during the applicable performance period and are not eligible to be excluded from the measure, and are screened by the facility for all five HRSNs (food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety) divided by the total number of patients 18 years or older on the 1st day of the performance period (January 1st) at that dialysis facility. In the proposed rule, we proposed a 12-month period of performance for the measure, and facilities would be required to report annually (88 FR 42514). We proposed that a facility would be scored according to the following equation: l Number of Eligible Patients for Whom a Facility Screened for all Five HSRNs During the Performance Period X lO Total Number of Eligible Patients During the Performance Period We believe that this scoring policy would encourage facilities to report the measure data appropriately without penalizing facilities for the results of such data, which may be based on circumstances beyond a facility’s control. 302 Larimer, M. E. (2009). Health Care and Public Service Use and Costs Before and After Provision of Housing for Chronically Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. Available at: https://doi.org/10.1001/ jama.2009.414. 303 Social Interventions Research & Evaluation Network. (2019). Social Needs Screening Tool Comparison Table. Available at: https://sirenetwork. ucsf.edu/tools-resources/resources/screening-toolscomparison. Accessed January 18, 2021. 304 Centers for Medicare & Medicaid Services. (2021). A Guide to Using the Accountable Health Communities Health-Related Social Needs Screening Tool: Promising Practices and Key Insights (June 2021). Available at: https:// innovation.cms.gov/media/document/ahcmscreeningtool-companion. Accessed January 18, 2021. 305 More information on the HRSN Screening Tool is available at: https://innovation.cms.gov/ files/worksheets/ahcm-screeningtool.pdf. 306 RTI International. (2020). Accountable Health Communities (AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/ 2020/ahc-first-eval-rpt. 307 Lewis C., Wellman R., Jones S., Walsh-Bailey C., Thompson E., Derus A., Paolino A., Steiner J., VerDate Sep<11>2014 screened during the performance period for all of the following five HRSNs: Food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety. 00:42 Nov 04, 2023 Jkt 262001 d. Data Submission and Reporting In the proposed rule, we proposed to require facilities to report this measure PO 00000 Frm 00129 Fmt 4701 Sfmt 4700 on an annual basis beginning with PY 2027 (88 FR 42514). In alignment with the policy we finalized for the Hospital IQR Program, we would allow facilities flexibility to select their own screening tool or method to screen patients for De Marchis E., Gottlieb L., and Sharp A. (2020). Comparing the Performance of Two Social Risk Screening Tools in a Vulnerable Subpopulation. J Family Med Prim Care. 2020 Sep; 9(9): 5026–5034. Available at: https://www.ncbi.nlm.nih.gov/pmc/ articles/PMC7652127/. 308 CMS. A Guide to Using the Accountable Health Communities Health-Related Social Needs Screening Tool: Promising Practices and Key Insights. June 2021. Accessed: November 23, 2021. Available at: https://innovation.cms.gov/media/ document/ahcm-screeningtool-companion. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.038</GPH> ddrumheller on DSK120RN23PROD with RULES2 [ insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety. To report on this measure, facilities would provide: (1) the number of patients admitted to the facility who are 18 years or older during the applicable performance period who are screened for all of the following five HRSNs: Food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety; and (2) the total number of patients at the facility who are 18 years or older during the applicable performance period and who are not excluded from the measure. In the proposed rule, we proposed to add this measure to the Reporting Measure Domain beginning with PY 2027 (88 FR 42514). We discuss measure domains and weights for PY 2027 in section IV.D.7 of this final rule. Measure specifications for this measure are currently available on the QualityNet website at: https:// qualitynet.cms.gov/esrd/esrdqip. 76471 76472 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety. Potential sources of these data for incorporation in a tool could include, for example, administrative claims data, electronic clinical data, standardized patient assessments, or patient-reported data and surveys. Additionally, multiple screening tools exist and are publicly available. Facilities could refer to the Social Interventions Research and Evaluation Network (SIREN) website, for example, for comprehensive information about the most widely used HRSN screening tools.309 310 SIREN contains descriptions of the content and characteristics of various tools, including information about intended populations, completion time, and number of questions. We encourage facilities to consider digital standardized screening tools and refer readers to the FY 2023 IPPS/LTCH PPS final rule (87 FR 49207), where we noted that the use of certified health IT can support capture of HRSN information in an interoperable fashion so that these data can be shared across the care continuum to support coordinated care. We proposed that the deadline for submission would be the end of the EQRS December data reporting month for the applicable performance period, which is consistent with current reporting deadlines for other ESRD QIP measures (88 FR 42514). For example, the deadline for submission in PY 2027 would be the end of the December data reporting month in CY 2025. ddrumheller on DSK120RN23PROD with RULES2 e. Review by the Measure Applications Partnership We included the Screening for Social Drivers of Health reporting measure as a measure under consideration for the ESRD QIP on the publicly available 2022 MUC List, a list of measures under consideration for use in various Medicare programs.311 The CBEconvened MAP Health Equity Advisory Group reviewed the MUC List and the 309 Social Interventions Research & Evaluation Network. (2019). Social Needs Screening Tool Comparison Table. Available at: https://sirenetwork. ucsf.edu/tools-resources/resources/screening-toolscomparison. Accessed January 18, 2021. 310 The Social Interventions Research and Evaluation Network (SIREN) at University of California San Francisco was launched in the spring of 2016 to synthesize, disseminate, and catalyze research on the social determinants of health and healthcare delivery. 311 Centers for Medicare & Medicaid Services. 2022. List of Measures Under Consideration for December 1, 2022. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub. cms.gov/measure-lifecycle/measureimplementation/pre-rulemaking/lists-and-reports. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Screening for Social Drivers of Health measure (MUC 2022–053) in detail and at the same time as the Screen Positive Rate for Social Drivers of Health measure on December 6–7, 2022 (discussed below).312 The Health Equity Advisory Group expressed support for the data collection related to social drivers of health, but raised concerns about public reporting of the data and redundancy in asking for the same information of patients. In addition, on December 8–9, 2022, the MAP Rural Health Advisory Group reviewed the 2022 MUC List and the MAP Hospital Workgroup did so on December 13–14, 2022.313 The Rural Health Advisory Group noted some potential reporting challenges including the potential masking of health disparities that are underrepresented in some areas and that sample size and populations served may be an issue, but expressed that the measure serves as a starting point to determine where screening is occurring. The MAP Hospital Workgroup expressed strong support for the measure but noted that interoperability will be important and cautioned about survey fatigue. The MAP Hospital Workgroup members conditionally supported the measure pending: (1) testing of the measure’s reliability and validity; (2) endorsement by a consensus-based entity (CBE); (3) additional details on how potential tools map to the individual drivers, as well as best practices; (4) what resources may be available to assist patients; and (5) alignment with data standards, particularly the GRAVITY project.314 Thereafter, the MAP Coordinating Committee deliberated on January 24 and 25, 2023, and ultimately voted to conditionally support the Screening for Social Drivers of Health reporting 312 Centers for Medicare & Medicaid Services. 2022. 2022–2023 MAP Preliminary Recommendations. Health Equity Advisory Group. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. 313 Centers for Medicare & Medicaid Services. 2022. 2022–2023 MAP Preliminary Recommendations, Rural Health Advisory Group. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. 314 Centers for Medicare & Medicaid Services. (2022). 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. For Information on the GRAVITY project, please see https://thegravityproject.net/. PO 00000 Frm 00130 Fmt 4701 Sfmt 4700 measure for rulemaking with the same conditions.315 f. Consensus-Based Entity Endorsement Although section 1881(h)(2)(B)(i) of the Act generally requires that measures specified by the Secretary for the ESRD QIP be endorsed by the entity with a contract under section 1890(a) of the Act, section 1881(h)(2)(B)(ii) of the Act states that in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. We reviewed CBE-endorsed measures and were unable to identify any other CBE-endorsed measures on this topic, and, therefore, we believe the exception in section 1881(h)(2)(B)(ii) of the Act applies. g. Public Display In the proposed rule, we proposed to publicly display the facility-specific results for the Screening for Social Drivers of Health measure on an annual basis through our Care Compare website at: https://www.medicare.gov/carecompare/. We stated that we anticipate making the first public report available in January 2027. We invited public comment on this proposal. The comments we received and our responses are set forth below. We address comments that broadly referred both the Screening for Social Drivers of Health measure and the Screen Positive Rate for Social Drivers of Health measure in this section as well. Comment: Several commenters expressed support for the Screening for Social Drivers of Health reporting measure, noting that it would help to provide facilities with additional information to help identify and address health disparities in ESRD patients. A few commenters noted that identifying patient social risk factors will allow care providers and community organizations to work together to improve care delivery. Response: We thank commenters for their support. 315 Centers for Medicare & Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Comment: Several commenters expressed support for the proposed Screening for Social Drivers of Health reporting measure and recommended additional changes to the measure specifications. A few of these commenters suggested that the measure screen for additional HRSNs, such as financial needs and caregiver burdens. One commenter, noting the critical role of nurses in cultivating trust and communication with patients as being necessary to help identify and address health disparities among patients while also balancing administrative burden, recommended that CMS take additional actions that would further enable nurses to comprehensively address HRSNs across care settings. One commenter stated that patients who are unable to complete screenings and do not have a legal guardian or caregiver able to complete the screening on their behalf are extremely vulnerable and recommended dialysis facilities be encouraged to support these patients in resource identification. Response: We thank commenters for their support and will take their recommendations under consideration for future rulemaking. We selected the proposed five HRSN domains based on the successful use of these domains in the screening that was done under the AHC Model. We note that while the Screening for Social Drivers of Health measure requires screening for the five identified HRSNs, facilities may screen for additional HRSNs that they believe may be impacting their patient population. One resource that facilities could consider is the Accountable Health Communities screening tool, which includes questions for eight supplemental domains, including financial strain. Although the Screening for Social Drivers of Health reporting measure excludes patients who are unable to complete the screening and have no legal guardian or caregiver who is able to complete the screening on their behalf, we would nonetheless encourage facilities to support these patients with resource identification. Comment: Several commenters expressed concern that the proposed Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure would not effectively address poor health outcomes associated with HRSNs. A few of these commenters believed that the measures did not provide sufficient patient or provider support to help empower patients to improve their health outcomes. One commenter noted that the availability of community resources is highly variable depending VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 76473 on location and expressed concern that screening for HRSNs through administering questionnaires may be futile in deprived areas that lack access to such community organizations. One commenter expressed concern that the proposed measures may lead to unintended consequences and further perpetuate health disparities by disincentivizing facilities from providing care to patients with HRSNs or communities with higher rates of HRSNs. One commenter expressed concern that the proposed measures do not distinguish between a patient’s social risks and a patient’s social needs, noting that the former is determined by screening instrument and the latter is based on a patient’s own priorities and preferences. The commenter recommended that CMS develop a measure that focuses on assessing a patient’s self-identified needs and priorities while ensuring that resources are available to provide responsive follow-up care. Response: We thank commenters for their feedback. During the development of both Social Drivers of Health measures, we gave this topic significant consideration. The intent of the two measures is to incentivize facilities to screen their patients for HRSNs in five core domains, as well as to analyze those data to determine whether there is a relationship between the HRSNs and the outcomes experienced by their patients. Facilities could use those data to develop solutions to improve access to care and clinical outcomes among their patient population. Evaluation of the AHC Model concluded that universal screening may identify needs that would otherwise remain undetected.316 While broad availability of community-based resources that address patients’ health-related social needs would be ideal, we believe that one of the benefits of these measures will be identification of opportunities to enable meaningful action, including prioritizing and investing in such resources where feasible. For example, a facility may decide to offer shuttle services for some of its patients if transportation is identified as a barrier to treatment. A facility may also be able to connect patients with local resources to assist with food insecurity, housing instability, or utility difficulties. Beginning to collect the data on patients’ HRSNs remains imperative and a crucial step in developing resources for advancing health equity. We note that identifying and addressing HRSNs is a critical topic for ESRD patients and that there are high levels of health disparities experienced by this patient population. Although we believe that the two measures will not lead to unintended consequences because screening would be required for all eligible patients and facilities would not be penalized based on reported screen positive rates, CMS will monitor measure implementation as part of standard program and measure review and will consider updates to the measures if improvements are identified through this process. Comment: Several commenters expressed concern that the proposed Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure were not ready for inclusion in the ESRD QIP measure set. A few commenters recommended an endorsement review by the CBE to ensure that such measures will drive improved health outcomes and advance health equity, given the significance of addressing social risk factors and the potential administrative burden associated with the inclusion of new measures. One commenter expressed concern with the proposed measures, recommending that more work be done to address potential reporting challenges and potential masking of health disparities before the measures are incorporated into the ESRD QIP. One commenter noted that these are the first measures aimed at HRSNs that would be used in the ESRD QIP, and the impact of their adoption into a payment program is unknown. Response: Although we recognize the value of measures undergoing review for potential CBE endorsement, given the urgency of improving health equity, we believe it is important to implement this measure as soon as possible while balancing facilities’ need for sufficient time to implement screening and data collection processes, which is why we proposed to adopt this measure beginning with the PY 2027 ESRD QIP. We note that the most recent evaluation of the AHC model, which informed the development of these proposed measures, showed that it was effective in screening beneficiaries for HRSNs, identifying eligible beneficiaries, and referring those beneficiaries to HRSNrelated navigation services.317 We 316 RTI International. (2020). Accountable Health Communities (AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/ 2020/ahc-first-eval-rpt. 317 RTI International. (2023). Accountable Health Communities (AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/ 2023/ahc-second-eval-rpt. PO 00000 Frm 00131 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76474 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations believe that the success of the AHC model shows that these measures will have a similar impact. Additionally, we note that, under section 1881(h)(2)(B)(ii) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. We reviewed measures endorsed by consensus organizations and were unable to identify any other measures on this topic endorsed by a consensus organization, and therefore, we believe the exception in section 1881(h)(2)(B)(ii) of the Act applies. Comment: Several commenters expressed concern with the potential burden associated with the proposed Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure. A few commenters noted that facilities would need additional resources in order to implement and comply with proposed measure requirements. A few of these commenters expressed particular concern regarding staffing constraints. A few commenters expressed concern regarding the administrative burden associated with the data collection and reporting requirements and requested that facilities receive additional resources such as training and funding to support the data collection and reporting efforts associated with the proposed measures. One commenter expressed concern that the administrative burden associated with the proposed measures could divert facility resources from direct patient care and requested an assessment of the administrative burden. Response: While we understand that implementation of the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure are associated with some burden, as discussed in section VI.C.3 of this final rule, we believe the benefits outweigh the burden because screening for and identifying patients’ HRSNs is a critical step towards a facility identifying and understanding how the presence of the screened HRSNs might be impacting patient access to ESRD care and outcomes. We intend to monitor the measures for any unintended or adverse outcomes associated with implementation. We note that screening can occur any time during the patient’s treatment at the facility during the performance period prior to discharge and that, for example, the AHC Screening Tool addresses these 5 HRSNs using a total VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 of 10 questions. Therefore, we believe that facilities will be able to find sufficient time to screen their patients. Comment: A few commenters expressed concern with the proposed Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure, believing that the goals of the two measures were already effectively covered through other means. One of these commenters noted that facilities are already required to screen their patients for HRSNs as part of ESRD Conditions for Coverage assessments required at 42 CFR 494.90. One of these commenters stated that dialysis facilities are already required to screen patients for multiple non-clinical conditions, noting that CMS previously proposed revisions to the ESRD Medical Evidence Report form (CMS–2728), which includes seven screening questions related to HRSNs that address the same five core domains as these measures. One of these commenters stated that the clinical measures currently included in the ESRD QIP are more effectively aimed at incentivizing beneficial patient outcomes such as preventing avoidable hospitalizations and reducing mortality. Response: We recognize that there may be overlap between the HRSN data screened for under the proposed measures and data that facilities are reporting for other purposes. However, we note that some of the data cited by commenters is collected on a one-time basis, whereas the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measures require that the screens be conducted annually. This difference in the frequency of the screens will facilitate the ability of facilities to identify HRSNs that develop or change over time. We agree with the commenter that noted the beneficial impact of clinical measures in the ESRD QIP measure set. Given the link between social risk factors and adverse health outcomes, we believe that incentivizing facilities to screen for and identify a patient’s HRSNs will similarly lead to better patient health outcomes. Comment: A few commenters recommended that the measures use a standardized survey to identify and collect HRSN data. One of these commenters noted that because the measure does not require facilities to use a standard screening instrument, facility performance on the measure is not comparable and the reported data will not be meaningful to the public. The commenter recommended that CMS only publicly report whether a facility PO 00000 Frm 00132 Fmt 4701 Sfmt 4700 screens for HRSNs and that CMS not publicly report the percentage of patients at a facility that screens positive for each HRSN. One commenter recommended that CMS provide guidance on the role of Protocol for Responding to & Assessing Patients’ Assets, Risks & Experiences (PRAPARE) for screening in dialysis facilities. One commenter suggested that the measure use a standardized survey to identify and collect HRSN data. Response: We proposed that facilities would be able to choose their own screening tool for purposes of complying with both the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure because we think it is important to provide facilities with the flexibility to choose the screening tool that works best for them. We understand that the absence of a standardized screening tool could introduce some inconsistency in the information collected across facilities because different screening tools may vary in terms of the number of screening questions included or the language used in those screening questions. While we acknowledge the potential benefits of requiring all facilities to use the same screening instrument or a prescribed set of standards around the number or types of screening questions used, we also recognize the benefits of providing facilities with flexibility to customize screening and data collection to their patient populations. We encourage facilities to select screening tools that have undergone thorough testing to ensure they are accurate and reliable. We believe that this measure should promote screening practices which, among other things, help to identify unmet HRSNs. We disagree with commenter’s recommendation that CMS publicly report only whether a facility screens for HRSNs and not the percentage of patients at a facility that screens positive for each HRSN. Public reporting provides a means of delivering important healthcare information to facilities, consumers, and patient advocates on the level of unmet HRSNs among a facility’s patient population that might be contributing to the clinical outcomes at the facility. We believe that a facility’s ability to identify HRSNs among its patient population should be considered part of the quality of care it provides to its patients. In addition to helping facilities identify these HRSNs among their patient population that could play a factor in clinical outcomes, it also may provide the public with E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations useful information that could be used to improve resources available to patients. Although the commenter is correct that PRAPARE may be a useful screening tool for engaging patients in assessing and addressing social drivers of health, we are not requiring that facilities use a specific standardized screening tool for purposes of complying with the proposed measures at this time. For selecting a screening tool, we suggest that facilities refer to evidence-based resources for comprehensive information about the most widely used HRSN screening tools. For example, the Social Interventions Research and Evaluation Network (SIREN) website, housed at the Center for Health and Community at the University of California, San Francisco, contains descriptions of the content and characteristics of various tools, including information about intended populations, completion time, and number of questions. Comment: One commenter expressed concern with the proposed use of a standardized tool to screen patients for HRSNs, noting that HRSN screening may be accomplished through alternative means such as informal but thorough patient interviewing by a practitioner or predictive modeling using available patient data. The commenter cautioned against penalizing providers for not using a standardized tool to screen for HRSNs, absent evidence showing the superiority of the proposed method. Response: We did not propose to require facilities to use a standardized screening tool. In the proposed rule, we proposed that facilities would be able to select a screening tool of their choosing for purposes of this measure to give facilities the flexibility to tailor their screen to the needs of their patient population. Comment: A few commenters requested clarification regarding whether Electronic Data Interchange may be used between systems and the screening tools already in place, including clarification that CMS intends to collect the data through the EQRS. One commenter recommended delaying adoption of the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting because dialysis facilities may need more time to update different EMRs. Response: Facilities will collect and report the measure data through EQRS. Because we are not requiring facilities to adopt a standardized screening tool, we believe that the proposed measures provide facilities with the flexibility to customize screening and data collection VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 to their local community contexts and patient populations, especially in the initial stages of implementing screening protocols. We note that these measures are proposed for inclusion beginning with PY 2027, so we believe that facilities will have ample time to build out their interfaces and test their systems before measure data reporting requirements officially begin. Comment: A few commenters recommended that CMS align the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure with the requirements of the Comprehensive Kidney Care Contracting (CKCC) option of the KCC Model. Response: We thank commenters for the recommendations. Comment: One commenter recommended that facilities should receive full credit for reporting on these measures, cautioning against potentially penalizing facilities by holding them accountable for social disparities beyond their control. Response: We proposed that the Screening for Social Drivers of Health measure is calculated as the number of eligible patients at a dialysis facility who are 18 years or older who are treated at the facility during the applicable performance period and are screened by the facility for all five HRSNs divided by the total number of patients 18 years or older on the 1st day of the performance period at that dialysis facility. For the Screen Positive Rate for Social Drivers of Health reporting measure, we proposed that the facility’s measure rate would be calculated as the number of eligible patients for whom the facility reports the screening results for all five HRSNs during the performance period over the total number of eligible patients who the facility screened for all five HRSNs during that performance period. To calculate the facility’s score on the measure, we would multiply the results of that fraction by ten. We note that patients who opt-out or are unable to complete the screening are excluded from the measure denominators, so that facilities are not penalized if a patient refuses to answer certain screening questions. Facilities will be scored on whether they reported the measure data, not the results of the measure data itself. Although we believe that it is important to encourage facilities to screen their patients for HSRNs and to report data for screen positive rates, we want to avoid potential unintended consequences that may result from scoring facilities on the outcomes of the screen positive rates themselves. That PO 00000 Frm 00133 Fmt 4701 Sfmt 4700 76475 is, we will not score a facility based on its screen positive rates, which may reflect circumstances beyond a facility’s control. We believe that these scoring policies will encourage facilities to report the measure data accurately without penalizing facilities for the results of such data. Comment: One commenter expressed strong concern that the two proposed measures were inappropriate for use in the ESRD QIP, noting the risk of exacerbating long-standing mistrust in the healthcare system among certain patient populations. One commenter recommended that resources be offered to all patients to avoid potential stigma associated with a patient’s identified HRSNs. One commenter recommended that ‘‘screening’’ be clearly defined to ensure that patients are being actively and directly engaged in these screenings. The commenter expressed strong concern that incentivizing facility performance through data collection and financial penalties would potentially interfere with the autonomy of the facility’s patients. Response: We agree that it is important for the screening for HRSNs to be accomplished in a way that is respectful, person-centered, and engenders trust. We recommend that facilities consider these factors in their selection of a screening tool or other methodology to use for purposes of implementing these measures. We note that the results of a patient’s HRSN screening would become part of the patient’s medical record and therefore subject to the same privacy protections as the rest of the patient’s medical record. We note that identifying and addressing HRSNs is a critical topic for ESRD patients and that there are high levels of health disparities experienced by this patient population. We believe that identifying the HRSNs of ESRD patients will be valuable in helping facilities to identify and understand patients’ unmet needs, which may encourage improvements in care coordination with outpatient and community resources, and further support development of patientcentered treatment plans. Comment: One commenter believed that HRSN screenings should remain voluntary, and clinics should not be penalized if a patient refuses to respond to a question or screening. Response: Patients who opt-out of a screening or are unable to complete a screening are excluded from the measure denominator, so a facility will not be penalized if a patient declines to respond to a question or opts out of the screening entirely. We encourage facilities to explain to their patients E:\FR\FM\06NOR2.SGM 06NOR2 76476 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations what the purpose of the screening is and that they may opt out. Final Rule Action: After considering public comments, we are finalizing our proposal to adopt the Screening for Social Drivers of Health reporting measure as proposed. 3. Adoption of the Screen Positive Rate for Social Drivers of Health Reporting Measure Beginning With PY 2027 ddrumheller on DSK120RN23PROD with RULES2 a. Background The impact of social risk factors on health outcomes has been wellestablished in the literature.318 319 320 321 322 The Physicians Foundation reported that 73 percent of the physician respondents to their annual survey agreed that social risk factors such as housing instability and food insecurity would drive health services demand in 2021.323 Recognizing the need for a more comprehensive approach to closing equity gaps, we have prioritized quality measures that identify social drivers of health among patients served in various care settings and, in turn, support providers in addressing the impact of these drivers on disparities in patient outcomes, healthcare utilization, and costs.324 325 326 Specifically, in the 318 Institute of Medicine 2014. Capturing Social and Behavioral Domains and Measures in Electronic Health Records: Phase 2. Washington, DC: The National Academies Press. Available at: https://doi.org/10.17226/18951. 319 Centers for Medicare & Medicaid Services. (2021). Accountable Health Communities Model. Accountable Health Communities Model | CMS Innovation Center. Available at: https:// innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 2021. 320 Kaiser Family Foundation. (2021). Racial and Ethnic Health Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-andethnic-health-inequities-and-medicare/. Accessed November 23, 2021. 321 Milkie Vu et al. Predictors of Delayed Healthcare Seeking Among American Muslim Women, Journal of Women’s Health 26(6) (2016) at 58; Nadimpalli SB, Cleland CM, Hutchinson MK, Islam N, Barnes LL, Van Devanter N. (2016) The Association between Discrimination and the Health of Sikh Asian Indians. Health Psychology, 35(4), 351–355. https://doi.org/10.1037/hea0000268. 322 Office of the Assistant Secretary for Planning and Evaluation (ASPE). (2020). Report to Congress: Social Risk Factors and Performance Under Medicare’s Value-Based Purchasing Program (Second of Two Reports). Available at: https:// aspe.hhs.gov/pdf-report/second-impact-report-tocongress. 323 The Physicians Foundation. (2020) 2020 Survey of America’s Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/ uploads/2020/10/2020-Physicians-FoundationSurvey-Part3.pdf. 324 Alley, D.E., C.N. Asomugha, P.H. Conway, and D.M. Sanghavi. 2016. Accountable Health Communities–Addressing Social Needs through Medicare and Medicaid. The New England Journal of Medicine 374(1):8–11. Available at: https:// doi.org/10.1056/NEJMp1512532. 325 Centers for Medicare & Medicaid Services. (2021). Accountable Health Communities Model. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 dialysis facility setting, we aim to encourage systematic identification of patients’ HRSNs as part of treatment planning, with the intention of promoting linkages with relevant community-based services that address those needs. We also believe that the identification of HRSNs can help facilities devise strategies that improve the quality of care provided to all of their patients and lead to improved health outcomes following establishment of care at the facility. While the Screening for Social Drivers of Health reporting measure (discussed in section IV.D.2 of this final rule) enables facilities to identify patients with HRSNs, we stated in the CY 2024 ESRD PPS proposed rule (88 FR 42516) that the Screen Positive Rate for Social Drivers of Health measure would allow facilities to capture the magnitude of these needs by reporting the rate of those patients who screen positive for HRSNs and even potentially estimate the impact of individual-level HRSNs on healthcare utilization when evaluating quality of care.327 328 329 These measures complement each other because they would require facilities to report both the percentage of patients they screened (under the Screening for Social Drivers of Health measure) and the results of that screening (under the Screen Positive Rate for Social Drivers of Health measure) in order to potentially identify gaps and develop sustainable solutions at a facility level and a community level. In the proposed rule, we noted that our proposals to adopt these two separate, complementary measures align with other quality reporting programs (88 FR 42516). These two measures have been Accountable Health Communities Model | CMS Innovation Center. Available at: https:// innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 2021. 326 Billioux, A., Verlander, K., Anthony, S., & Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 327 Baker, M.C., Alberti, P.M., Tsao, T.Y., Fluegge, K., Howland, R.E., & Haberman, M. (2021). Social Determinants Matter for Hospital Readmission Policy: Insights From New York City. Health Affairs, 40(4), 645–654. Available at: https:// doi.org/10.1377/hlthaff.2020.01742. 328 CMS. Accountable Health Communities Model. Accountable Health Communities Model | CMS Innovation Center. Available at: https:// innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 2021. 329 Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. (2020). Social Determinants of Health Improve Predictive Accuracy of Clinical Risk Models for Cardiovascular Hospitalization, Annual Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 13 (6) 290–299. Available at: https://doi.org/10.1161/ CIRCOUTCOMES.120.006752. PO 00000 Frm 00134 Fmt 4701 Sfmt 4700 finalized for the Hospital IQR Program in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49191 through 49220), and since publication of the CY 2024 ESRD PPS proposed rule, have been finalized for the PPS-Exempt Cancer Hospital Quality Reporting Program in the FY 2024 IPPS/LTCH PPS final rule (88 FR 59210 through 59222) and the Inpatient Psychiatric Facility Quality Reporting Program in the FY 2024 IPF PPS final rule (88 FR 51107 through 51121). In the CY 2024 ESRD PPS proposed rule, we proposed to adopt this measure under section 1881(h)(2)(A)(iv) of the Act, which gives the Secretary broad authority to specify measures for the ESRD QIP (88 FR 42516). The Screen Positive Rate for Social Drivers of Health reporting measure would require facilities to screen all patients who are 18 years or older for food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety and then report the resulting screen positive rates for each of those domains to CMS. These are the same five core HRSN domains under the Screening for Social Drivers of Health reporting measure, and facilities could use the same screening tool for purposes of both measures. We stated that reporting the screen positive rate for social drivers of health for each domain could inform actionable planning by facilities by helping to enable the development of individual patient action plans for those patients who screen positive (including navigation and referral). Following a positive HRSN screening, facilities could analyze data to understand, for example, whether there are any HRSNs that may be affecting their patients’ access to care or contributing to poor outcomes in their patient populations and, in turn, develop appropriate solutions to improve access and outcomes. Thus, this measure has the potential to improve patient outcomes by acknowledging patients’ non-clinical needs that nevertheless greatly contribute to adverse clinical outcomes and providing the opportunity for additional support by linking providers with community-based organizations to enhance patient-centered treatment and discharge planning, although such reach out is not required.330 331 332 This 330 The Physicians Foundation. (2020). Survey of America’s Patients, Part Three. Available at: https:// physiciansfoundation.org/wp-content/uploads/ 2020/10/2020-Physicians-Foundation-SurveyPart3.pdf. 331 De Marchis, E., Knox, M., Hessler, D., WillardGrace, R., Oliyawola, JN, et al. (2019). Physician Burnout and Higher Clinic Capacity to Address Patients’ Social Needs. The Journal of the American Board of Family Medicine, 32 (1), 69 through 78. E:\FR\FM\06NOR2.SGM 06NOR2 76477 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations measure may also prove useful to patients by providing data transparency and signifying facilities’ familiarity, expertise, and commitment regarding these issues. Finally, we believe this measure has the potential to facilitate data-informed collaboration with community-based services and focused community investments, including the development of pathways and infrastructure to more seamlessly connect patients to local community resources. Thus, the measure aims to support facilities in leveraging available data, pursuing focused quality improvement activities, and promoting efficient and effective use of their resources. While the measure does not require facilities to take specific actions, we expect that any solution a facility might develop to address a gap it identifies would comply with all applicable Federal non-discrimination laws. We also note that the measure is intended to promote health equity for all patients and is not intended to create a conflict between a CMS requirement and a State’s civil rights laws. b. Overview of Measure The Screen Positive Rate for Social Drivers of Health measure identifies the proportion of patients at the facility who screened positive for each of the following five HRSNs: Food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety. We proposed that we would require facilities to report these data as five separate rates.333 Measure specifications for this measure are currently available on the QualityNet website at: https://quality net.cms.gov/esrd/esrdqip. (1) Cohort The cohort for the Screen Positive Rate for Social Drivers of Health is patients, aged 18 years or older who are treated at the facility during the applicable performance period and are not eligible to be excluded from the measure, who were screened by the facility for all five HRSNs, and for whom the facility reports the results of a screen asking whether they have a need in one or more of the following five HRSNs (calculated separately): Food insecurity, housing instability, transportation needs, utility difficulties or interpersonal safety.334 (2) Numerator The numerator consists of the number of patients at a dialysis facility who are 18 years or older who are treated at the facility during the applicable performance period and are not eligible to be excluded from the measure, who were screened for all five HRSNs, and who screened positive for one or more of the following five HRSNs: Food insecurity, housing instability, transportation needs, utility difficulties, or interpersonal safety.335 (3) Denominator The denominator consists of the number of patients at a dialysis facility who are 18 years or older who are treated at the facility during the applicable performance period and are not eligible to be excluded from the measure, and are screened for an HRSN (food insecurity, housing instability, transportation needs, utility difficulties and interpersonal safety). The following patients are excluded from the denominator: (1) Patients who opt-out of screening; and (2) patients who are themselves unable to complete the screening and have no caregiver able to do so on the patient’s behalf. c. Measure Calculation We proposed that the facility’s measure rate for this measure would be calculated for a payment year as the number of eligible patients for whom the facility reports the screening results for all five HRSNs during the performance period over the total number of eligible patients who the facility screened for all five HRSNs during that performance period. To calculate the facility’s score on the measure, we would multiply the results of that fraction by ten. The full equation is set forth here: 1 Number of Eligible Patients for Whom a Facility Reports Screening Results for all Five HSRNs During the Performance Period 10 Total Number of Eligible Patients who were Screened for all Five HSRNs x During the Performance Period However, for purposes of public reporting only, we proposed to display the facility’s screen positive rate for each HRSN separately, for a total of five separate rates. Although we would not score facilities on the results of those five separate rates, we believe that making such data public may help to better inform patients and their caregivers about a facility. We proposed a 12-month period of performance for the measure, and facilities would be required to report annually. We believe that these policies would encourage facilities to report the measure data appropriately without scoring facilities based on the results of such data, which may be based on circumstances beyond a facility’s control. Although we believe that it is important to encourage facilities to screen their patients for HSRNs and to report data for screen positive rates, we want to avoid potential unintended consequences that may result from scoring facilities on the outcomes of the screen positive rates themselves. That is, we do not want to score a facility based on its patients’ given socioeconomic factors, which may be based on circumstances beyond a facility’s control. 332 Kung, A., Cheung, T., Knox, M., WillardGrace, R., Halpern, J., et.al, (2019). Capacity to Address Social Needs Affect Primary Care Clinician Burnout. Annals of Family Medicine. 17 (6), 487 through 494. Available at: https://doi.org/10.1370/ afm.2470. 333 Billioux, A., Verlander, K., Anthony, S., & Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The Accountable Health Communities Screening Tool. NAM Perspectives, 7(5). Available at: https:// doi.org/10.31478/201705b. 334 In the CY 2024 ESRD PPS proposed rule, we stated that the cohort consisted of eligible patients ‘‘who were screened by the facility for an HRSN, and who screened positive for one or more of the following five HRSNs: Food insecurity, housing instability, transportation needs, utility difficulties or interpersonal safety.’’ (88 FR 42517). This statement describes the numerator, rather than the measure cohort, and we have revised our descriptions of the measure cohort and the measure numerator in this final rule accordingly. 335 In the CY 2024 ESRD PPS proposed rule, we stated that the numerator consisted of eligible patients ‘‘who were screened for an HRSN, and for whom the facility reports the results of a screen asking whether they have a need in one or more of the following five HRSNs (calculated separately): Food insecurity, housing instability, transportation needs, utility difficulties or interpersonal safety.’’ (88 FR 42517). This statement describes the measure cohort, rather than the measure numerator, and we have revised our descriptions of the measure cohort and the measure numerator in this final rule accordingly. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00135 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.039</GPH> ddrumheller on DSK120RN23PROD with RULES2 r 76478 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations d. Data Collection, Submission and Reporting In the CY 2024 ESRD PPS proposed rule, we proposed to require facilities to submit data necessary to calculate the numerator and the denominator for this measure once annually within the ESRD Quality Reporting System (EQRS), beginning with PY 2027 (88 FR 42517). We proposed that facilities would be required to submit data on this measure using the same process we have finalized for the submission of data on other measures in the ESRD QIP within EQRS. e. Review by the Measure Applications Partnership ddrumheller on DSK120RN23PROD with RULES2 We included the Screen Positive Rate for Social Drivers of Health reporting measure for consideration in the ESRD QIP on the publicly available 2022 MUC List, a list of measures under consideration for use in various Medicare programs.336 The CBEconvened MAP Health Equity Advisory Group reviewed the Screen Positive Rate for Social Drivers of Health measure (MUC 2022–050) in detail and at the same time as the Screening for Social Drivers of Health measure on December 6–7, 2022.337 The Health Equity Advisory Group expressed support for the collection of data related to social health drivers, but raised concerns regarding public reporting and the repetition of asking patients the same questions. In addition, on December 8–9, 2022, the MAP Rural Health Advisory Group reviewed the 2022 MUC List and was also reviewed by the MAP Hospital Workgroup on December 13–14, 2022.338 The Rural Health Advisory Group noted potential reporting challenges including the potential masking of health disparities that are underrepresented in some areas and that sample size and populations served may be an issue, but also 336 Centers for Medicare Medicaid Services. 2022. List of Measures Under Consideration for December 1, 2022. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/ measure-lifecycle/measure-implementation/prerulemaking/lists-and-reports. 337 Centers for Medicare Medicaid Services. 2022. 2022–2023 MAP Preliminary Recommendations, Health Equity Advisory Group. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/ measure-implementation/pre-rulemaking/lists-andreports. 338 Centers for Medicare Medicaid Services. 2022. MAP Preliminary Recommendations, Rural Health Advisory Group. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub. cms.gov/measure-lifecycle/measureimplementation/pre-rulemaking/lists-and-reports. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 expressed support that the measure seeks to advance the drivers of health and serves as a starting point to determine where screening is occurring. The MAP Hospital Workgroup recommended conditional support for the measure for rulemaking pending endorsement by a CBE to address reliability and validity concerns, attentiveness to how results are shared and contextualized for public reporting, and encouragement for CMS to examine any differences in reported rates by reporting process (to assess whether they are the same or different across dialysis facilities).339 Thereafter, the MAP Coordinating Committee deliberated on January 24–25, 2023, and ultimately voted to conditionally support the Screen Positive Rate for Social Drivers of Health measure for rulemaking with the same conditions.340 f. Consensus-Based Entity Endorsement Although section 1881(h)(2)(B)(i) of the Act generally requires that measures specified by the Secretary for the ESRD QIP be endorsed by the entity with a contract under section 1890(a) of the Act, section 1881(h)(2)(B)(ii) of the Act states that in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. We reviewed CBE-endorsed measures and were unable to identify any other CBE-endorsed measures on this topic, and, therefore, we believe the exception in section 1881(h)(2)(B)(ii) of the Act applies. g. Public Display In the proposed rule, we proposed to publicly display the ESRD QIP score and facility-specific rates for the Screen Positive Rate for Social Drivers of Health measure on an annual basis beginning in PY 2027 through our Care Compare website at: https:// www.medicare.gov/care-compare/. 339 Centers for Medicare Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. 340 Centers for Medicare Medicaid Services. 2023. 2022–2023 MAP Final Recommendations. We note that the link provided in the CY 2024 ESRD PPS proposed rule has been updated, and is now available at: https://mmshub.cms.gov/measurelifecycle/measure-implementation/pre-rulemaking/ lists-and-reports. PO 00000 Frm 00136 Fmt 4701 Sfmt 4700 We invited public comment on this proposal. The comments we received and our responses are set forth below. We note that we have addressed comments that broadly referred both the Screening for Social Drivers of Health measure and the Screen Positive Rate for Social Drivers of Health measure in section IV.D.2 of this final rule. Comment: Several commenters expressed support for the proposed Screen Positive Rate for Social Drivers of Health reporting measure. A few of these commenters noted that the proposed measure would provide facilities with important information regarding a patient’s potential HRSNs that often impact patient outcomes. A few commenters expressed support because the measure will help identify patient social risk factors, allowing care providers and community organizations to work together to improve care delivery. One commenter expressed support and noted that the transportation challenges and utility insecurity may be particularly important for dialysis patients. Response: We thank the commenters for their support. We agree that HRSNs are critical factors that impact patient outcomes, and increased knowledge about patients’ HRSNs will help facilities ensure that all of their patients receive the highest quality ESRD care. Further, we agree that collecting these data will incentivize facilities to better recognize whether any of the HRSNs in the screening tool are impacting their patients and take steps to improve access and outcomes. Comment: One commenter expressed support for the proposal to include the Screen Positive Rate for Social Drivers of Health measure as a reporting measure so that facilities are not scored based on the results of the data which reflect factors beyond the facility’s control. Response: We thank the commenter for its support. Comment: Several commenters recommended additional changes to the measure specifications to encourage follow up after a positive screening. A few commenters recommended that CMS require the development of action plans to address HRSNs or otherwise add requirements for facilities to follow up with patients on identified HRSNs where appropriate. A few commenters recommended that CMS update the measure to require referral and delivery of identified needed services. If services are not available, one commenter suggested that facilities should be responsible for reporting this to relevant Federal, State, or local agencies authorities. One commenter E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations recommended that CMS consider potential uses for the data captured by this measure and propose these uses in future rulemaking. Response: We thank the commenters for their recommendations, and may consider them in future rulemaking. We believe this measure has the potential to improve patient outcomes by acknowledging patients’ HSRN needs that can contribute to adverse clinical outcomes. Comment: A few commenters expressed concern that the Screen Positive Rate for Social Drivers of Health reporting measure would disincentivize caring for socially vulnerable patients because facilities serving patient populations with high rates of HRSNs would be unfairly penalized for poor performance on the proposed measure. One commenter expressed concern that the proposed Screen Positive Rate for Social Drivers of Health reporting measure will disadvantage facilities by penalizing them based on the existence of patients with HRSNs, rather than the quality of care provided, and recommended that CMS instead offer supplemental payments to facilities that commit to use these supplemental payments to address HRSNs relevant to their patient population. Response: We believe that identifying the HRSNs of ESRD patients will be valuable in helping facilities to identify and understand patients’ unmet needs, which may encourage improvements in care coordination with outpatient and community resources, and further support development of patientcentered treatment plans. We note that identifying and addressing HRSNs is a critical topic for ESRD patients and that there are high levels of health disparities experienced by this patient population. Although we believe that the proposed measure will not lead to unintended consequences because facilities would not be penalized based on reported screen positive rates, CMS will monitor measure implementation and data reporting as part of standard program and measure review and will consider updates to the measure if improvements are identified through this process. Although we appreciate the commenter’s suggestion that CMS offer supplemental payments to facilities to address HRSNs relevant to their patient population, we do not have authority under the ESRD QIP statute to offer the supplemental payments suggested by the commenter. Comment: A few commenters expressed concern with the proposed Screen Positive Rate for Social Drivers of Health reporting measure, stating that VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 data collected for this measure ultimately would not provide consumers with meaningful information relevant to a facility’s quality of care. One commenter noted that publicly reported information would be subject to misinterpretation due to existing biases and preconceptions. A few commenters did not support public reporting because the measure reflects characteristics of the facility’s patient population, not the facility’s performance or quality of care. Response: We appreciate the commenters’ concerns. The measure provides a means of delivering important healthcare information to facilities, consumers, and patient advocates on the level of unmet HRSNs among a facility’s patient population that might be contributing to the clinical outcomes experienced at the facility. We believe that a facility’s ability to identify these HRSNs among its patient population should be considered part of the quality of care it provides to its patients. In addition to helping facilities identify these HRSNs among their patient population that could play a factor in clinical outcomes, it also may provide the public with useful information that could be used to improve resources available to patients. We intend to conduct outreach and education with providers and patients to share information about the two Social Drivers of Health measures in conjunction with public reporting. Comment: A few commenters expressed concern regarding the potential burden associated with the proposed measure. Noting the potential burden to facilities, one commenter recommended that facilities receive adequate support and training to facilitate the data collection efforts associated with such measure prior to the measure’s implementation. One commenter expressed concern that the measure adds reporting burden to report data that CMS is already collecting. One commenter expressed concern that the proposed Screen Positive Rate for Social Drivers of Health reporting measure would not benefit small facilities that already have individualized care plans for each of their patients, and that the additional burden from the proposed measure outweighs any potential benefit to patients. Response: While we understand implementation of HRSN screening processes and reporting of the Screen Positive Rate for Social Drivers of Health reporting measure is associated with some burden, as discussed in section VI.C.3 of this final rule, we believe the benefits outweigh the burden because identifying patients’ PO 00000 Frm 00137 Fmt 4701 Sfmt 4700 76479 HRSNs is a critical step towards a facility identifying and understanding how the presence of the screened HRSNs might be impacting patient access to ESRD care and outcomes. We appreciate that facilities may already be collecting relevant data and potentially incorporating it into individualized patient care plans. However, we believe that the proposed Screen Positive Rate for Social Drivers of Health reporting measure is an important step towards health equity by supporting facilities in leveraging available data, pursuing focused quality improvement activities, and promoting efficient and effective use of their resources. Comment: One commenter expressed concern with the proposed Screen Positive Rate for Social Drivers of Health reporting measure, recommending that CMS further explore potential reliability and validity concerns associated with the measure before it is included in the ESRD QIP. Response: We appreciate the commenter’s concern. We note that the most recent evaluation of the AHC model, which informed the development of these proposed measures, showed that it was effective in screening beneficiaries for HRSNs, identifying eligible beneficiaries, and referring those beneficiaries to HRSNrelated navigation services. Although facilities in the ESRD QIP can use a screening tool of their choice, we note that multiple screening tools exist and are publicly available. Facilities could refer to the SIREN website, for example, for comprehensive information about the most widely used HRSN screening tools, including validity assessments where available.341 We note that CMS also performs validity assessments as part of its annual EQRS data validation. Additionally, CMS will monitor measure implementation and data reporting as part of standard program and measure review and will consider updates to the measure if improvements are identified through this process. Comment: One commenter requested that CMS provide additional information regarding how the data will be used. Commenter also questioned the intervals for collecting the data. Response: We believe that the data may be used by facilities to inform actionable planning by helping to enable the development of individual patient action plans for those patients who screen positive (including 341 Social Interventions Research & Evaluation Network. (2019). Social Needs Screening Tool Comparison Table. Available at: https:// sirenetwork.ucsf.edu/tools-resources/resources/ screening-tools-comparison. Accessed October 24, 2023. E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76480 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations navigation and referral). By helping to identify patients’ non-clinical needs that nevertheless greatly contribute to adverse clinical outcomes, the data may be used to link providers with community-based organizations to enhance patient-centered treatment and discharge planning, although such reach out is not required. We also note that there are multiple interested parties who will be able to use data regarding facilities’ patient populations, including patients and their caregivers, patient advocacy organizations, local community services organizations, and Federal, State, and local policy makers. We also believe that the measure will facilitate systematic gathering of such data in a manner that provides information to facilities on the level of unmet need among their patients that many facilities do not compile currently. Although facilities are reporting the data to CMS for purposes of the measures at this time, CMS at this time does not plan to use the data for any purposes beyond the public reporting being finalized in this final rule. Comment: One commenter stated that the equation provided does not match the description of the numerator. The commenter also recommended establishing a baseline period for implementation and data validation prior to public reporting. Response: In the CY 2024 ESRD PPS proposed rule, we stated that the numerator consisted of eligible patients ‘‘who were screened for an HRSN, and for whom the facility reports the results of a screen asking whether they have a need in one or more of the following five HRSNs (calculated separately): Food insecurity, housing instability, transportation needs, utility difficulties or interpersonal safety.’’ (88 FR 42517). However, this statement actually describes the measure cohort, rather than the measure numerator. The measure numerator was correctly described in the equation that we proposed to use for scoring facilities on the measure. Therefore, in this final rule we have updated the description of the numerator to match the equation. The numerator now reads, ‘‘The numerator consists of the number of patients at a dialysis facility who are 18 years or older who are treated at the facility during the applicable performance period and are not eligible to be excluded from the measure, who were screened for all five HRSNs, and who screened positive for one or more of the following five HRSNs: Food insecurity, housing instability, transportation needs, utility difficulties, or interpersonal safety.’’ Regarding the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 commenter’s suggestion to establish a baseline period for implementation and data validation, we note that we are finalizing an updated definition of mTPS in IV.B.1 of this final rule which applies to new reporting measures for which there is an insufficient quantity of data available prior to the first performance period. Under our finalized policy, if there is an insufficient quantity of data available prior to the first performance period of a new reporting measure, we will set a proxy median of zero for the reporting measure until we have sufficient data, which will account for the possibility that new reporting measures may have different reporting requirements. We believe this policy will allow the timely inclusion of new reporting measures in the ESRD QIP measure set while also encouraging facilities to report the new or additional data that may be specified by that reporting measure so that they are able to receive credit for reporting. We also believe that by delaying the implementation of these measures until PY 2027 will give facilities ample time to ensure the validity of their data. CMS also performs validity assessments as part of its annual EQRS data validation. Final Rule Action: After considering public comments, we are finalizing our proposal to adopt the Screen Positive Rate for Social Drivers of Health reporting measure. 4. Performance Period for the PY 2027 ESRD QIP We continue to believe that our current policy of 12-month performance and baseline periods provide us sufficiently reliable quality measure data for the ESRD QIP. Under this policy, we will adopt CY 2025 as the performance period and CY 2023 as the baseline period for the PY 2027 ESRD QIP. We did not propose any changes to this policy. We addressed comments and finalized our proposals to apply this performance period to the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure in sections IV.D.2 and IV.D.3 of this final rule. 5. Performance Standards for the PY 2027 ESRD QIP Section 1881(h)(4)(A) of 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 determined appropriate by the Secretary, and must PO 00000 Frm 00138 Fmt 4701 Sfmt 4700 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 define the terms ‘‘achievement threshold,’’ ‘‘benchmark,’’ ‘‘improvement threshold,’’ and ‘‘performance standard’’ in our regulations at § 413.178(a)(1), (3), (7), and (12), respectively. For reporting measures, performance standards are the levels of data submission and completion of other actions specified by CMS that are used to award points to an ESRD facility on the measure (§ 413.178(a)(12)). a. Performance Standards for Clinical Measures in the PY 2027 ESRD QIP In the CY 2024 ESRD PPS proposed rule, we erroneously stated that at that time, we did 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 did not have CY 2022 data, and stated our intention to publish these numerical values, using CY 2022 data, in the CY 2024 ESRD PPS final rule (88 FR 42518). We intended to refer to CY 2023 data in the proposed rule, rather than CY 2022 data. Because we do not have CY 2023 data at this time, we are clarifying in this final rule that we will publish these numerical values, using CY 2023 data, in the CY 2025 ESRD PPS final rule. b. Performance Standards for the Newly Finalized Reporting Measures Beginning With the PY 2027 ESRD QIP In this final rule, we are finalizing our proposals to add the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure beginning with the PY 2027 ESRD QIP, which we discuss in IV.D.2 and IV.D.3 of this final rule. We are finalizing a 12-month period of performance for both the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure, and facilities will be required to report annually for both measures beginning with the PY 2027 ESRD QIP. 6. Scoring the PY 2027 ESRD QIP a. Scoring Facility Performance on Clinical Measures In the CY 2014 ESRD PPS final rule, we finalized policies for scoring E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 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). In the CY 2023 ESRD PPS final rule, we updated our scoring methodology beginning with PY 2025 (87 FR 67251 through 67254). b. Scoring Facility Performance on Reporting Measures Our policy for scoring performance on reporting measures is codified at § 413.178(e). In section IV.D.2 of this final rule, we are finalizing our proposal to adopt the Screening for Social Drivers of Health reporting measure beginning with PY 2027. We are also finalizing our proposal to adopt the Screen Positive Rate for Social Drivers of Health reporting measure, as discussed in section IV.D.3 of this final rule. As discussed above, we are finalizing in this final rule that a facility will be scored based on the equations described in sections IV.D.2.c and IV.D.3.c of this final rule. We are adopting a 12-month period of performance for the measures, and facilities will be required to report annually. We believe that these scoring policies will encourage facilities to report the measure data appropriately without penalizing facilities for the results of such data, which may be impacted by circumstances beyond a facility’s control. ddrumheller on DSK120RN23PROD with RULES2 7. Revisions To Measure Domains and To Measure Weights Used To Calculate the Total Performance Score (TPS) Beginning With the PY 2027 ESRD QIP In the CY 2024 ESRD PPS proposed rule, beginning with PY 2027, we proposed to add the Screening for Social Drivers of Health reporting measure and the Screen Positive for Social Drivers of Health reporting measure to the Reporting Measure Domain (88 FR 42519). To accommodate the new number of measures in the Reporting Measure Domain, we proposed to update the individual measure weights in this domain. We stated our belief that these proposed updates would help to ensure that a facility’s individual VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 measure performance has an appropriately proportionate impact on a facility’s TPS, while also continuing to further incentivize improvement on clinical measures through those individual measure weights. Consistent with our approach in the CY 2023 ESRD PPS final rule, we proposed to assign individual measure weights to reflect the proposed updated number of measures in the Reporting Measure Domain so that each measure is weighted equally (87 FR 67251 through 67253). Since we proposed to add two new measures to the Reporting Measure Domain beginning with PY 2027, we stated that we would weight each measure within that domain equally at approximately 1.43 percent, which is consistent with our previously finalized approach to weight each measure in the Reporting Measure Domain equally. We noted that although we proposed to change the number of measures in the Reporting Measure Domain and weights of certain individual measures in that domain, we did not propose to change the weights of the five domains themselves, because we believe the proposed updates to individual measures and measure weights did not significantly impact the measure domains themselves such that updating the weights of the measure domains would be required to accommodate the updated individual measure weights. The previously finalized and newly proposed measures that would be included in each domain, along with the proposed new measure weights, beginning with PY 2027, were depicted in Table 22 of the proposed rule (88 FR 42520). We welcomed public comment on these proposals. The comments we received and our responses are set forth below. Comment: One commenter recommended that the ESRD QIP measure set be streamlined to focus more weight on clinically meaningful measures. Response: We agree with the commenter that the weights should reflect clinical value and meaningfulness to patients, which we took into account in developing our measure domains and individual PO 00000 Frm 00139 Fmt 4701 Sfmt 4700 76481 measure weights. We believe that the measure domains and weights will provide facilities with meaningful incentives to improve their performance on measures that are impactful in terms of both clinical value and importance to patients. We note that we have developed the ESRD QIP measure set specifically to ensure that facilities focus on the most relevant clinical topics that will lead to improved quality of care and better outcomes for patients. Comment: One commenter expressed concern that with the large number of program measures, the reporting measures’ weight is disproportionately small compared to the effort to operationalize associated processes, and recommended collaboration with the kidney care community to identify appropriate measures and weights. Response: We note that the weight of a given measure domain takes into account a number of factors, including clinical evidence, opportunity for improvement, clinical significance, and patient and provider burden (83 FR 56995 through 56996). We also consider (1) the number of measures and measure topics in a domain; (2) how much experience facilities have had with the measures and measure topics in a domain; and (3) how well the measures align with CMS’s highest priorities for quality improvement for patients with ESRD (79 FR 66214). We assign weights to the measure domains based on the clinical value and meaningfulness of the measures to patients, and the burden of complying with individual measure requirements. Having taken all of these factors into consideration, we believe that the Reporting Measure Domain weights are appropriate to support high quality health care on all ESRD QIP measures. Final Rule Action: After considering public comments, we are finalizing our proposals as proposed. As we discussed previously, we are finalizing our proposals to update the measure domains and measure weights beginning with the PY 2027 ESRD QIP as proposed, and therefore provide the updated ESRD QIP measure domains and measure weights in Table 23. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 76482 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 23: Newly Finalized ESRD QIP Measure Domains and Weights Beginning with PY2027 SHR clinical measure SRR clinical measure PPPW measure 7.50 7.50 7.50 Clinical Depression Screening and Follow-Up measure* 7.50 Screen Positive Rate for Social Drivers of Health reporting measure*** 1.43 Facility Commitment to Health Equity reporting measure**** 1.43 1.43 1.43 1.43 1.43 *We are finalizing our proposal to convert the Clinical Depression Screening and Follow-Up measure beginning with PY 2026, as discussed in section IV.C.4 of this final rule. **We are finalizing our proposal to add the Screening for Social Drivers of Health measure beginning with PY 2027, as discussed in section IV.D.2 of this final rule. ***We are finalizing our proposal to add the Screen Positive Rate for Social Drivers of Health reporting measure beginning with PY 2027, as discussed in section IV.D.3 of this fmal rule. ****We are finalizing our proposal to add the Facility Commitment to Health Equity reporting measure beginning with PY 2026, as discussed in section IV.C.2 of this fmal rule. V. End-Stage Renal Disease Treatment Choices (ETC) Model ddrumheller on DSK120RN23PROD with RULES2 A. Background Section 1115A of the Act authorizes the Innovation Center to test innovative payment and service delivery models expected to reduce Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) expenditures while preserving or enhancing the quality of care furnished to the beneficiaries of these programs. The purpose of the ETC Model is to test the effectiveness of adjusting certain Medicare payments to ESRD facilities and Managing Clinicians to encourage greater utilization of home VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 dialysis and kidney transplantation, support Beneficiary modality choice, reduce Medicare expenditures, and preserve or enhance the quality of care. As described in the Specialty Care Models final rule (85 FR 61114), beneficiaries with ESRD are among the most medically fragile and high-cost populations served by the Medicare program. ESRD Beneficiaries require dialysis or kidney transplantation to survive, and the majority of ESRD Beneficiaries receiving dialysis receive hemodialysis in an ESRD facility. However, as described in the Specialty Care Models final rule, alternative renal replacement modalities to in-center hemodialysis, including home dialysis PO 00000 Frm 00140 Fmt 4701 Sfmt 4700 and kidney transplantation, are associated with improved clinical outcomes, better quality of life, and lower costs than in-center hemodialysis (85 FR 61264). The ETC Model is a mandatory payment model. ESRD facilities and Managing Clinicians are selected as ETC Participants based on their location in Selected Geographic Areas—a set of 30 percent of Hospital Referral Regions (HRRs) that have been randomly selected to be included in the ETC Model, as well as HRRs with at least 20 percent of ZIP codesTM located in Maryland.342 CMS excludes all U.S. 342 ZIP codeTM is a trademark of the United States Postal Service. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.040</GPH> BILLING CODE 4120–01–C ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Territories from the Selected Geographic Areas. Under the ETC Model, ETC Participants are subject to two payment adjustments. The first is the Home Dialysis Payment Adjustment (HDPA), which is an upward adjustment on certain payments made to participating ESRD facilities under the ESRD Prospective Payment System (PPS) on home dialysis claims, and an upward adjustment to the Monthly Capitation Payment (MCP) paid to participating Managing Clinicians on home dialysisrelated claims. The HDPA applies to claims with claim service dates beginning January 1, 2021 and ending December 31, 2023. The second payment adjustment under the ETC Model is the Performance Payment Adjustment (PPA). For the PPA, we assess ETC Participants’ home dialysis rates and transplant rates during a Measurement Year (MY), which includes 12 months of performance data. Each MY has a corresponding PPA Period—a 6-month period that begins 6 months after the conclusion of the MY. We adjust certain payments for ETC Participants during the PPA Period based on the ETC Participant’s home dialysis rate and transplant rate, calculated as the sum of the transplant waitlist rate and the living donor transplant rate, during the corresponding MY. Based on an ETC Participant’s achievement in relation to benchmarks based on the home dialysis rate and transplant rate observed in Comparison Geographic Areas during the Benchmark Year, and the ETC Participant’s improvement in relation to their own home dialysis rate and transplant rate during the Benchmark Year, we would make an upward or downward adjustment to certain payments to the ETC Participant. The magnitude of the positive and negative PPAs for ETC Participants increases over the course of the Model. These PPAs apply to claims with claim service dates beginning July 1, 2022 and ending June 30, 2027. In the CY 2022 ESRD PPS final rule, we finalized a number of changes to the ETC Model. We made adjustments to the calculation of the home dialysis rate (86 FR 61951 through 61955) and the transplant rate (86 FR 61955 through 61959) and updated the methodology for attributing Pre-emptive Living Donor Transplant (LDT) Beneficiaries (86 FR 61950 through 61951). We modified the achievement benchmarking and scoring methodology (86 FR 61959 through 61968), as well as the improvement benchmarking and scoring methodology (86 FR 61968 through 61971). We specified the method and requirements VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 for sharing performance data with ETC Participants (86 FR 61971 through 61984). We also made a number of updates and clarifications to the kidney disease patient education services waivers and made certain related flexibilities available to ETC Participants (86 FR 61984 through 61994). In the CY 2023 ESRD PPS final rule (87 FR 67136) we finalized further changes to the ETC Model. We updated the PPA achievement scoring methodology beginning in the fifth Measurement Year (MY) of the ETC Model, which began on January 1, 2023 (87 FR 67277 through 67278). We also clarified requirements for qualified staff to furnish and bill kidney disease patient education services under the ETC Model’s Medicare program waivers (87 FR 67278 through 67280), and finalized our intent to publish participant-level model performance information to the public (87 FR 67280). B. Summary of the Proposed Provisions, Public Comments, and Responses to Comments on the ETC Model The CY 2024 ESRD PPS proposed rule appeared in the June 30, 2023, version of the Federal Register, with a comment period that ended on August 25, 2023. In that proposed rule, we proposed to modify the ETC Model, effective January 1, 2024, to acknowledge the availability of administrative review of targeted review requests. We received five timely public comments on our proposal, including comments from dialysis organizations and national provider and quality improvement organizations. We also received comments related to issues that we did not discuss in the CY 2024 ESRD PPS proposed rule. These include, for example, general expressions of support for the ETC Model, concerns regarding CMS’s methodology for ETC Participant selection and aggregation group construction, a recommendation that CMS develop a tool to measure the experience of Beneficiaries using home modalities, and recommendations regarding the format in which CMS posts ETC Model results. While we generally are not addressing those comments in this final rule, we thank commenters for their input and may consider their recommendations in future rulemaking. In this final rule, we provide a summary the proposed provision, a summary of the public comments received and our responses to them, and the policies we are finalizing for the ETC Model. These policies take effect January 1, 2024. In the Specialty Care Models final rule (85 FR 61114), we established our policies for targeted reviews of the PO 00000 Frm 00141 Fmt 4701 Sfmt 4700 76483 calculation of an ETC Participant’s Modality Performance Score (MPS). As described in § 512.390(c), targeted reviews are limited to the calculation of the MPS and may not pertain to the methodologies used to calculate the MPS, home dialysis rate, transplant rates, achievement and improvement benchmarks, or the PPA amounts. ETC Participants have 90 days following the availability of the MPS to submit a targeted review request. CMS responds to each targeted review request that is received within the 90-day time period. CMS may solicit additional information from the ETC Participant in support of the request after which a determination is made as to whether there was an error in the calculation of the ETC Participant’s MPS that results in an incorrect PPA being applied during the PPA period. In such a scenario, CMS notifies the ETC Participant and resolves any resulting discrepancy in payment that arises from the application of an incorrect PPA. In the CY 2024 ESRD PPS proposed rule, we proposed revisions to our regulations at § 512.390 to clarify the ability of the CMS Administrator to review targeted review determinations. In particular, we proposed to add § 512.390(d) to specify that the CMS Administrator may review targeted review requests when administrative review is requested by ETC Participants within 15-calendar days of a targeted review request determination made by CMS. We proposed that within 45 days of the date of the ETC Participant’s request for administrative review, the CMS Administrator may act as follows: (i) decline to review the targeted review request determination made by CMS, (ii) render a final decision based on the CMS Administrator’s review of the targeted review request determination, or (iii) choose to take no action on the request for administrative review. We proposed that targeted review request determinations made by the CMS Administrator are considered final if the CMS Administrator declines an ETC Participant’s request for administrative review or if the CMS Administrator does not take any action on the ETC Participant’s request for administrative review by the end of the 45-day period described. We also proposed a conforming change to delete the existing provision in § 512.390(c)(5), which states that decisions based on targeted review are final, and there is no further review or appeal. These changes were proposed to ensure that accountability for the decisions of CMS is vested in a E:\FR\FM\06NOR2.SGM 06NOR2 76484 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations principal officer and to bring the targeted review process to a more similar posture as other CMS appeals entities that provide for CMS Administrator review. These revisions were also proposed to ensure that ETC Participants are aware that administrative review is available to ETC Participants who wish to seek additional review of the results of a targeted review request. We solicited comment on this proposal. Comment: We received five in scope comments timely submitted. All five comments were supportive of our proposed administrative review policy. One provider organization wrote that the proposed policy would increase awareness of the availability of administrative review among ETC Participants. A dialysis organization wrote that the proposed policy would increase transparency and accountability for targeted review determinations made by CMS. A kidney care coalition also noted the proposed policy would support awareness, transparency, and accountability. Response: We thank the commenters for their support of our proposed administrative review policy. Final Rule Action: We are finalizing our proposed modifications to the ETC Model regulations at § 512.390 to clarify the ability of the CMS Administrator to review targeted review determinations. We are adding § 512.390(d) to specify that the CMS Administrator may review targeted review requests when administrative review is requested by ETC Participants within 15-calendar days of a targeted review request determination made by CMS. ddrumheller on DSK120RN23PROD with RULES2 VI. Collection of Information Requirements 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 OMB for review and approval. To fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues. • The need for the information collection and its usefulness in carrying out the proper functions of our agency. • The accuracy of our estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 affected public, including automated collection techniques. We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs). A. ICRs Regarding the JW and JZ Reporting Requirements; Reporting Policy for Discarded Amounts of Renal Dialysis Drugs and Biological Products Paid for Under the ESRD PPS, Section II.B.1.h (OMB Control Number 0938– 0997) As discussed in section II.B.1.h of this final rule, we are finalizing a requirement that beginning January 1, 2025, ESRD facilities must report information on claims about the total number of billing units of any discarded amount of a renal dialysis drug or biological product from a single-dose container or single-use package that is paid for under the ESRD PPS, using the JW modifier (or any successor modifier that includes the same data). Additionally, we are finalizing a requirement that ESRD facilities report the JZ modifier for all such drugs and biological products with no discarded amounts beginning no later than January 1, 2025. Based on our analysis of ESRD PPS claims as well as the billing guidance in sections 8 and 17 of the Medicare Claims Processing Manual, we have determined that the JW modifier requirement reflects current practices for ESRD facilities and would not significantly increase burden for ESRD facilities. Additionally, the JZ modifier requirement is not expected to increase burden on ESRD facilities because under the guidance provided regarding use of the JW modifier, the ESRD facility should already have processes in place in order to determine, in the case of certain drugs and biological products, whether or not there are any discarded units from a single use container or package, record discarded amounts in the patient medical record, and specify administered and discarded amounts on the claim form. Additionally, as discussed in section II.B.1.h of this final rule, any separately payable drugs or biological products that ESRD facilities bill for using the AY modifier would already be subject to the JW and JZ modifier policies under Medicare Part B. Although we recognize that ESRD facilities may need additional time to train staff and update their systems in order to apply existing processes to a broader scope of renal dialysis drugs and biological products, we continue to anticipate that most ESRD facilities should already be set up to report the PO 00000 Frm 00142 Fmt 4701 Sfmt 4700 JW and JZ modifiers without incurring additional burden. B. ICRs Regarding the Proposal to Require Time on Machine Data as a Recordkeeping and Cost Reporting Requirement for Outpatient Maintenance Dialysis; Section II.B.1.j (OMB Control Numbers 0938–0997) We are finalizing a requirement that ESRD facilities submit data and information on ESRD PPS claims regarding the number of minutes between the start and end of hemodialysis treatment, without accounting for any interruptions, received by a beneficiary in center in an ESRD facility effective January 1, 2025. We have developed monetary estimates of the amount of ESRD facility staff time required to calculate and report on claims the minutes of time on machine for each in-center hemodialysis treatment to estimate the cost associated with the finalized requirement to report time on machine data. We have included those estimates in the Regulatory Impact Analysis in section VII.D.2.a of this final rule. We acknowledge the burden associated with this requirement, but we note that the burden associated with the CMS–1450 institutional claim form already accounts for the variability in the number and type of codes submitted for each claim. C. Additional Information Collection Requirements 1. ESRD QIP—Wage Estimates (OMB Control Numbers 0938–1289 and 0938– 1340) To derive wages estimates, we used data from the U.S. Bureau of Labor Statistics’ May 2021 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 the ESRD Quality Reporting System (EQRS) (formerly, CROWNWeb) and the CDC’s NHSN, as well as compiling and submitting patient records for the purpose of data validation studies. In the proposed rule, we stated that the most recently available median hourly wage of a Medical Records Specialist is $22.43 per hour (88 FR 42522).343 In this final rule, we are updating the median hourly wage to $22.69 per hour, which reflects 343 https://www.bls.gov/oes/2021/may/ oes292072.htm. Accessed on January 3, 2023. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 the most recently available data.344 We also calculate fringe benefit and overhead at 100 percent. 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. 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, there is no practical alternative, and we believe that these are reasonable estimation methods. Therefore, using these assumptions, in the proposed rule we estimated an hourly labor cost of $44.86 as the basis of the wage estimates for all collections of information calculations in the ESRD QIP (88 FR 42522). In this final rule, we are updating our previously estimated hourly labor cost to $45.38 as the basis of the wage estimates for all collections of information calculations in the ESRD QIP. We used this updated wage estimate, along with updated facility and patient counts, to update our estimate for the total information collection burden in the ESRD QIP for PY 2026 that we discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42522 through 42523) and to estimate the total information collection burden in the ESRD QIP for PY 2027. We provide the re-estimated information collection burden associated with the PY 2026 ESRD QIP and the newly estimated information collection burden associated with the PY 2027 ESRD QIP in section VII.C.3 of this final rule. 2. Estimated Burden Associated With The Data Validation Requirements for PY 2026 and PY 2027 (OMB Control Numbers 0938–1289 and 0938–1340) In the CY 2020 ESRD PPS final rule, we finalized a policy to adopt the EQRS (formerly, CROWNWeb) data validation methodology that we previously adopted for the PY 2016 ESRD QIP as the methodology we would use to validate EQRS 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 344 https://www.bls.gov/oes/current/ oes292072.htm. Accessed on July 18, 2023. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 rule, we are updating these burden estimates using a newly available wage estimate of a Medical Records Specialist. In the CY 2020 ESRD PPS final rule, we estimated that it would take each facility approximately 2.5 hours to comply with this requirement (84 FR 60787). If 300 facilities are requested to submit records, we estimated that the total combined annual burden for these facilities would be 750 hours (300 facilities × 2.5 hours). Since we anticipate that Medical Records Specialists or similar administrative staff would submit these data, we estimate that the aggregate cost of the EQRS data validation each year would be approximately $34,035 (750 hours × $45.38), or an annual total of approximately $113.45 ($34,035/300 facilities) per facility in the sample. The burden cost increase associated with these requirements will be submitted to OMB in the revised information collection request (OMB control number 0938–1289; Expiration date: November 30, 2025). In the CY 2021 ESRD PPS final rule, we finalized our policy to reduce the number of records that a facility selected to participate in the NHSN data validation must submit to a CMS contractor, beginning with PY 2023 (85 FR 71471 through 71472). 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 this policy for NHSN validation, we estimated that it would take each facility approximately 5 hours to comply with this requirement. If 300 facilities are requested to submit records each year, we estimated 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 Specialists or similar staff would submit these data, using the newly available wage estimate of a Medical Records Specialist, we estimate that the aggregate cost of the NHSN data validation each year would be approximately $68,070 (1,500 hours × $45.38), or a total of approximately $226.90 ($68,070/300 facilities) per facility in the sample. While the burden hours estimate would not change, the burden cost updates associated with these requirements will be submitted to OMB in the revised information collection request (OMB control number PO 00000 Frm 00143 Fmt 4701 Sfmt 4700 76485 0938–1340; Expiration date: November 30, 2025). 3. Estimated EQRS Reporting Requirements for PY 2026 and PY 2027 (OMB Control Number 0938–1289) To estimate the burden associated with the EQRS reporting requirements (previously known as the CROWNWeb reporting requirements), we look at the total number of patients nationally, the number of data elements per patientyear that the facility would be required to submit to EQRS 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 EQRS, and the number of facilities submitting data to EQRS. In the CY 2023 ESRD PPS final rule, we estimated that the burden associated with EQRS reporting requirements for the PY 2026 ESRD QIP was approximately $220 million for approximately 4,908,291 total burden hours (87 FR 67282). We are finalizing several changes to the ESRD QIP measure set in this final rule that will affect the burden associated with EQRS reporting requirements for PY 2026 or PY 2027. Beginning with PY 2026, we are removing two measures from the ESRD QIP measure set and adding one measure to the ESRD QIP measure set. We note that, although the finalized measure we are adding to the ESRD QIP measure set beginning with PY 2026 is modified from the version of the measure that was proposed, the estimated burden associated with the measure will not change because the modification will not impose additional EQRS reporting requirements on facilities. For PY 2027 and for subsequent years, we are adding two measures to the ESRD QIP measure set. We have re-calculated the burden estimate for PY 2026 to reflect the impact of these finalized policies, using updated estimates of the total number of ESRD facilities, the total number of patients nationally, and wages for Medical Records Specialists or similar staff, as well as a refined estimate of the number of hours needed to complete data entry for EQRS reporting. In the CY 2024 ESRD PPS proposed rule, we estimated that the amount of time required to submit measure data to EQRS would be 2.5 minutes per element and did not use a rounded estimate of the time needed to complete data entry for EQRS reporting (88 FR 42523). We are further updating these estimates in this final rule. There are 126 data elements for 507,837 patients across 7,833 facilities, for a total of 63,987,462 E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76486 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations elements (126 data elements × 507,837 patients). At 2.5 minutes per element, this would yield approximately 340.3 hours per facility. Therefore, the PY 2026 burden would be 2,666,144 hours (340.3 hours × 7,833 facilities). Using the wage estimate of a Medical Records Specialist, we estimate that the PY 2026 total burden cost is approximately $120.9 million (2,666,144 hours × $45.38). There would also be an incremental burden change from PY 2026 to PY 2027 because we are adding two new measures beginning with PY 2027. For PY 2027, there are 136 data elements proposed for 507,837 patients across 7,833 facilities. At 2.5 minutes per element, this would yield approximately 367.3 hours per facility. Therefore, the PY 2027 burden would be 2,877,743 hours (367.3 hours × 7,833 facilities). Using the wage estimate of a Medical Records Specialist, we estimate that the PY 2027 total burden cost would be approximately $130.5 million (2,877,743 hours × $45.38). We received two comments on the ESRD QIP collection of information discussions. The comments we received and our response is set forth below. Comment: One commenter stated that because CMS is estimating an increase in facility burden for both PY 2026 and PY 2027, CMS should limit data collection and reporting under the ESRD QIP to those measures that are absolutely necessary to ensure that facilities can spend the maximum time, effort and resources on caring for patients. A second commenter expressed concern that $131 million dollars of increased burden is not sustainable. Response: We note that we have developed the ESRD QIP measure set specifically to ensure that facilities focus on the most relevant clinical topics that will lead to improved quality of care and better outcomes for patients. We appreciate the commenter’s concern regarding the estimated burden for PY 2027, but note that the net increase in burden from PY 2026 (approximately $120.9 million) to PY 2027 (approximately $130.5 million) is estimated to be less than $10 million. By contrast, the estimated burden for PY 2026 is approximately $100 million less than the estimated burden for PY 2025, which is approximately $220 million (87 FR 67282). If you comment on these information collection, that is, reporting, recordkeeping or third-party disclosure requirements, submit your comments to the Office of Information and Regulatory Affairs, Office of Management and VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Budget, Attention: CMS Desk Officer, CMS–1782–F Fax: (202) 395–6974; or Email: OIRA_submission@ omb.eop.gov. VII. Regulatory Impact Analysis A. Statement of Need 1. ESRD 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 Act, as added by section 153(b) of 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 Affordable Care Act (Pub. L. 111–148), established that beginning CY 2012, and each subsequent year, the Secretary shall annually increase payment amounts by an ESRD market basket percentage increase, reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. This final rule implements updates and policy changes to the CY 2024 ESRD wage index values, the final combined wage index and TPEAPA budget-neutrality adjustment factor, the outlier payment threshold amounts, and the TPNIES offset amount. Failure to publish this final rule would result in ESRD facilities not receiving appropriate payments in CY 2024 for renal dialysis services furnished to ESRD beneficiaries. This rule also has several policy changes to improve payment stability and adequacy under the ESRD PPS. These include a new transitional add-on payment adjustment for pediatric patients and a new add-on payment adjustment for certain new renal dialysis drugs and biological products in existing ESRD PPS functional categories after the end of the TDAPA period. We are also finalizing updates to the administrative process for the LVPA, requiring ESRD facilities to report on claims billing units of any discarded amounts of certain drugs and biological products, and requiring ESRD facilities to report ‘‘time on machine’’ data on ESRD PPS claims for all in-center hemodialysis treatments. We believe that each of these changes will improve payment stability and adequacy under the ESRD PPS. 2. AKI This final rule finalizes updates to the payment rate for renal dialysis services furnished by ESRD facilities to individuals with AKI. As discussed in section III.B of this final rule, we are also applying to all AKI dialysis PO 00000 Frm 00144 Fmt 4701 Sfmt 4700 payments the updates to the ESRD PPS base rate and wage index. Failure to publish this final rule would result in ESRD facilities not receiving appropriate payments in CY 2024 for renal dialysis services furnished to patients with AKI in accordance with section 1834(r) of the Act. 3. ESRD QIP Section 1881(h)(1) of the Act requires CMS to reduce the payments otherwise made to a facility under the ESRD PPS by up to two percent if the facility does not satisfy the requirements of the ESRD QIP for that year. This final rule finalizes updates for the ESRD QIP, including removing the Ultrafiltration Rate reporting measure from the ESRD QIP measure set beginning with PY 2026, removing the Standardized Fistula Rate clinical measure from the ESRD QIP measure set beginning with PY 2026, updating the COVID–19 Vaccination Coverage Among HCP beginning with PY 2026, converting the Clinical Depression Screening and Follow-Up reporting measure to a clinical measure beginning with PY 2026, and adding the Facility Commitment to Health Equity reporting measure to the ESRD QIP measure set beginning with PY 2026. This final rule also finalizes the adoption of the Screening for Social Drivers of Health reporting measure and the Screen Positive Rate for Social Drivers of Health reporting measure to the ESRD QIP measure set beginning with PY 2027. 4. ETC Model We believe it is necessary to make certain changes to the ETC Model to acknowledge the availability of administrative review of targeted review requests. The policy we are finalizing in this rule is necessary to provide transparency to ETC Participants regarding the avenue available to them should they wish to seek additional review of the results of a targeted review request determination. B. Overall Impact We have examined the impacts of this final rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), Executive Order 14094 entitled ‘‘Modernizing Regulatory Review’’ (April 6, 2023), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96–354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104–4), Executive E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)) Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 14094 entitled ‘‘Modernizing Regulatory Review’’ (hereinafter, the Modernizing E.O.) amends section 3(f)(1) of Executive Order 12866 (Regulatory Planning and Review). The amended 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 $200 million or more in any 1 year (adjusted every 3 years for changes in gross domestic product), or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or Tribal governments or communities; (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 legal or policy issues for which centralized review would meaningfully further the President’s priorities or the principles set forth in this Executive order. A regulatory impact analysis (RIA) must be prepared for major rules with significant regulatory action/s and/or with significant effects as per section 3(f)(1) of Executive Order 12866 ($200 million or more in any 1 year). Based on our estimates of the combined impact of the ESRD PPS, ESRD QIP, and ETC provisions in this final rule, OMB has determined this rulemaking is significant per section 3(f)(1) economic effect as measured by the $200 million or more in any 1 year threshold, and hence is also a major rule under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act). Accordingly, we have prepared a Regulatory Impact Analysis that to the best of our ability presents the costs and benefits of the rulemaking. Therefore, OMB has reviewed this final rule, and the Department has provided the following assessment of its impact. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 C. Impact Analysis 1. ESRD PPS We estimate that the revisions to the ESRD PPS will result in an increase of approximately $190 million in Medicare payments to ESRD facilities in CY 2024, which includes the amount associated with updates to the outlier thresholds, payment rate update, updates to the wage index, the budget-neutral transitional pediatric ESRD add-on payment adjustment, the beginning of the post-TDAPA add-on payment adjustment, and continuation of the approved TDAPA as identified in Table 11. We note that approximately $10 million in projected CY 2024 expenditures for Jesduvroq (daprodustat) are not included in the detailed economic analysis in Table 24 due to the fact that we do not yet have the required claims data for Jesduvroq, and therefore we cannot estimate impacts at the facility level. 2. AKI We estimate that the updates to the AKI payment rate will result in an increase of approximately $1 million in Medicare payments to ESRD facilities in CY 2024. 3. ESRD QIP We estimate that the updates to the ESRD QIP will result in $16 million in estimated payment reductions across all facilities for PY 2026. 4. ETC Model We estimate that the changes to the ETC Model will not impact the Model’s projected direct savings from payment adjustments alone. As described in the CY 2023 ESRD PPS final rule, we estimate that the Model would generate $28 million in direct savings related to payment adjustments over 6.5 years (87 FR 67297 through 67299). 5. Summary of Impacts We estimate that the combined impact of the policies finalized in this rule on payments for CY 2024 is $190 million based on the estimates of the updates to the ESRD PPS and the AKI payment rates, as well as $10 million in projected new TDAPA spending in CY 2024. We estimate an additional $12 million in costs associated with the final policy to require ESRD facilities to report time on machine data. We estimate the impacts of the ESRD QIP for PY 2026 to be $120.9 million in information collection burden and $16 million in estimated payment reductions across all facilities. Additionally, we estimate the impacts of the ESRD QIP for PY 2027 to be $130.5 million in information collection PO 00000 Frm 00145 Fmt 4701 Sfmt 4700 76487 burden and $13.8 million in estimated payment reductions across all facilities. Finally, we estimate that the changes to the ETC model in this final rule will not impact the Model’s projected direct savings from payment adjustments alone. D. Detailed Economic Analysis In this section, we discuss the anticipated benefits, costs, and transfers associated with the changes in this final rule. Additionally, we estimate the total regulatory review costs associated with reading and interpreting this final rule. 1. Benefits Under the CY 2024 ESRD PPS and AKI payment, ESRD facilities will continue to receive payment for renal dialysis services furnished to Medicare beneficiaries under a case-mix adjusted PPS. We continue to expect that making prospective Medicare payments to ESRD facilities will enhance the efficiency of the Medicare program. Additionally, we expect that updating the Medicare ESRD PPS base rate and rate for AKI treatments furnished at ESRD facilities by 2.1 percent based on the CY 2024 ESRDB market basket percentage increase reduced by the CY 2024 productivity adjustment will improve or maintain beneficiary access to high quality care by ensuring that payment rates reflect the best available data on the resources involved in delivering renal dialysis services. We estimate that overall payments under the ESRD PPS will increase by 2.1 percent. 2. Costs a. ESRD PPS and AKI As discussed in section II.B.1.j of this final rule, we are finalizing a requirement for ESRD facilities to submit data and information on ESRD PPS claims for renal dialysis services regarding the number of minutes of hemodialysis treatment received by a beneficiary in center in an ESRD facility. This patient-level reporting on resource use will be used to apportion composite rate costs for use in the casemix adjustment under the ESRD PPS. We estimate that there will be an increase in costs for ESRD facilities associated with this final reporting requirement; however, as we previously noted in the CY 2020 ESRD PPS proposed rule (84 FR 38396 through 38400), we are aware that many ESRD facilities’ EHR systems automatically collect this information for every dialysis treatment, minimizing the additional burden of reporting this metric on claims. However, commenters identified that there are additional burdens associated with transmitting E:\FR\FM\06NOR2.SGM 06NOR2 ddrumheller on DSK120RN23PROD with RULES2 76488 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations that information from the medical records to the billing system, as many ESRD facilities do not have such processes in place. Therefore, we are updating our burden estimate to include the burden associated with this step in the process. For those ESRD facilities that use EHRs, we estimate that there will be only very minimal additional staff time required to record such time on machine data on the patient’s medical records for renal dialysis services. For those ESRD facilities that do not use EHRs, we estimate that additional staff time will be required to take note of the time at which hemodialysis began and the time at which hemodialysis ended and subtract the start time from the end time to determine the total number of minutes of hemodialysis. Conservatively, we estimate this will require no more than 1 minute per treatment. For all ESRD facilities, we estimate that additional staff time will be required to compile time on machine data for each patient each month and enter it into the billing system to be submitted. Conservatively, we estimate that this will require no more than 5 minutes per patient month. To calculate the annual additional ESRD facility staff time that will be associated with recording time on machine data on ESRD PPS claims for renal dialysis services, we multiply the estimated time per treatment by the number of dialysis treatments. Based on the most recent available CY 2022 ESRD PPS claims for this final rule, we estimate there were approximately 30.6 million treatments. However, as discussed in section II.B.1.j, we proposed to limit this reporting requirement to in-center claims. We estimated that approximately 14.8 percent of claims are for home dialysis, and therefore we reduce our estimate of the total number of treatments by 14.8 percent. Additionally, we believe it is reasonable to assume that LDOs will utilize existing systems and processes to document treatment duration in the EHR and send that information to the claim. Based on the latest available data as shown in Table 24, approximately 78.4 percent of treatments were furnished by LDOs. Therefore, we estimate that the additional costs associated with this time on machine reporting requirement will be associated with approximately 5.6 million incenter, non-LDO dialysis treatments per year. Additionally, ESRD facilities already report time on machine data monthly in the EQRS for a single dialysis session. This means that for a patient who VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 receives 156 dialysis treatments per year, the duration of twelve of those sessions would already be reported in the EQRS. We do not believe there will be any additional staff time required to report time on machine data on ESRD PPS claims for the treatments already reported in EQRS. Therefore, we estimate that the additional staff time that will be needed for reporting time on machine will be for 144 out of 156 treatments per year for the typical patient. For our cost estimate, we multiplied our estimate of 5.6 million in-center dialysis treatments by a factor of (144/156), which equals approximately 5.2 million treatments per year. To calculate the annual additional ESRD facility staff time that will be associated with calculating and reporting time on machine data on ESRD PPS claims for renal dialysis services, we multiply the estimated time per patient month by the number of dialysis patient months. Based on the most recent available ESRD PPS claims data for this final rule (from CY 2022), we estimate there were approximately 2.2 million patient months for patients receiving in-center hemodialysis. Therefore, we estimate that the additional costs associated with compiling and reporting the data for this time on machine reporting requirement will be associated with approximately 2.2 million in-center dialysis patient months per year. To derive wages estimates, we used data from the U.S. Bureau of Labor Statistics’ May 2022 National Occupational Employment and Wage Estimates. We believe it is reasonable to assume that Medical Records and Health Information Technicians, who are responsible for organizing and managing health information data, are the individuals reporting time on machine data. As discussed in the CY 2016 ESRD PPS final rule (80 FR 69069), this is consistent with our assumptions about the types of employees tasked with submitting measure data to CROWNWeb (now EQRS) and NHSN, as well as compiling and submitting patient records for the purpose of data validation studies. The most recently available mean hourly wage of a Medical Records and Health Information Technician is $24.42 per hour.345 We also calculate fringe benefit and overhead at 100 percent. 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 345 https://www.bls.gov/oes/current/ oes292099.htm. PO 00000 Frm 00146 Fmt 4701 Sfmt 4700 benefits and overhead. We note 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, there is no practical alternative, and we believe that these are reasonable estimation methods. Therefore, using these assumptions, we estimate an hourly labor cost of $48.84 as the basis of the wage estimates for the estimate of cost associated with the proposed requirement to report time on machine data on ESRD PPS claims for renal dialysis services. Based on the figures discussed in the preceding paragraphs, we estimate that total additional staff time each year for ESRD facilities associated with the requirement to record time on machine data is equal to 5.2 million × 1 minute = 5.2 million minutes = 86,667 hours. Additionally, we estimate that the total additional staff time each year for ESRD facilities associated with the calculation and reporting of the time on machine data is equal to 2.2 million × 5 minutes = 11 million minutes = 183,333 hours. We estimate the total annual cost associated with this requirement is equal to (86,667 hours + 183,333 hours) × $47.34 = $12,781,800 per year. We recognize that some non-LDO ESRD facilities may also choose to adopt an automated process, rather than a manual process. Therefore, the estimate of $12,781,800 represents the upper limit of our burden estimate. For ESRD facilities that choose to utilize existing systems and processes to document treatment duration in the EHR and send that data to the claim, we estimate the burden associated with our requirement to report time on machine data will be minimal. b. ESRD QIP For PY 2026 and PY 2027, we have updated the estimated costs associated with the information collection requirements under the ESRD QIP with updated estimates of the total number of ESRD facilities, the total number of patients nationally, wages for Medical Records Specialists or similar staff, and a refined estimate of the number of hours needed to complete data entry for EQRS reporting. We have made no changes to our methodology for calculating the annual burden associated with the information collection requirements for EQRS data validation (previously known as the CROWNWeb validation study) or NHSN data validation. We have updated our methodology for calculating the annual burden associated with the information E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations collection requirements for EQRS reporting based on our measure updates for PY 2026, PY 2027, and subsequent years. We also updated the payment reduction estimates based on our policies that we have finalized in this final rule, using more recent data for the measures in the ESRD QIP measure set. We estimate that as a result of our previously finalized policies and the policies we have finalized in this final rule for PY 2026, there would be approximately $120.9 million in information collection burden and an additional $16 million in estimated payment reductions across all facilities, for a total estimated impact of $136.9 million. For PY 2027, we estimate that as a result of our previously finalized policies and the policies we have finalized in this final rule for PY 2027, there would be approximately $130.5 million in information collection burden and $13.8 million in estimated payment reductions across all facilities, for a total estimated impact of $144.3 million. ddrumheller on DSK120RN23PROD with RULES2 3. Transfers We estimate that the updates to the ESRD PPS and AKI payment rate will result in a total increase of approximately $190 million in Medicare payments to ESRD facilities in CY 2024, which includes the amount associated with updates to the outlier thresholds, and updates to the wage index. This estimate includes an increase of approximately $1 million in Medicare payments to ESRD facilities in CY 2024 due to the updates to the AKI payment rate, of which approximately 20 percent is increased beneficiary coinsurance payments. We estimate approximately $150 million in transfers from the Federal Government to ESRD facilities due to increased Medicare program VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 payments and approximately $40 million in transfers from beneficiaries to ESRD facilities due to increased beneficiary coinsurance payments because of 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 ESRD PPS 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 ESRD PPS final rule, we assume that the total number of unique commenters on this year’s ESRD PPS proposed rule, 256, will be the number of reviewers of this ESRD PPS final rule. We acknowledge that this assumption may understate or overstate the costs of reviewing this final rule. It is possible that not all commenters reviewed this year’s proposed rule in detail, and it is also possible that some reviewers chose not to comment on the ESRD PPS proposed rule. For these reasons we thought that the number of commenters would be a fair estimate of the number of reviewers of this final rule. We invited comments on the approach in estimating the number of entities which will review this final rule but did not receive any comments on this topic. 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 solicited comments on this assumption and none were received. Using the wage information from the BLS for medical and health service managers (Code 11–9111), we estimate that the cost of reviewing this final rule is $123.06 per hour, including overhead and fringe benefits (https://www.bls.gov/ PO 00000 Frm 00147 Fmt 4701 Sfmt 4700 76489 oes/current/oes_nat.htm). Assuming an average reading speed, we estimate that it will take approximately 300 minutes (5.00 hours) for the staff to review half of this final rule, which has a total of approximately 150,000 words. For each entity that reviews the rule, the estimated cost is $615.30 (5.00 hours × $123.06). Therefore, we estimate that the total cost of reviewing this regulation is $157,516.80 ($615.30 × 256). 5. Impact Statement and Table a. CY 2024 End-Stage Renal Disease Prospective Payment System (1) Effects on ESRD Facilities To understand the impact of the changes affecting Medicare payments to different categories of ESRD facilities, it is necessary to compare estimated payments in CY 2023 to estimated payments in CY 2024. To estimate the impact among various types of ESRD facilities, it is imperative that the estimates of Medicare payments in CY 2023 and CY 2024 contain similar inputs. Therefore, we simulated Medicare payments only for those ESRD facilities for which we can calculate both current Medicare payments and new Medicare payments. For this final rule, we used CY 2022 data from the Medicare Part A and Part B Common Working Files as of August 4, 2023, as a basis for Medicare dialysis treatments and payments under the ESRD PPS. We updated the 2022 claims to 2023 and 2024 using various updates. The updates to the ESRD PPS base rate are described in section II.B.1.d of this final rule. Table 24 shows the impact of the estimated CY 2024 ESRD PPS payments compared to estimated Medicare payments to ESRD facilities in CY 2023. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 76490 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Large dialysis organization 6,123 24.0 0.0% 0.0% 0.0% 0.0% 2.0% Regional chain 913 3.7 0.0% 0.0% 0.0% -0.1% 1.9% Independent 462 1.7 0.0% 0.0% 0.1% 0.6% 2.7% Hospital based 357 1.2 0.0% 0.8% 0.1% 0.2% 3.4% 9 0.0 0.0% 0.0% 0.1% 0.4% 2.6% East North Central 1,228 4.1 0.0% 0.0% 0.0% -0.4% 1.7% East South Central 617 2.0 0.0% 0.0% 0.0% -0.3% 1.7% Middle Atlantic 895 3.8 0.0% 0.0% 0.0% 0.8% 2.9% Mountain 441 1.7 0.0% 0.0% 0.0% -0.7% 1.4% New England 200 1.0 0.0% 0.0% 0.0% -0.5% 1.6% Pacific4 986 5.2 0.0% 0.0% 0.0% 0.0% 2.1% Puerto Rico and Virgin Islands 53 0.1 0.0% 0.0% 0.1% 0.0% 2.1% South Atlantic 1,830 6.8 0.0% 0.0% 0.0% 0.3% 2.4% West North Central 495 1.7 0.0% 0.0% 0.0% -0.3% 1.9% West South Central 1,119 4.1 0.0% 0.1% 0.0% 0.0% 2.1% ddrumheller on DSK120RN23PROD with RULES2 Unknown VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00148 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.041</GPH> TABLE 24: Impacts of the Changes in Medicare Payments to ESRD Facilities for CY 2024 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76491 Less than 4,000 treatments 1,245 1.4 0.0% 0.4% 0.0% -0.1% 2.5% 4,000 to 9,999 treatments 3,503 10.2 0.0% 0.0% 0.0% -0.1% 2.0% 10,000 or more treatments 3,116 19.0 0.0% 0.0% 0.0% 0.0% 2.1% 0 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 7,761 30.3 0.0% 0.0% 0.0% 0.0% 2.1% Between 2% and 19% 38 0.2 0.0% 1.5% 0.1% -0.5% 3.2% Between 20% and 49% 9 0.0 0.1% 8.4% 0.1% -1.1% 9.7% Unknown Less than2% ddrumheller on DSK120RN23PROD with RULES2 BILLING CODE 4120–01–C 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.1.c of this final rule is shown in column C. For CY 2024, the impact on all ESRD facilities because of the final changes to the outlier payment policy would be an increase in estimated Medicare payments of less than 0.1 percent. Column D shows the effect of the TPEAPA as described in section II.B.1.g of this final rule. This adjustment will be implemented in a budget neutral manner, so the total impact of this change would be 0.0 percent. However, there will be distributional impacts of this final change, primarily a 25.3 percent increase to payments to Pediatric ESRD facilities (with more VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 than 50 percent of patients under age 18). This policy change also corresponds to a 0.8 percent increase to hospital-based ESRD facilities. Because the budget neutrality factor for this policy is so small, the impact analysis found no significant decrease to any ESRD facility as the total decrease in payments for ESRD facilities that predominantly serve adults will still be less than 0.05 percent. Column E shows the effect of yearover-year payment changes related to the post-TDAPA add-on payment adjustment as described in section II.B.1.i of this final rule and current TDAPA payments. The post-TDAPA add-on payment adjustment will not be budget neutral; however, we estimate the difference between total payments in CY 2023 during which time payment is made using the TDAPA under the ESRD PPS and estimated total payments in CY 2024 under the final post-TDAPA PO 00000 Frm 00149 Fmt 4701 Sfmt 4700 add-on payment adjustment would be less than 0.1 percent. Therefore, the total impact of this change as compared to current TDAPA payments is 0.0 percent. Column F reflects the effect of the update to the ESRD PPS wage index as described in section II.B.1.b of this final rule. This update will be budget neutral, so the total impact of this policy change is 0.0 percent. However, there will be distributional impacts of this change. The largest increase would be to midAtlantic ESRD facilities that would receive 0.8 percent higher payments because of the final updated ESRD PPS wage index. The largest decrease will be to ESRD facilities with more than 20 percent and less than 50 percent pediatric patients, who will receive 1.1 percent lower payments because of the updated ESRD PPS wage index. Column G reflects the overall impact, that is, the effects of the final outlier E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.042</GPH> More than 50% 56 0.0 0.1 % 25.3% 0.1 % 0.0% 28.4% 1This column includes the impact of the end ofTDAPA payment for Korsuva® and the start of the proposed postTDAPA payment adjustment for that drug beginning in April, 2024. This change is not budget neutral, but we estimate the overall change in total payments would be an increase of less than 0.1 percent. 2 Although TDAPA spending for Jesduvroq (January 1, 2024-December 31, 2024) is projected at approximately $10 million, this amount is not reflected in Table 24, because Jesduvroq utilization was not yet represented in the claims data used for this table. 3 This column includes the impact of the final updates in columns (C) through (F) in Table 24, and of the ESRDB market basket percentage increase for CY 2024 of2.4 percent, reduced by 0.3 percentage point for the productivity adjustment as required by section 1881(b)(14)(F)(i)(II) of the Act. Note, the products of these impacts may be different from the percentage changes shown here due to rounding effects. 4 Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands. 76492 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations policy changes, the TPEAPA, the postTDAPA payment adjustment, the updated wage index, and the payment rate update as described in section II.B.1.d of this final rule. The ESRD PPS payment rate update for CY 2024 is 2.1 percent, which reflects the ESRDB market basket percentage increase for CY 2024 of 2.4 percent and the productivity adjustment of 0.3 percent. We expect that overall ESRD facilities will experience a 2.1 percent increase in estimated Medicare payments in CY 2024. The categories of types of ESRD facilities in the impact table show impacts ranging from a 1.4 percent increase to a 28.4 percent increase in their CY 2024 estimated Medicare payments. (2) 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 2024, we estimate that the ESRD PPS will have zero impact on these other providers. (3) Effects on the Medicare Program We estimate that Medicare spending (total Medicare program payments) for ESRD facilities in CY 2024 will be approximately $6.7 billion. This estimate considers a projected decrease in fee-for-service Medicare ESRD beneficiary enrollment of 4.3 percent in CY 2024. (4) 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 2.1 percent overall increase in the CY 2024 ESRD PPS payment amounts, we estimate that there will be an increase in beneficiary coinsurance payments of 2.1 percent in CY 2024, which translates to approximately $40 million. ddrumheller on DSK120RN23PROD with RULES2 (5) Alternatives Considered (i) Transitional Pediatric ESRD Add-On Payment Adjustment As discussed in section II.B.1.g.(4) of this final rule, we proposed and are finalizing to implement a transitional add-on payment adjustment of 30 percent for Pediatric ESRD Patients, which we call the TPEAPA. We also considered, but did not propose, an alternative payment structure which would phase in the adjustment over 3 years starting at 10 percent for the first year and 20 percent for the second year. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 (ii) Add-On Payment Adjustment for Certain Renal Dialysis Drugs and Biological Products After the TDAPA Period Ends As discussed in section II.B.1.i.(3) of this final rule, we proposed and are finalizing an add-on payment adjustment for new renal dialysis drugs and biological products in existing ESRD PPS functional categories after the end of the TDAPA period. We also considered, but did not propose, an alternative methodology for calculating this payment adjustment which would incorporate a reconciliation of all the formerly separately billable drugs against the calculated post-TDAPA payment adjustment. Additionally, we considered but did not propose alternative approaches to applying and calculating this add-on payment adjustment for specific patient populations. (iii) Reporting Time on Machine Data on ESRD PPS Claims for Renal Dialysis Services As discussed in section II.B.1.j.(3) of this final rule, we proposed and are finalizing to require ESRD facilities to submit data and information on ESRD PPS claims for renal dialysis services regarding the number of minutes of hemodialysis treatment received by a beneficiary in center in an ESRD facility. This patient-level reporting on resource use would be used to apportion composite rate costs for use in the casemix adjustment. We also considered, but did not propose, to use dialysis duration data from EQRS to apportion composite rate costs for this purpose. We discuss why we did not propose this alternative in further detail in section II.B.1.j.(3) of this final rule. (iv) Allowing ESRD Facilities Impacted by a Disaster or Other Emergency To Apply for an Exception From the Treatment Volume Threshold Requirement for the LVPA As discussed in section II.B.1.f.(3)(a)(ii), we are finalizing our proposal to allow ESRD facilities to receive exceptions for some of the requirements for the LVPA if they are impacted by a disaster or other emergency. One of these exceptions is for ESRD facilities that exceed the 4000treatment volume threshold due to treating patients who were displaced from an ESRD facility that closed or experienced an operational disruption due to a disaster or other emergency. To receive this exception, we proposed that the ESRD facility must submit a request for the exception, in writing, to CMS by the annual attestation deadline of PO 00000 Frm 00150 Fmt 4701 Sfmt 4700 November 1st. We are finalizing that the deadline for requesting this exception be either the annual attestation deadline or 30 days after the end of the costreporting year for which the ESRD facility is attesting, whichever is later. We also considered, but did not finalize, having a deadline of December 31st for the attestation for ESRD facilities impacted by a disaster or other emergency and, therefore, a deadline of December 31st for requesting the exception. We discuss why we are not finalizing this alternative in further detail in section II.B.1.f.(3)(a)(ii) of this final rule. b. Continuation of Approved Transitional Drug Add-On Payment Adjustments (TDAPA) for New Renal Dialysis Drugs or Biological Products for CY 2024 (1) Korsuva® (difelikefalin) One renal dialysis drug for which the TDAPA was paid in CY 2022 and CY 2023 will continue to be eligible for the TDAPA in CY 2024. CMS Transmittal 11295,346 implemented the 2-year TDAPA period specified in § 413.234(c)(1) for Korsuva® (difelikefalin). The TDAPA payment period began on April 1, 2022, and will continue through March 31, 2024. As set forth in § 413.234(c), TDAPA payment is based on 100 percent of average sales price (ASP). If ASP is not available, then the TDAPA is based on 100 percent of wholesale acquisition cost (WAC) and, when WAC is not available, the payment is based on the drug manufacturer’s invoice. We based the CY 2024 impacts on the most current 72x claims data; from May 2022, when utilization first appeared on the claims, through July 2023. During that timeframe, the average monthly TDAPA payment amount for Korsuva® was $1,000,000. In applying that average to the 3 remaining months of the TDAPA payment period in CY 2024, we estimate $3,000,000 in spending ($1,000,000 * 3 = $3,000,000) of which, approximately $600,000 ($3,000,000 * 0.20 = $600,000) would be attributed to beneficiary coinsurance amounts. (2) Jesduvroq (daprodustat) On July 27, 2023, CMS Transmittal 12157 347 implemented the 2-year TDAPA period specified in § 413.234(c)(1) for Jesduvroq (daprodustat). The TDAPA payment 346 CMS Transmittal 11295 rescinded and replaced CMS Transmittal 11278, dated February 24, 2022 and is available at: https://www.cms.gov/ files/document/r11295CP.pdf. 347 CMS Transmittal 12157, dated July 27, 2023 is available at: https://www.cms.gov/files/ document/r12157cp.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations period began on October 1, 2023, and will continue through September 30, 2025. As stated previously, TDAPA payment is based on 100 percent of ASP. If ASP is not available, then the TDAPA is based on 100 percent of WAC and, when WAC is not available, the payment is based on the drug manufacturer’s invoice. We based our impact analysis on the most current pricing and manufacturer provided volume estimates at the time of this final rule. Estimates are based on the most current, reasonable assumptions but are subject to change based on any changes to the product’s label, indication, recommended dosage, safety profile or changes to applicable law, regulations and/or the standard of care. Jesduvroq is currently priced at $3.91 per 1 milligram unit.348 Several factors ddrumheller on DSK120RN23PROD with RULES2 348 CMS ESRD PPS Transitional Drug Add-on Payment Adjustment web page. Payment Amounts for New Renal Dialysis Drugs and Biological Products Currently Eligible for the TDAPA. Available at: https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ESRDpayment/ Downloads/Drugs-and-Biologicals-Eligible-forTDAPA.pdf. Accessed on September 29, 2023. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 effect dosing, as described in Jesduvroq’s Prescribing Information.349 However, total volume is estimated at 2,623,860 units in CY 2024. Multiplying the 2,623,860 units by the current pricing of $3.91 would result in approximately $10.3 million in CY 2024 spending (2,623,860 * $3.91 = $10,259,293), of which, approximately $2.1 million ($10,259,293 * 0.20 = $2,051,859) would be attributed to beneficiary coinsurance amounts. c. Payment for Renal Dialysis Services Furnished to Individuals With AKI (1) Effects on ESRD Facilities To understand the impact of the changes affecting Medicare payments to different categories of ESRD facilities for renal dialysis services furnished to individuals with AKI, it is necessary to compare estimated Medicare payments in CY 2023 to estimated Medicare payments in CY 2024. To estimate the 349 Jesduvroq Prescribing Information Available at: https://gskpro.com/content/dam/global/ hcpportal/en_US/Prescribing_Information/ Jesduvroq/pdf/JESDUVROQ-PI-MG.PDF. Accessed on September 29, 2023. PO 00000 Frm 00151 Fmt 4701 Sfmt 4700 76493 impact among various types of ESRD facilities for renal dialysis services furnished to individuals with AKI, it is imperative that the Medicare payment estimates in CY 2023 and CY 2024 contain similar inputs. Therefore, we simulated Medicare payments only for those ESRD facilities for which we can calculate both current Medicare payments and new Medicare payments. For this final rule, we used CY 2022 data from the Medicare Part A and Part B Common Working Files as of August 4, 2023, as a basis for Medicare for renal dialysis services furnished to individuals with AKI. We updated the 2022 claims to 2023 and 2024 using various updates. The updates to the AKI payment amount are described in section III.B of this final rule. Table 25 shows the impact of the estimated CY 2024 Medicare payments for renal dialysis services furnished to individuals with AKI compared to estimated Medicare payments for renal dialysis services furnished to individuals with AKI in CY 2023. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 76494 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations Large dialysis organization 4,234 576 179 120 1 229.8 29.1 13.7 5.4 0.0 -0.1% -0.1% 0.6% 0.1% 0.2% 1.9% 1.9% 2.7% 2.1% 2.2% 853 386 534 301 146 621 44.8 19.5 32.5 19.5 6.7 42.5 -0.5% -0.2% 0.7% -0.8% -0.3% -0.2% 1.6% 1.8% 2.7% 1.2% 1.8% 1.8% 5 1,235 320 709 0.1 67.4 13.2 31.7 0.0% 0.1% -0.2% 0.0% 2.1% 2.2% 1.8% 2.1% Less than 4,000 treatments 513 17.3 -0.1% 2.0% 4,000 to 9,999 treatments 2,312 114.1 -0.1% 2.0% 2,285 0 146.6 0.0 -0.1% 0.0% 2.0% 0.0% Regional chain Independent Hospital based2 Unknown East North Central East South Central Middle Atlantic Mountain New England Pacific3 Puerto Rico and Virgin Islands South Atlantic West North Central West South Central 10,000 or more treatments ddrumheller on DSK120RN23PROD with RULES2 Unknown VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 PO 00000 Frm 00152 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.043</GPH> TABLE 25: Impacts of the Changes in Medicare Payments for Renal Dialysis Services Furnished to Individuals with AKI for CY 2024 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 11 1 2 Between 2% and 19% Between 20% and 49% -1.4% -1.6% -0.7% 0.6 0.1 0.0 76495 0.6% 0.5% 1.4% More than 50% This column includes the impact of the updates in columns (C) as well as the impact of the TPEAPA budgetneutrality adjustment factor in Table 25, and of the ESRDB market basket percentage increase for CY 2024 of 2.4 percent, reduced by 0.3 percentage point for the productivity adjustment as required by section 188l(b)(l4)(F)(i)(II) of the Act. Note, the products of these impacts may be different from the percentage changes shown here due to rounding effects. 2 Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership. 3 Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands. 1 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 CY 2024 wage indices. Column D shows the overall impact, that is, the effects of the combined wage index and TPEAPA budget-neutrality adjustment factor, wage index updates, and the payment rate update of 2.1 percent, which reflects the ESRDB market basket percentage increase for CY 2024 of 2.4 percent and the productivity adjustment of 0.3 percentage point. We expect that overall ESRD facilities will experience a 2.0 percent increase in estimated Medicare payments in CY 2024. The categories of types of ESRD facilities in the impact table show impacts ranging from an increase of 0.5 percent to 2.7 percent in their CY 2024 estimated Medicare payments. ddrumheller on DSK120RN23PROD with RULES2 (2) Effects on Other Providers Under section 1834(r) of the Act, as added by section 808(b) of TPEA, we proposed to update 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 patient and his or her physician make the decision about where the renal dialysis services are furnished. Therefore, this change would have zero impact on other Medicare providers. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 (3) Effects on the Medicare Program We estimate approximately $70 million will be paid to ESRD facilities in CY 2024 because of patients with AKI receiving renal dialysis services in an 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. (4) Effects on Medicare Beneficiaries Currently, beneficiaries have a 20 percent coinsurance obligation when they receive AKI dialysis in the hospital outpatient setting. When these services are furnished in an ESRD facility, the patients will 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 expect beneficiaries to pay less coinsurance when AKI dialysis is furnished by ESRD facilities. (5) 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 adjustments is inappropriate. We PO 00000 Frm 00153 Fmt 4701 Sfmt 4700 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 will assist us in developing knowledgeable, data-driven proposals. d. ESRD QIP (1) Effects of the PY 2026 ESRD QIP on ESRD Facilities The ESRD QIP is intended to prevent reductions in the quality of ESRD dialysis facility services provided to beneficiaries. The general methodology that we use to calculate 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 2026 ESRD QIP will apply to the ESRD PPS payments made to the facility for services furnished in CY 2026, as codified in our regulations at § 413.177. For the PY 2026 ESRD QIP, we estimate that, of the 7,833 facilities (including those not receiving a TPS) enrolled in Medicare, approximately 30.56 percent or 2,394 of the facilities that have sufficient data to calculate a TPS would receive a payment reduction for PY 2026. Among an estimated 2,394 facilities that would receive a payment reduction, approximately 64 percent or 1,544 facilities would receive the smallest payment reduction of 0.5 percent. We are updating the estimated impact of the PY 2026 ESRD QIP that we provided in the CY 2023 ESRD PPS final rule (87 FR 67293 through 67296). Based on our final policies, the updated total estimated payment reductions for all the 2,394 facilities expected to E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.044</GPH> BILLING CODE 4120–01–C 76496 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations receive a payment reduction in PY 2026 would be approximately $15,990,524. Facilities that do not receive a TPS do not receive a payment reduction. Table 26 shows the updated overall estimated distribution of payment reductions resulting from the PY 2026 ESRD QIP. TABLE 26: Updated Estimated Distribution of PY 2026 ESRD QIP Payment Reductions Payment Reduction Number of Facilities 5167 0.0% 1544 0.5% 628 1.0% 1.5% 194 28 2.0% *272 facilities not scored due to insufficient data To estimate whether a facility would receive a payment reduction for PY 2026, we scored each facility on achievement and improvement on several clinical measures we have previously finalized and for which there were available data from EQRS and Medicare claims. Payment reduction estimates were calculated using the most recent data available (specified in Percent of Facilities* 68.34% 20.42% 8.31% 2.57% 0.37% Table 27) in accordance with the policies finalized in this final rule. Measures used for the simulation are shown in Table 27. TABLE 27: Data Used to Update the Estimated PY 2026 ESRD QIP Payment Reductions SRR SHR PPPW ddrumheller on DSK120RN23PROD with RULES2 Kt/V Dialysis Adequacy Comprehensive VAT % Catheter STrR NHSNBSI Clinical Depression For all measures except the SHR clinical measure, the SRR clinical measure, and the STrR measure, measures with less than 11 patients for a facility were not included in that facility’s TPS. For the SHR clinical measure and the SRR clinical measure, facilities were required to have at least 5 patient-years at risk and 11 index discharges, respectively, to be included in the facility’s TPS. For the STrR clinical measure, facilities were required to have at least 10 patient-years at risk to be included in the facility’s TPS. Each facility’s TPS was compared VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2021-Dec 2021 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 to an estimated mTPS and an estimated payment reduction table consistent with the final policies outlined in section IV.C of this final rule. Facility reporting measure scores were estimated using available data from CY 2022. 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 2026 for each facility resulting from this final rule, we multiplied the total Medicare payments to the facility during the 1-year period between January 2022 and December PO 00000 Frm 00154 Fmt 4701 Sfmt 4700 2022 by the facility’s estimated payment reduction percentage expected under the ESRD QIP, yielding a total payment reduction amount for each facility. Table 28 shows the estimated impact of the finalized ESRD QIP payment reductions to all ESRD facilities for PY 2026. 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 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.046</GPH> ICH CARPS Survey Performance period ER06NO23.045</GPH> Measure Period of time used to calculate achievement thresholds, 50th percentiles of the national performance, benchmarks, and improvement thresholds Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations performance period used for these calculations differs from the performance period we are using for the PY 2026 ESRD QIP, the actual impact of the PY 2026 ESRD QIP may vary 76497 significantly from the values provided here. BILLING CODE 4120–01–P TABLE 28: Updated Estimated Impact ofESRD QIP Payment Reductions to ESRD Facilities for PY 2026 All Facilities Facility Type: Freestanding 7,481 Hospital-based 352 Ownership Type: Large Dialysis 6,068 Regional Chain 901 Independent 451 Hospital-based (non-chain) 352 Unknown 61 Facility Size: Large Entities 6,969 Small Entities 1 803 61 Unknown Rural Status: 1) Yes 1,264 2)No 6,569 Census Region: 1,093 Northeast Midwest 1,718 South 3,555 1,404 West US Territories 2 63 Census Division: 11 Unknown East North Central 1,223 East South Central 616 Middle Atlantic 893 Mountain 438 New England 200 Pacific 966 South Atlantic 1,820 West North Central 495 West South Central 1,119 52 US Territories 2 Facility Size(# of total treatments) Less than 4,000 treatments 1,267 4,000-9,999 treatments 3,294 Over 10,000 treatments 3,272 1Small Entities include hospital-based and satellite facilities, and non-chain facilities based on EQRS. 2Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands. BILLING CODE 4120–01–C ddrumheller on DSK120RN23PROD with RULES2 (3) Effects of the PY 2027 ESRD QIP on ESRD Facilities For the PY 2027 ESRD QIP, we are updating the estimated effect that we presented in the CY 2024 ESRD PPS proposed rule (88 FR 42534 through 42536). In this final rule, we estimate that, of the 7,833 facilities (including VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Number of Facilities with QIP Score 7,561 28.6 1.1 7,232 329 2,252 142 -0.22% -0.36% 23.2 3.6 1.7 1.1 0.0 5,882 877 434 329 39 1,622 346 264 142 20 -0.18% -0.31% -0.60% -0.36% -0.35% 26.9 2.9 0.0 6,759 763 39 1,968 406 20 -0.19% -0.50% -0.35% 4.2 25.6 1,211 6,350 277 2,117 -0.15% -0.24% 4.7 5.7 12.5 6.6 0.2 1,050 1,649 3,439 1,362 61 333 526 1,164 344 27 -0.22% -0.23% -0.25% -0.16% -0.28% 0.1 4.0 2.0 3.7 1.6 1.0 5.0 6.5 1.7 4.0 0.1 10 1,176 593 854 429 196 933 1,758 473 1,088 51 5 409 186 283 107 50 237 643 117 335 22 -0.40% -0.25% -0.22% -0.23% -0.17% -0.18% -0.16% -0.28% -0.18% -0.22% -0.26% 1.5 9.2 19.0 1,100 3,203 3,258 364 856 1,174 -0.28% -0.19% -0.24% those not receiving a TPS) enrolled in Medicare, approximately 28.88 percent or 2,262 of the facilities that have sufficient data to calculate a TPS would receive a payment reduction for PY 2027. Among an estimated 2,262 facilities that would receive a payment reduction, approximately 70 percent or 1,584 facilities would receive the smallest payment reduction of 0.5 PO 00000 Frm 00155 Fmt 4701 Sfmt 4700 Payment Reduction (percent change in total ESRD payments) -0.23% percent. The total payment reductions for all the 2,262 facilities expected to receive a payment reduction is approximately $13,847,479. Facilities that do not receive a TPS do not receive a payment reduction. Table 29 shows the overall estimated distribution of payment reductions resulting from the PY 2027 ESRD QIP. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.047</GPH> Number of Facilities 7,833 Number of Treatments 2019 (in millions) 29.8 Number of Facilities Expected to Receive a Payment Reduction 2,394 76498 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 29: Estimated Distribution of PY 2027 ESRD QIP Payment Reductions Number of Facilities Percent of Facilities* Payment Reduction 70.33% 5362 0.0% 20.78o/c 1584 0.5% 7.45% 568 1.0% 97 l .27o/c 1.5% 0.17% 13 2.0% *Note: 209 facilities not scored due to insufficient data To estimate whether a facility would receive a payment reduction in PY 2027, we scored each facility on achievement and improvement on several clinical measures we have previously finalized and for which there were available data from EQRS and Medicare claims. Payment reduction estimates were calculated using the most recent data available (specified in Table 30) in accordance with the policies finalized in this final rule. Measures used for the simulation are shown in Table 30. TABLE 30: Data Used to Estimate PY 2027 ESRD QIP Payment Reductions SRR SHR PPPW ddrumheller on DSK120RN23PROD with RULES2 Kt/V Dialysis Adequacy Comprehensive VAT % Catheter STrR NHSNBSI Clinical Depression For all measures except the SHR clinical measure, the SRR clinical measure, and the STrR measure, measures with less than 11 patients for a facility were not included in that facility’s TPS. For the SHR and SRR measures, facilities were required to have at least 5 patient-years at risk and 11 index discharges, respectively, to be included in the facility’s TPS. For the STrR clinical measure, facilities were required to have at least 10 patient-years at risk 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 previously finalized policies and the policies we have VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2021-Dec 2021 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 Jan 2022-Dec 2022 finalized in this final rule outlined in section IV.D of this final rule. Facility reporting measure scores were estimated using available data from CY 2022. 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 2027 for each facility resulting from this final rule, we multiplied the total Medicare payments to the facility during the 1-year period between January 2022 and December 2022 by the facility’s estimated payment reduction percentage expected under the ESRD QIP, yielding a total payment reduction amount for each facility. PO 00000 Frm 00156 Fmt 4701 Sfmt 4700 Table 31 shows the estimated impact of the finalized ESRD QIP payment reductions to all ESRD facilities for PY 2027. 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 using for the PY 2027 ESRD QIP, the actual impact of the PY 2027 ESRD QIP may vary significantly from the values provided here. BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.049</GPH> ICH CARPS Survey Performance period ER06NO23.048</GPH> Measure Period of time used to calculate achievement thresholds, 50th percentiles of the national performance, benchmarks, and improvement thresholds Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Jan 2019-Dec 2019 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 76499 TABLE 31: Estimated Impact of ESRD QIP Payment Reductions to ESRD Facilities for PY2027 All Facilities Facility Type: Freestanding 7,481 Hospital-based 352 Ownership Type: Large Dialysis 6,068 Regional Chain 901 Independent 451 Hospital-based (non-chain) 352 Unknown 61 Facility Size: Large Entities 6,969 Small Entities 1 803 Unknown 61 Rural Status: 1) Yes 1,264 2)No 6,569 Census Region: Northeast 1,093 Midwest 1,718 South 3,555 1,404 West US Territories2 63 Census Division: Unknown 11 East North Central 1,223 East South Central 616 Middle Atlantic 893 Mountain 438 New England 200 Pacific 966 South Atlantic 1,820 West North Central 495 West South Central 1,119 US Territories2 52 Facility Size(# of total treatments): Less than 4,000 treatments 1,267 4,000-9,999 treatments 3,294 Over 10,000 treatments 3,272 1Small Entities include hospital-based and satellite facilities, and non-chain facilities based on EQRS. 2Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands. ddrumheller on DSK120RN23PROD with RULES2 (4) Effects on Other Providers The ESRD QIP is applicable to ESRD 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 facilities work to reduce the number of VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 Number of Facilities with QIP Score 7,624 28.6 1.1 7,292 332 2,127 135 -0.19% -0.30% 23.2 3.6 1.7 1.1 0.0 5,904 882 446 332 60 1,534 322 254 135 17 -0.16% -0.26% -0.50% -0.30% -0.18% 26.9 2.9 0.0 6,786 778 60 1,856 389 17 -0.17% -0.42% -0.18% 4.2 25.6 1,223 6,401 274 1,988 -0.14% -0.21 % 4.7 5.7 12.5 6.6 0.2 1,066 1,663 3,464 1,369 62 301 507 1,118 313 23 -0.19% -0.20% -0.22% -0.15% -0.20% 0.1 4.0 2.0 3.7 1.6 1.0 5.0 6.5 1.7 4.0 0.1 11 1,187 600 869 430 197 939 1,771 476 1,093 51 5 397 176 259 100 42 213 619 110 323 18 -0.31% -0.22% -0.19% -0.20% -0.16% -0.14% -0.14% -0.24% -0.15% -0.19% -0.18% 1.5 9.2 19.0 1,163 3,203 3,258 359 822 1,081 -0.23% -0.17% -0.21 % 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. PO 00000 Frm 00157 Fmt 4701 Sfmt 4700 Payment Reduction (percent change in total ESRD payments) -0.20% (5) Effects on the Medicare Program For PY 2027, we estimate that the ESRD QIP would contribute approximately $13,847,478.73 in Medicare savings. For comparison, Table 32 shows the payment reductions that we estimate will be applied by the ESRD QIP from PY 2018 through PY 2027. E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.050</GPH> Number of Facilities 7,833 Number of Treatments 2019 (in millions) 29.8 Number of Facilities Expected to Receive a Payment Reduction 2,262 76500 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 32: Estimated ESRD QIP Aggregate Payment Reductions for Payment Years 2018 through 2027 Estimated Payment Reductions $13,847,479 $15,990,524 $32,457,693 (87 FR 67297) $17,104,031 (86 FR 62011) $5,548,653 (87 FR 67297) $0350 (86 FR 62011) $32,196,724 (83 FR 57062) $31,581,441 (81 FR 77960) $15,470,309 (80 FR 69074) $11,576,214 (79 FR 66257) BILLING CODE 4120–01–C ddrumheller on DSK120RN23PROD with RULES2 (6) Effects on Medicare Beneficiaries The ESRD QIP is applicable to ESRD facilities. Since the Program’s inception, there is evidence of 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. (7) Alternatives Considered In section IV.C.5 of this final rule, we are finalizing the removals of the Ultrafiltration Rate reporting measure and the Standardized Fistula Rate clinical measure, beginning with PY 2026. We considered not removing these measures. However, we concluded that removing these two measures was 350 In the CY 2022 ESRD PPS final rule, we adopted a special scoring methodology and payment policy for PY 2022 due to significant VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 appropriate under our previously finalized measure removal factors. This approach will help to ensure that a facility’s performance is assessed based on measures that continue to be meaningful parts of the ESRD QIP measure set. e. ETC Model (1) Overview The ETC Model is a mandatory payment model designed to test payment adjustments to certain dialysis and dialysis-related payments, as discussed in the Specialty Care Models final rule (85 FR 61114), the CY 2022 ESRD PPS final rule (86 FR 61874), and the CY 2023 ESRD PPS final rule (87 FR 67136) for ESRD facilities and for Managing Clinicians for claims with dates of service from January 1, 2021, to June 30, 2027. The requirements for the ETC Model are set forth in 42 CFR part 512, subpart C. We proposed to revise our regulations at § 512.390 to acknowledge the ability of the CMS Administrator to review the results of ETC Participants’ targeted review requests. For the results of the detailed economic analysis of the ETC Model and a description of the methodology used to perform the analysis, see the Specialty Care Models final rule (85 FR 61114). (2) Data and Methods statistical assumptions derived from retrospectively constructed ESRD facilities’ and Managing Clinicians’ Medicare dialysis claims, transplant claims, and transplant waitlist data reported during 2018 and 2019, the most recent years of complete data available before the start of the ETC Model. Both datasets and the riskadjustment methodologies for the ETC Model were developed by the CMS Office of the Actuary (OACT). Table 33 summarizes the estimated impact of the ETC Model when the achievement benchmarks for each year are set using the average of the home dialysis rates for year t-1 and year t-2 for the HRRs randomly selected for participation in the ETC Model. We estimate that the Medicare program would save a net total of $43 million from the PPA and HDPA between January 1, 2021, and June 30, 2027 less $15 million in increased training and education expenditures. Therefore, the net impact to Medicare spending is estimated to be $28 million in savings. This is consistent with the net impact to Medicare spending estimated for the CY 2022 ESRD PPS final rule, in which the net impact to Medicare spending was also estimated to be $28 million in savings (86 FR 62014 through 62016). Making administrative review available to ETC Participants who wish to seek additional review of a targeted review determination is not expected to change this estimate. A stochastic simulation was created to estimate the financial impacts of the ETC Model relative to baseline expenditures, where baseline expenditures were defined as data from CYs 2018 and 2019 without the changes applied. The simulation relied upon BILLING CODE 4120–01–P impacts related to the COVID–19 public health emergency (86 FR 61918 through 61919). Under this policy, we did not apply any payment reductions to ESRD facilities for PY 2022. PO 00000 Frm 00158 Fmt 4701 Sfmt 4700 (3) Medicare Estimate—Primary Specification, Assume Rolling Benchmark E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.051</GPH> Payment Year PY2027 PY2026 PY2025 PY2024 PY2023 PY2022 PY2021 PY2020 PY2019 PY2018 76501 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations TABLE 33: Estimates of Medicare Program Savings (Rounded $M) for ESRD Treatment Choices (ETC) Model 2021 Net Impact to Medicare Spending 15 9 -1 -9 -12 -19 -9 Overall PPA Net & HDPA 14 7 -3 -11 -15 -22 -12 -43 -2 1 -1 0 -2 1 -1 -3 1 -2 -3 1 -2 -2 1 -1 0 -1 0 0 0 -13 6 -7 0 -20 12 -8 6 -25 15 -10 -31 18 -14 -39 19 -20 -21 10 -11 14 -9 5 -3 10 -145 79 -66 29 Total PPA Downward Adjustment Total PPA Upward Adjustment Total PPA Net TotalHDPA -22 13 -9 6 -27 16 -11 -34 19 -15 -43 21 -22 -23 11 -12 14 -9 6 -4 10 -158 84 -73 30 Kidney Disease Patient Education Services Costs 0 1 1 1 1 1 1 5 Facility Downward Adjustment Facility Upward Adiustment Facility PPA Net Facility HDPA 2023 Year of Model 2024 2025 2026 6.5 Year Total* -28 Clinician PPA Downward Adjustment Clinician PPA Upward Adjustment Clinician PPA Net Clinician HDPA 2022 2027 HD Training Costs 1 1 1 1 2 2 2 10 *Totals may not sum due to rounding and from beneficiaries that have dialysis treatment spanning multiple years. Negative spending reflects a reduction in Medicare spending. The kidney disease patient education services benefit costs are less than $IM each year, but are rounded up to $IM to show what years they apply to. Similarly, the HD Training Costs are less than $IM for years 2021-2024, but are rounded up to $IM to indicate that costs were applied those years. ddrumheller on DSK120RN23PROD with RULES2 (4) Effects on the Home Dialysis Rate, the Transplant Rate, and Kidney Transplantation The changes in this final rule will not impact the findings reported for the effects of the ETC Model on the home dialysis rate or the transplant rate described in the Specialty Care Models final rule (85 FR 61355) and the CY 2022 ESRD PPS final rule (86 FR 62017). VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 (5) Effects on Kidney Disease Patient Education Services and HD Training Add-Ons The changes in this final rule will not impact the findings reported for the effects of the ETC Model on kidney disease patient education services and HD training add-ons described in the Specialty Care Models final rule (85 FR 61355) and the CY 2023 ESRD PPS final rule (87 FR 67136). (6) Effects on Medicare Beneficiaries Providing the option for ETC Participants to seek administrative review of targeted review determinations will not impact the findings reported for the effects of ETC Model on Medicare beneficiaries in lieu of the ETC Model’s likelihood of incentivizing ESRD facilities and Managing Clinicians to improve access to home dialysis and transplantation for Medicare beneficiaries. Further details on the impact of the ETC Model on PO 00000 Frm 00159 Fmt 4701 Sfmt 4700 ESRD Beneficiaries may be found in the Specialty Care Models final rule (85 FR 61357), the CY 2022 ESRD PPS final rule (86 FR 61874), or the CY 2023 ESRD PPS final rule (87 FR 67136). (7) Alternatives Considered In this final rule, we are finalizing the proposal to revise our regulations at § 512.390 to acknowledge the availability of administrative review of targeted review requests. We considered retaining our current process, in which targeted review determinations are final with no further review or appeal; however, we believe that providing for administrative review of targeted review determinations is important to provide ETC Participants with transparency regarding the avenue that is available should they wish to seek review of their targeted review determination, to vest accountability for the decisions of CMS in a principal officer, and to bring the E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.052</GPH> In Table 33, negative spending reflects a reduction in Medicare spending, while positive spending reflects an increase. The results for this table were generated from an average of 400 simulations under the assumption that benchmarks are rolled forward with a 1.5-year lag. For a detailed description of the key assumptions underlying the impact estimate, see the Specialty Care Models final rule (85 FR 61353) and the CY 2022 ESRD PPS final rule (86 FR 60214 through 60216). 76502 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ETC Model into alignment with other CMS programs. E. Accounting Statement As required by OMB Circular A–4 (available at Https:// www.whitehouse.gov/wp-content/ uploads/legacy_drupal_files/omb/ circulars/A4/a-4.pdf), we have prepared an accounting statement in Table 34 showing the classification of the impact associated with the provisions of this final rule. TABLE 34: Accounting Statement: Classification of Estimated Transfers and Costs/Savings ddrumheller on DSK120RN23PROD with RULES2 BILLING CODE 4120–01–C F. Regulatory Flexibility Act Analysis (RFA) The Regulatory Flexibility Act (RFA) requires agencies to analyze options for regulatory relief of small entities if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. 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. Therefore, the number of small entities estimated in this RFA analysis includes the number of ESRD facilities that are either considered small businesses or nonprofit organizations. VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 According to the Small Business Administration’s (SBA) size standards, an ESRD facility is classified as a small business if it has total revenues of less than $41.5 million in any 1 year. For the purposes of this analysis, we exclude the ESRD facilities that are owned and operated by LDOs and regional chains, which would have total revenues of more than $8.1 billion in any year when the total revenues for all locations are combined for each business (LDO or regional chain), and are not, therefore, considered small businesses. Because we lack data on individual ESRD facilities’ receipts, we cannot determine the number of small proprietary ESRD facilities or the proportion of ESRD facilities’ revenue derived from Medicare payments. Therefore, we assume that all ESRD facilities that are not owned by LDOs or regional chains are considered small businesses. Accordingly, we consider the 462 facilities that are independent and 357 PO 00000 Frm 00160 Fmt 4701 Sfmt 4700 facilities that are hospital-based, as shown in the ownership category in Table 24, to be small businesses. These facilities represent approximately 10 percent of all ESRD facilities in our data set. Additionally, we identified in our analytic file that there are 796 facilities that are considered nonprofit organizations, which is approximately 10 percent of all ESRD facilities in our data set. In total, accounting for the 370 nonprofit ESRD facilities that are also considered small businesses, there are 1,245 ESRD facilities that are either small businesses or nonprofit organizations, which is approximately 16 percent of all ESRD facilities in our data set. For the ESRD PPS updates in this final rule, a hospital-based ESRD facility (as defined by type of ownership, not by type of ESRD facility) is estimated to receive a 3.4 percent increase in Medicare payments for CY 2024. An E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO23.053</GPH> ESRD PPS and AKI (CY 2024) Category Transfers Annualized Monetized Transfers $150 million From Whom to Whom Federal Government to ESRD facilities Category Transfers Increased Beneficiarv Co-insurance Payments $40 million From Whom to Whom Beneficiaries to ESRD facilities ESRD PPS (CY 2025) Category Costs Increased Reporting Burden for Time on Machine $13 million For Whom ESRD Facilities ESRD QIP for PY 2026 Category Transfers Annualized Monetized Transfers -$16.0 million From Whom to Whom Federal Government to ESRD facilities ESRD OIP for PY 2027 Category Transfers Annualized Monetized Transfers -$13.8 million From Whom to Whom Federal Government to ESRD facilities ETC Model for July 1, 2022, through June 30, 2027 Category Transfers Annualized Monetized Transfers $0.03 million From Whom to Whom Federal Government to ESRD facilities and Managing Clinicians ddrumheller on DSK120RN23PROD with RULES2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations independent facility (as defined by ownership type) is likewise estimated to receive a 2.7 percent increase in Medicare payments for CY 2024. As shown in Table 24, we estimate that the overall revenue impact of this final rule on all ESRD facilities is a positive increase to Medicare payments by approximately 2.1 percent. For AKI dialysis, we are unable to estimate whether patients will go to ESRD facilities, however, we have estimated there is a potential for $70 million in payment for AKI dialysis treatments that could potentially be furnished in ESRD facilities. For the ESRD QIP, we estimate that of the 2,394 ESRD facilities expected to receive a payment reduction as a result of their performance on the PY 2026 ESRD QIP, 406 are ESRD small entity facilities. We present these findings in Table 25 (‘‘Estimated Distribution of PY 2026 ESRD QIP Payment Reductions’’) and Table 27 (‘‘Estimated Impact of ESRD QIP Payment Reductions to ESRD Facilities for PY 2026’’). Regarding the ETC Model, in the Specialty Care Models final rule, we described our assumption, for the purposes of the regulatory impact analysis, that the great majority of Managing Clinicians are small entities by nature of meeting the SBA definition of a small business, but that the greater majority of ESRD facilities are not, as they are owned, either partially or entirely, by organizations that do not meet the SBA definition of a small entity. We described the low volume threshold exclusions and aggregation policies used in the ETC Model and our assessment that, in conjunction with the fact that the ETC Model affects Medicare payment only for select services furnished to Medicare FFS beneficiaries; the ETC Model will not have a significant impact on spending for a substantial number of small entities. For the purposes of this final rule, we have determined that the policy to clarify the ability of the CMS Administrator to review targeted review determinations will not change the assessment that the ETC Model will not have a significant impact on spending for a substantial number of small entities. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. 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 VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 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 121 rural hospital-based ESRD facilities, we do not know how many of them are based at hospitals with fewer than 100 beds. However, overall, the 121 rural hospital-based ESRD facilities will experience an estimated 2.2 percent increase in payments. Therefore, the Secretary has certified that this final rule would not have a significant impact on the operations of a substantial number of small rural hospitals. Clarifying the ability of the CMS Administrator to review ETC Model targeted review determinations is not expected to change the Secretary’s assessment. G. Unfunded Mandates Reform Act Analysis (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 2023, that threshold is approximately $177 million. This final rule will not impose a mandate that will result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of more than $177 million in any 1 year. 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. H. 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 State, local, or Tribal governments. I. Congressional Review Act This final regulation is subject to the Congressional Review Act provisions of PO 00000 Frm 00161 Fmt 4701 Sfmt 4700 76503 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. VIII. Files Available to the Public The Addenda for the annual ESRD PPS proposed and final rule will no longer appear in the Federal Register. Instead, the Addenda will be available only through the internet and will be posted on CMS’s website under the regulation number, CMS–1782–F, at https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ ESRDpayment/End-Stage-RenalDisease-ESRD-Payment-Regulationsand-Notices. In addition to the Addenda, limited data set files (LDS) are available for purchase at https:// www.cms.gov/Research-Statistics-Dataand-Systems/Files-for-Order/Limited DataSets/EndStageRenalDisease SystemFile. Readers who experience any problems accessing the Addenda or LDS files, should contact CMS by sending an email to CMS at the following mailbox: ESRDPayment@cms.hhs.gov. Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services, approved this document on October 24, 2023. List of Subjects 42 CFR Part 413 Diseases, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements. 42 CFR Part 512 Administrative practice and procedure, Health care, Health facilities, Health insurance, Medicare, Penalties, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR chapter IV as set forth below: 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), 1395m, 1395x(v), 1395x(kkk), 1395hh, 1395rr, 1395tt, and 1395ww. E:\FR\FM\06NOR2.SGM 06NOR2 76504 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations 2. Section 413.178 is amended by revising paragraphs (a)(8) and (c) to read as follows: ■ ddrumheller on DSK120RN23PROD with RULES2 § 413.178 ESRD quality incentive program. (a) * * * (8) Minimum total performance score (mTPS) means, with respect to a payment year except payment year 2023, the total performance score that an ESRD facility would receive if it performed at the 50th percentile of national ESRD facility performance on all clinical measures during the baseline period, and it performed at the median of national ESRD facility performance on all reporting measures using data from the most recently available year before the performance period. * * * * * (c) ESRD QIP measure selection, retention, and removal—(1) ESRD QIP measure selection. CMS specifies measures for the ESRD QIP for a payment year and groups the measures into domains. The measures for a payment year include: (i) Measures on anemia management that reflect the labeling approved by the Food and Drug Administration for such management; (ii) Measures on dialysis adequacy; (iii) To the extent feasible, a measure (or measures) of patient satisfaction; (iv) To the extent feasible, measures on iron management, bone mineral metabolism, and vascular access (including for maximizing the placement of arterial venous fistula); (v) Beginning with the 2016 payment year, measures specific to the conditions treated with oral-only drugs and that are, to the extent feasible, outcomesbased; and (vi) Other measures that CMS specifies. (2) Use of endorsed measures—(i) General rule. Measures specified by CMS under paragraph (c)(1) of this section will be endorsed by the entity with a contract under section 1890(a) of the Social Security Act, unless the exception in paragraph (c)(2)(ii) of this section applies. (ii) Exception. CMS may specify a measure under paragraph (c)(1) of this section that does not meet the requirement in paragraph (c)(2)(i) of this section if: (A) CMS has determined that a specified area or medical topic is appropriate for inclusion in the ESRD QIP; (B) CMS has not identified a feasible and practical measure with respect to that specified area or medical topic that has been endorsed by the entity with a contract under section 1890(a) of the Social Security Act; and VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 (C) CMS has given due consideration to measures that have been endorsed or adopted by a consensus organization. (3) Updating of measure specifications. CMS uses rulemaking to make substantive updates to the specifications of measures used in the ESRD QIP. CMS announces technical measure specification updates through the QualityNet website (https://quality net.cms.gov) and listserv announcements. (4) Measure retention. All measures specified for the ESRD QIP measure set remain in the measure set unless CMS, through rulemaking, removes or replaces them. (5) Measure removal factors—(i) General rule. CMS may remove or replace a measure based on one or more of the following factors: (A) Factor 1. Measure performance among the majority of ESRD facilities is so high and unvarying that meaningful distinctions in improvements or performance can no longer be made. (B) Factor 2. Performance or improvement on a measure does not result in better or the intended patient outcomes. (C) Factor 3. A measure no longer aligns with current clinical guidelines or practice. (D) Factor 4. A more broadly applicable (across settings, populations, or conditions) measure for the topic or a measure that is more proximal in time to desired patient outcomes for the particular topic becomes available. (E) Factor 5. A measure that is more strongly associated with desired patient outcomes for the particular topic becomes available. (F) Factor 6. Collection or public reporting of a measure leads to negative or unintended consequences. (G) Factor 7. It is not feasible to implement the measure specifications. (H) Factor 8. The costs associated with a measure outweigh the benefit of its continued use in the program. (ii) Exception. CMS may retain a measure that meets one or more of the measure removal factors described in paragraph (c)(5)(i) of this section for reasons including, but not limited to, that the measure addresses a gap in quality that is so significant that removing the measure would lower the quality of care furnished by facilities, or that the measure is statutorily required. (iii) Patient safety exception. Upon a determination by CMS that the continued requirement for facilities to submit data on a measure raises specific patient safety concerns, CMS may elect to immediately remove the measure from the ESRD QIP measure set. CMS will, upon removal of the measure— PO 00000 Frm 00162 Fmt 4701 Sfmt 4700 (A) Provide notice to facilities and the public at the time CMS removes the measure, along with a statement of the specific patient safety concerns that would be raised if facilities continued to submit data on the measure; and (B) Provide notice of the removal in the Federal Register. * * * * * ■ 3. Section 413.198 is amended by revising paragraphs (a) and (b)(3)(iii) and adding paragraphs (b)(5) and (6) to read as follows: § 413.198 Recordkeeping and cost reporting requirements for outpatient maintenance dialysis. (a) Purpose and scope. This section implements sections 1881(b)(2)(B)(i) and 1881(b)(14) of the Act by specifying recordkeeping and cost reporting requirements for ESRD facilities under part 494 of this chapter. The records and reports will enable CMS to determine the costs incurred in furnishing outpatient maintenance dialysis as defined in § 413.170(a). * * * * * (b) * * * (3) * * * (iii) Flow from the provision of luxury items or services (items or services substantially in excess of or more expensive than those generally considered necessary for the provision of needed health services); or * * * * * (5) Each ESRD facility must submit data and information of the types and in the formats established by CMS for the purpose of estimating patient-level and facility-level variation in resource use involved in furnishing renal dialysis services. Beginning January 1, 2025, the data and information must include, but is not limited to the following: (i) Information reported on ESRD prospective payment system (PPS) claims for renal dialysis services regarding the number of minutes between the start and end of hemodialysis treatment, without accounting for any interruptions, received by a beneficiary in center in an ESRD facility; (ii) Information reported on ESRD PPS claims about the total number of billing units (or the expected number of billing units, for renal dialysis drugs and biological products provided to beneficiaries for use while receiving home dialysis services as defined in § 413.217 of this chapter or oral forms of renal dialysis drugs and biological products), of any discarded amount of a renal dialysis drug or biological product from a single-dose container or singleuse package that is paid for under the E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ESRD PPS, using the JW modifier (or any successor modifier that includes the same data); and (iii) Information reported on ESRD PPS claims about any renal dialysis drug or biological product from a singledose container or single-use package that is paid for under the ESRD PPS for which there is no discarded amount (or no discarded amount expected, for renal dialysis drugs and biological products provided to beneficiaries for use while receiving home dialysis services as defined in § 413.217 of this chapter or oral forms of renal dialysis drugs and biological products), using the JZ modifier (or any successor modifier that includes the same data). (6) Beginning January 1, 2025, each ESRD facility must document in the beneficiary’s medical record any discarded amounts of a renal dialysis drug or biological product from a singledose container or single-use package that is paid for under the ESRD PPS. ■ 4. Section 413.230 is amended by revising paragraphs (d) and (e) and adding paragraph (f) to read as follows: § 413.230 Determining the per treatment payment amount. * * * * * (d) Any transitional drug add-on payment adjustment under § 413.234(c); (e) Any transitional add-on payment adjustment for new and innovative equipment and supplies under § 413.236(d); and (f) Any add-on payment adjustment for new renal dialysis drugs or biological products in existing ESRD PPS functional categories after the payment period for the transitional drug add-on payment adjustment has ended, as described in § 413.234(c)(3) and (g). ■ 5. Section 413.232 is amended by revising paragraphs (b)(1) and (2) and (g) introductory text and adding paragraphs (g)(5) and (6) to read as follows: § 413.232 Low-volume adjustment. ddrumheller on DSK120RN23PROD with RULES2 * * * * * (b) * * * (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 paragraphs (g)(4) and (5) of this section) preceding the payment year; and (2) Has not opened, closed, or received a new provider number due to a change in ownership (except where the change in ownership results in a change in facility type) in the 3 cost reporting years (based on as-filed or final settled 12-consecutive month cost reports, whichever is most recent) VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 preceding the payment year, except as specified in paragraph (g)(6) of this section. * * * * * (g) To receive the low-volume adjustment, an ESRD facility must include in its 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 paragraphs (g)(4) and (5) of this section, for the 3 cost reporting years preceding the payment year to verify the number of treatments, except that: * * * * * (5) For payment year 2024 and subsequent payment years, an ESRD facility may attest in the attestation specified in paragraph (e) of this section that it would have met the requirements of paragraph (b)(1) of this section, except that for one or more of the most recent 3 cost reporting years the facility furnished 4,000 or more treatments because of temporary patient-shifting as a result of the closure or operational disruption of another ESRD facility due to a disaster or other emergency. For the purposes of the exception in this paragraph (g)(5), temporary patientshifting is defined as providing renal dialysis services to one or more displaced patient(s) at any time through the end of the CY following the 12month period beginning when an ESRD facility first begins providing renal dialysis services to one or more displaced patients. 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 cost reporting year due to temporary patient-shifting as a result of the closure or operational disruption of an ESRD facility resulting from a disaster or other emergency; (ii) The facility must request an exception under this paragraph (g)(5) from CMS, in the form and manner specified by CMS, no later than the attestation deadline specified in paragraph (e) of this section or 30 days after the end of the cost reporting year, whichever is later, for each cost reporting year that the facility furnishes treatments equal to or in excess of 4,000 due to temporary patient-shifting as a result of the closure or operational disruption of an ESRD facility resulting from a disaster or other emergency; (iii) Within 30 days of CMS’s receipt of the facility’s request, CMS will PO 00000 Frm 00163 Fmt 4701 Sfmt 4700 76505 review the request and either approve the request based on a determination that the ESRD facility furnished treatments equal to or in excess of 4,000 in the cost reporting year due to temporary patient-shifting as a result of the closure or operational disruption of an ESRD facility resulting from a disaster or other emergency, or deny the request, and will notify the facility and the MAC of its decision; (iv) If CMS approves the request, the ESRD facility is paid the low-volume adjustment on claims for Medicare beneficiaries, on the basis of the exception in this paragraph (g)(5), during the payment year in which the temporary patient-shifting occurred, so long as all other requirements for the low-volume adjustment are met. For any future payment year, the ESRD facility would not be prevented from receiving the low-volume adjustment if the ESRD facility meets or exceeds the 4,000 treatment threshold in a cost reporting year due to temporary patient-shifting as a result of the disaster or other emergency that resulted in another ESRD facility’s closure or operational disruption, so long as all other requirements for the low-volume adjustment are met; and (v) The facility must maintain documentation of the number of displaced patients treated and information about the ESRD facility or facilities that closed or experienced operational disruptions due to a disaster or other emergency and previously treated those patients, and must provide such supporting documentation to CMS and the MAC upon request. (6) In the case of an ESRD facility that closes due to a disaster or other emergency and later reopens, the ESRD facility may attest in the attestation specified in paragraph (e) of this section that CMS has granted an exception to the requirements specified in paragraph (b)(2) of this section because it closed due to a disaster or other emergency. For any facility that so attests— (i) The ESRD facility would need to request such an exception from CMS, in the form and manner specified by CMS, within 60 days of the facility’s closure, and the ESRD facility must inform the MAC of this request in writing; (ii) With 30 days of CMS’s receipt of the facility’s request, CMS will review the request and either approve the request based on a determination that the ESRD facility closed due to a disaster or other emergency, or deny the request, and will inform both the facility and the MAC of its decision; and (iii) If CMS approves the request, the exception under this paragraph (g)(6) will be applicable for a period E:\FR\FM\06NOR2.SGM 06NOR2 76506 Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations consisting of the remainder of the cost reporting year (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) in which the closure occurred and the following full 2 cost reporting years. After this period the ESRD facility would follow the general attestation process for the low-volume adjustment specified in paragraph (e) of this section and this paragraph (g). (iv) The ESRD facility that attests under this paragraph (g)(6) to have closed due to a disaster or other emergency would need to notify CMS and the MAC, in the form and manner specified by CMS, within 30 days reopening and providing renal dialysis services. Within 30 days of CMS’s receipt of the facility’s notification, CMS will confirm receipt to the facility and the MAC of the facility’s notification and the ESRD facility will be able to receive the low-volume adjustment as of the date of reopening, so long as all other requirements for the low-volume adjustment are met. (v) The ESRD facility must maintain documentation regarding its closure, and must provide such supporting documentation to CMS and/or the MAC upon request. * * * * * ■ 6. Section 413.234 is amended by: ■ a. Adding paragraph (b)(1)(iii); ■ b. Revising paragraph (c)(1)(i); and ■ c. Adding paragraphs (c)(1)(ii), (c)(3), and (g). The additions and revision read as follows: § 413.234 Drug designation process. ddrumheller on DSK120RN23PROD with RULES2 * * * * * (b) * * * (1) * * * (iii) The new renal dialysis drug or biological product is paid for using the add-on payment adjustment described in paragraphs (c)(3) and (g) of this section, referred to as the posttransitional drug add-on payment adjustment (TDAPA) add-on payment adjustment. * * * * * (c) * * * (1) * * * (i) Following payment of the transitional drug add-on payment adjustment, the new renal dialysis drug or biological product is paid the postTDAPA add-on payment adjustment as set forth in paragraphs (c)(3) and (g) of this section. (ii) Following payment of the transitional drug add-on payment adjustment the ESRD PPS base rate will not be modified. * * * * * VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 (3) For any new renal dialysis drug or biological product that is eligible for payment using the transitional drug add-on payment adjustment described in paragraphs (b)(1)(iii) and (c)(1) of this section, CMS applies a post-TDAPA add-on payment adjustment to all ESRD PPS claims that is calculated using the methodology set forth in paragraph (g) of this section. CMS will apply the postTDAPA add-on payment adjustment beginning 8 calendar quarters after the first calendar quarter in which the transitional drug add-on payment adjustment is paid for the applicable product, and ending 12 calendar quarters after the end of the last calendar quarter in which the transitional drug add-on payment adjustment is paid for the applicable product. If CMS stops receiving the latest full calendar quarter of ASP data for the applicable renal dialysis drug or biological product during the applicable time period specified in paragraph (c)(1) of this section or during the 3-year period following such applicable time period, CMS will not pay any postTDAPA add-on payment adjustment for such product in any future year. * * * * * (g) Post-TDAPA add-on payment adjustment methodology. CMS uses the following methodology to calculate the post-TDAPA add-on payment adjustment described in paragraph (c)(3) of this section: (1) CMS bases the calculation on the most recent 12-month period of utilization for the new renal dialysis drug or biological product and the most recent available full calendar quarter of ASP data. If the most recent full calendar quarter of ASP data reflects zero or negative sales, then the calculation is based on 100 percent of WAC and, when WAC is not available, the payment is based on the drug manufacturer’s invoice. (2) CMS calculates the post-TDAPA add-on payment adjustment annually as the expenditure for the new renal dialysis drug or biological product divided by the total number of ESRD PPS treatments during the same period. (3) CMS applies a reduction factor to the post-TDAPA add-on payment adjustment for case mix standardization to reflect estimated increases resulting from the application of the patient-level adjustments as described in paragraph (g)(5) of this section. This reduction factor is calculated based on the patientlevel adjustments (as described in § 413.235) applicable to the most recent 12-month period of utilization of ESRD PPS claims. (4) The amount of the post-TDAPA add-on payment adjustment is equal to PO 00000 Frm 00164 Fmt 4701 Sfmt 4700 65 percent of the amount calculated in paragraph (g)(2) of this section, multiplied by the reduction factor specified in paragraph (g)(3) of this section, and multiplied by the latest available forecast of annual growth in the ESRD bundled market basket composite price proxy for pharmaceuticals. (5) The post-TDAPA add-on payment adjustment that is applied to an ESRD PPS claim is adjsuted by any applicable patient-level case-mix adjustments under § 413.235. ■ 7. Section 413.235 is amended by revising paragraph (b) to read as follows: § 413.235 Patient-level adjustments. * * * * * (b) CMS adjusts the per treatment base rate for Pediatric ESRD Patients in accordance with section 1881(b)(14)(D)(iv)(I) of the Act as follows: (1) To account for patient age and treatment modality; and (2) Beginning January 1, 2024, to provide a per-treatment transitional add-on payment adjustment of 30 percent of the per treatment payment amount under § 413.230 for renal dialysis services furnished to Pediatric ESRD Patients during calendar years 2024, 2025, and 2026. * * * * * ■ 8. Section 413.236 is amended by revising paragraph (b)(2) to read as follows: § 413.236 Transitional add-on payment adjustment for new and innovative equipment and supplies. * * * * * (b) * * * (2) Is new, meaning a complete application has been submitted to CMS under paragraph (c) of this section within 3 years of the date of the Food and Drug Administration (FDA) marketing authorization; * * * * * PART 512—RADIATION ONCOLOGY MODEL AND END STAGE RENAL DISEASE TREATMENT CHOICES MODEL 9. The authority citation for part 512 continues to read as follows: ■ Authority: 42 U.S.C. 1302, 1315a, and 1395hh. 10. Section 512.390 is amended by removing paragraph (c)(5) and adding paragraph (d). The addition reads as follows: ■ § 512.390 Notification, data sharing, and targeted review. * E:\FR\FM\06NOR2.SGM * * 06NOR2 * * Federal Register / Vol. 88, No. 213 / Monday, November 6, 2023 / Rules and Regulations ddrumheller on DSK120RN23PROD with RULES2 (d) Review of targeted review decisions. The Administrator may review a targeted review request when administrative review is requested by an ETC Participant within 15-calendar days of a targeted review request determination made by CMS. (1) Administrative review. Within 45 days of the date of the ETC Participant’s request for administrative review, the CMS Administrator may act as follows: (i) Decline to review a targeted review request determination made by CMS; VerDate Sep<11>2014 00:42 Nov 04, 2023 Jkt 262001 (ii) Render a final decision based on the CMS Administrator’s review of the targeted review request determination; or (iii) Choose to take no action on the request for administrative review. (2) Administrative review determinations. The targeted review determination made by the CMS Administrator is final if the CMS Administrator declines an ETC Participant’s request for administrative review or if the CMS Administrator does PO 00000 Frm 00165 Fmt 4701 Sfmt 9990 76507 not take any action on the ETC Participant’s request for administrative review by the end of the 45-day period described in paragraph (d)(1) of this section. CMS–1782–F Dated: October 25, 2023. Xavier Becerra, Secretary, Department of Health and Human Services. [FR Doc. 2023–23915 Filed 10–27–23; 4:15 pm] BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2

Agencies

[Federal Register Volume 88, Number 213 (Monday, November 6, 2023)]
[Rules and Regulations]
[Pages 76344-76507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23915]



[[Page 76343]]

Vol. 88

Monday,

No. 213

November 6, 2023

Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 413 and 512





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, and 
End-Stage Renal Disease Treatment Choices Model; Final Rule

Federal Register / Vol. 88 , No. 213 / Monday, November 6, 2023 / 
Rules and Regulations

[[Page 76344]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 413 and 512

[CMS-1782-F]
RIN 0938-AV05


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, and End-Stage Renal Disease Treatment Choices Model

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Final rule.

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SUMMARY: This final rule updates and revises the End-Stage Renal 
Disease (ESRD) Prospective Payment System (PPS) for calendar year (CY) 
2024. 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 final rule updates requirements for the 
ESRD Quality Incentive Program and the ESRD Treatment Choices Model.

DATES: These regulations are effective on January 1, 2024.

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.
    [email protected], for issues related to applications 
for the Transitional Drug Add-on Payment Adjustment (TDAPA) or 
Transitional Add-On Payment Adjustment for New and Innovative Equipment 
and Supplies (TPNIES).
    [email protected], for issues related to the ESRD Quality 
Incentive Program (QIP).
    [email protected], for issues related to the ESRD Treatment 
Choices (ETC) Model.

SUPPLEMENTARY INFORMATION: 
    Current Procedural Terminology (CPT) Copyright Notice: Throughout 
this final rule, we use CPT[supreg] codes and descriptions to refer to 
a variety of services. We note that CPT[supreg] codes and descriptions 
are copyright 2020 American Medical Association (AMA). All Rights 
Reserved. CPT[supreg] is a registered trademark of the AMA. Applicable 
Federal Acquisition Regulations (FAR) and Defense Federal Acquisition 
Regulations (DFAR) apply.

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) 2024 End-Stage Renal Disease (ESRD) 
Prospective Payment System (PPS)
    A. Background
    B. Provisions of the Proposed Rule, Public Comments, and 
Responses to the Comments on the CY 2024 ESRD PPS
    C. Transitional Add-On Payment Adjustment for New and Innovative 
Equipment and Supplies (TPNIES) Clarifications and Application for 
CY 2024 Payment
    D. Continuation of Approved Transitional Add-On Payment 
Adjustments for New and Innovative Equipment and Supplies for CY 
2024
    E. Continuation of Approved Transitional Drug Add-On Payment 
Adjustments for CY 2024
III. Calendar Year (CY) 2024 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 CY 2024 Payment for Renal Dialysis Services 
Furnished to Individuals With AKI
    C. Annual Payment Rate Update for CY 2024
IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
    A. Background
    B. Updates to the Regulation Text for the ESRD QIP
    C. Updates to the Requirements Beginning With the PY 2026 ESRD 
QIP
    D. Updates to the Requirements Beginning With the PY 2027 ESRD 
QIP
V. End-Stage Renal Disease Treatment Choices (ETC) Model
    A. Background
    B. Summary of the Proposed Provisions, Public Comments, and 
Responses to Comments on the ETC Model
VI. Collection of Information Requirements
VII. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. Impact Analysis
    D. Detailed Economic Analysis
    E. Accounting Statement
    F. Regulatory Flexibility Act Analysis (RFA)
    G. Unfunded Mandates Reform Act Analysis (UMRA)
    H. Federalism
    I. Congressional Review Act
VIII. Files Available to the Public via the Internet

I. Executive Summary

A. Purpose

    This 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), the 
ESRD Quality Incentive Program (QIP), and the ESRD Treatment Choices 
(ETC) Model. Additionally, this rule finalizes policies that reflect 
our commitment to achieving equity in health care for our beneficiaries 
by supporting our ability to assess whether, and to what extent, our 
programs and policies perpetuate or exacerbate systemic barriers to 
opportunities and benefits for underserved communities. Our policy 
objectives include commitment to advancing health equity, which stands 
as the first pillar of the Centers for Medicare & Medicaid Services 
(CMS) Strategic Plan,\1\ and reflect the goals of the Administration, 
as stated in the President's Executive Order 13985.\2\ We define health 
equity as the attainment of the highest level of health for all people, 
where everyone has a fair and just opportunity to attain their optimal 
health regardless of race, ethnicity, disability, sexual orientation, 
gender identity, socioeconomic status, geography, preferred language, 
or other factors that affect access to care and health outcomes.'' \3\ 
In the calendar year (CY) 2023 ESRD PPS final rule, we noted that, when 
compared with all Medicare fee-for-service (FFS) beneficiaries, 
Medicare FFS beneficiaries receiving dialysis are disproportionately 
young, male, African American, have disabilities and low income as 
measured by eligibility for both Medicare and Medicaid (dual eligible 
status), and reside in an urban setting (87 FR 67183). In this final 
rule, we continue to address health equity for beneficiaries with ESRD 
who are members of underserved communities, including but not limited 
to those living in rural communities, those who have disabilities, and 
racial and ethnic minorities. The term `underserved communities' refers 
to populations sharing a particular characteristic, including 
geographic communities, that have been systematically denied a full

[[Page 76345]]

opportunity to participate in aspects of economic, social, and civic 
life.\4\ Specifically, in the CY 2024 ESRD PPS proposed rule (88 FR 
42431), we requested information regarding a potential payment 
adjustment for geographically isolated and rural ESRD facilities, 
proposed additional payment for the subgroup of Pediatric ESRD Patients 
(as defined in 42 CFR 413.171), and proposed policies to further our 
efforts to determine if payment to ESRD facilities treating patients 
with co-morbidities such as sickle cell anemia is aligned with resource 
use by such ESRD facilities. As discussed in sections II.B.1.g and 
II.B.1.j of this final rule, we are now finalizing the proposed payment 
adjustment for Pediatric ESRD Patients and policies to improve the 
measurement of individual resource use. Additionally, we are adding 
three new measures to the ESRD QIP measure set that are aimed at 
promoting health equity for ESRD patients, including by enabling ESRD 
facilities to identify gaps experienced by their patient populations.
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    \1\ Centers for Medicare & Medicaid Services (2022). Health 
Equity. Available at: https://www.cms.gov/pillar/health-equity.
    \2\ 86 FR 7009 (January 25, 2021). https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
    \3\ Centers for Medicare & Medicaid Services (2022). Health 
Equity. Available at: https://www.cms.gov/pillar/health-equity.
    \4\ 86 FR 7009 (January 25, 2021). https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
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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 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 percentage increase, 
reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act. This final rule updates the ESRD PPS 
for CY 2024.
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 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 final rule updates the AKI payment 
rate for CY 2024.
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 establishes 
incentives for facilities to achieve high quality performance on 
measures with the goal of improving outcomes for ESRD beneficiaries. 
This final rule finalizes several updates for the ESRD QIP, including: 
(1) updates that will begin with Payment Year (PY) 2026, including one 
new quality measure, modifications to two current measures, and the 
removal of two measures; (2) the addition of two new measures beginning 
with PY 2027; (3) a revision to the regulatory definition of ``minimum 
total performance score'' that more accurately captures how we 
calculate the median of national ESRD facility performance on reporting 
measures; and (4) the codification of our previously finalized measure 
selection, retention, and removal policies.
4. End-Stage Renal Disease Treatment Choices (ETC) Model
    The ETC Model is a mandatory Medicare payment model tested under 
section 1115A of the Act. The ETC Model is operated by the Center for 
Medicare and Medicaid Innovation (Innovation Center) and tests the use 
of payment adjustments to encourage greater utilization of home 
dialysis and kidney transplants, to preserve or enhance the quality of 
care furnished to Medicare beneficiaries while reducing Medicare 
expenditures.
    The ETC Model was finalized as part of a final rule published in 
the Federal Register on September 29, 2020, titled ``Medicare Program: 
Specialty Care Models to Improve Quality of Care and Reduce 
Expenditures'' (85 FR 61114), referred to herein as the ``Specialty 
Care Models final rule.'' We revised and updated certain ETC Model 
policies in the CY 2022 ESRD PPS final rule (86 FR 61874), and the CY 
2023 ESRD PPS final rule (87 FR 67136). In this final rule, we are 
finalizing a modification to our regulations at 42 CFR 512.390 to 
acknowledge the availability of administrative review of targeted 
review requests. This change will provide ETC Participants with 
information about the availability of administrative review if an ETC 
Participant wishes to seek additional review of its targeted review 
request.

B. Summary of the Major Provisions

1. ESRD PPS
     Update to the ESRD PPS base rate for CY 2024: The final CY 
2024 ESRD PPS base rate is $271.02, an increase from the CY 2023 ESRD 
PPS base rate of $265.57. This amount reflects the application of the 
combined wage index and transitional pediatric ESRD add-on payment 
adjustment (TPEAPA) budget-neutrality adjustment factor (0.999534) and 
a productivity-adjusted market basket percentage increase of 2.1 
percent as required by section 1881(b)(14)(F)(i)(I) of the Act, 
equaling $271.02 (($265.57 x 0.999534) x 1.021 = $271.02).
     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 2024, we are updating the wage index values based on the latest 
available data.
     Annual update to the outlier policy: We are updating the 
outlier policy based on the most current data. Accordingly, we are 
updating the Medicare allowable payment (MAP) amounts for adult and 
pediatric patients for CY 2024 using the latest available CY 2022 
claims data. We are updating the ESRD outlier services fixed dollar 
loss (FDL) amount for pediatric patients using the latest available CY 
2022 claims data and updating the FDL amount for adult patients using 
the latest available claims data from CY 2020, CY 2021, and CY 2022. 
For pediatric beneficiaries, the final FDL amount will decrease from 
$23.29 to $11.32, and the MAP amount will decrease from $25.59 to 
$23.36, as compared to CY 2023 values. For adult beneficiaries, the 
final FDL amount will decrease from $73.19 to $71.76, and the MAP 
amount will decrease from $39.62 to $36.28. The 1.0 percent target for 
outlier payments was not achieved in CY 2022. Outlier payments 
represented approximately 0.8 percent of total

[[Page 76346]]

Medicare payments rather than 1.0 percent.
     Update to the offset amount for the transitional add-on 
payment adjustment for new and innovative equipment and supplies 
(TPNIES) for CY 2024: The final CY 2024 average per treatment offset 
amount for the TPNIES for capital-related assets that are home dialysis 
machines is $10.00. This offset amount reflects the application of the 
ESRD Bundled (ESRDB) productivity-adjusted market basket update of 2.1 
percent ($9.79 x 1.021 = $10.00). There are no capital-related assets 
set to receive the TPNIES in CY 2024 for which this offset will apply.
     Clarifications to the TPNIES eligibility criteria: We are 
finalizing certain clarifications regarding our evaluation of the 
TPNIES eligibility criteria under Sec.  413.236(b).
     TPNIES application received for CY 2024: In this final 
rule, we announce our determination on the one TPNIES application under 
consideration for the TPNIES for CY 2024 payment.
     Modifications to the administrative process for the low-
volume payment adjustment (LVPA): We are finalizing exceptions to the 
current LVPA attestation process for ESRD facilities that are affected 
by disasters and other emergencies. These exceptions will allow ESRD 
facilities to close and reopen in response to a disaster or other 
emergency and still receive the LVPA. Additionally, the exceptions will 
allow an ESRD facility to receive the LVPA even if it exceeds the LVPA 
treatment volume threshold if its treatment counts increase due to 
treating additional patients displaced by a disaster or emergency.
     Policy to measure patient-level utilization: We are 
finalizing a requirement for ESRD facilities to report the time on 
machine (that is, the amount of time that a beneficiary spends 
receiving an in-center hemodialysis treatment) on claims, effective 
January 1, 2025. This will serve to provide more data to better inform 
CMS's pursuit of equitable payment policies in the future.
     Transitional Pediatric ESRD Add-on Payment Adjustment 
(TPEAPA): We are finalizing the establishment of a new budget neutral 
add-on payment adjustment of 30 percent of the per treatment payment 
amount for renal dialysis services furnished to Pediatric ESRD Patients 
effective January 1, 2024, for CYs 2024, 2025, and 2026. This will 
serve to bring Medicare payments for renal dialysis services furnished 
to pediatric patients more in line with their estimated relative costs 
for the next 3 years until further collection and analysis of cost 
report data can be conducted.
     Add-on payment adjustment following the end of the 
transitional drug add-on payment adjustment (TDAPA) period: We are 
finalizing a new add-on payment adjustment for certain new renal 
dialysis drugs and biological products in existing ESRD PPS functional 
categories after the end of the TDAPA period, which we call the post-
TDAPA add-on payment adjustment. This payment adjustment will be case-
mix adjusted and set at 65 percent of expenditure levels for the given 
renal dialysis drug or biological product. The post-TDAPA add-on 
payment adjustment will be applied to all ESRD PPS payments and paid 
for 3 years.
     Reporting of discarded billing units of certain renal 
dialysis drugs and biological products paid for under the ESRD PPS: We 
are finalizing a new policy to require the use of the JW or JZ modifier 
on claims to track discarded amounts of single-dose container and 
single-use package renal dialysis drugs and biological products paid 
for under the ESRD PPS, effective January 1, 2025.
2. Payment for Renal Dialysis Services Furnished to Individuals With 
AKI
    We are updating the AKI payment rate for CY 2024. The final CY 2024 
payment rate is $271.02, which is the same as the base rate finalized 
for the ESRD PPS for CY 2024.
3. ESRD QIP
    We are finalizing several updates for the ESRD QIP. Beginning with 
PY 2026, we are adding the Facility Commitment to Health Equity 
reporting measure to the ESRD QIP measure set, modifying the COVID-19 
Vaccination Coverage Among Healthcare Personnel (HCP) reporting measure 
to align with updated measure specifications developed by the Centers 
for Disease Control and Prevention (CDC), removing the Ultrafiltration 
Rate reporting measure and the Standardized Fistula Rate clinical 
measure, and updating the Clinical Depression Screening and Follow-Up 
measure's scoring methodology and converting that measure to a clinical 
measure. Beginning with PY 2027, we are adding the Screening for Social 
Drivers of Health reporting measure and the Screen Positive Rate for 
Social Drivers of Health reporting measure to the ESRD QIP measure set. 
In addition, we are revising the codified definition of ``minimum total 
performance score'' and codifying our previously finalized measure 
selection, retention, and removal policies.
4. ETC Model
    We are finalizing a modification to our regulations at Sec.  
512.390 to acknowledge the ability of the CMS Administrator to review 
the results of ETC Participants' targeted review requests.
C. Summary of Costs and Benefits
    In section VII.D.5 of this final rule, we set forth a detailed 
analysis of the impacts that the finalized changes will have on 
affected entities and beneficiaries. The impacts include the following:
1. Impacts of the Final ESRD PPS
    The impact table in section VII.D.5.a of this final rule displays 
the estimated change in Medicare payments to ESRD facilities in CY 2024 
compared to estimated Medicare payments in CY 2023. The overall impact 
of the CY 2024 changes is projected to be a 2.1 percent increase in 
Medicare payments. Hospital-based ESRD facilities have an estimated 3.1 
percent increase in Medicare payments compared with freestanding ESRD 
facilities with an estimated 2.0 percent increase. We estimate that the 
aggregate ESRD PPS expenditures will increase by approximately $190 
million in CY 2024 compared to CY 2023. This reflects an increase of 
approximately $180 million from the payment rate update and the final 
post-TDAPA add-on payment adjustment and approximately $10 million in 
estimated TDAPA payment amounts for Korsuva[supreg] and Jesduvroq 
(daprodustat), as further described in the following paragraphs. 
Because of the projected 2.1 percent overall payment increase, we 
estimate there will be an increase in beneficiary coinsurance payments 
of 2.1 percent in CY 2024, which translates to approximately $40 
million.
    Section 1881(b)(14)(D)(iv) of the Act provides that the ESRD PPS 
may include such other payment adjustments as the Secretary determines 
appropriate. Under this authority, CMS implemented Sec.  413.234 to 
establish the TDAPA, a transitional drug add-on payment adjustment for 
certain new renal dialysis drugs and biological products and Sec.  
413.236 to establish the TPNIES, a transitional add-on payment 
adjustment for certain new and innovative equipment and supplies. The 
TDAPA and the TPNIES are not budget neutral.
    As discussed in section II.D of this final rule, the TPNIES payment 
period for the Tablo[supreg] System ends on December 31, 2023. As 
discussed in section II.E of this final rule, the TDAPA

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payment period for Korsuva[supreg] (difelikefalin) will continue 
through March 31, 2024, and for Jesduvroq, will continue throughout 
2024. As described in section VII.D.5 of this final rule, we estimate 
that the overall TDAPA payment amounts in CY 2024 will be approximately 
$13.3 million, of which, approximately $2.7 million will be attributed 
to beneficiary coinsurance amounts. We note that these expenditures are 
estimated in addition to the overall $180 million increase described in 
the preceding paragraphs and are not fully represented in the detailed 
impact analysis shown in Table 24.
    Lastly as discussed in section II.B.1.i of this final rule, we are 
finalizing a non-budget-neutral payment adjustment for certain new 
renal dialysis drugs and biological products after the TDAPA period 
ends, starting in CY 2024. The structure of the post-TDAPA add-on 
payment adjustment for a new renal dialysis drug or biological product 
will be based on the case-mix adjusted average per-treatment 
expenditure for such drug or biological product. We will apply a 65 
percent risk-sharing adjustment to the calculated payment amount for 
the post-TDAPA add-on payment adjustment. We are finalizing a 3-year 
period following TDAPA during which the drug or biological product 
would be included in the post-TDAPA add-on payment adjustment. During 
this period, the renal dialysis drug or biological product would be 
considered for outlier payments, if it meets the definition of an ESRD 
outlier service. The first drug that will meet these criteria in CY 
2024 will be Korsuva[supreg], which fits into the existing ESRD PPS 
functional category for antipruritic drugs and biological products. The 
post-TDAPA add-on payment adjustment calculated for Korsuva[supreg] 
will be $0.2493.
2. Impacts of the Final Payment Rate for Renal Dialysis Services 
Furnished to Individuals With AKI
    The impact table in section VII.D.5.c of this final rule displays 
the estimated change in Medicare payments to ESRD facilities for renal 
dialysis services furnished to individuals with AKI compared to 
estimated Medicare payments for such services in CY 2023. The overall 
impact of the CY 2024 changes is projected to be a 2.0 percent increase 
in Medicare payments for individuals with AKI. Hospital-based ESRD 
facilities have an estimated 2.1 percent increase in Medicare payments 
compared with freestanding ESRD facilities that have an estimated 2.0 
percent increase. The overall impact reflects the effects of the final 
Medicare payment rate update and final CY 2024 ESRD PPS wage index. We 
estimate that the aggregate Medicare payments made to ESRD facilities 
for renal dialysis services furnished to individuals with AKI, at the 
final CY 2024 ESRD PPS base rate, will increase by $1 million in CY 
2024 compared to CY 2023.
3. Impacts of the Final Changes to the ESRD QIP
    We estimate that the overall economic impact of the PY 2026 ESRD 
QIP will be approximately $136.9 million. The $136.9 million estimate 
for PY 2026 includes $120.9 million in costs associated with the 
collection of information requirements and approximately $16 million in 
payment reductions across all facilities. We also estimate that the 
overall economic impact of the PY 2027 ESRD QIP will be approximately 
$144.3 million. The $144.3 million estimate for PY 2027 includes $130.5 
million in costs associated with the collection of information 
requirements and approximately $13.8 million in payment reductions 
across all facilities.
4. Impacts of the Final Changes to the ETC Model
    The impact estimate in section VII.D.5.d of this final rule 
describes the estimated change in anticipated Medicare program savings 
arising from the ETC Model over the duration of the ETC Model as a 
result of the changes in this final rule. We estimate that the ETC 
Model will result in $28 million in net savings over the 6.5-year 
duration of the ETC Model. We also estimate that the changes in this 
final rule will produce no change in net savings for the ETC Model. As 
the ETC Model targeted review process has already been finalized in the 
Specialty Care Models final rule and ETC Participants are not required 
to seek administrative review of targeted review determinations, we 
expect there will be minimal additional burden associated with the 
administrative review policy we are finalizing.

II. Calendar Year (CY) 2024 End Stage Renal Disease (ESRD) Prospective 
Payment System (PPS)

A. Background

1. Statutory Background
    On January 1, 2011, CMS 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 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 (Affordable Care Act) 
(Pub. L. 111-148), established that beginning with CY 2012, and each 
subsequent year, the Secretary shall annually increase payment amounts 
by an ESRD market basket percentage increase 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. 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 percentage increase 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

[[Page 76348]]

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.
    Section 204 of the Stephen Beck, Jr., Achieving a Better Life 
Experience Act of 2014 (ABLE) (Pub. L. 113-295) 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 drugs and biological products 
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 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 definition 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, and four comorbidity categories (that is, pericarditis, 
gastrointestinal tract bleeding, hereditary hemolytic or sickle cell 
anemia, myelodysplastic syndrome). A different set of case-mix 
adjusters are applied for the pediatric population. Pediatric patient-
level adjusters include two age categories (under age 13, or age 13 to 
17) and two dialysis modalities (that is, peritoneal or hemodialysis) 
(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 payment 
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).
    There are four additional payment adjustments under the ESRD PPS. 
The ESRD PPS provides adjustments, when applicable, for: (1) a training 
add-on for home and self-dialysis modalities (Sec.  413.235(c)); (2) an 
additional payment for high cost outliers due to unusual variations in 
the type or amount of medically necessary care (Sec.  413.237); (3) a 
TDAPA for certain new renal dialysis drugs and biological products 
(Sec.  413.234(c)); and (4) a TPNIES for certain 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.
    Most recently, we published a final rule, which appeared in the 
November 7, 2022, issue of 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, and End-Stage Renal Disease Quality Incentive Program, and End-
Stage Renal Disease Treatment Choices Model,'' referred to herein as 
the ``CY 2023 ESRD PPS final rule.'' In that rule, we updated the ESRD 
PPS base rate, wage index, and outlier policy for CY 2023. We also 
finalized changes that included rebasing and revising the ESRD Bundled 
(ESRDB) market basket to reflect a 2020 base year, refining the 
methodology for outlier calculations, implementing a wage index floor 
of 0.600, implementing a permanent 5 percent cap on year-over-year wage 
index decreases for ESRD facilities, and modifying the definition of 
``oral-only drug.'' For further detailed information regarding these 
updates, see 87 FR 67136.

B. Provisions of the Proposed Rule, Public Comments, and Response to 
the Comments on the CY 2024 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, End-Stage Renal 
Disease Quality Incentive Program, and End-Stage Renal Disease 
Treatment Choices Model'' (88 FR 42430 through 42544), referred to 
herein as the ``CY 2024 ESRD PPS proposed rule,'' appeared in the 
Federal Register on June 30, 2023, with a comment period that ended on 
August 25, 2023. In that rule, we proposed to make a number of annual 
updates for CY 2024, including updates to the ESRD PPS base rate, wage 
index, outlier policy, and the offset amount for the TPNIES. We also 
proposed two new exceptions to the LVPA eligibility requirements for 
ESRD facilities impacted by a disaster or other emergency, a new add-on 
payment adjustment for pediatric ESRD patients, a new add-on payment 
adjustment for certain new drugs and biological products after the 
TDAPA period ends, a new reporting requirement for discarded billing 
units of certain renal dialysis drugs or biological products, and a new 
reporting requirement for time on machine data for in-center 
hemodialysis treatments. We proposed clarifications regarding our 
evaluation of the TPNIES eligibility criteria under Sec.  413.236(b) 
and included a summary of the one CY 2024 TPNIES application that we 
received by the February 1, 2023 deadline with our preliminary analysis 
of the applicant's claims related to substantial clinical improvement 
and other eligibility criteria for the TPNIES. In addition, the 
proposed rule included a request for information regarding potential 
changes to the LVPA and a potential new payment adjustment for 
geographic isolation.
    We received 344 public comments on our ESRD PPS proposals, 
including comments from kidney and dialysis organizations, such as 
large and small dialysis organizations; for-profit and non-profit ESRD 
facilities; ESRD networks; and a dialysis coalition. We also received 
comments from patients; healthcare providers for adult and pediatric 
ESRD beneficiaries; home renal dialysis services and advocacy 
organizations; provider and legal advocacy organizations; 
administrators and insurance groups; a non-profit dialysis association, 
a professional association, and alliances for kidney care and home 
dialysis stakeholders; drug and device manufacturers; health care 
systems; a health care consultant; and the Medicare Payment Advisory 
Commission (MedPAC).
    We received comments related to issues that we either did not 
discuss in the CY 2024 ESRD PPS proposed rule or that we discussed for 
the purpose of background or context, but for which we did not propose 
changes in the rule. These include, for example, concerns regarding 
staff training, education for kidney disease patients, access to 
innovation for Medicare Advantage

[[Page 76349]]

beneficiaries, transportation for ESRD patients, nutrition for ESRD 
patients, and telehealth. We also received several comments on Medicare 
coverage for certain Humanitarian Use Devices. We are not providing 
detailed responses to those comments in this final rule because they 
are out of the scope of the CY 2024 ESRD PPS proposed rule. We thank 
the commenters for their input and will consider the recommendations in 
potential future rulemaking.
    We received numerous comments on the potential inclusion of oral-
only drugs into the ESRD PPS bundled payment beginning January 1, 2025. 
As noted in the CY 2023 ESRD PPS final rule (87 FR 67180), we expect 
that the only oral-only drugs and biological products that would be 
included in the ESRD bundled payment in CY 2025 are phosphate binders. 
Commenters expressed concerns on potential access and health equity 
issues, which could result from including oral-only drugs and 
biological products in the ESRD PPS bundled payment. Some commenters 
also expressed additional concerns associated with the potential 
inclusion of oral-only drugs and biological products in the ESRD PPS 
bundled payment, such as concerns about the following: the 
administrative burden of managing a patient's dosage and combination of 
phosphate lowering drugs; administration of the prescription insofar as 
patients think they must go to the ESRD facility to obtain the 
phosphate binders; confusion for patients, in that some patients think 
the phosphate lowering drugs would only be dispensed at the ESRD 
facility, and since the drugs must be taken with food, they would not 
be able to take the drugs because eating during dialysis is not 
allowed, or they must go to the ESRD facility to get the phosphate 
binders even when they do not have a dialysis treatment; innovation of 
new oral-only drugs and biological products, such as phosphate lowering 
therapies, would be unavailable because of the cost of the new drugs or 
biological products; and the definition of oral-only drugs and 
biological products for phosphate lowering agents until an intravenous 
or injectable equivalent of the drug is available. We thank the 
commenters for their insight regarding the potential inclusion of oral-
only drugs and biological products in the ESRD PPS bundled payment 
beginning in CY 2025; however, we did not make any proposals related to 
the potential inclusion of oral-only drugs and biological products in 
the ESRD PPS bundled payment in CY 2025 in the CY 2024 ESRD PPS 
proposed rule. We will take commenters' insight, concerns, and 
recommendations into consideration for future rulemaking on this topic.
    Additionally, we received some comments from commenters including 
ESRD patients and caregivers which contained details of quality-of-care 
concerns or adverse quality events for which the commenters had first-
hand experience. We address these comments as they concern the 
proposals in the CY 2024 ESRD PPS proposed rule, but we wish to note 
that any serious adverse quality events can be reported to the CMS 
ombudsman. Information on beneficiary rights and how to report quality 
events can be found at https://www.cms.gov/center/special-topic/ombudsman/medicare-beneficiary-ombudsman-home.
    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 2024 ESRD PPS.
1. CY 2024 ESRD PPS Update
a. CY 2024 ESRD Bundled (ESRDB) Market Basket Percentage Increase; 
Productivity Adjustment; and Labor-Related Share
(1) Background
    In accordance with section 1881(b)(14)(F)(i) of the Act, as added 
by section 153(b) of MIPPA and amended by section 3401(h) of the 
Affordable Care Act, beginning in 2012, the ESRD PPS payment amounts 
are required to be annually increased by an ESRD market basket 
percentage increase 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. Section 
1881(b)(14)(F)(i) of the Act 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 included in renal dialysis 
services.
    As required under section 1881(b)(14)(F)(i) of the Act, CMS 
developed an all-inclusive ESRD Bundled (ESRDB) input price index using 
CY 2008 as the base year (75 FR 49151 through 49162). We subsequently 
revised and rebased the ESRDB input price index to a base year of CY 
2012 in the CY 2015 ESRD PPS final rule (79 FR 66129 through 66136). In 
the CY 2019 ESRD PPS final rule (83 FR 56951 through 56964), we 
finalized a rebased ESRDB input price index to reflect a CY 2016 base 
year. In the CY 2023 ESRD PPS final rule (87 FR 67141 through 67154), 
we finalized a revised and rebased ESRDB input price index to reflect a 
CY 2020 base year.
    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.
    The ESRDB market basket is a fixed-weight, Laspeyres-type price 
index. A Laspeyres-type price index measures the change in price, over 
time, of the same mix of goods and services purchased in the base 
period. Any changes in the quantity or mix of goods and services (that 
is, intensity) purchased over time are not measured.
(2) CY 2024 ESRD Market Basket Update
    We proposed to use the 2020-based ESRDB market basket as finalized 
in the CY 2023 ESRD PPS final rule (87 FR 67141 through 67154) to 
compute the proposed CY 2024 ESRDB market basket percentage increase 
based on the best available data. Consistent with historical practice, 
we proposed to estimate the ESRDB market basket percentage increase 
based on IHS Global Inc.'s (IGI) forecast using the most recently 
available data at the time of rulemaking. IGI is a nationally 
recognized economic and financial forecasting firm with which CMS 
contracts to forecast the components of the market baskets. As 
discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42435 through 
42436), we proposed to calculate the market basket update for CY 2024 
based on the proposed market basket percentage increase and the 
proposed productivity adjustment, following our longstanding 
methodology.
(a) CY 2024 Market Basket Percentage Increase
    Based on IGI's first quarter 2023 forecast of the 2020-based ESRDB 
market basket, the proposed CY 2024 market basket percentage increase 
was 2.0 percent. We also proposed that if more recent data became 
available after the publication of the CY 2024 ESRD PPS proposed rule 
and before the publication of the final rule (for example, a more 
recent estimate of the market basket percentage increase), we would use 
such data, if appropriate, to determine the CY 2024 market basket 
percentage increase in this final rule.

[[Page 76350]]

(b) Productivity Adjustment
    Under section 1881(b)(14)(F)(i) of the Act, as amended by section 
3401(h) of the Affordable Care Act, for CY 2012 and each subsequent 
year, the ESRDB market basket percentage increase shall be reduced by 
the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) 
of the Act. The statute defines the productivity adjustment to be equal 
to the 10-year moving average of changes in annual economy-wide, 
private nonfarm business multifactor productivity (MFP) (as projected 
by the Secretary for the 10-year period ending with the applicable 
fiscal year (FY), year, cost reporting period, or other annual period) 
(the ``productivity adjustment'').
    The Bureau of Labor Statistics (BLS) publishes the official 
measures of productivity for the United States economy. As we noted in 
the CY 2023 ESRD PPS final rule (87 FR 67155), the productivity measure 
referenced in section 1886(b)(3)(B)(xi)(II) of the Act previously was 
published by BLS as private nonfarm business MFP. Beginning with the 
November 18, 2021, release of productivity data, BLS replaced the term 
``multifactor productivity'' with ``total factor productivity'' (TFP). 
BLS noted that this is a change in terminology only and will not affect 
the data or methodology.\5\ As a result of the BLS name change, the 
productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the 
Act is now published by BLS as private nonfarm business TFP; however, 
as mentioned previously, the data and methods are unchanged. We 
referred readers to https://www.bls.gov/productivity/ for the BLS 
historical published TFP data. A complete description of IGI's TFP 
projection methodology is available on CMS's website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch. In addition, in 
the CY 2022 ESRD PPS final rule (86 FR 61879), we noted that effective 
for CY 2022 and future years, we will be changing the name of this 
adjustment to refer to it as the productivity adjustment rather than 
the MFP adjustment. We stated this was not a change in policy, as we 
will continue to use the same methodology for deriving the adjustment 
and rely on the same underlying data.
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    \5\ Total Factor Productivity in Major Industries--2020. 
Available at: https://www.bls.gov/news.release/prod5.nr0.htm.
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    Based on IGI's first quarter 2023 forecast, the proposed 
productivity adjustment for CY 2024 (the 10-year moving average of TFP 
for the period ending CY 2024) was 0.3 percentage point. Furthermore, 
we proposed that if more recent data became available after the 
publication of the CY 2024 ESRD PPS proposed rule and before the 
publication of this final rule (for example, a more recent estimate of 
the productivity adjustment), we would use such data, if appropriate, 
to determine the CY 2024 productivity adjustment in this final rule.
(c) CY 2024 Market Basket Update
    In accordance with section 1881(b)(14)(F)(i) of the Act, we 
proposed to base the CY 2024 market basket percentage increase on IGI's 
first quarter 2023 forecast of the 2020-based ESRDB market basket. We 
proposed to then reduce this percentage increase by the estimated 
productivity adjustment for CY 2024 based on IGI's first quarter 2023 
forecast. Therefore, the proposed CY 2024 ESRDB market basket update 
was equal to 1.7 percent (2.0 percent market basket percentage increase 
reduced by a 0.3 percentage point productivity adjustment). 
Furthermore, as noted previously, we proposed that if more recent data 
became available after the publication of the CY 2024 ESRD PPS proposed 
rule and before the publication of the final rule (for example, a more 
recent estimate of the market basket and/or productivity adjustment), 
we would use such data, if appropriate, to determine the CY 2024 market 
basket percentage increase and productivity adjustment in the final 
rule.
    We invited public comment on our proposals for the CY 2024 ESRDB 
market basket update and productivity adjustment. Approximately 150 
commenters, including large dialysis organizations (LDOs); provider 
advocacy organizations; nonprofit dialysis associations; a coalition of 
dialysis organizations; a network of dialysis organizations; 
professional organizations and several ESRD facilities, commented on 
the proposed CY 2024 ESRDB market basket update. The following is a 
summary of the public comments received on these proposals and our 
responses.
    Comment: Commenters generally supported increasing the ESRD PPS 
base rate and the utilization of the most recent data available (for 
example, a more recent estimate of the market basket and/or 
productivity adjustment) to determine the final CY 2024 ESRD PPS 
update. MedPAC recommended that the ESRD PPS base rate increase for CY 
2024 should be updated by the amount determined under current law, and 
commented that analysis reported in the March 2023 Report to the 
Congress: Medicare Payment Policy \6\ concluded that this increase is 
warranted based on its analysis of payment adequacy (which includes an 
assessment of beneficiary access, supply and capacity of facilities, 
facilities' access to capital, quality, and financial indicators for 
the sector). Many commenters expressed concern that the CY 2024 payment 
update does not adequately factor in the effects of many challenges 
faced by ESRD facilities, such as the impact of the COVID-19 public 
health emergency (PHE), inflationary pressure, higher patient acuity, 
Federal budget sequestration, increasing labor costs due to labor 
shortages, and other increased costs, such as personal protective 
equipment (PPE), drugs, and supplies. Several commenters also asserted 
that during the last two ESRD PPS rulemaking cycles the ESRDB market 
basket updates have not kept pace with the market basket increases for 
other Medicare providers, such as hospitals and Skilled Nursing 
Facilities (SNFs). Commenters additionally noted that the proposed CY 
2024 ESRDB market basket increase was lower than certain other 
estimates of overall inflation and healthcare-specific inflation. One 
commenter stated that since the ESRD PPS' inception, the annual updates 
in several years have fallen far below other measures, such as general 
inflation or health care inflation as measured by the Consumer Price 
Index (CPI).
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    \6\ https://www.medpac.gov/wp-content/uploads/2023/03/Mar23_MedPAC_Report_To_Congress_v2_SEC.pdf.
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    Response: We are required to update ESRD PPS payments annually by 
the market basket update adjusted for productivity, as directed by 
section 1881(b)(14)(F)(i) of the Act. Specifically, section 
1881(b)(14)(F)(i)(I) of the Act states that the increase factor shall 
be based on an ESRD market basket percentage increase for a bundled 
payment system for renal dialysis services that reflects changes over 
time in the prices of an appropriate mix of goods and services included 
in renal dialysis services. We believe the increase in the 2020-based 
ESRDB market basket adequately reflects the average change in the price 
of goods and services ESRD facilities purchase to provide ESRD medical 
services and is technically appropriate to use as the ESRD payment 
update factor. The ESRDB market basket is a fixed-weight, Laspeyres-
type index that measures price changes over time and would not reflect 
increases in costs associated with changes in the volume or intensity 
of

[[Page 76351]]

input goods and services. As such, the ESRDB market basket update would 
reflect the prospective price pressures described by the commenters 
(such as wage growth or higher energy prices) but would not inherently 
reflect other factors that might increase the level of costs, such as 
the quantity of labor used or any shifts between contract workers and 
staffed employees. We note that cost changes (that is, the product of 
price and quantities) would only be reflected when a market basket is 
rebased, and the base year weights are updated to a more recent time 
period. We finalized the 2020-based ESRDB market basket in the CY 2023 
ESRD PPS final rule (87 FR 67141), and therefore, any change in the 
cost structure for ESRD facilities that occurred between 2016 and 2020 
is now reflected in the cost weights for the 2020-based ESRDB market 
basket, which was the most recent fully complete cost data available at 
the time of rulemaking. We will continue to monitor the cost share 
weights and, if technically appropriate, consider rebasing the ESRDB 
market basket more frequently than usual should the cost weights change 
significantly. Any proposal to rebase the ESRDB market basket would 
occur through notice-and-comment rulemaking. The final CY 2024 ESRDB 
market basket update reflects the most recent available data regarding 
prices of labor used to provide renal dialysis services. As set forth 
later in section II.B.1.a.(2)(c) of this final rule, the final 
productivity-adjusted CY 2024 ESRDB market basket update is 2.1 
percent, representing a ESRDB market basket increase of 2.4 percent 
reduced by a productivity adjustment of 0.3 percent. We note that the 
final CY 2024 ESRDB market basket update is 0.4 percentage points 
higher than the proposed CY 2024 ESRDB market basket update. We 
recognize that this 2.1 percent productivity-adjusted ESRDB market 
basket update may still be lower than some commenters believe is 
appropriate; however, it reflects the most recent available data 
regarding expected price inflation for inputs required to provide renal 
dialysis services based on CMS's longstanding methodology.
    We acknowledge commenters' claims that the CY 2024 ESRD PPS 
proposed market basket increase is less than increases for other 
Medicare payment systems, including the Inpatient Prospective Payment 
System (IPPS) and the Hospital Outpatient Prospective Payment System 
(OPPS). In response to these concerns, we note that one cause of these 
differences is that the mix of inputs used to provide renal dialysis 
services is different from those used for other services captured by 
other CMS market baskets. For example, the ESRDB market basket labor 
cost weights (reflecting those cost weights that use an Employment Cost 
Index (ECI) as price proxy) are generally lower than the labor cost 
weights in other CMS PPS market baskets, and the pharmaceuticals and 
medical supply cost weights in the ESRDB market basket (which is based 
on the ESRD Medicare cost report (Form CMS-265-11)) are higher than the 
pharmaceuticals and medical supply cost weights in other CMS PPS market 
baskets.\7\ The weighting together of these different mixes of inputs 
can appropriately result in differential rates of increase for various 
market baskets. Additionally, we acknowledge that many measures of 
inflation are higher than both the proposed 1.7 percent and the final 
2.1 percent productivity-adjusted ESRDB market basket update for CY 
2024. We note that some of the measures of inflation that commenters 
referenced in their comments are either measures of past inflation or 
measures of current inflation. The ESRDB market basket update is based 
on a forecast for the changes in input prices as measured by the ESRDB 
market basket for CY 2024, and not a measure of inflation during CY 
2023. Under section 1881(b)(14)(F)(i) of the Act, the annual market 
basket update reflects the changes over time in the prices of an 
appropriate mix of goods and services included in renal dialysis 
services. We believe that this is a more accurate estimate of the 
changes in input prices faced by ESRD facilities than less specific 
measures such as overall inflation or inflation across the entire 
healthcare sector. Additionally, concerns raised by commenters that the 
ESRDB market basket updates have been lower than general inflation or 
healthcare inflation measures are not relevant comparisons, because the 
law requires that the increase be based on an index that measures input 
price pressures for providing renal dialysis services. We acknowledge 
that many patients, ESRD facilities, and other health care providers 
believe that rising prices are a major concern in providing high 
quality care; however, we project that growth in input prices for renal 
dialysis services will slow in CY 2024 relative to CY 2023, which is 
reflected in the productivity-adjusted ESRDB market basket update of 
2.1 percent.
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    \7\ Public data can be found at https://www.bls.gov/eci/home.htm 
and https://www.cms.gov/data-research/statistics-trends-and-reports/cost-reports.
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    Comment: Several commenters indicated a belief that the ESRDB 
market basket update would have an impact on quality of care provided 
by ESRD facilities. Other commenters indicated that they believe the 
current quality of care that ESRD PPS beneficiaries receive is too low, 
and used this belief as justification for either supporting or opposing 
the ESRDB market basket update.
    Response: We appreciate commenters' insight into the quality of 
care which Medicare beneficiaries receive at ESRD facilities. Medicare 
beneficiaries have a right to safe, appropriate, and quality health 
services. For ESRD facilities, the Federal health and safety 
requirements are codified at 42 CFR part 494. To determine if a 
facility meets ESRD conditions for coverage, the State survey agency 
(SA), or a CMS-approved national accrediting organization (AO), 
performs an on-site survey of the facility. After the initial approval, 
dialysis facilities have routine onsite surveys to monitor compliance 
with the Federal requirements. If a dialysis facility is found to be 
deficient in one or more of the standards in the conditions for 
coverage, it may participate in, or be covered under, the Medicare 
program only if the dialysis facility has submitted an acceptable plan 
of correction for achieving compliance within a reasonable period of 
time acceptable to CMS. In the case of an immediate jeopardy situation 
(that is, a situation in which the facility's non-compliance with one 
or more Medicare conditions for coverage has caused, or is likely to 
cause, serious injury, harm, impairment, or death to a patient), we may 
require a shorter time period for achieving compliance.
    When poor quality or unsafe health care is furnished by any type of 
Medicare-certified provider or supplier, a complaint may be filed by 
anyone, including patients, family members, or staff. Dialysis facility 
complaints relating to improper care, unsafe conditions, and quality of 
care may be filed with the State Health Department or the ESRD 
Network.\8\
---------------------------------------------------------------------------

    \8\ https://www.cms.gov/training-education/open-door-forums/end-stage-renal-disease-clinical-laboratories-esrd/network.
---------------------------------------------------------------------------

    CMS has an established complaint process to protect all patients 
from abuse, neglect, exploitation, and inadequate care and supervision. 
The goal of the complaints process is to establish a system that will 
assist in promoting and protecting the health and safety of all 
patients receiving health services in a Medicare-certified facility. 
The procedures for handling complaints

[[Page 76352]]

are outlined in Chapter 5 of the State Operations Manual,\9\ and they 
are followed when complaints and reported incidents, including 
referrals from the public or other Federal entities, involve Medicare-
certified providers/suppliers. The evaluation, investigation, and 
resolution of complaints are critical certification activities. CMS and 
the SAs, or AOs, are responsible for ensuring that participating 
providers/suppliers of healthcare services continually meet Federal 
requirements. This requires that the SA, or AO, promptly reviews 
complaints/incidents, conducts unannounced onsite investigations of 
reports alleged noncompliance, and informs the CMS locations any time a 
facility is found to be out of compliance with the applicable 
certification requirements. We believe the resources provided by the 
ESRD PPS are appropriate to enable ESRD facilities to comply with the 
requirements and procedures described above.
---------------------------------------------------------------------------

    \9\ https://www.cms.gov/medicare/provider-enrollment-and-certification/surveycertificationgeninfo/downloads/som107c05pdf.pdf.
---------------------------------------------------------------------------

    Comment: One ESRD patient stated that ESRD facilities were already 
being paid too much and that the quality of care provided by ESRD 
facilities was insufficient given the payment amount.
    Response: We appreciate the comments on Medicare payment amounts to 
ESRD facilities. As stated previously, we are required to update ESRD 
PPS bundled payments by the market basket update adjusted for 
productivity under section 1881(b)(14)(F)(i) of the Act, which states 
that the Secretary shall annually increase payment amounts by an ESRD 
market basket percentage increase that reflects changes over time in 
the prices of an appropriate mix of goods and services included in 
renal dialysis services. As such, we believe that the final CY 2024 
ESRDB market basket update is appropriate. We note that MedPAC states 
that payment rates are adequate for the ESRD facilities. In addition, 
regarding the commenter's belief that ESRD facilities are being paid 
too much, and the concerns the commenter noted citing specific quality 
of care issues for ESRD patients, we note that, as described earlier in 
this section, CMS is actively engaged in efforts to ensure Medicare 
ESRD beneficiaries receive quality care. Additionally, the ESRD QIP 
actively monitors and adjusts payments to facilities under the ESRD PPS 
based on their performance on several quality measures.
    Comment: Several commenters, including a coalition of dialysis 
organizations, stated that ESRD facilities face relatively small profit 
margins when caring for Medicare beneficiaries and indicated that they 
believe the ESRDB market basket increase amount would lead to lower 
standards of care in CY 2024 and that to prevent this, CMS should 
consider increasing payments by a larger amount. One ESRD patient 
characterized the proposed CY 2024 ESRDB market basket update as being 
insufficient for the extent of the financial impact of recent 
inflationary events. Numerous commenters stated that a larger payment 
rate increase would allow ESRD facilities to hire more staff and 
increase the quality of care. Some commenters suggested that CMS 
reevaluate the proposed market basket update and instead increase ESRD 
PPS payments by a larger amount.
    Response: We understand that commenters are concerned about the 
profit margins for ESRD facilities. As stated previously, we believe 
that the final CY 2024 ESRDB market basket update reflects the most 
recent available data regarding the input prices required to provide 
renal dialysis services. We did not propose any additional increases to 
the ESRD PPS base rate to improve ESRD facility margins or otherwise 
account for factors that commenters believe are not adequately 
represented in the market basket update methodology, and we are not 
finalizing any such increases. We will continue to monitor the adequacy 
of the ESRD PPS payment amount and will consider these comments in 
potential future rulemaking. In addition, as described earlier in this 
section, CMS is actively engaged in efforts to ensure Medicare ESRD 
beneficiaries receive quality care.
    Comment: Several commenters, including a provider advocacy 
organization, noted that the ESRD PPS payment rate update would have 
implications for Medicare Advantage payment rates. Many of these 
commenters expressed that the proposed ESRDB market basket update of 
1.7 percent would lead to lower payments from Medicare Advantage.
    Response: We understand that some commenters are concerned about 
the impact that the proposed CY 2024 ESRDB market basket update would 
have on rates for other payors, including Medicare Advantage. However, 
we are required to update the ESRD PPS bundled payment by the market 
basket update adjusted for productivity under section 1881(b)(14)(F)(i) 
of the Act, which states that the Secretary shall annually increase 
payment amounts by an ESRD market basket percentage increase that 
reflects changes over time in the prices of an appropriate mix of goods 
and services included in renal dialysis services. This update is not 
intended to account for or direct the business practices of other 
payors. We note that the final productivity-adjusted CY 2024 ESRDB 
market basket update is 2.1 percent, which represents an increase to 
the proposed productivity-adjusted CY 2024 ESRDB market basket update 
of 1.7 percent, and we anticipate that the increase alleviates some of 
the commenters' concerns. We did not propose to make any additional 
methodological changes to the market basket update or ESRD PPS base 
rate to account for other payors and are not finalizing any additional 
methodological changes on this topic.
    Comment: We received numerous other comments on potential 
implications of the proposed CY 2024 ESRDB market basket update. 
Several commenters claimed the proposed CY 2024 ESRD PPS base rate 
update would have a negative impact on other factors including, but not 
limited to, wait times for dialysis appointments, access to innovative 
treatments for ESRD patients, ESRD treatments for nursing home 
patients, ESRD treatments for the elderly, Medicare Part A payments, 
and hospitalizations for ESRD PPS patients.
    Response: We recognize that commenters are concerned about the 
impact that the magnitude of the CY 2024 ESRDB market basket update has 
on ESRD facilities' ability to provide quality renal dialysis services. 
As stated previously, the final CY 2024 ESRDB market basket update 
reflects the most recent available data regarding prices for inputs 
used to provide renal dialysis services. We recognize that payment 
policy within the ESRD PPS can affect the quality and accessibility of 
renal dialysis services; however, the CY 2024 ESRDB market basket 
update adequately reflects the average change in the price of goods and 
services ESRD facilities purchase to provide renal dialysis services, 
so we do not agree with commenters' claims that the ESRDB market basket 
update would have a negative impact on these other factors. We did not 
propose any changes to the existing ESRDB market basket update 
methodology in the CY 2024 ESRD PPS proposed rule and are not 
finalizing any such methodological changes in this rule. We appreciate 
the insight of commenters into the implications of the ESRDB market 
basket update and will keep these implications in mind in future 
rulemaking.
    Comment: Several commenters questioned CMS's longstanding market 
basket methodology. Commenters expressed concern over the accuracy of 
the forecast underlying the proposed

[[Page 76353]]

market basket update for CY 2024, including that CMS's use of the IGI 
forecast for determining the market basket update does not capture the 
specialized nature of ESRD facility costs. A few commenters requested 
that CMS reexamine the forecasting approach or consider other methods 
and data sources to calculate the final rule market basket update that 
better reflect the rapidly increasing input prices and costs facing 
ESRD facilities. Other commenters indicated that they believed that it 
is inappropriate to continue to use the same mix of goods and services 
that were used at the inception of the ESRD PPS in the CY 2011 ESRD PPS 
final rule. One ESRD facility suggested that, because there has been 
significant variation between the forecasted and actual ESRDB market 
basket price growth, CMS should evaluate whether the market basket 
methodology is inherently flawed. Several commenters believed that a 
retrospective adjustment to the base rate to account for past 
differences between the ESRDB market basket update for a given year and 
what the ESRDB market basket update would have been for that year based 
on the actual changes in prices, known as a forecast error adjustment, 
could alleviate some of the perceived flaws in the market basket update 
methodology.
    Response: We thank commenters for providing these comments on the 
ESRDB market basket update methodology. In response to the commenters' 
request that we reexamine the current forecasting approach for 
determining the ESRDB market basket update, we provide the following 
information. IGI is a nationally recognized economic and financial 
forecasting firm with which CMS contracts to forecast the price proxies 
used in the market baskets. At the time of the CY 2024 ESRD PPS 
proposed rule, based on the IGI first quarter 2023 forecast with 
historical data through the fourth quarter of 2022, the 2020-based 
ESRDB market basket update was forecasted to be 2.0 percent for CY 
2024, reflecting forecasted compensation price growth of 3.7 percent 
(by comparison, compensation price growth in the ESRDB market basket 
averaged 2.6 percent from 2013 to 2022). In the CY 2024 ESRD PPS 
proposed rule, we proposed that if more recent data became available, 
we would use such data, if appropriate, to derive the final CY 2024 
ESRDB market basket update for the final rule. For this final rule, we 
now have an updated forecast of the price proxies underlying the market 
basket that incorporates more recent historical data and reflects a 
revised outlook regarding the U.S. economy and expected price inflation 
for CY 2024. Based on IGI's third quarter 2023 forecast with historical 
data through the second quarter of 2023, we are projecting a CY 2024 
ESRDB market basket update of 2.4 percent (reflecting forecasted 
compensation price growth of 4.1 percent) and a productivity adjustment 
of 0.3 percentage point. Therefore, for CY 2024 a final ESRDB 
productivity-adjusted market basket update of 2.1 percent (2.4 percent 
less 0.3 percentage point) will be applicable, compared to the 1.7 
percent productivity-adjusted market basket update that was proposed. 
We note that section 1881(b)(14)(F)(i) of the Act states that the 
Secretary shall annually increase payment amounts by an ESRD market 
basket percentage increase that reflects changes over time in the 
prices of an appropriate mix of goods and services included in renal 
dialysis services. We believe that the current market basket update 
methodology as finalized in the CY 2011 ESRD PPS final rule (75 FR 
49151 through 49162), and most recently updated in the CY 2023 ESRD PPS 
final rule (87 FR 67141 through 67157) to reflect a 2020 base year, 
fulfills this statutory requirement. We support the continued use of 
the current mix of goods and services to provide continuity to the 
financial impacts of the ESRD PPS payment policy, and we note that the 
weighting for this mix of goods and services is updated periodically 
through rebasing. However, we will consider the commenter's suggestion 
regarding the use of different methods or other data sources for the 
ESRDB market basket for future rulemaking. We discuss the commenters' 
request for a forecast error adjustment below. We did not propose any 
methodological changes to the ESRDB market basket update methodology 
for CY 2024, and we are finalizing the continued use of the ESRDB 
market basket methodology as finalized in the CY 2023 ESRD PPS final 
rule (87 FR 67141 through 67157). We do not believe that the ESRDB 
market basket update is inherently flawed because the forecast errors 
for CYs 2021 and 2022 were higher-than-normal due to the high inflation 
during the COVID-19 PHE, which we discuss further in section 
II.B.1.a.(2)(d) of this final rule. We will continue to monitor the 
performance of the ESRDB market basket update, and we will keep these 
comments on the market basket methodology in mind for future 
rulemaking. We note that CMS engages with the public, including the 
dialysis industry and associations, routinely throughout the year in 
our continuing efforts to align payment with resource utilization. We 
welcome continuing dialogue on the topic of improving the market basket 
update methodology, and other topics pertinent to the ESRD PPS, toward 
the common goal of improving care for ESRD patients.
    Comment: Some commenters provided information on additional rising 
costs faced by ESRD facilities that the commenters believed were not 
adequately captured in the proposed CY 2024 ESRDB market basket update. 
These additional costs included the following: costs associated with 
compliance with additional regulations regarding infection control; 
costs related to supply chain problems; rising costs for certain 
supplies; and cost related to changes in labor, such as additional pay 
for traveling nurses or contract nurses.
    Response: We appreciate the insight into changing costs that ESRD 
facilities face. As stated previously, the final CY 2024 ESRDB market 
basket update reflects the most recent available data regarding prices 
for inputs used to provide renal dialysis services. These costs which 
commenters listed are included in the ESRDB and so the change in their 
prices would be included in the CY 2024 ESRDB market basket update. If 
the rising costs the commenters' mentioned are due to an increase in 
quantity of the good purchased, rather than an increase in price, we 
note that such cost changes would only be reflected when a market 
basket is rebased, and the base year weights are updated to a more 
recent time period. We finalized the 2020-based ESRDB market basket in 
the CY 2023 ESRD PPS final rule (87 FR 67141); therefore, any change in 
the cost structure for ESRD facilities that occurred between 2016 and 
2020 is now reflected in the cost weights for the 2020-based ESRDB 
market basket, which was the most recent fully complete cost data 
available at the time of rulemaking. We believe that it is technically 
appropriate to use the 2020-based ESRDB market basket for the CY 2024 
ESRDB market basket update.
    Comment: One commenter asserted that experience over the past few 
years has indicated that the ESRD PPS methodology is unable to reflect 
short-term and long-term impacts of an economic shock, such as the 
COVID-19 PHE. The commenter noted that although CMS offers detailed 
explanations of the market basket's construction and issues data 
through its website, the dialysis provider community still has little 
insight into the factors contributing to annual

[[Page 76354]]

payment updates that the commenter believes consistently fail to 
reflect increases in the cost of care delivery. The commenter urged CMS 
to engage in a formal dialogue with the kidney care community outside 
of the annual rulemaking process to better identify the methodology's 
limitations and inform development of improvements. The commenter also 
requested that IGI have representation and participation in this 
dialogue.
    Response: We appreciate the commenter's concerns regarding the 
market basket methodology. Our longstanding ESRDB market basket update 
methodology sets rates prospectively on an annual basis. We acknowledge 
that over the course of a year, short term changes in economic 
conditions can lead to uncertainty, which may be exacerbated by 
economic shocks. Because the ESRD PPS base rate is updated annually, 
the purpose of the ESRDB market basket update is to account for the 
change in price of the ESRDB from year to year, not necessarily to 
capture the effect of shorter term fluctuations of prices. That short 
term fluctuations are not addressed by the ESRDB market basket update 
is a consequence of the annual nature of the update as required by 
section 1881(b)(14)(F) of the Act. We believe the ESRDB market basket 
update appropriately captures the change in the price of goods and 
services over time in the long term. Some commenters have suggested a 
forecast error adjustment as a way to mitigate the impact of these 
short-term uncertainties, which we discuss in further detail in section 
II.B.1.a.(2)(d) of this final rule. CMS will continue to engage with 
the public regarding ways to ensure the Medicare ESRD PPS payments are 
appropriate and that the market basket price proxies and base year 
weights are accurate.
    Comment: We received several comments, including from a patient 
organization, stating that the proposed ESRDB market basket update 
would not sufficiently support innovation.
    Response: We note that ESRD PPS policies to encourage the 
adaptation of new innovations, such as the TDAPA and TPNIES, are add-on 
payment adjustments to the base rate, and although there is only one 
ESRD PPS bundled payment, these adjustments are not a part of the ESRDB 
and therefore, are not included in the ESRD PPS base rate or the ESRDB 
market basket update. This is similarly true for the post-TDAPA add-on 
payment adjustment that we are finalizing in this rule, which is 
described in further detail in section II.B.1.i of this final rule. 
These add-on payment adjustments are actively supporting the adoption 
of certain new and innovative drugs, biological products, equipment and 
supplies by ESRD facilities, by providing additional payment to offset 
the additional cost of those drugs, biological products, equipment and 
supplies. We did not propose any changes to the ESRDB market basket 
update methodology to account for innovation within the ESRD PPS and 
are not finalizing any such changes in this final rule. We will 
consider these comments on supporting innovation and access to 
innovative products in potential future rulemaking.
    Comment: We received approximately 90 comments related to the 
nature of labor costs at ESRD facilities, including comments from large 
dialysis organizations, advocacy organizations, ESRD facilities, 
providers, and a coalition of dialysis organizations. Commenters 
generally stated that labor costs at ESRD facilities are increasing, 
which is driving overall cost increases at ESRD facilities, and that 
the proposed ESRDB market basket update was insufficient to cover these 
increased labor costs. Many of the commenters cited that the growth in 
their labor costs has outpaced the ESRDB market basket updates or the 
growth of the market basket compensation cost category in the ESRDB 
market basket. Additionally, some commenters noted that labor costs 
were rising across the healthcare sector, which the commenters asserted 
was not appropriately reflected in the ESRDB market basket update. 
Commenters described other barriers to hiring and maintaining staff 
including, but not limited to, burnout, lack of resources, inability to 
match competitive pay, and long travel times for staff. A coalition of 
dialysis organizations commented that it was increasingly difficult for 
ESRD facilities to hire new staff while competing with other health 
care providers with more resources and non-healthcare employers. They 
stated that this was leading to some ESRD facilities having to turn 
away patients or being unable to continue operations. One LDO noted 
that staffing concerns are leading to ESRD facilities using a higher 
percentage of more-expensive contract labor and that contract labor 
wages and benefits make up 1.9 percent and 0.5 percent of the 2020-
based ESRDB, respectively. Some commenters highlighted the COVID-19 PHE 
as a significant factor in the workforce shortage that ESRD facilities 
face; however, some commenters indicated that they believe this 
workforce shortage has been in progress for a long time.
    Some ESRD facilities and LDOs included various additional 
information or data on the extent to which their labor costs have 
increased over the past few years. Several commenters, including an LDO 
and a non-profit dialysis organization, referenced an analysis that 
showed labor costs grew at a compound average growth rate of 6.96 
percent from 2018 to 2022, whereas the proxy for labor used in the 
ESRDB market basket update methodology grew at a compound average 
growth rate of 3.15 percent from 2018 to Q1 2022. One provider advocacy 
organization commented that its analysis found that direct patient care 
labor costs per dialysis treatment increased by 18.9 percent from 2017 
to 2022.
    Commenters also stated that the increasing labor costs were 
resulting in staffing concerns at ESRD facilities. Some of these 
comments highlighted access issues arising from fewer available 
dialysis sessions. Some comments referenced quality issues related to 
the burden placed on workers at ESRD facilities by low staffing and the 
limited training of staff at ESRD facilities due to high turnover. Many 
of these comments came from ESRD patients, caretakers and patient 
advocates and included the commenters' personal experience on the 
issues related to receiving care at ESRD facilities (for example, 
difficulty finding appointments, having to travel significant distances 
to get care, and how low staffing at ESRD facilities has impacted their 
care). Other commenters conveyed their concern about inadequate 
staffing and related many incidents of significant adverse events and 
sub-standard quality care, which they attributed to low staffing. A 
kidney disease patient organization included multiple testimonials from 
ESRD patients regarding their issues in trying to locate dialysis 
treatments.
    Some commenters highlighted the impact that staffing shortages had 
on home dialysis. Several patients expressed a willingness and desire 
for self-dialysis training, but stated they were unable to receive 
self-dialysis dialysis training due to staff shortages at their 
clinics.
    Response: We thank commenters for their insight into labor supply 
and labor costs at ESRD facilities, and we recognize that labor costs 
are a driving factor in cost increases at ESRD facilities. We 
acknowledge that CY 2022 price growth for the 2016-based ESRDB market 
basket was higher (5.1 percent) than was forecasted at the time of the 
CY 2022 ESRD PPS final rule (2.4 percent). We note that the lower 
projected CY 2024 ESRDB market basket percent increase (2.4 percent) 
relative to the observed CY 2022 historical increase, as well as the 
forecasted CY

[[Page 76355]]

2023 ESRDB market basket increase of 3.1 percent, reflect the 
expectation that wage and price pressures will lessen in CY 2024 
compared to recent years. As described previously, the ESRDB market 
basket measures price changes (including changes in the prices for 
wages and salaries and benefits) over time and would not reflect 
increases in costs associated with changes in the volume or intensity 
of input goods and services until the market basket is rebased. An 
ESRD-specific compensation price index is unavailable; therefore, we 
use a composite wage and benefit index of various Employment Cost 
Indices (ECIs) reflecting the occupational mix of full-time equivalents 
(FTE) data from ESRD Medicare Cost reports and ECIs from BLS (87 FR 
67147). Health-related occupations account for 79 percent of the 2020-
based ESRDB compensation cost weight and are proxied by the ECI for All 
Civilian Workers in Hospitals, reflecting similar medical occupations 
used in ESRD facilities (particularly nurses) and their associated 
price growth. As discussed in the CY 2023 ESRD PPS final rule, we 
believe the composite weighted index for wages and salaries and 
benefits to be a reasonable proxy for the compensation component of the 
ESRDB market basket. We note that section 1881(b)(14)(F)(i) of the Act 
states that the Secretary shall annually increase payment amounts by an 
ESRD market basket percentage increase that reflects changes over time 
in the prices of an appropriate mix of goods and services included in 
renal dialysis services. While labor is included in the mix of goods 
and services in the ESRD PPS bundled payment, the annual market basket 
increase accounts for more than the price change for labor. As such, it 
is possible for the market basket increase to be less than the increase 
in the price of labor if the other goods and services included in the 
ESRDB do not experience as large of a price increase. Our analysis of 
the data used to determine the ESRDB market basket forecast indicates 
that this dynamic is reflected in the market basket increases for the 
past few years. For example, in 2021 the overall market basket forecast 
was an increase of 1.9 percent, but the labor portion of the ESRDB 
market basket was forecasted to increase by 2.5 percent. We recognize 
commenters' view that the proposed ESRDB market basket increase for CY 
2024 was less than ESRD facilities' reported labor increases. However, 
if, as commenters have stated, labor is the driving factor for the 
increase in costs for ESRD facilities, it would be expected that the 
labor percentage increase would be greater than the overall ESRDB 
market basket percentage increase. This is because the ESRDB market 
basket increase is a weighted average of the changes in prices for the 
ESRDB market basket. Labor is only one part of the ESRDB market basket, 
and commenters have indicated that other components of the ESRDB market 
basket have not experienced the same growth in price as labor. We 
believe the 2020-based ESRDB market basket increase adequately reflects 
the average change in the price of goods and services ESRD facilities 
purchase to provide renal dialysis services, including labor, and is 
technically appropriate to use as the ESRD PPS payment update factor. 
The ESRDB market basket update will reflect the expected prospective 
price pressures described by the commenters as increasing during a high 
inflation period (such as faster wage growth or higher energy prices) 
but inherently will not reflect other factors that might increase the 
level of costs, such as the quantity of labor used. Therefore, the 
final CY 2024 ESRDB market basket update reflects the most recent 
available data regarding both prices and the items and services used to 
provide renal dialysis services.
    We thank commenters for including detailed information and data on 
the changes to labor costs that ESRD facilities face. We agree that 
during the COVID-19 PHE, labor costs increased more than normal. 
According to our analysis, the ESRDB market basket compensation price 
growth was forecasted to increase a cumulative 18.9 percent from CY 
2017 to CY 2022. This is the same as the figure which one commenter 
described as being the change in direct labor costs over that time. We 
recognize that some comments indicated that ESRD facilities experienced 
larger or smaller changes in labor costs than this over that time. We 
note that the ESRDB market basket does not measure each individual ESRD 
facility's own experience, but instead the ESRDB market basket cost 
weights reflect the experience of the average ESRD facility. Therefore, 
if one area of the country experienced an increase in labor costs at a 
higher rate than other areas of the country, that would not be wholly 
captured in the annual update. Instead, the relative difference in 
labor cost growth should be captured in changes to the wage index for 
that ESRD facility. However, we recognize that our wage index 
methodology uses historical data instead of a forecast and as such 
takes longer to update in response to periods of large change.
    We appreciate comments from ESRD patients which highlighted their 
experiences at ESRD facilities. We are concerned by the comments which 
indicate access and quality concerns at ESRD facilities related to 
staffing issues. We note that Sec.  494.180(b) requires that an ESRD 
facility have an adequate number of qualified and trained staff; 
however, the governing body of the facility has a measure of discretion 
when determining staffing. The ESRD PPS provides a bundled payment that 
encompasses all renal dialysis services, including labor. We recognize 
that staffing shortages can pose a difficulty to ESRD patients who 
desire training for self-dialysis. We note that the ESRD PPS includes 
an add-on payment adjustment for self-dialysis training (42 CFR 
413.235(c); 81 FR 77851 to 77856). We appreciate the comments regarding 
these staffing issues and will consider them for potential future 
rulemaking.
    Comment: One commenter encouraged CMS to explore other changes to 
the composition of the market basket to better capture evolving 
dynamics in the labor force. The commenter provided as an example that 
the ECI may no longer accurately capture the changing composition and 
cost structure of the hospital labor market given the large increases 
in short-term contract labor use and its growing costs.
    Several commenters expressed concern that not all the ESRDB market 
basket price proxies, particularly the labor-related price proxies, 
accurately reflect ESRD facilities' faster than expected cost growth. 
One commenter noted that for healthcare providers across all sectors, 
the impact of the tight labor market (both in the healthcare sector and 
general economy overall) has forced ESRD facilities to rely more 
heavily on contracted labor. The commenter further pointed out that 
under the 2020-based ESRDB market basket, contract labor wages and 
benefits have 1.9 percent and 0.5 percent weights, respectively; 
however, the commenter expressed concern that these weights were 
derived by assuming that ESRD facilities use the same labor amount and 
mix as they did more than a decade ago, which does not reflect the 
current environment in which dialysis providers deliver care. They 
stated that use of the U.S. Census Bureau's Services Annual Survey 
(SAS) data may not reflect staffing ratio or minimum wage requirements 
adopted by State and municipal governments since 2012, the recent 
years' shift in labor mix, unanticipated increase in compensation

[[Page 76356]]

expenses, or the COVID-19 PHE's overall impact on the healthcare labor 
force.
    A few commenters stated that certain market basket components rely, 
to some extent, on severely lagged data, which during times of unusual 
circumstances, could limit a forecast model's ability to capture 
economic shocks and the subsequent impact on health care providers' 
costs. The commenters stated, for example, the BLS's ECI price proxies 
generally hold the employment mix constant for several years. They 
stated that the ECI's weights reflected the 2012 occupational mix until 
recently (the December 2022 BLS release updated the data to reflect 
2021 employment weights). The commenters noted that since ECI 
employment weights are held constant for a period this would introduce 
inaccuracies into the market basket updates. They stated that since the 
ECI 2012 weights were used for the price proxies in the ESRDB market 
basket through the CY 2022 rulemaking cycles it could have resulted in 
errors in the ESRDB market basket update.
    Response: We appreciate the commenters' concerns about the 
composition of the ESRDB market basket and whether the price proxies 
used in the market basket are accurately capturing the price pressures 
experienced by ESRD facilities.
    The commenters are correct that the ECI data are based on fixed 
occupational weights; however, we believe these indexes continue to be 
technically appropriate measures of pure compensation inflation to be 
used in the ESRDB market basket. Because the market baskets are 
intended to measure price changes over time, and not changes in costs 
that also reflect quantity and intensity changes, the fixed 
occupational distribution of the ECI is appropriate. BLS periodically 
updates these distributions (in the January 2023 release of December 
2022 ECI data they introduced updated 2021 fixed employment weights, 
replacing the 2012 weights used through September 2022). Additionally, 
the observed ECI for Wages and Salaries for All Civilian workers in 
Hospitals (which accounts for 29 percent of the 2020-based ESRDB market 
basket) data has reflected recent wage ``price'' pressures as growth in 
2021 and 2022 accelerated relative to 2020. The projection of the ECI 
also considers anticipated wage pressures due to various economic and 
industry-specific factors; the hospital ECI is projected to grow faster 
in 2023 compared to the historical average growth in the series, 
particularly prior to 2021. We note that when developing its forecast 
for the ECI for All Civilian Workers in Hospitals, IGI considers 
overall labor market conditions (including rise in contract labor 
employment due to tight labor market conditions) as well as trends in 
contract labor wages, which both have an impact on wage pressures for 
workers employed directly by the hospital. We also acknowledge the 
commenters' concerns that the ECI only reflects employed labor costs; 
however, we note that the alternative publicly available average hourly 
earnings series also does not include contract labor costs. 
Additionally, we analyzed the FTE data reported on the Medicare cost 
reports and found that the share of contract labor FTEs is about 2 
percent of all FTEs and has remained relatively constant in 2021 and 
2022. We will continue to monitor the cost report data as it is 
received to ensure that the ECI series used to proxy ESRD labor 
categories continues to offer the most appropriate price proxies for 
measuring compensation price growth in ESRD facilities.
    Lastly, we acknowledge commenters' concern that the contract labor 
cost weight in the ESRDB market basket relies on 2012 SAS data 
published by the United States Census Bureau inflated to 2020-dollar 
values as the basis for the contract labor cost weight. We proposed and 
finalized the methodology for deriving the compensation cost share 
weights in the CY 2023 ESRD PPS rulemaking cycle (87 FR 67141 through 
67157). Because the Medicare cost report data does not capture the 
specific costs for contract labor, we therefore must rely on other data 
sources to estimate the share of contract labor costs that are reported 
within Administrative and General costs on the cost reports. We have 
not identified any other data source that provides specific contract 
labor costs for ESRD facilities.
    Final Rule Action: After consideration of the comments received, we 
are finalizing a CY 2024 ESRDB productivity-adjusted market basket 
increase of 2.1 percent based on the most recent data available. As 
noted previously, based on the more recent data available for this CY 
2024 ESRD PPS final rule (that is, IGI's third quarter 2023 forecast of 
the 2020-based ESRDB market basket with historical data through the 
second quarter of 2023), the CY 2024 ESRDB market basket update is 2.4 
percent. Based on the more recent data available from IGI's third 
quarter 2023 forecast, the current estimate of the productivity 
adjustment for CY 2024 is 0.3 percentage point. Therefore, the current 
estimate of the CY 2024 ESRD productivity-adjusted market basket 
increase factor is equal to 2.1 percent (that is, the 2.4 percent 
market basket update reduced by the 0.3 percentage point productivity 
adjustment).
(d) Requests for a Forecast Error Payment Adjustment
    In the CY 2024 ESRD PPS proposed rule (88 FR 42435), we discussed 
that in the CY 2023 ESRD PPS final rule (87 FR 67157), many commenters 
requested that CMS apply a forecast error payment adjustment to the 
ESRD PPS base rate to support ESRD facilities during the inflationary 
period occurring at that time, particularly accounting for what 
commenters stated was an error in the forecasted payment updates for 
CYs 2021 and 2022. In response to those comments, we reminded readers 
that ESRDB market basket updates are set prospectively, meaning the 
update relies on a mix of both historical data for part of the period 
for which the update is calculated and forecasted data for the 
remainder. We explained that while there is no precedent to adjust for 
market basket forecast error in the annual ESRD PPS update, the 
forecast error for a market basket update is calculated as the actual 
market basket increase for a given year less the forecasted market 
basket increase.\10\ We also explained that due to the uncertainty 
regarding future price trends, forecast errors can be both positive and 
negative. For example, the CY 2017 ESRDB forecast error was -0.8 
percentage point, while the CY 2021 ESRDB forecast error was +1.2 
percentage points. At the time of the CY 2023 ESRD PPS final rule, CY 
2022 historical data was not yet available to calculate a forecast 
error for CY 2022; however, based on the latest available historical 
data for CY 2022, we now calculate that the CY 2022 ESRDB forecast 
error was +2.7 percentage points.
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    \10\ FAQ--Market Basket Definitions and General Information. 
Available at: https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/medicareprogramratesstats/downloads/info.pdf.
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    We further noted that, in the CY 2023 ESRD PPS final rule (87 FR 
67156), we recognized that recent higher inflationary trends impacted 
the outlook for price growth over the next several quarters. For that 
CY 2023 ESRD PPS final rule, we used an updated forecast of the price 
proxies underlying the market basket that incorporated more recent 
historical data and reflected a revised outlook regarding the U.S. 
economy and expected price inflation for CY 2023 for ESRD facilities. 
We explained that predictability in

[[Page 76357]]

Medicare payments is important to enable ESRD facilities to budget and 
plan their operations, and that forecast errors are unpredictable (87 
FR 67517). Prior to the COVID-19 PHE period, the positive differences 
between the actual and forecasted market basket increase in prior years 
have offset negative differences over time. Therefore, we stated in the 
CY 2024 ESRD PPS proposed rule that, in accordance with our 
longstanding ESRDB market basket update methodology, we would not 
propose to apply a forecast error adjustment to the ESRDB market basket 
update for CY 2024.
    Comment: We received approximately 30 comments related to CMS's 
decision not to propose a forecast error adjustment for CY 2024. These 
commenters, including a coalition of dialysis providers, several LDOs, 
and numerous provider and patient advocacy organizations, requested 
that CMS reevaluate and implement a payment adjustment to account for 
past forecast errors. Many commenters requested that CMS apply a 
forecast error adjustment to the ESRD PPS payment update for CY 2024. 
Some specific suggestions for payment adjustments included: a CY 2024 
adjustment of 10 to 20 percent per discharge; an adjustment for the 
``underpayment'' of ESRD facilities since 2020; and/or the adoption a 
forecast error adjustment like the one used in the SNF PPS. Several 
commenters stated that absent a forecast error adjustment they may be 
forced to close some of their ESRD facilities, particularly those 
facilities located in areas with vulnerable populations.
    The commenters stated that the forecast error was driven mainly by 
unforeseen increased costs for labor (including a higher reliance on 
contract labor staff), equipment, and medical supplies (including PPE 
and pharmaceuticals), which resulted in increased costs to provide care 
to ESRD beneficiaries that were never properly reimbursed under the 
Medicare ESRD PPS payments. Commenters stated that while the growth in 
these costs has begun to stabilize somewhat in 2023, they continue to 
be substantially higher than pre-pandemic levels. Commenters also 
pointed out that while high wage inflation and labor shortages affect 
all health care providers, dialysis providers are particularly 
vulnerable because there is not variation in types of services 
performed or billed and due to the less variable payer mix that relies 
more on Medicare and Medicaid payment than other health care provider 
types.
    One commenter noted that while other health care providers have 
experienced similar forecast errors in CY 2022 and CY 2023, the current 
cumulative underpayment error for the ESRD PPS exceeds the errors in 
other payment systems such as IPPS, home health, and long-term care 
hospitals.
    Some commenters acknowledged that since the market basket updates 
are set prospectively, they are inherently imperfect, and forecast 
errors from year to year may occur in either a positive or negative 
direction. However, several commenters noted that in the case of the 
ESRDB market basket these differences have not offset one another over 
time. The commenters stated a belief that the magnitude of the errors 
in 2021 and 2022, which they state resulted from a flawed methodology 
that failed to accurately forecast higher than normal inflation, are 
highly unlikely to even out over time unless there is a similar, fast 
moving deflationary event resulting in the same magnitude in the 
forecast.
    Many commenters requested CMS establish a payment adjustment 
modeled after the forecast error adjustment for payments to SNFs that 
was established in 2004 (68 FR 46057). These commenters responded to 
CMS's view that historical negative forecast errors are offset by 
positive errors by noting that over the past few years the forecast 
errors have been predominantly positive, at 1.2 percent and 2.7 percent 
in CYs 2021 and 2022 respectively. As such, the ESRD PPS base rate is 
lower than it would have been if the forecasts had been accurate. Many 
of these commenters supported a forecast error adjustment methodology 
that would, like the SNF adjustment of 2004, only be applied if the 
error is larger than a certain threshold. Multiple commenters supported 
a threshold of 0.5 percentage point for this adjustment. Many 
commenters compared the state of SNF payment in 2004 and of the ESRD 
PPS today, emphasizing the similarities in the amount by which the 
recent market basket updates had been incorrect, the source of the 
error mainly attributable to unexpectedly large increases in the costs 
of labor, and certain similar statutory language describing the SNF PPS 
and the ESRD PPS. A coalition of dialysis organizations suggested that 
for the CY 2024 ESRD PPS final rule CMS should adjust the ESRD PPS base 
rate by the cumulative forecast error since 2019 but added that they 
would also approve of adjusting the ESRD PPS base rate by the 
cumulative forecast error since the inception of the ESRD PPS in 2011. 
Some commenters, including an LDO, suggested in lieu of a permanent 
forecast error adjustment policy for ESRDs, CMS could apply a one-time 
positive adjustment to the ESRD PPS base rate to account for the 
forecast error in recent years, with commenters suggesting it be 
applied to the ESRD PPS base rate in a non-budget neutral manner. Some 
commenters, including an LDO, recognized that CMS's view that the 
market basket errors could balance out over time could be true for 
small variations; however, the commenters stated that it would not hold 
true for periods of significant missed forecasts due to periods of 
rapid change, for example during the COVID-19 PHE. Generally, 
commenters stated that they agreed with CMS on the importance of 
predictability for payments but stated that payment accuracy was more 
important, so a forecast error payment adjustment would be useful as it 
would improve payment accuracy.
    Some comments included additional information on what commenters 
stated could happen with or without a forecast error adjustment. One 
LDO commented that their analysis indicated that the under-forecast 
would lead to a total of $1.8 billion in underpayments between CY 2021 
to 2027. One patient-led dialysis organization recommended an 
``Essential Worker Safety Catch'' to revise past updates to ensure 
labor is adequately compensated. A provider advocacy organization 
questioned CMS's use of 2020-cost reports in determining payment for CY 
2024, saying it was outdated and inaccurate. One ESRD facility 
commented that given the size of recent errors, they believed it was 
likely that errors would continue to increase and potentially become 
larger in the future.
    Response: While the projected ESRDB market basket updates for CY 
2021 and CY 2022 were under-forecast (that is, actual increases were 
greater than forecasted), as is the preliminary CY 2023 forecast error, 
this was largely due to unanticipated inflationary and labor market 
pressures as the economy emerged from the COVID-19 PHE. An analysis of 
the forecast error of the ESRDB market basket over a longer period 
shows the forecast error has been both positive and negative. We 
recognize that the COVID-19 PHE and high inflationary environment have 
had an adverse impact on costs for ESRD facilities. Due to ESRD 
payments being set prospectively, we rely on a projection of the ESRDB 
market basket that reflects both historical and forecasted trends. Due 
to the uncertainty regarding future price trends, the difference 
between the projected and actual market basket increases can be both 
positive and negative. We note that from CY 2012 to CY 2020, the only 
year in which the forecast error of the ESRDB

[[Page 76358]]

market basket update exceeded the 0.5 percentage point threshold in 
absolute terms (which is applicable for the SNF PPS forecast error 
adjustment) was CY 2017. The forecasted CY 2017 ESRDB market basket 
update was 0.8 percentage point higher than the actual CY 2017 
percentage increase of the 2012-based ESRDB market basket based on 
historical data. We also acknowledge that the ESRDB market basket 
forecast errors for CY 2021 (1.2 percentage points) and CY 2022 (2.7 
percentage points) exceeded the 0.5 percentage point threshold where 
the forecasted ESRDB market basket updates were lower than the actual 
percentage increases based on historical data. These recent forecast 
errors were largely a function of uncertainty in the overall economy 
and the health sector specifically due to the nature of the COVID-19 
PHE and the unforeseen rapidly accelerating inflationary environment. 
Rapid increase in costs during the COVID-19 PHE has led to a positive 
forecast error for every Medicare PPS.
    The data on which the final CY 2024 ESRDB market basket update is 
based is the most recent available data. We note that the 2020 cost 
report data was used for rebasing the market basket as finalized in the 
CY 2023 ESRD PPS final rule (87 FR 67141 through 67154), and at the 
time of CY 2023 rulemaking the 2020 cost report data was the most 
recent year of complete cost report data available to develop the ESRDB 
market basket cost weights. The ESRDB market basket cost weights do not 
change from year to year since it is a fixed-weight Laspeyres index; 
therefore, for CY 2024, we use the most recent available forecast of 
the price proxies to estimate the growth in the input prices of this 
mix of goods and services for providing renal dialysis services for the 
coming year. The most recent forecast of the price proxies in the ESRDB 
market basket for this final rule is the IGI third quarter 2023 
forecast with historical data through the second quarter of 2023. This 
is the established methodology as finalized in the CY 2011 ESRD PPS 
final rule (75 FR 49151 through 49162). Therefore, while the weighting 
of the various goods and services that make up the ESRDB market basket 
did utilize 2020 data for rebasing, it is inaccurate to characterize 
the CY 2024 market basket increase as being based on 2020 data 
generally. We do not agree with the commenter that stated a belief that 
because forecast errors have been greater in recent years it is likely 
that forecast errors will be larger in the future. As we have 
indicated, the larger-than-normal forecast errors in CY 2021 and CY 
2022 were largely due to unanticipated inflationary and labor market 
pressures as the economy emerged from the COVID-19 PHE, which we do not 
anticipate will continue in CY 2024. Our preliminary estimates of the 
CY 2023 ESRD PPS forecast error indicate that it was smaller than the 
forecast errors in CY 2022 and CY 2021.
    For these reasons, after evaluating the historical performance of 
the ESRDB market basket and the financial environment unique to ESRD 
facilities, we do not believe it is appropriate to include adjustments 
to the ESRDB market basket update for future years based on the 
difference between the actual and forecasted ESRDB market basket 
increase in prior years. However, we will continue to monitor the 
overall performance of the ESRDB market basket update, including 
analyzing the change in the price of labor inputs for ESRD facilities 
over time. We will take commenters' concerns into consideration for 
potential future rulemaking.
    Comment: One LDO commented that they believe that CMS has a 
statutory obligation to implement a forecast error adjustment under 
section 1881(b)(14)(F)(i) of the Act, which states that the Secretary 
shall annually increase payment amounts by an ESRD market basket 
percentage increase for a bundled payment system for renal dialysis 
services that reflects changes over time in the prices of an 
appropriate mix of goods and services included in renal dialysis 
services. The commenter acknowledged that forecasting prices is 
inherent in a PPS but indicated that they believe that the current 
methodology fails to annually capture the changes over time in the 
price of providing renal dialysis services. The commenter stated that 
correcting for prior and future forecast errors is a step CMS can 
easily implement to ensure the ESRD PPS payment, and future market 
basket update factors, reflect the prices of delivering renal dialysis 
services. The commenter noted that in 2004 when CMS implemented a 
forecast error adjustment in the payment system for SNFs it was based 
on very similar statutory language and was implemented under what the 
commenter stated were ``virtually identical'' circumstances to the ESRD 
PPS today.
    Response: We thank the commenter for sharing their view on this 
issue; however, we do not agree that CMS's position regarding an ESRD 
PPS forecast error payment adjustment conflicts with any statutory 
requirements for the ESRD PPS. We appreciate the commenter's 
interpretation of the circumstances involved in the implementation of 
the forecast error adjustment for SNF payment; however, we disagree 
with the claim that the circumstance was virtually identical to the 
ESRD PPS today. While the cumulative under-forecast of the SNF market 
basket increases in 2004 was based on a rapid increase in the price of 
labor, it was not due to a PHE as occurred with the ESRD PPS's under-
forecast in recent years. Additionally, it was an issue which only SNFs 
were experiencing, unlike the current ESRD PPS environment where 
multiple Medicare payment systems have faced similar forecast errors. 
We note that when CMS finalized a forecast error adjustment for the SNF 
payment system, we concluded that a forecast error adjustment was 
appropriate for payment accuracy for SNFs; not that it was required 
under the statute (68 FR 46057). For these reasons, we do not agree 
with the commenter's stated belief that a forecast error adjustment 
would be required to fulfill the ESRD PPS statutory requirements, and, 
at this time, for the reasons discussed previously, we do not believe 
that a forecast error payment adjustment would be appropriate for the 
ESRD PPS.
    Final Rule Action: After consideration of the comments we received, 
we are finalizing a CY 2024 ESRDB productivity-adjusted market basket 
increase of 2.1 percent based on the most recent data available. As 
noted previously, based on the more recent data available for this CY 
2024 ESRD PPS final rule (that is, IGI's third quarter 2023 forecast of 
the 2020-based ESRDB market basket with historical data through the 
second quarter of 2023), the CY 2024 ESRDB market basket update is 2.4 
percent. Based on the more recent data available from IGI's third 
quarter 2023 forecast, the current estimate of the productivity 
adjustment for CY 2024 is 0.3 percentage point. Therefore, the current 
estimate of the CY 2024 ESRD productivity-adjusted market basket 
increase factor is equal to 2.1 percent (2.4 percent market basket 
update reduced by 0.3 percentage point productivity adjustment). We are 
finalizing our proposal to determine the CY 2024 ESRDB market basket 
update for the final rule without an adjustment to account for past 
forecast errors. Additionally, we did not propose and are not 
finalizing any methodology for a forecast error payment adjustment. We 
will continue to monitor the performance of the ESRDB market basket 
forecasts and will consider the information provided by commenters for 
potential future rulemaking.

[[Page 76359]]

(e) Labor-Related Share
    We define the labor-related share as those expenses that are labor-
intensive and vary with, or are influenced by, the local labor market. 
The labor-related share of a market basket is determined by identifying 
the national average proportion of operating costs that are related to, 
influenced by, or vary with the local labor market. For the CY 2024 
ESRD PPS payment update, we proposed to continue using a labor-related 
share of 55.2 percent, which was finalized in the CY 2023 ESRD PPS 
final rule (87 FR 67153 through 67154).
    Comment: We received three comments which acknowledged our proposal 
to use the labor-related share of 55.2 percent as finalized in the CY 
2023 ESRD PPS final rule. Additionally, one LDO commented on the 
weights attributed to contract labor and benefits in the 2020-based 
ESRDB market basket, indicating that they thought that these areas were 
under-represented in the 2020-based ESRDB market basket. This LDO 
recognized that CMS did not propose any changes to the labor-related 
share from CY 2023. One provider advocacy organization suggested CMS 
utilize a different labor-related share for ESRD facilities with low 
wage index values, noting that for facilities with low wage index 
values, labor likely relates to a smaller share of total costs.
    Response: We thank commenters for reviewing the proposed labor-
related share. We appreciate the comment on the weights of contract 
labor in the 2020-based ESRDB market basket. As stated in section 
II.B.1.a.(2)(c) of this final rule, changes in both the cost and 
quantity of an input are reflected when the ESRDB market basket is 
rebased, and the base year weights are updated to a more recent time 
period. We finalized the 2020-based ESRDB market basket in the CY 2023 
ESRD PPS final rule (87 FR 67141), and, therefore, any change in the 
cost structure for ESRD facilities that occurred between 2016 and 2020 
is now reflected in the cost weights for the 2020-based ESRDB market 
basket, which was the most recent fully complete cost data available at 
the time of rulemaking. Our monitoring indicates that the 2020-based 
ESRDB market basket is still appropriate for determining the cost 
weights for inputs for providing renal dialysis services. Therefore, 
following the methodology finalized in the CY 2011 ESRD PPS final rule 
(75 FR 49116), we consider the labor related components of the ESRDB 
market basket to be an appropriate basis for the labor-related share 
for the CY 2024 ESRD PPS payments. We will continue to monitor the cost 
share weights and, if technically appropriate, consider rebasing the 
ESRDB market basket more frequently than usual should the cost weights 
change significantly. We appreciate the suggestion to use a different 
labor-related share for low wage index ESRD facilities. We did not 
propose any methodological changes to the application of the labor-
related share, such as using a different labor-related share for 
different ESRD facilities, but we will consider this comment in 
potential future rulemaking.
    Comment: One commenter expressed appreciation that the labor-
related share of the ESRD PPS increased from 52.3 percent to 55.2 
percent in CY 2023 and stated that they believe this is a consistent 
trend with the ESRD PPS, for which CMS has increased the labor-related 
share of the market basket over the lifetime of the PPS. The commenter 
opined that increasing the labor-related share of the market basket, 
while positive, does not fully address the steep rising costs of labor 
needed to deliver care to Medicare beneficiaries with ESRD, since it 
only alters the percentage of ESRD PPS payments allocated to labor as 
compared with other inputs required for renal dialysis services but 
does not deliver more resources through the ESRD PPS to cover the 
rising costs of care associated with the increases in the cost of 
labor.
    Response: The purpose of the labor-related share is to reflect the 
proportion of the national ESRD PPS base payment rate that is adjusted 
by the wage index. 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. Therefore, we include a cost category in 
the labor-related share if the costs are labor intensive and vary with 
the local labor market. We note that the historical increase to the 
labor-related share is based on the increase to the labor-related cost-
weights in the ESRDB market basket.
    As acknowledged by the commenter, the purpose of the labor-related 
share is to allocate ESRD payment between labor-related costs and non-
labor costs. The labor-related share is not meant to increase payments 
overall for the rising cost of labor.
    Final Rule Action: We are finalizing our proposal to use the labor-
related share of 55.2 percent, as finalized in the CY 2023 ESRD PPS 
final rule, for CY 2024 ESRD PPS payments.
b. CY 2024 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 
ESRD PPS 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) 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/.
    We have also adopted methodologies for calculating wage index 
values for ESRD facilities that are in urban and rural areas where 
there is no hospital data. For a full discussion, see the 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 applied 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 applied the wage 
index for Guam to American Samoa and the Northern Mariana Islands (78 
FR 72172).
    Under Sec.  413.231(d), a wage index floor value of 0.6000 is 
applied under the ESRD PPS as a substitute wage index for areas with 
very low wage index values, as finalized in the CY 2023 ESRD PPS final 
rule (87 FR 67161). Currently, all areas with wage index values that 
fall below the floor are in Puerto Rico and the U.S. Virgin Islands. 
However, the wage index floor value is applicable for any area that may 
fall

[[Page 76360]]

below the floor. A further 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) and the CY 2023 ESRD PPS final rule 
(87 FR 67161).
    An ESRD facility's wage index is applied to the labor-related share 
of the ESRD PPS base rate. In the CY 2023 ESRD PPS final rule (87 FR 
67153), we finalized a labor-related share of 55.2 percent. In the CY 
2021 ESRD PPS final rule (85 FR 71436), we updated the OMB delineations 
as described in the September 14, 2018, OMB Bulletin No. 18-04, 
beginning with the CY 2021 ESRD PPS wage index. In that same rule, we 
finalized 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. We finalized that the transition would be phased in over 2 
years, such that the 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. In the CY 
2023 ESRD PPS final rule (87 FR 67161), we finalized a permanent policy 
under Sec.  413.231(c) 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 CY. For CY 2024, as discussed in section II.B.1.a.(2)(e) of this 
final rule, the labor-related share to which the wage index will be 
applied is 55.2 percent.
(2) CY 2024 ESRD PPS Wage Index
    For CY 2024, we proposed to update the wage indices to account for 
updated wage levels in areas in which ESRD facilities are located using 
our existing methodology. We proposed to use 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 2024, the updated wage 
data are for hospital cost reporting periods beginning on or after 
October 1, 2019, and before October 1, 2020 (FY 2020 cost report data).
    For CY 2024, we proposed to update the ESRD PPS wage index to use 
the most recent hospital wage data. We proposed that if more recent 
data become available after the publication of the proposed rule and 
before the publication of the final rule (for example, a more recent 
estimate of the wage index), we would use such data, if appropriate, to 
determine the CY 2024 ESRD PPS wage index in the final rule.
    We received several comments on our proposal to update the ESRD PPS 
wage index. The comments and our responses are set forth below.
    Comment: We received several comments on CMS's proposal to use the 
most recent wage index data in the CY 2024 ESRD PPS final rule. 
Commenters were generally supportive of the use of more recent data. 
Additionally, several commenters reiterated support for the 5 percent 
cap on wage index decreases that we finalized in the CY 2023 ESRD PPS 
final rule (87 FR 67161).
    Response: We thank the commenters for their support on the use of 
more recent data and for the policy to cap wage index decreases.
    Comment: One ESRD facility expressed concerns that the ESRD PPS 
wage index does not reflect the realities that it faces and, 
specifically, does not accurately reflect the increase in its cost of 
labor over the past few years.
    Response: We appreciate the concerns that the commenter raised; 
however, we did not propose to change the wage index methodology for CY 
2024 and are not finalizing any changes to that methodology in this 
final rule. The wage data used to construct the ESRD PPS wage index are 
updated annually, based on the most current data available, and are 
based on OMB's CBSA delineations when applying the rural definitions 
and corresponding wage index values. As discussed in CY 2011 ESRD PPS 
final rule (75 FR 49200), the wage index reflects the relative level of 
hospital wages and wage-related costs in the geographic area in which 
the ESRD facility is located. Because the wage index is scaled relative 
to the national average, it does not reflect changes over time to the 
cost of labor. Rather, the market basket increase accounts for national 
trends, including inflation. As discussed in the CY 2024 ESRD PPS 
proposed rule (88 FR 42435), we proposed to increase the ESRD PPS base 
rate for CY 2024 by the market basket increase factor in accordance 
with section 1881(b)(14)(F)(i) of the Act, which provides that the 
market basket increase factor should reflect the changes over time in 
the prices of an appropriate mix of goods and services that reflect the 
costs of furnishing renal dialysis services. As discussed in section 
II.B.1.a.(2).(c) of this final rule, the final productivity-adjusted 
market basket update for CY 2024 is 2.1 percent based on the latest 
available data. We note that this final update is 0.4 percentage point 
higher than the proposed update and reflects a revised outlook 
regarding the U.S. economy and expected price inflation for CY 2024 for 
ESRD facilities. We believe the final productivity-adjusted market 
basket update will address some of the commenter's concerns regarding 
rising wages due to inflation.
    Comment: Several commenters, including MedPAC, a coalition of 
dialysis organizations and an LDO, suggested that CMS reevaluate the 
wage index methodology for the ESRD PPS. MedPAC recommended we 
establish an ESRD PPS wage index for all ESRD facilities using wage 
data that represents all employers and industry-specific occupational 
weights, rather than the hospital wage data currently used. Two ESRD 
facilities and a provider advocacy organization requested CMS use the 
floors and reclassifications that IPPS uses for their wage index. Some 
of these commenters additionally indicated a belief that this change 
would help ESRD facilities compete with hospitals for labor.
    Response: We appreciate the suggestions from commenters on how to 
improve the ESRD PPS wage index methodology. The use of hospital wage 
data for the ESRD PPS wage index is set forth in Sec. Sec.  
413.196(d)(2) and 413.231(a). As we previously discussed in the CY 2011 
ESRD PPS proposed rule (74 FR 49968), the ESRD PPS wage index uses the 
same wage index values used in the basic case-mix adjusted composite 
payment system, which 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. The application of the pre-floor, pre-
reclassification hospital wage index for the ESRD case-mix adjusted 
composite payment system is further discussed in the CY 2009 Physician 
Fee Schedule (PFS) final rule (73 FR 69726, 69758) and the CY 2007 PFS 
final rule (71 FR 69624, 69685). We did not propose changes to the ESRD 
PPS wage index methodology for CY 2024, and we are not finalizing any 
changes to that methodology in this final rule.
    As discussed in the CY 2023 ESRD PPS final rule (87 FR 67160), the 
wage index is intended to be a relative measure of the value of labor 
in prescribed labor market areas. There is a variety of reasons why our 
longstanding ESRD PPS wage index policy has not applied the same floors 
or reclassifications as applied under the IPPS, which we note, are not 
applied to the ESRD PPS wage index by statute (sections 1881(b)(12)(D) 
& (b)(14)(D)(iv)(II) of the Act). For example, applying 
reclassifications to the ESRD PPS wage index would

[[Page 76361]]

significantly increase administrative burden, both for ESRD facilities 
and for CMS, that would be associated with ESRD facilities 
reclassifying from one CBSA to another, and it would significantly 
increase the complexity of the methodology.
    Furthermore, because floors and reclassifications would be applied 
budget-neutrally under the wage index, these policies would increase 
the wage index for some ESRD facilities while reducing ESRD PPS 
payments for all other ESRD facilities, which would upset the long-
settled expectations with which ESRD facilities across the country have 
been operating. For example, under the IPPS rural floor policy, section 
4410(a) of the Balanced Budget Act of 1997 (Pub. L. 105-33) provides 
that, for discharges on or after October 1, 1997, the area wage index 
applicable to any hospital that is located in an urban area of a State 
may not be less than the area wage index applicable to hospitals 
located in rural areas in that State. Applying the IPPS rural floor to 
the ESRD PPS wage index would result in increasing the wage index for 
any ESRD facilities located in an urban area whose wage index is less 
than the rural wage index for that State. As we discussed in the CY 
2023 ESRD PPS final rule (87 FR 67164 through 67165) with respect to 
the increase to the ESRD PPS wage index floor in that year, a higher 
wage index floor will slightly decrease the ESRD PPS base rate for all 
ESRD facilities due to the application of the budget neutrality factor. 
Given that increasing the wage index floor results in a proportional 
decrease in the base rate for all ESRD facilities, we established a 
wage index floor value that strikes a balance between providing 
increased payment to areas for which labor costs are higher than the 
current wage index for the relevant CBSAs indicates, while maintaining 
the accuracy of payments under the ESRD PPS and minimizing the overall 
impact to all ESRD facilities.
    For these reasons, we believe that the ESRD PPS wage index is the 
most appropriate data to use for estimating the variation in wage 
levels across the country. However, we will take these comments into 
consideration to potentially inform future rulemaking.
    Comment: A non-profit health insurance organization commented that 
they believed a wage index floor of 0.7000 was justified and suggested 
CMS reevaluate the current wage index floor of 0.6000. The commenter 
indicated that CMS would find it appropriate to raise the wage index 
floor to 0.7000.
    Response: We appreciate the suggestion and will consider it for 
potential future rulemaking. We did not propose any change to the 
current wage index floor of 0.6000 specified in Sec.  413.231(d) and 
are not finalizing any changes to that floor in this final rule.
    Final Rule Action: We are finalizing our proposal to update the 
ESRD PPS wage index for CY 2024 to use the most recent hospital wage 
data, as proposed. The final CY 2024 ESRD PPS wage index is set forth 
in Addendum A and is available on CMS's website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices. Addendum A provides a 
crosswalk between the CY 2023 wage index and the CY 2024 wage index. 
Addendum B provides an ESRD facility level impact analysis. Addendum B 
is available on CMS's website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices.
c. CY 2024 Update to the Outlier Policy
(1) Background
    Section 1881(b)(14)(D)(ii) of the Act requires that the ESRD PPS 
include a payment adjustment for high-cost outliers due to unusual 
variations in the type or amount of medically necessary care, including 
variability in the amount of erythropoiesis stimulating agents (ESAs) 
necessary for anemia management. Some examples of the patient 
conditions that may be reflective of higher facility costs when 
furnishing dialysis care are frailty and obesity. A patient's specific 
medical condition, such as secondary hyperparathyroidism, may result in 
higher per treatment costs. The ESRD PPS recognizes that some patients 
require high-cost care, and we have codified the outlier policy and our 
methodology for calculating outlier payments at Sec.  413.237.
    Section 413.237(a)(1) enumerates the following items and services 
that are eligible for outlier payments as ESRD outlier services: (i) 
Renal dialysis drugs and biological products that were or would have 
been, prior to January 1, 2011, separately billable under Medicare Part 
B; (ii) renal dialysis laboratory tests that were or would have been, 
prior to January 1, 2011, separately billable under Medicare Part B; 
(iii) 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; (iv) 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 (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.\11\
---------------------------------------------------------------------------

    \11\ Under Sec.  413.237(a)(1)(vi), as of January 1, 2012, the 
laboratory tests that comprise the Automated Multi-Channel Chemistry 
panel are excluded from the definition of outlier services.
---------------------------------------------------------------------------

    In the CY 2011 ESRD PPS final rule (75 FR 49142), CMS stated that 
for purposes of determining whether an ESRD facility would be eligible 
for an outlier payment, it would be necessary for the ESRD 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 ESRD outlier services were specified in Transmittal 
2134, dated January 14, 2011.\12\ 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. For example, we use these issuances to 
identify renal dialysis oral drugs that were or would have been covered 
under Medicare Part D prior to 2011 to provide unit prices for 
determining the imputed MAP amounts. In addition, we use these 
issuances to update the list of ESRD outlier services by adding or 
removing items and services that we determined, based our monitoring 
efforts, are either incorrectly included or missing from the list.
---------------------------------------------------------------------------

    \12\ Transmittal 2033 issued August 20, 2010, was 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. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R2134CP.pdf.
---------------------------------------------------------------------------

    Under Sec.  413.237, an ESRD facility is eligible for an outlier 
payment if its imputed (that is, calculated) MAP amount per treatment 
for ESRD outlier services exceeds a threshold. The MAP amount 
represents the average estimated expenditure 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 MAP amount per treatment plus the FDL amount. As described in 
the following paragraphs, the ESRD

[[Page 76362]]

facility's predicted MAP amount is the national adjusted average ESRD 
outlier services MAP amount per treatment, further adjusted for case-
mix and facility characteristics applicable to the claim. We use the 
term ``national adjusted average'' in this section of this final rule 
for clarity, to distinguish the calculation of the average ESRD outlier 
services MAP amount per treatment from the calculation of the predicted 
MAP amount for a claim. The average ESRD outlier services MAP amount 
per treatment is based on utilization from all ESRD facilities, whereas 
the calculation of the predicted MAP amount for a claim is based on the 
individual ESRD facility and patient characteristics of the monthly 
claim. In accordance with Sec.  413.237(c), ESRD 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 codified in Sec.  
413.220(b)(4), using 2007 data, we established the outlier percentage, 
which is used to reduce the per treatment ESRD PPS base rate to account 
for the proportion of the estimated total Medicare 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 2023 ESRD PPS final rule, we finalized an update to the 
outlier methodology to better target 1.0 percent of total Medicare 
payments (87 FR 67170 through 67177). We finalized that we would 
continue to follow our established methodology for the calculation of 
the adult and pediatric MAP amounts, but we would prospectively 
calculate the adult FDL amounts based on the historical trend in FDL 
amounts that would have achieved the 1.0 percent outlier target in the 
3 most recent available data years.
(2) CY 2024 Update to the Outlier Services MAP Amounts and FDL Amounts
    For CY 2024, we proposed to update the MAP amounts for adult and 
pediatric patients using the latest available CY 2022 claims data. We 
proposed to update the ESRD outlier services FDL amount for pediatric 
patients using the latest available CY 2022 claims data, and to update 
the ESRD outlier services FDL amount for adult patients using the 
latest available claims data from CY 2020, CY 2021, and CY 2022, in 
accordance with the methodology finalized in the CY 2023 ESRD PPS final 
rule (87 FR 67170 through 67174). CY 2022 claims data showed outlier 
payments represented approximately 0.8 percent of total Medicare 
payments (88 FR 42432 and 42438).
    The impact of this final update is shown in Table 1, which compares 
the outlier services MAP amounts and FDL amounts used for the outlier 
policy in CY 2023 with the updated estimates for this final rule. The 
estimates for the CY 2024 MAP amounts, which are included in Column II 
of Table 1, were inflation adjusted to reflect projected 2024 prices 
for ESRD outlier services.
BILLING CODE 4120-01-P

[[Page 76363]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.003

    As demonstrated in Table 1, the estimated FDL per treatment that 
determines the CY 2024 outlier threshold amount for adults (Column II; 
$71.76) is lower than that used for the CY 2023 outlier policy (Column 
I; $73.19). The lower threshold is accompanied by a decrease in the 
adjusted average MAP for outlier services from $39.62 to $36.28. For 
pediatric patients, there is a decrease in the FDL amount from $23.29 
to $11.32. There is a corresponding decrease in the adjusted average 
MAP for outlier services among pediatric patients, from $25.59 to 
$23.36.
    We estimate that the percentage of patient months qualifying for 
outlier payments in CY 2024 would be 4.87 percent for adult patients 
and 20.86 percent for pediatric patients, based on the 2022 claims data 
and methodology finalized in the CY 2023 ESRD PPS final rule. 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 ESAs and other injectable drugs).
(3) 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. In 
the 2023 ESRD PPS final rule, we finalized a change to the outlier 
methodology to better achieve this 1 percent target (87 FR 67170 
through 67174). We stated in the CY 2024 ESRD PPS proposed rule that, 
based on the CY 2022 claims, outlier payments represented approximately 
0.9 percent of total payments. Based on more complete CY 2022 claims 
data, this figure has been updated to 0.8 percent for this final rule, 
which is below the 1 percent target due to declines in the use of 
outlier services. However, this is significantly closer to the 1 
percent target than the outlier payments based on CY 2021 claims, which 
represented approximately 0.5 percent of total payments. In the CY 2024 
ESRD PPS proposed rule, we noted that we believe the update to the 
outlier MAP and FDL amounts for CY 2024 would increase payments for 
ESRD beneficiaries requiring higher resource utilization. This would 
move us even closer to meeting our 1 percent outlier policy goal, 
because we would be using more current data for computing the MAP and 
FDL amounts, which is more reflective of current outlier services 
utilization rates. We also noted that the proposed recalibration of the 
FDL amounts would result in no change in payments to ESRD facilities 
for beneficiaries with renal dialysis items and 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: We received several comments on CMS's proposals to update 
the FDL and MAP amounts for CY 2024. Commenters were generally 
supportive of the use of more recent data to determine the CY 2024 ESRD 
PPS final MAP and FDL amounts. Several commenters stated that they 
appreciated that the methodological changes CMS made to the outlier 
policy in the CY 2023 ESRD PPS final rule resulted in the total 
percentage of payments for outliers being closer to the 1 percent 
target than ever before. However, some commenters noted that the ESRD 
PPS base rate is reduced on the assumption that 1 percent of total 
payments will be attributable to outlier payments, and if the actual 
percentage is less than 1 percent it means that total payments to ESRD 
facilities are less than they should be. Commenters suggested that CMS 
should implement a policy to recompense ESRD facilities for

[[Page 76364]]

underpayment when total outlier payments are less than 1 percent of 
total ESRD PPS payments. One commenter recommended CMS reduce the 
outlier target to 0.5 percent of total payments.
    Response: We appreciate the support for the proposed use of more 
recent data to update the MAP and FDL amounts for the outlier policy 
and the thoughtful suggestions provided by commenters. We acknowledge 
that, even with annually adjusting the MAP and FDL amounts to reflect 
the most recent utilization and costs of ESRD PPS eligible outlier 
services according to the updated outlier methodology finalized in the 
CY 2023 ESRD PPS final rule, total outlier payments have not yet 
reached the 1 percent target. However, the performance of the outlier 
payments has improved significantly due to the modification to the 
outlier methodology finalized in CY 2023 ESRD PPS final rule, as 
outlier payments represented 0.8 percent of the total payments in CY 
2022. We appreciate the comments suggesting solutions for refining the 
outlier policy methodology, for example, reducing the outlier 
percentage, as defined at Sec.  413.220(b)(4), to less than 1 percent 
or establishing a mechanism that pays back ESRD facilities those 
allocated outlier amounts that were not paid out in the projected year. 
We did not propose any modifications to the ESRD PPS outlier policy for 
CY 2024 codified at Sec.  413.220, and we are not finalizing any 
changes to the methodology in this final rule. We will consider the 
commenters' suggestions regarding changes in methodology in potential 
future rulemaking.
    Final Rule Action: After considering the public comments, we are 
finalizing the updated outlier thresholds for CY 2024 displayed in 
Column II of Table 1 of this final rule based on the most current data.
d. Impacts to the CY 2024 ESRD PPS Base Rate
(1) ESRD PPS Base Rate
    In the CY 2011 ESRD PPS final rule (75 FR 49071 through 49083), CMS 
established the methodology for calculating the ESRD PPS per-treatment 
base rate, that is, the ESRD PPS base rate, and calculating 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, 
and any applicable outlier payment, training adjustment add-on, TDAPA, 
and TPNIES.
(2) Annual Payment Rate Update for CY 2024
    In the CY 2024 ESRD PPS proposed rule, we proposed an ESRD PPS base 
rate for CY 2024 of $269.99 (88 FR 42432). We are finalizing an ESRD 
PPS base rate for CY 2024 of $271.02. 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 2024, we did not propose and are not finalizing 
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 final CY 2024 wage index budget-neutrality adjustment 
factor using treatment counts from the 2022 claims and facility-
specific CY 2023 payment rates to estimate the total dollar amount that 
each ESRD facility would have received in CY 2023. The total of these 
payments became the target amount of expenditures for all ESRD 
facilities for CY 2024. Next, we computed the estimated dollar amount 
that would have been paid for the same ESRD facilities using the final 
CY 2024 ESRD PPS wage index and final labor-related share for CY 2024. 
As discussed in section II.B.1.b of this final rule, the ESRD PPS wage 
index for CY 2024 includes an update to the most recent hospital wage 
data and continued use of the 2018 OMB delineations. The total of these 
payments becomes the new CY 2024 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 2024 amount. When 
we multiplied the wage index budget neutrality factor by the applicable 
CY 2024 estimated payments, aggregate Medicare 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 2024 wage index budget-neutrality 
adjustment factor is 1.000031. This CY 2024 wage index budget-
neutrality adjustment factor reflects the impact of all wage index 
policy changes, including the final CY 2024 ESRD PPS wage index and 
labor-related share.
    TPEAPA Budget-Neutrality Adjustment Factor: As explained in section 
II.B.1.g.(7) of this final rule, we are finalizing a new, budget-
neutral transitional add-on payment adjustment for pediatric ESRD renal 
dialysis services, which we call the TPEAPA. The final CY 2024 budget-
neutrality adjustment factor for the TPEAPA is 0.999503. The budget-
neutrality adjustment factor for the TPEAPA is discussed in section 
II.B.1.g of this final rule.
    Combined Wage Index and TPEAPA Budget-Neutrality Adjustment Factor: 
For purposes of calculating the ESRD PPS base rate for CY 2024, we are 
using one combined budget-neutrality adjustment factor includes both 
the wage index budget-neutrality adjustment factor and the TPEAPA 
budget-neutrality adjustment factor. The CY 2024 combined wage index 
and TPEAPA budget neutrality factor is 0.999534 (1.000031 x 0.999503). 
This application would yield a CY 2024 ESRD PPS base rate of $265.48 
prior to the application of the CY 2024 market basket update percentage 
($265.57 x 0.999534 = $265.45).
    Market Basket Update: 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 an ESRD market basket percentage 
increase. As discussed previously in section II.B.1.a.(2)(a) of this 
final rule, the latest CY 2024 projection of the ESRDB market basket 
percentage increase is 2.4 percent. In CY 2024, 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 in section 
II.B.1.a.(2)(b) of this final rule, the latest CY 2024 projection of 
the productivity adjustment is 0.3 percentage point, thus yielding a CY 
2024 productivity-adjusted ESRDB market basket update of 2.1 percent 
for

[[Page 76365]]

CY 2024. Therefore, the final CY 2024 ESRD PPS base rate is $271.02 
(($265.57 x 0.999534) x 1.021 = $271.02).
    The comments and our responses to the comments on our proposed 
updates to the ESRD PPS base rate are set forth below.
    Comment: We received several comments which characterized the 
proposed CY 2024 ESRD PPS base rate as too low. Some of these 
commenters requested that CMS increase the base rate. The reasoning for 
this requested increase varied by commenter. Some commenters wanted an 
increase to account for recent under-forecasts, whereas other 
commenters wanted an increase to allow facilities to provide an 
increased quality of care.
    Response: The CY 2024 ESRD PPS base rate is derived from the CY 
2023 ESRD PPS base rate, the CY 2024 ESRDB market basket update, and 
the CY 2024 combined wage index-TPEAPA budget neutrality factor. In 
accordance with section 1881(b)(14)(F) of the Act, the primary factor 
in determining the ESRD PPS base rate increase from one year to the 
next is the ESRDB market basket update. We believe the final CY 2024 
ESRDB market basket update reflects the most recent available data 
regarding the forecasted prices of labor used to provide renal dialysis 
services. We discuss the CY 2024 ESRDB market basket update in more 
detail in section II.B.1.a of this final rule, with detailed responses 
to comments on the magnitude of the productivity-adjusted ESRDB market 
basket increase in section II.B.1.a.(2)(c) of this final rule and 
detailed responses to comments on previous forecast errors for the 
ESRDB market basket update in section II.B.1.a.(2)(d) of this final 
rule. We appreciate the concerns of the commenters, but we did not 
propose any new payment adjustments to the base rate based on those 
concerns. We will continue to monitor the adequacy of the ESRD PPS 
payment and will consider these commenters' insights for future 
rulemaking.
    Final Rule Action: We are finalizing a CY 2024 ESRD PPS base rate 
of $271.02. This amount reflects the combined CY 2024 wage index-TPEAPA 
budget-neutrality adjustment factor of 0.999534, and the CY 2024 ESRD 
PPS productivity-adjusted market basket update of 2.1 percent.
e. Update to the Average per Treatment Offset Amount for Home Dialysis 
Machines
    In the CY 2021 ESRD PPS final rule (85 FR 71427), we expanded 
eligibility for the TPNIES under Sec.  413.236 to include certain 
capital-related assets that are home dialysis machines when used in the 
home for a single patient. To establish the TPNIES basis of payment for 
these items, we finalized the additional steps that the Medicare 
Administrative Contractors (MACs) must follow to calculate a pre-
adjusted per treatment amount, using the prices they establish under 
Sec.  413.236(e) for a capital-related asset that is a home dialysis 
machine, as well as the methodology that CMS uses to calculate the 
average per treatment offset amount for home dialysis machines that is 
used in the MACs' calculation, to account for the cost of the home 
dialysis machine that is already in the ESRD PPS base rate. For 
purposes of this final rule, we refer to this as the ``TPNIES offset 
amount.''
    The methodology for calculating the TPNIES offset amount is set 
forth in Sec.  413.236(f)(3). Section 413.236(f)(3)(v) states that 
effective January 1, 2022, CMS annually updates the amount determined 
in Sec.  413.236(f)(3)(iv) by the ESRD bundled market basket percentage 
increase factor minus the productivity adjustment factor. The TPNIES 
for capital-related assets that are home dialysis machines is based on 
65 percent of the MAC-determined pre-adjusted per treatment amount, 
reduced by the TPNIES offset amount, and is paid for 2 CYs.
    As we discussed in the CY 2024 ESRD PPS proposed rule (88 FR 
42432), there are currently no capital-related assets that are home 
dialysis machines set to receive TPNIES for CY2024, as the TPNIES 
payment period for the Tablo[supreg] System ends on December 31, 2023, 
and the only TPNIES application for CY 2024 is not for a home dialysis 
machine. However, as required by Sec.  413.236(f)(3)(v), we proposed to 
update the TPNIES offset amount annually according to the methodology 
described previously.
    We proposed a CY 2024 TPNIES offset amount for capital-related 
assets that are home dialysis machines of $9.96, based on the proposed 
CY 2024 ESRDB productivity-adjusted market basket update of 1.7 percent 
(2.0 percent market basket percentage increase reduced by 0.3 
percentage point productivity adjustment). We explained in the CY 2024 
ESRD PPS proposed rule that applying the proposed update factor of 
1.017 to the CY 2023 offset amount resulted in the proposed CY 2024 
offset amount of $9.96 ($9.79 x 1.017 = $9.96). We proposed to update 
this calculation to use the most recent data available in the CY 2024 
ESRD PPS final rule.
    We received three comments on this proposal to update the TPNIES 
offset amount for capital related assets that are home dialysis 
machines, including comments from an LDO and a device manufacturer. The 
comments and our responses to the comments on the proposed update to 
the TPNIES offset amount are set forth below.
    Comment: A device manufacturer requested that CMS remove the TPNIES 
offset for capital-related assets that are home dialysis machines. The 
commenter and two others indicated that they believe that the TPNIES 
offset, combined with the 65 percent reduction for risk sharing, are 
leading to capital-related assets that are home dialysis machines being 
undervalued. An LDO agreed that the TPNIES for capital-related assets 
that are home dialysis machines should be offset by an amount currently 
in the base rate.
    Response: We appreciate the commenters' insight into the impacts of 
the TPNIES offset for capital-related assets that are home dialysis 
machines. We did not propose any methodological changes for this TPNIES 
offset amount set forth at Sec.  413.236(f), and we are not finalizing 
any changes. We will consider the commenters' concerns for potential 
future rulemaking.
    Final Rule Action: We are finalizing our proposal to calculate the 
CY 2024 TPNIES offset amount using the most recent data available. The 
CY 2023 TPNIES offset amount for capital-related equipment that are 
home dialysis machines used in the home is $9.79. As discussed 
previously in section II.B.1.a.(2)(c) of this final rule, the final CY 
2024 ESRDB productivity-adjusted market basket update is 2.1 percent 
(2.4 percent market basket percentage increase reduced by 0.3 percent 
productivity adjustment). Applying the update factor of 1.021 to the CY 
2023 TPNIES offset amount results in a final CY 2024 TPNIES offset 
amount of $10.00 ($9.79 x 1.021).
f. Refinement of the Low-Volume Payment Adjustment (LVPA)
(1) Background
    Section 1881(b)(14)(D)(iii) of the Act provides that the ESRD PPS 
shall include a payment adjustment that reflects the extent to which 
costs incurred by low-volume facilities (as defined by the Secretary) 
in furnishing renal dialysis services exceed the costs incurred by 
other facilities in furnishing such services, and for payment for renal 
dialysis services furnished on or after January 1, 2011, and before 
January 1, 2014, such payment adjustment shall not be less than 10 
percent. Therefore, the ESRD PPS provides a facility-level payment 
adjustment to ESRD facilities

[[Page 76366]]

that meet the definition of a low-volume facility. In this section of 
the final rule, we discuss the low volume-payment adjustment (LVPA) 
under the ESRD PPS.
    The current amount of the LVPA is 23.9 percent. In the CY 2011 ESRD 
PPS final rule (75 FR 49118 through 49125), we finalized the 
methodology used to target the appropriate population of ESRD 
facilities that were low-volume and to determine the treatment 
threshold for those ESRD facilities identified. After consideration of 
public comments, we established an 18.9 percent adjustment for ESRD 
facilities that furnish less than 4,000 treatments annually and 
indicated that this increase to the ESRD PPS base rate would encourage 
small ESRD facilities to continue providing access to care.
    In the CY 2016 ESRD PPS proposed rule (80 FR 37819), we analyzed 
ESRD facilities that met the definition of a low-volume facility under 
Sec.  413.232(b) as part of the updated regression analysis and found 
that these ESRD facilities still had higher costs compared to other 
ESRD facilities. A regression analysis of CYs 2012 and 2013 low-volume 
facility claims and cost report data indicated a multiplier of 1.239 
percent; therefore, we proposed an updated LVPA adjustment factor of 
23.9 percent in the CY 2016 ESRD PPS proposed rule (80 FR 37819) and 
finalized this policy in the CY 2016 ESRD PPS final rule (80 FR 69001). 
In CY 2021, 366 ESRD facilities received the LVPA. Using the most 
recent available data for CY 2022, the number of ESRD facilities 
receiving the LVPA was 353.
(a) Current LVPA Methodology
    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 costs reports, whichever is 
most recent, except as specified in paragraph (g)(4)) preceding the 
payment year; and (2) has not opened, closed, or received a new 
provider number due to a change in ownership (except where the change 
in ownership results in a change in facility type) in the 3 cost-
reporting years (based on as-filed or final settled 12-consectuive 
month cost reports, whichever is most recent) preceding the payment 
year.
    In addition, 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. To receive the LVPA, an ESRD facility must submit 
a written attestation statement to its Medicare Administrative 
Contractor (MAC) confirming that it meets all the requirements 
specified in Sec.  413.232 and qualifies as a low-volume ESRD facility. 
For purposes of determining eligibility for the LVPA, ``treatments'' 
mean total hemodialysis equivalent treatments (Medicare and non-
Medicare). For peritoneal dialysis patients, one week is considered 
equivalent to three hemodialysis treatments (80 FR 68994). Section 
413.232(e) generally imposes a yearly November 1st deadline for 
attestation submissions unless extraordinary circumstances justify an 
exception and specifies exceptions for certain years where the deadline 
is in December or January. The November 1st attestation timeframe 
provides 60 days for a MAC to verify that an ESRD facility meets the 
LVPA eligibility criteria (76 FR 70236). The ESRD facility would then 
receive the LVPA payment for all the Medicare-eligible treatments in 
the payment year. Once an ESRD facility is determined to be eligible 
for the LVPA, a 23.9 percent increase is applied to the ESRD PPS base 
rate for all treatments furnished by the ESRD facility (80 FR 69001).
    In the CY 2021 ESRD PPS final rule (85 FR 71443), we finalized a 
policy to allow ESRD facilities flexibility for LVPA eligibility due to 
the COVID-19 PHE. Under Sec.  413.232(g)(4), for purposes of 
determining ESRD facilities' eligibility for payment years 2021, 2022, 
and 2023, we will only consider total dialysis treatments for any 6 
months of their cost-reporting period ending in 2020. ESRD facilities 
that would not otherwise meet the number of treatments criterion 
because of the COVID-19 PHE may attest that their total dialysis 
treatments for those 6 months of their cost reporting period ending in 
2020 are less than 2,000. The attestation must further include 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.
(b) Current Issues and Concerns From Interested Parties
    Interested parties, including MedPAC and the Government 
Accountability Office (GAO),\13\ have recommended that we make 
refinements to the LVPA to better target ESRD facilities that are 
critical to beneficiary access to dialysis care in remote or isolated 
areas.\14\ These groups and other interested parties have also have 
expressed concern that the strict treatment count introduces a ``cliff-
effect'' that may incentivize ESRD facilities to restrict their patient 
caseload to remain below 4,000 treatments per year to meet the LVPA 
threshold.\15\
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    \13\ https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun20_ch7_reporttocongress_sec.pdf.
    \14\ https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-summary-report-april-2021.pdf.
    \15\ https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-summary-report-april-2021.pdf.
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(2) Requests for Information on Modification of LVPA Methodology and 
Development of a New Payment Adjustment Based on Geographic Isolation
    In the CY 2024 ESRD PPS proposed rule (88 FR 42440 through 42441), 
we explained that we recognize the importance of revising the ESRD PPS 
LVPA adjustment methodology to ensure that payments accurately reflect 
differences in cost and adequately target low-volume facilities, and to 
strive for healthcare equity for ESRD beneficiaries. The LVPA and rural 
adjusters currently result in increased payments to some geographically 
isolated ESRD facilities, but these adjusters do not specifically 
target geographically isolated ESRD facilities. We noted several points 
of concern that interested parties have raised in the past, as well as 
certain statutory limitations that could apply to some of the 
methodological approaches suggested in the past. We solicited 
information from the public about potential approaches to refine the 
ESRD PPS methodology, which we would take into consideration for any 
potential changes to the LVPA in the future.
    This section addresses several RFIs regarding the LVPA and a 
potential new adjustment for geographically isolated ESRD facilities.
(a) Comment Solicitation for Modifications to LVPA Methodology
    In the CY 2024 ESRD PPS proposed rule, we solicited comments on

[[Page 76367]]

potential changes to the LVPA methodology (88 FR 42441 through 42444), 
including maintaining a single threshold, establishing LVPA tiers, and/
or utilizing a continuous function. Any potential refinements to the 
LVPA methodology that may result from our consideration of these 
comments would be proposed through notice-and-comment rulemaking in the 
future. We requested that commenters keep in mind that section 
1881(b)(14)(D)(iii) of the Act requires the LVPA to reflect 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.
(i) Maintain a Single LVPA Threshold
    As discussions about modifying the existing treatment threshold or 
payment adjustment percentage have been ongoing since the beginning of 
the multi-year LVPA reform efforts, we solicited comments on 
maintaining a single threshold for the LVPA. ESRD facilities that fall 
below the treatment threshold would continue to receive payment, and 
payments would not be adjusted for those ESRD facilities above the 
threshold. We stated that we were engaged in continuing monitoring 
efforts to align resource use with payment. As noted in the CY 2024 
ESRD PPS proposed rule (88 FR 42442), if we were to re-compute the LVPA 
percentage amount using the latest available claims and cost report 
data and the methodology established in the CY 2011 and CY 2016 ESRD 
PPS final rules (75 FR 49118 through 49125 and 80 FR 69001), the 
current treatment threshold of 4,000 treatments per year would 
correspond to a 17.6 percent payment adjustment. The 4,000-treatment 
threshold could be maintained, or the treatment threshold could be 
recalibrated to maintain the 23.9 percent payment adjustment. 
Maintaining a single threshold would not address concerns regarding the 
potential for gaming or remove what commenters call the payment cliff. 
Potential approaches for a single LVPA threshold are outlined in Table 
2.
[GRAPHIC] [TIFF OMITTED] TR06NO23.004

(ii) Establishment of Multiple LVPA Tiers
    We solicited comments on creating a tiered payment adjustment that 
would include multiple thresholds, with separate payment adjustments 
calibrated so that ESRD facilities in tiers with the lowest treatment 
volume would receive the highest payment adjustment, and vice versa. 
MedPAC has previously recommended setting LVPA treatment thresholds at 
fewer than 4,000 treatments, between 4,000 and 4,999 treatments, and 
between 5,000 and 6,000 treatments, with payment adjustments calibrated 
so that ESRD facilities in tiers with the lowest volume would receive 
the highest payment adjustment, and vice versa.\16\ Establishing 
multiple thresholds, with a separate payment adjustment for ESRD 
facilities under each threshold level, would reduce the potential for 
gaming through reduction of the magnitude of the payment cliff. 
Additionally, LVPA eligibility would be expanded to more ESRD 
facilities. We solicited comments regarding the establishment of 
multiple thresholds, including up to an eight-tiered structure for the 
LVPA. Tables 3 through 6 outline various methodological options. Tables 
3 and 4 would establish larger adjustment factors on average than the 
current methodology but would require reductions to the ESRD PPS base 
rate to maintain budget neutrality. Tables 5 and 6 show adjustment 
factors which are scaled to maintain budget neutrality within the LVPA, 
keeping the LVPA's budget at the same amount that would occur under the 
current methodology without requiring reductions to the ESRD PPS base 
rate. As illustrated below, scaling the adjusters while maintaining 
budget neutrality within the LVPA results in lower LVPA adjusters. For 
example, Tier 1 (less than 5,000 treatments) in the Four-Tiered Model 
varies based on the approach to maintaining budget neutrality, as the 
LVPA adjuster is 13.7 percent where budget neutrality is maintained 
within the ESRD PPS (Table 3) and 5.8 percent where budget neutrality 
is maintained within the LVPA (Table 5). For comparison, the Eight-
Tiered Model shows that for Tier 1 (less than 1,000 treatments), ESRD 
facilities would receive a 123 percent LVPA adjuster where budget 
neutrality is maintained within the ESRD PPS (Table 4) and 40.5 percent 
LVPA adjuster where budget neutrality is maintained within the LVPA 
(Table 6).
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[[Page 76369]]


[GRAPHIC] [TIFF OMITTED] TR06NO23.008

(iii) Continuous Function
    We also solicited comments on potentially establishing a continuous 
function to adjust LVPA payments. Under this approach, ESRD facilities 
with the lowest treatment volume would receive the highest payment 
adjustment, and the payment adjustment would decrease continuously as 
volume increases. This could include calibration of the point at which 
the payment adjustment becomes zero to correspond with the existing 
4,000 treatment upper bound, or establishment of a new upper bound 
based on a regression analysis. Establishment of a continuous function 
has the potential to significantly reduce the potential for gaming by 
eliminating payment cliffs entirely. Additionally, this would increase 
payment for ESRD facilities with the lowest volume, therefore better 
aligning payment with resource use. Furthermore, a continuous function 
would potentially expand LVPA eligibility to the most ESRD facilities.
    In the CY 2024 ESRD PPS proposed rule, we noted that we are 
considering several approaches to modifying the LVPA to address 
concerns about its incentive structure, treatment threshold, and 
administrative burden, as expressed by interested parties (including 
the GAO, MedPAC, and industry representatives). We issued this RFI to 
seek feedback on the suggested changes to the LVPA, as described 
previously, and to solicit further input from interested parties to 
inform future modifications to the methodology used to determine the 
LVPA.
    CMS welcomed input and responses to the following considerations, 
requests, and questions:
     Regarding concerns about a payment cliff in the existing 
LVPA, we are considering implementing payment tiers or a continuous 
adjustment, based on treatment volume, in place of the current single 
tiered adjustment.
    ++ Comment on which payment structure would be more appropriate: 
single threshold as currently employed, tiered structure, or continuous 
function, and provide the reasoning behind your recommendation.
    ++ Comment on which option would be most effective in removing 
gaming incentives and which option would bring greater congruency 
between cost of providing renal dialysis services and payment.
     Using the alternative methodology described previously, 
under a tiered or continuous payment adjustment, the treatment 
threshold for eligibility would be determined based on the median 
treatment count among all ESRD facilities (approximately eight thousand 
treatments per year). The resulting tiers and incremental payment 
adjustments between tiers could follow several different 
configurations.
    ++ What factors should be evaluated to best determine the treatment 
count threshold, as well as the tiering structure? Specifically, 
comment on the treatment volume beneath which per-treatment costs begin 
to increase.
    ++ Enumerate any concerns you might have should the implementation 
of a tiered or continuous adjustment result in an expanded set of 
eligible ESRD facilities, and payment redistribution.
     Interested parties have voiced concern regarding the 
administrative burden involved in the current LVPA attestation process. 
As such, we are considering potentially decreasing the number of years 
of attestation data needed to determine LVPA eligibility.
    ++ Comment on the extent to which this change would alleviate 
burden, and if there are other administrative changes that could be 
made to simplify this process.
    ++ Describe any anticipated effects of decreasing the amount of 
treatment volume data used to determine LVPA eligibility.
    ++ Describe the ways that simplifying the attestation process could 
help ESRD facilities with fewer resources to promote health equity by 
improving their ability to serve vulnerable and underserved 
communities.
(b) Comment Solicitation on the Development of a New Payment Adjustment 
Based on Geographic Isolation
    CMS is striving to promote health equity by ensuring that ESRD 
facilities, including both rural and low-volume facilities, are being 
paid equitably for serving populations that are currently underserved. 
Therefore, in the CY 2024 ESRD PPS proposed rule (88 FR 42444 through 
42445), we solicited comments on potentially assisting geographically 
isolated ESRD facilities and promoting access in these areas, including 
labor force hiring and retention. We stated that we considered 
establishing a new payment adjustment that accounts for isolation, 
rurality, and other geographical factors. We also requested information 
on geographic isolation to determine if ESRD facilities that are

[[Page 76370]]

currently considered rural would benefit from a geographic isolation 
adjustment. The new geographically based payment adjustment may 
consider local dialysis need (LDN), as explained later in this section, 
instead of basing payment strictly upon a rural designation, as set 
forth in Sec.  413.233 and 413.231(b)(2). We considered changes to the 
eligibility criteria to address the concerns that GAO and MedPAC raised 
about targeting LVPA payments to ESRD facilities that are not located 
near other ESRD facilities that are necessary to protect access to 
care. As noted previously, under section 1881(b)(14)(D)(iii) of the 
Act, the LVPA must reflect the extent to which costs incurred by low-
volume facilities (as defined by the Secretary) in furnishing renal 
dialysis services exceed the costs incurred by other facilities in 
furnishing such services. We explained that our preliminary analysis 
found that, in general, low-volume facilities that are rural, isolated, 
or located in low-demand areas did not have higher costs than low-
volume ESRD facilities overall. Therefore, certain changes that 
interested parties have suggested would not comport with the statutory 
requirements and limitations for the LVPA. We solicited comments on 
potential methodologies for creating a separate payment adjustment that 
could potentially address GAO and MedPAC's concerns, relying upon the 
authority under section 1881(b)(14)(D)(iv) of the Act, which states 
that the ESRD PPS may include such other payment adjustments as the 
Secretary determines appropriate.
    We solicited responses to the following questions.
    ++ What factors should be considered in formulating a payment 
adjustment for ESRD facilities in isolated geographical areas or areas 
for which there is a low need for renal dialysis services?
    ++ What are the best ways to incentivize renal dialysis service 
provision in isolated geographic areas?
    ++ Our analysis of the LDN methodology has shown that low LDN 
census tracts intersect with areas designated as Health Professional 
Shortage Areas. What impact would a payment adjustment based on 
geographic isolation have on the ability of ESRD facilities in isolated 
areas to recruit and retain health care professionals?
    ++ Comment on the appropriateness of maintaining the rural facility 
adjustment under Sec.  413.233 if we were to establish an LDN payment 
adjustment in conjunction with a modified LVPA.
    ++ Comment on the relationship between geographic isolation and 
cost. Please provide any data that could further inform CMS's 
understanding of the relationship between geographic isolation and cost 
for low volume facilities.
    ++ Comment on the appropriateness of utilizing driving time between 
current beneficiary address and treatment location as the appropriate 
metric for travel time.
    ++ Are there ways in which the suggested methodology for this 
potential payment adjustment could fail in targeting isolated ESRD 
facilities, or ESRD facilities in areas with low LDN?
    ++ Are there ways in which the determination of LDN might be 
subject to gaming?
    ++ Would a payment adjustment for ESRD facilities in areas with low 
LDN improve health equity? Are there specific recommendations to change 
the LDN methodology described above to promote quality access to care 
for all ESRD beneficiaries?
    ++ Comment on the favorability of CMS's implementation of a new 
payment adjustment for ESRD facilities in areas with low LDN as 
described above.
    ++ Are there any other considerations we should keep in mind when 
considering proposing a new payment adjustment based on an LDN 
methodology?
(c) Summary of Request for Information on Potential Modification to 
LVPA Methodology and Information Received From Commenters
    As discussed above, in the CY 2024 ESRD PPS proposed rule (88 FR 
42430), we sought comment on several approaches to modifying the LVPA 
to address concerns about its incentive structure, treatment threshold, 
and administrative burden. We issued an RFI to seek feedback from the 
public on potential changes to the LVPA methodology, including 
maintaining a single threshold, establishing LVPA tiers, and/or 
utilizing a continuous function to ensure that payments accurately 
reflect differences in cost and adequately target low-volume 
facilities. We also solicited comments on the establishment of an add-
on payment adjustment for geographic isolation of ESRD facilities. We 
asked commenters whether a payment adjustment for geographic isolation 
of ESRD facilities in areas with low local dialysis need would improve 
health equity.
    We received 23 public comments in response to our RFI, including 
from large, small, and non-profit dialysis organizations; an advocacy 
organization; a coalition of dialysis organizations; a large non-profit 
health system; and MedPAC. A high-level description of these comments 
is included in the following subsections of this CY 2024 ESRD PPS final 
rule.
    We thank the commenters for their detailed and thoughtful comments. 
While we will not respond to these comments in this CY 2024 ESRD PPS 
final rule, we intend to take them into consideration for future 
rulemaking and future policy development. We will provide more detailed 
information about the commenters' recommendations in a future posting 
on CMS's website located at the following link: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Educational_Resources.
(i) Responses on Criteria for Receiving LVPA Status
    We received a wide range of responses to the RFI. Many commenters 
supported MedPAC's proposal of implementing a two-tier low-volume and 
isolated (LVI) adjustment in place of the LVPA so that facilities can 
expand services to meet patient needs without substantial payment 
decreases while limiting administrative burden. Some commenters 
supported maintaining a single threshold with varying recommendations 
for adjusted treatment counts. Other commenters supported establishing 
varying numbers of tiers at varying treatment counts. Some commenters 
also supported establishing a continuous function as described in the 
CY 2024 ESRD PPS proposed rule. Many comments included general concerns 
regarding the administrative burden and transparency of the various 
methodologies described. While we are not providing a detailed response 
to these comments in this final rule, we thank the commenters for their 
input and will consider the recommendations in potential future 
rulemaking.
(ii) Responses on the Local Dialysis Need (LDN) Methodology
    Commenters generally believed that the LDN methodology was overly 
complicated and lacked transparency. Several commenters expressed 
renewed support for incorporating geographic isolation directly into 
the LVPA formula, using a methodology such as the LVI adjustment that 
MedPAC suggested. While we are not providing a detailed response to 
these comments in this final rule, we thank the commenters for their 
input and will consider the recommendations in potential future 
rulemaking.

[[Page 76371]]

(3) Exception to the Current LVPA Attestation Process for Disasters and 
Other Emergencies
    Under our current regulations at 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, except as specified in 
Sec.  413.232(g)(4)) preceding the payment year; and (2) has not 
opened, closed, or received a new provider number due to a change in 
ownership (except where the change in ownership results in a change in 
facility type) 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. When we first established these 
requirements in the CY 2011 ESRD PPS final rule, we explained that 
looking across data for three years provided us with sufficient 
information to view consistency in business operations (79 FR 49123). 
In the CY 2019 ESRD PPS final rule (83 FR 56949) and the CY 2021 ESRD 
PPS proposed rule (85 FR 42165), we acknowledged commenters' concerns 
that the eligibility criteria in the LVPA regulations are very explicit 
and leave little room for flexibility during disasters or other 
emergency situations like the COVID-19 PHE. Commenters have emphasized 
that low-volume facilities rely on the LVPA, and that loss of the 
payment adjustment could result in beneficiary access issues.
    As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42165), 
the COVID-19 PHE caused ESRD facilities to have to shift patients among 
ESRD facilities to provide uninterrupted care to their Medicare ESRD 
population. In some cases, this patient shifting increased dialysis 
treatments at some low-volume ESRD facilities, putting the ESRD 
facility temporarily over the LVPA treatment threshold. This increase 
in dialysis treatments, resulting from the COVID-19 PHE, disqualified 
some ESRD facilities that would have otherwise received the LVPA of 
23.9 percent per treatment. In the CY 2021 ESRD PPS final rule (85 FR 
71485), we established a policy that ESRD facilities would be held 
harmless from increases in treatment counts due to temporary patient 
shifting because of the COVID-19 PHE. To be held harmless, ESRD 
facilities must follow the attestation process for the exception set 
forth in Sec.  413.232(g)(4) and are expected to provide supporting 
documentation to the MACs upon request. Interested parties have 
expressed support for CMS's swift response to the COVID-19 PHE's impact 
on ESRD facilities, with an association of dialysis providers stating 
that holding harmless LVPA status for these ESRD facilities will better 
ensure that ESRD patients can continue to access the life-sustaining 
dialysis treatment they need, particularly in rural and underserved 
areas where low-volume facilities heavily depend on the LVPA to remain 
open and provide treatment for patients.
    In the CY 2024 ESRD PPS proposed rule, we stated that we recognize 
there could be future circumstances, potentially like the circumstances 
of the COVID-19 PHE, in which it would be appropriate to provide 
flexibilities with respect to certain LVPA requirements (88 FR 42446). 
Commenters have previously expressed concerns about the strict 
attestation requirements for ESRD facilities to remain eligible for the 
LVPA, particularly when faced with a disaster or other emergency, such 
as a local or national emergency, natural disaster, catastrophic event, 
or public health emergency. We noted that during disasters or other 
emergencies, low-volume facilities could be forced to close, or could 
experience increases in their treatment counts if they treat patients 
who are displaced from a nearby ESRD facility that is impacted by such 
an event. For example, in August of 2021, an ESRD facility in Louisiana 
sustained significant damage because of Hurricane Ida, which required 
the ESRD facility to close for repairs and temporarily stop furnishing 
renal dialysis services. The ESRD facility served a rural community and 
for over 10 years received the LVPA due to the low number of dialysis 
treatments it furnished each year. This ESRD facility sought recourse 
to maintain its eligibility for the LVPA when it resumed operations 
following the required repairs to the ESRD facility, however, recourse 
was unavailable due to the limitations set forth in Sec.  413.232(b). 
We explained that when we established the LVPA in the CY 2011 ESRD PPS 
final rule, we stated that we believed the LVPA should encourage small 
ESRD facilities to continue to provide access to care to an ESRD 
patient population where providing that care would otherwise be 
problematic (75 FR 49118). Given that these requirements for low-volume 
facilities were created to protect access to care for the vulnerable 
patient population that these ESRD facilities serve, we noted, adding 
certain flexibilities during disasters or other emergencies would 
promote our commitment to ensuring access to care for ESRD patients.
(a) Changes to the LVPA
    We proposed to make two changes to the LVPA regulation at Sec.  
413.232 to allow for more administrative flexibilities during disasters 
or other emergencies. First, we proposed to create a new exception to 
the attestation process for disasters and other emergencies. Second, we 
proposed to establish a process that would allow low-volume facilities 
to close and reopen in response to a disaster or other emergency and 
still receive the LVPA. CMS would assess whether a particular situation 
is a disaster or other emergency based on the totality of the 
circumstances that could result in disruption of or inability to 
furnish renal dialysis services at one or more ESRD facilities, thus 
affecting the ESRD facility or facilities' ability to qualify for the 
LVPA. For purposes of the proposal, disasters or other emergencies 
would include, but not be limited to, the below examples:
     A public health emergency declared by the Secretary due to 
a significant outbreak of infectious disease or bioterrorist attacks.
     Natural disasters including winter storms, floods, 
tornados, hurricanes, wildfires, earthquakes, or any combination 
thereof.\17\
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     Catastrophic events outside of an ESRD facility's control 
that disrupt operations and result in an ESRD facility's closure, for 
example, loss of operations or patient shifting due to a local 
emergency such as fire, floods, earthquakes, or tornadoes.
     Other disasters or emergency conditions under which a 
waiver could be granted pursuant to section 1135 of the Act.
    We stated that these policy changes could help displaced ESRD 
patients maintain access to renal dialysis services by preventing ESRD 
facilities from permanently closing due to the loss of their LVPA. It 
is important that ESRD facilities that are receiving the LVPA can 
maintain LVPA eligibility despite the impacts caused by a disaster or 
other emergency. This policy could potentially protect other ESRD 
facilities that need to maintain the LVPA to remain open from 
potentially losing their LVPA by exceeding the treatment threshold 
because they accepted displaced patients. We noted that we do not want 
the fear of losing the LVPA due to increased treatments exceeding the 
threshold to disincentivize ESRD facilities from accepting patients 
from

[[Page 76372]]

other ESRD facilities experiencing a disaster or other emergency. It is 
also important that ESRD facilities that are forced to close due to a 
disaster or other emergency can maintain their LVPA eligibility upon 
reopening to ensure continued access in areas that otherwise may lack 
sufficient ESRD facilities. This policy could also help those ESRD 
facilities affected by the disaster or other emergency potentially 
resume operations and avoid permanent closure if they would be allowed 
to receive the LVPA upon reopening despite the closure or disruption of 
operations.
(i) Exception to the LVPA Treatment Threshold for ESRD Facilities That 
Accept Patients From an ESRD Facility Affected by a Disaster or Other 
Emergency
    We proposed in the CY 2024 ESRD PPS proposed rule to create an 
exception to the LVPA treatment threshold requirements set forth in 
Sec.  413.232(b)(1) under a new provision in Sec.  413.232(g)(5), which 
would allow an ESRD facility to receive the LVPA even if it exceeds the 
LVPA threshold if its treatment counts increase due to treating 
additional patients displaced by a disaster or other emergency. 
Qualification for the exception would require an ESRD facility to 
absorb those displaced patients from an outside or adjacent ESRD 
facility that experienced a temporary closure or operational disruption 
(such as a water shut off). If an ESRD facility accepts the patients of 
the ESRD facility affected by the disaster or other emergency, causing 
that ESRD facility to meet or exceed the 4,000-treatment count for all 
dialysis patients, it would attest to its MAC that it furnished 
treatments equal to or in excess of 4,000 in the cost reporting year 
due to temporary patient-shifting as a result of the closure or 
operational disruption of an ESRD facility due to a disaster or other 
emergency. We proposed to define temporary patient-shifting in the 
context of the LVPA in the ESRD PPS as providing renal dialysis 
services to one or more patient(s) at any time through the end of the 
CY following the 12-month period beginning when an ESRD facility first 
begins providing renal dialysis services to the displaced patient(s). 
The ESRD facility would be required to request this exception from CMS 
by writing to the ESRD Payment Mailbox ([email protected]) no 
later than the annual attestation deadline of November 1st. CMS would 
review the exception request within 30 days to determine if the ESRD 
facility qualifies for the exception. If approved by CMS, the ESRD 
facility would be paid the LVPA for Medicare beneficiaries for up to 
the first 4,000 dialysis treatments in the payment year in which the 
temporary patient-shifting occurred. Under this exception, the ESRD 
facility would be held harmless for meeting or exceeding the 4,000-
treatment threshold during one or more cost reporting years within the 
3-year lookback for LVPA eligibility as long as their 4,000-treatment 
threshold was exceeded as a result of temporary patient-shifting from 
the ESRD facility that experienced the disaster or other emergency. If 
CMS does not approve the request, CMS would notify the ESRD facility 
and the MAC, and the ESRD facility would be disqualified from receiving 
the LVPA until it meets all the LVPA criteria (including the 3-year 
lookback). The ESRD facility receiving this exception must maintain 
documentation of the number of displaced patients treated and 
information about the ESRD facility or facilities that previously 
treated those patients and closed or experienced an operational 
disruption due to a disaster or other emergency and must provide such 
documentation to CMS and the MAC upon request. The ESRD facility 
requesting this exception would have to repeat the process for 
requesting an exception for each cost reporting year in which its 
treatment volume meets or exceeds 4,000 due to temporary patient-
shifting from the ESRD facility that experienced the disaster or other 
emergency. Additionally, the ESRD facility requesting this exception 
would have to follow the attestation process as described at Sec.  
413.232(e) for the two payment years following the last cost reporting 
year in which its treatment volume meets or exceeds 4,000 due to 
treating displaced patients from the ESRD facility that experienced the 
disaster or other emergency and attest that the ESRD facility meets the 
criteria established at Sec.  413.232.
    We provided the following example: if a disaster occurs on June 1, 
2024, which results in ESRD facility X's closure or operational 
disruption resulting in ESRD facility Y (an existing low-volume 
facility) treating additional patients from ESRD facility X that puts 
ESRD facility Y's total renal dialysis treatments for cost reporting 
year 2024 over the 4,000 treatment threshold, ESRD facility Y would be 
required to request an exception to Sec.  413.232(b)(1) from CMS by 
November 1, 2024 to continue receiving the LVPA. Since ESRD facility Y 
began treating the displaced patients in CY 2024, the window for 
temporary patient shifting would extend until December 31, 2025. To be 
approved for the exception under the proposed provision in Sec.  
413.232(g)(5), CMS would determine that ESRD facility Y furnished 
treatments equal to or more than 4,000 in the cost reporting year due 
to temporary patient-shifting because of the closure or operational 
disruption of ESRD facility X resulting from a disaster or other 
emergency. Should the exception be approved by CMS, ESRD facility Y 
would receive the LVPA for up to the first 4,000 treatments it 
furnished in 2024. Additionally, ESRD facility Y would not be 
disqualified from receiving the LVPA for payment years (PYs) 2025 and 
2026 due to exceeding the treatment volume threshold in cost reporting 
year 2024, assuming the temporary patient-shifting from ESRD facility X 
occurred only in cost reporting year 2024. For PY 2025 and PY 2026, 
ESRD facility Y would have to attest that it meets all the criteria for 
the LVPA because it furnished treatments equal to or more than 4,000 in 
the cost reporting year due to temporary patient-shifting as a result 
of the closure or operational disruption of an ESRD facility resulting 
from a disaster or other emergency and received an exception for cost 
reporting year 2024. This would be the same attestation process as if 
ESRD facility Y did not furnish any excess treatments and was attesting 
that it continued to meet the criteria for the LVPA for those payment 
years. If the closure or operational disruption of ESRD facility X 
causes the treatment volume for ESRD facility Y to meet or exceed the 
4,000-dialysis treatment threshold in cost reporting year 2025, ESRD 
facility Y would have to submit another request for an exception by 
November 1, 2025. Should this exception be approved, ESRD facility Y 
would receive the LVPA for up to the first 4,000 treatments it 
furnished in cost reporting year 2025 and would not be disqualified 
from receiving the LVPA for PYs 2026 and 2027 due to exceeding the 
treatment volume threshold in cost reporting year 2024 and cost 
reporting year 2025. If ESRD facility Y continued to treat displaced 
patients from ESRD facility X in cost reporting year CY 2026, it would 
only be considered temporary patient-shifting if ESRD facility Y 
treated those patients before January 1, 2026, and if patients treated 
after January 1, 2026 cause ESRD facility Y to exceed the 4,000-
treatment volume threshold in cost reporting year 2026 then the ESRD 
facility would be disqualified from receiving the LVPA under Sec.  
413.232(b)(1). Under this example, ESRD facility Y would still have to 
meet the other eligibility requirements to

[[Page 76373]]

receive the LVPA in any PY in which the ESRD facility would receive the 
LVPA.
(ii) Exception to the LVPA Closure Provision for ESRD Facilities 
Affected by a Disaster or Other Emergency
    In addition to the proposed exception to the treatment threshold 
requirement under Sec.  413.232(b)(1) and (g)(5), we proposed an 
exception under Sec.  413.232(g)(6) that would allow an ESRD facility 
to still receive the LVPA if it temporarily closes. That is, if an ESRD 
facility temporarily ceases to operate and the patients must go to 
another ESRD facility to receive renal dialysis services due to a 
disaster or other emergency, and the ESRD facility subsequently 
reopens, we proposed to create an exception to the requirement in Sec.  
413.232(b)(2) that an ESRD facility ``has not opened, closed, or 
received a new provider number'' in the 3 cost reporting years 
preceding the payment year. If an ESRD facility is affected by a 
disaster or other emergency and the ESRD facility is forced to close 
and re-open later, the ESRD facility would need to request an exception 
from CMS in writing at the ESRD Payment Mailbox at 
[email protected] within 60 days of the closure and inform the 
MAC of the request. CMS would review the request within 30 days of 
receipt and either approve the request based on a determination that 
the ESRD facility closed due to a disaster or other emergency, or deny 
the request, and would inform both the ESRD facility and the MAC of its 
decision.
    Under the proposal, upon reopening and providing renal dialysis 
services, the ESRD facility would be required notify CMS and the MAC in 
writing within 30 days of its reopening. CMS would acknowledge receipt 
of the written notification within 30 days. If the exception is 
approved and CMS is duly informed of the ESRD facility's reopening, the 
ESRD facility would remain eligible for the LVPA and the MAC would 
process payment accordingly. To continue receiving the LVPA the ESRD 
facility would still have to meet all the other eligibility 
requirements for the LVPA. The exception to Sec.  413.232(b)(2) would 
be applicable for a period of 2 cost reporting years following the date 
of closure of the ESRD facility. After a period of 2-cost reporting 
years the ESRD facility would follow the normal attestation process for 
the LVPA specified in paragraphs (e) and (g) of Sec.  413.232. The ESRD 
facility would be required to maintain documentation regarding its 
closure, and to provide such supporting documentation to CMS and/or the 
MAC upon request.
    We provided the following example: If a disaster occurs on June 1, 
2024, which results in an ESRD facility experiencing a closure, the 
ESRD facility would request an exception to Sec.  413.232(b)(2) from 
CMS within 60 days of June 1, 2024 (that is, on or before July 31, 
2024). CMS would review the request and notify the ESRD facility and 
the MAC within 30 days if the exception is approved or denied. If the 
ESRD facility then reopens on September 1, 2024, the ESRD facility 
would notify CMS and the MAC in writing within 30 days of reopening 
(that is, on or before October 1, 2024). CMS would notify the ESRD 
facility and the MAC of its receipt of the reopening notification 
within 30 days. If the exception was approved by CMS, the ESRD facility 
would remain eligible for the LVPA for the rest of payment year 2024 
and for the entirety of payment year 2025 and payment year 2026, 
provided the ESRD facility continues to meet the other eligibility 
requirements for the LVPA.
    We received 10 public comments on our proposals to modify the LVPA 
regulation at Sec.  413.232 to allow for more administrative 
flexibilities during disasters or other emergencies. These comments 
came from three LDOs, a non-profit dialysis organization, a coalition 
of dialysis organizations, a non-profit advocacy organization, and a 
non-profit kidney organization. The comments on our proposals and our 
responses are set forth below.
    Comment: All of the comments supported CMS's proposal to establish 
exceptions to the LVPA requirements for ESRD facilities impacted by a 
disaster or other emergency.
    Response: We appreciate the support for our proposed exceptions to 
the LVPA requirements for ESRD facilities that are impacted by a 
disaster or other emergency.
    Comment: One LDO requested that CMS reevaluate the attestation 
deadline for ESRD facilities that exceed the LVPA treatment volume 
threshold due to accepting displaced patients from an ESRD facility 
that closes or experiences an operational disruption due to a disaster 
or other emergency. This LDO noted that if the disaster were to occur 
late in the year, it might be difficult for an ESRD facility to meet 
the November 1st attestation deadline.
    Response: We thank the commenter for the thoughtful suggestion on 
how to improve the proposed exception for ESRD facilities that exceed 
the 4,000-treatment volume threshold due to treating patients displaced 
by a disaster or other emergency. We note that Sec.  413.232(e) 
currently states that ``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 as otherwise specified. We did not propose to 
change the attestation deadline for ESRD facilities impacted by a 
disaster or other emergency. In the CY 2012 ESRD PPS final rule (76 FR 
70236), we finalized a yearly November 1st deadline for attestation 
submission, and noted that this timeframe provides 60 days for a MAC to 
verify that an ESRD facility meets the LVPA eligibility criteria. It is 
important that all ESRD facilities have the same attestation deadline 
for the LVPA to allow adequate verification time for the MACs and so 
that those ESRD facilities eligible for LVPA are able to receive it 
timely. In the past when we have extended the LVPA attestation 
deadline, we have done so for all ESRD facilities (85 FR 71442). 
However, we believe that a November 1st deadline is necessary so that 
the LVPA attestations can be properly processed, and payments can begin 
on January 1st of the next CY. In response to the concern for ESRD 
facilities which are impacted by a disaster late in the year, we are 
modifying the proposed regulation language at Sec.  413.232(g)(5) to 
allow an ESRD facility to request the exception to the 4,000-treatment 
volume threshold requirement up to 30 days after the end of the cost 
reporting year for which they are attesting. Although the ESRD facility 
would still have to submit an attestation by the November 1st deadline, 
this will allow additional flexibility for ESRD facilities that 
experience temporary patient shifting late in the year if their cost-
reporting year ends within 30 days of the attestation deadline. We 
clarify that under this exception, an ESRD facility would have to 
submit the exception request by either the attestation deadline or 30 
days after the end of the ESRD facility's cost reporting year, 
whichever is later, but would not be required to have received the 
exception by the attestation deadline. Then, in the event that the ESRD 
facility does not receive approval for the exception from CMS, the MAC 
would follow the current process. Specifically, as noted in Sec.  
413.232(h)(2), if the MAC determines an ESRD facility does not meet the 
definition of a low-volume facility, the MAC reprocesses claims and 
recoups

[[Page 76374]]

low-volume adjustments paid during the payment year.
    Comment: A coalition of dialysis organizations requested that the 
exception to the attestation process for ESRD facilities that treat 
displaced patients be extended to ESRD facilities that treat displaced 
patients from ESRD facilities that closed for reasons not related to a 
disaster or other emergency. This commenter noted that between 2020 and 
2023, 383 ESRD facilities closed, which impacted an estimated 21,000 
patients.
    Response: At this time, we do not agree that it is appropriate to 
allow ESRD facilities to exceed the LVPA treatment volume threshold due 
to treating displaced patients from ESRD facilities that close for 
reasons unrelated to disasters or other emergencies. If an ESRD 
facility closes due to a disaster or other emergency, the ESRD facility 
could re-open or another ESRD facility could open in its place, which 
would lead to the accepting ESRD facility returning to a lower 
treatment volume. However, if an ESRD facility closes for reasons 
unrelated to a disaster or other emergency, such as lack of demand or 
profitability, it is less likely that the ESRD facility would re-open 
or that a new ESRD facility would replace it. Additionally, 
implementing this commenter's suggestion could lead to perverse 
incentives. For example, an ESRD facility that does not receive the 
LVPA and closes temporarily has its patients receive treatment at 
another affiliated ESRD facility, which usually receives the LVPA (and 
therefore, a higher payment rate). If the commenter's suggestion were 
to be implemented, with the influx of new patients, the ``accepting'' 
ESRD facility could strategically surpass the 4,000-treatment level and 
still receive the LVPA.
    Final Rule Action: We are finalizing our proposals to establish an 
exception process to allow a facility to close and reopen in response 
to a disaster or emergency and still receive the LVPA, and to allow a 
facility to receive the LVPA even if it exceeds the LVPA threshold if 
its treatment counts increase due to treating additional patients 
displaced by a closure or operational disruption caused by a disaster 
or other emergency, as proposed, with two modifications. First, as 
noted above, we are finalizing one modification to Sec.  
413.232(g)(5)(ii) to change the deadline by which the ESRD facility 
must request the exception to Sec.  413.232(b)(1) to be the later of 
the attestation deadline or 30 days after the end of the cost reporting 
year for which the ESRD facility is attesting. Specifically, we are 
finalizing Sec.  413.232(g)(5) which states that if an ESRD facility 
exceeds the 4,000-treatment volume threshold due to temporary patient 
shifting from an ESRD facility that experiences a closure or 
operational disruption due to a disaster or other emergency, the 
accepting ESRD facility would be able to apply for an exception to the 
requirement at 413.232(b)(1) and, if the exception is approved, the 
ESRD facility would not be disqualified from receiving the LVPA on the 
basis of 413.232(b)(1) due to exceeding the 4,000-treatment volume 
threshold in that cost reporting year. The deadline for requesting this 
exception would be either the attestation deadline or 30 days after the 
end of the cost reporting year for which the ESRD facility is 
attesting, whichever is later. We are finalizing a definition of 
temporary patient shifting in the context of the ESRD PPS LVPA as 
providing renal dialysis services to one or more patient(s) at any time 
through the end of the CY following the 12-month period beginning when 
an ESRD facility first begins providing renal dialysis services to the 
displaced patient(s). We are finalizing a second modification of the 
proposed regulation text at Sec.  413.232(g)(5)(iv) to indicate that we 
will not limit the LVPA payment to 4,000 treatments for the payment 
year in which the temporary patient-shifting occurred due to a disaster 
or other emergency. We proposed that if an exception is approved under 
Sec.  413.232(g)(5), the ESRD facility would be paid the low-volume 
adjustment on claims for Medicare beneficiaries for up to the first 
4,000 dialysis treatments during the payment year in which the 
temporary patient-shifting occurred, so long as all other requirements 
for the low-volume adjustment are met. The intent of this proposed 
limit was to support stability of payments for ESRD facilities 
experiencing temporary patient-shifting due to an emergency at a level 
commensurate with their historical treatment volumes, while protecting 
the Medicare program against the risk of paying the LVPA for a large 
number of treatments. After further consideration of the operational 
and payment implications of this policy, we are making this change to 
be consistent with our historical practice of not limiting payment of 
the LVPA in the year in which the LVPA threshold is exceeded. We are 
concerned that limiting LVPA payment to 4,000 treatments for facilities 
would create operational confusion for facilities and could limit the 
ability of these ESRD facilities to take on patients who are displaced 
by a disaster or emergency. Furthermore, we considered that low-volume 
ESRD facilities generally receive the LVPA on fewer than 4,000 
treatments per year, since the 4,000 treatment threshold includes all 
treatments that the facility provides. We therefore do not believe it 
is necessary to apply the proposed limit, since ESRD facilities 
operating under an exception would be unlikely to exceed 4,000 
treatments paid under the ESRD PPS. We intend to monitor the use of 
these new exceptions to ensure that they are being applied 
appropriately and do not create opportunities for gaming.
    Additionally, we are finalizing Sec.  413.232(g)(6), which states 
that if an ESRD facility has closed and reopened in response to a 
disaster or other emergency, it would be able to apply for an exception 
to the requirement at 413.232(b)(2) and, if the exception is approved, 
the ESRD facility would not be disqualified from receiving the LVPA on 
the basis of 413.232(b)(2) due to closing in that year. The deadline 
for requesting this exception is 60 days after ESRD facility's closure.
(4) Technical Correction to Sec.  413.232(g)
    We proposed a technical correction at Sec.  413.232(g) to replace 
``their'' with ``its,'' to clarify the regulation language.
    Final Rule Action: We did not receive comments regarding the 
technical correction to the regulations text for the LVPA, and we are 
finalizing this revision as proposed.
g. Transitional Pediatric ESRD Add-On Payment Adjustment for Pediatric 
Patients With ESRD Receiving Renal Dialysis Services
(1) Background
    Section 1881(b)(14)(D)(iv)(I) of the Act provides that the ESRD PPS 
may include such payment adjustments as the Secretary determines 
appropriate, including a payment adjustment for pediatric providers of 
services and renal dialysis facilities. Determining such a payment 
adjustment has been historically difficult due to the consistent lack 
of data. The Medicare pediatric ESRD patient population receiving 
dialysis is small compared to the adult ESRD population, representing 
approximately 0.14 percent of the total ESRD patient population in 
2022. In the past, CMS has considered various payment adjustments for 
pediatric patients with ESRD, including different Medicare payments by 
sex or comorbidities (74 FR 49984 through 49986). However, many of 
these considered adjustments were not used as we were unable to get 
acceptable

[[Page 76375]]

precision due to the small sample size of pediatric patients with ESRD.
    Prior to the establishment of the ESRD PPS, payment for pediatric 
ESRD renal dialysis services was generally the same rate as adult ESRD 
renal dialysis services, unless the ESRD facility qualified for an 
exception to the composite rate. Section 1881(b)(7) of the Act stated 
that, subject to section 422(a)(2) of the Medicare, Medicaid, and SCHIP 
Benefits Improvement and Protection Act of 2000 (Pub. L. 106-554) 
(BIPA), the Secretary shall provide for exceptions as may be warranted 
by unusual circumstances (including the special circumstances of sole 
facilities located in isolated, rural areas and of pediatric 
facilities). During this time, CMS received many comments and concerns 
regarding the payment rate for renal dialysis services furnished to 
pediatric patients with ESRD. Section 623(b) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 
108-173) later amended section 422(a)(2) of BIPA to provide that any 
pediatric ESRD facility would be eligible for an exception to the 
composite rate, effective October 1, 2002. This statute defined 
pediatric ESRD facilities as facilities with at least 50 percent 
patients under the age of 18. This enabled pediatric ESRD facilities to 
obtain payments that specifically recognized the higher cost associated 
with treating these patients (69 FR 47530).
    We finalized a basic case-mix adjustment to the composite payment 
rate in the CY 2005 Physician Fee Schedule (PFS) final rule published 
on November 15, 2004 (69 FR 66327). This included a 62 percent 
pediatric payment increase (that is, an adjustment factor of 1.62) 
applied to the composite payment rate per treatment for any facility 
when furnishing outpatient renal dialysis services to pediatric 
patients with ESRD. This factor was derived from the average exception 
amounts for 20 ESRD facilities that had received exceptions for 
pediatric patients. This was intended to be a temporary measure, which 
would be eliminated once we developed the case-mix methodology that 
would apply for the ESRD PPS bundled payment. The use of this 
methodology allowed CMS to provide additional payment for the pediatric 
ESRD population under the composite rate in a data-driven manner to 
account for the higher costs pediatric patients faced (69 FR 66327).
    Section 153(b) of MIPPA added section 1881(b)(14) of the Act, which 
required CMS to implement an ESRD bundled PPS beginning January 1, 
2011, under which a single payment for renal dialysis services is made 
in lieu of any other payment. Renal dialysis services generally include 
items and services included in the composite rate for renal dialysis 
services as of December 31, 2010, and services furnished to individuals 
for treatment of ESRD, which were formerly separately billable, 
including drugs and biological products and laboratory tests. In the CY 
2011 ESRD PPS proposed rule, we proposed a single composite rate 
modifier of 1.199 for all Pediatric ESRD Patients receiving dialysis 
(74 FR 49982 through 49983). A ``Pediatric ESRD Patient'' is defined as 
an individual less than 18 years of age who is receiving renal dialysis 
services (Sec.  413.171). We also proposed an eight-group system for 
separately billable renal dialysis services furnished to Pediatric ESRD 
Patients with two subdivisions for each of the following factors: age 
(under 13, 13 to 17), modality (hemodialysis, peritoneal dialysis) and 
number of comorbidities (none, one or more) (74 FR 49983 through 
49987). The CY 2011 ESRD PPS proposed rule then calculated an 
``expanded bundle'' modifier, which combined the composite rate and 
separately billable modifiers for each of the eight groups (74 FR 
44987). These expanded bundle modifiers were the proposed pediatric 
patient-specific case-mix adjustment factors that would be applied to 
the base rate under the ESRD PPS. These modifiers were based on a 
regression of costs for all renal dialysis services furnished to 
Pediatric ESRD Patients. Comments on this proposed rule indicated that 
many interested parties believe the expanded bundle modifier was 
insufficient (75 FR 49128). In the CY 2011 ESRD PPS final rule, we 
responded to those comments by implementing the first iteration of the 
current four-group system for both the expanded bundle and the 
separately billable services. This methodology was data driven, but 
unlike the simple regression for composite rate costs, allowed for 
different Medicare payment amounts based on two sets of two 
characteristics: age of the patient (under 13 or 13 to 17) and modality 
of the treatment (hemodialysis or peritoneal dialysis). Additionally, 
this methodology used the same groups for the expanded bundle and 
separately billable modifiers (75 FR 49134).
    We codified the Pediatric ESRD Patient payment adjustment in Sec.  
413.235(b), which states that CMS adjusts the per treatment base rate 
for pediatric patients in accordance with section 1881(b)(14)(D)(iv)(I) 
of the Act, to account for patient age and treatment modality. These 
multipliers were updated in the CY 2016 ESRD PPS final rule using the 
same methodology (80 FR 69001 through 69002). The current expanded 
bundle case mix adjusters are presented in Table 7.

[GRAPHIC] [TIFF OMITTED] TR06NO23.009


    As we discussed in the CY 2024 ESRD PPS proposed rule (88 FR 
42449), despite these changes intended to improve payment accuracy for 
renal dialysis services furnished to Pediatric ESRD Patients, we 
continue to receive comments and concerns from interested parties that 
the payment amounts for renal dialysis services furnished to Pediatric 
ESRD Patients are too low. In addition to comments received through the 
annual ESRD PPS rulemaking, we have also solicited comments from 
interested parties on several occasions. During the December 2020 TEP, 
we queried a panel of experts on how to improve payment for pediatric 
dialysis care under the ESRD PPS. Panelists \18\ generally preferred 
creating more refined case-mix adjusters over creating

[[Page 76376]]

an entirely new pediatric ESRD PPS, citing the costs of creating an 
entirely new system both on CMS and the ESRD facilities and the need 
for new legislation to be able to increase payment through a separate 
pediatric ESRD PPS. Panelists also pointed to labor costs as a major 
reason for higher costs among pediatric dialysis clinics because these 
patients need more nursing attention and specialized pediatric 
nutritionists.
---------------------------------------------------------------------------

    \18\ https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-summary-report-april-2021.pdf.
---------------------------------------------------------------------------

    We noted that, in the CY 2023 ESRD PPS proposed rule (87 FR 38529), 
we issued a request for information regarding health equity for 
pediatric patients with ESRD. Many commenters asserted that Medicare 
payments for Pediatric ESRD Patients are too low and that the ESRD PPS 
bundled payment does not target the unique issues facing ESRD 
facilities furnishing renal dialysis services to Pediatric ESRD 
Patients.
    As we explained in the CY 2024 ESRD PPS proposed rule, we are 
committed to improving health equity for Pediatric ESRD Patients 
receiving renal dialysis services by improving payment equity through 
more efficient Medicare payments. Ensuring Medicare payments are 
appropriate and reflect costs for renal dialysis services furnished to 
Pediatric ESRD Patients would allow more ESRD facilities to provide 
quality care to this vulnerable population. The main barrier to payment 
equity is the lack of sufficient data to determine the relative costs 
associated with furnishing renal dialysis services to Pediatric ESRD 
Patients. To improve payment rate accuracy for Pediatric ESRD Patients, 
CMS has issued changes to the cost reports for both freestanding ESRD 
facilities and hospital-based ESRD facilities effective January 1, 
2023.^{19 20 21} These changes include separate categories for 
labor and supplies used in furnishing renal dialysis services to 
Pediatric ESRD Patients. These updates are intended to provide data for 
CMS to more comprehensively estimate the additional costs associated 
with furnishing renal dialysis services to Pediatric ESRD Patients. 
However, we estimated it would take approximately 3 years to obtain and 
analyze the granular data provided by the stratified cost reports data 
from these changes that we need to consider proposing a more finely 
tuned payment adjustment.
---------------------------------------------------------------------------

    \19\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r7p242.
    \20\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Transmittals/r18p240i.
    \21\ 87 FR 26760 (May 5, 2022). https://www.federalregister.gov/documents/2022/05/05/2022-09581/agency-information-collection-activities-submission-for-omb-review-comment-request.
---------------------------------------------------------------------------

(2) Alternative Methodology for Estimating Relative Costs for 
Furnishing Renal Dialysis Services to Pediatric ESRD Patients
    As discussed in the CY 2024 ESRD PPS proposed rule, payment 
accuracy has been historically difficult for pediatric ESRD dialysis 
because of the small sample size of Pediatric ESRD Patients receiving 
renal dialysis services paid for under the ESRD PPS. Pediatric ESRD 
dialysis treatments are also furnished differently from adult ESRD 
dialysis treatments in several crucial ways. For example, pediatric 
ESRD facilities are more likely to be hospital-based and, on average, 
have lower treatment volume and are in higher wage index areas. These 
systematic differences in treatment, when combined with the small 
sample size, make it very difficult to obtain low variance estimates of 
the differences in costs between pediatric and adult ESRD dialysis 
patients. Even if simple cost models show statistically significant 
estimates, it is possible that the systematic differences between 
pediatric and adult ESRD facilities can bias these estimates. Obtaining 
a reliable estimate of the additional costs that Pediatric ESRD 
Patients incur would allow us to create a payment adjustment to bring 
relative Medicare payments more in line with relative costs.
    One can account for this bias by selecting a specific sample of 
ESRD facilities that have similar characteristics except for proportion 
of dialysis treatments furnished to Pediatric ESRD Patients. This would 
help to show the additional costs of furnishing dialysis to Pediatric 
ESRD Patients based on the variation in costs across the ESRD 
facilities. To achieve this, we would use propensity score matching 
(PSM).
    PSM is a technique that uses regression analysis to account for 
systematic differences between two populations to isolate the effects 
of a single variable, in this case percentage of Pediatric ESRD 
Patients. The PSM regression includes a wide range of ESRD facility-
level characteristics including facility type, size, geographic 
location, and the pediatric ESRD dialysis population nearby the ESRD 
facility to make a propensity score. This propensity score represents 
the probability that a given ESRD facility treats a high volume of 
Pediatric ESRD Patients given its facility-level characteristics.
    Once the propensity score for each ESRD facility is determined, 
each ESRD facility with a significant percentage of Pediatric ESRD 
Patients (high-pediatric) is matched with the ESRD facility without a 
significant percentage of Pediatric ESRD Patients (low-pediatric) with 
the most similar propensity score. We can then compare the relative 
per-treatment costs of those ESRD facilities to estimate the additional 
costs an ESRD facility faces when it furnishes renal dialysis services 
to a higher proportion of Pediatric ESRD Patients, controlling for some 
important facility-level characteristics. The dependent variable of 
this regression is the log of the cost per treatment for the ESRD 
facility. The independent variables are the percent of dialysis 
treatments that are furnished to Pediatric ESRD Patients, the log of 
the facility size, the type of ESRD facility (hospital-based, 
children's hospital-based or freestanding), the log of the wage index 
for the ESRD facility and the year for the cost report data. The 
regression equation for cost per treatment given a certain percentage 
of dialysis treatments furnished to Pediatric ESRD Patients is:
[GRAPHIC] [TIFF OMITTED] TR06NO23.010

    This cost regression should be unbiased due to the use of PSM. 
However, PSM also requires a reduction in sample size, because there 
are relatively few ESRD facilities with a significant number of 
treatments furnished to Pediatric ESRD Patients that could be matched 
using PSM. This smaller sample size inherently results in an increase 
in margin of error. We stated that we believe this is a necessary 
tradeoff because a biased estimate cannot be relied upon, but we must 
be cautious while using high-error estimates. The result of this 
regression is that ESRD facilities that solely serve Pediatric ESRD 
Patients incur costs that are 40 percent higher per patient for 
furnishing renal dialysis services than similar ESRD facilities that 
serve no Pediatric ESRD Patients. The confidence

[[Page 76377]]

interval of this estimate is 20 percent to 60 percent. Therefore, on 
average, furnishing renal dialysis services to a Pediatric ESRD Patient 
costs 40 percent more than furnishing renal dialysis services to an 
adult patient with ESRD.
(3) Current Medicare Payments for Renal Dialysis Services Furnished to 
Pediatric ESRD Patients
    As discussed in the CY 2024 ESRD PPS proposed rule, the ESRD PPS 
already accounts for some of the higher costs that ESRD facilities 
incur while furnishing renal dialysis services to Pediatric ESRD 
Patients through the case-mix adjusters. Because the analysis described 
previously uses cost report data, it does not incorporate either the 
current case-mix adjusters or payment rates for Pediatric ESRD Patients 
receiving renal dialysis services. We noted that our most recent 
estimates showed that payments for dialysis treatments furnished to 
Pediatric ESRD Patients were approximately 10 percent higher than for 
adult patients with ESRD in CY 2022.
    We explained that we are striving for payment accuracy, which is 
achieved when relative Medicare payments are proportional to relative 
costs. There are several ways we could adjust ESRD PPS payments to 
achieve payment accuracy, including calculating the unaccounted-for 
cost differential, which is the amount by which ESRD PPS payments for 
pediatric ESRD renal dialysis services must be increased to achieve 
payment accuracy. We could do this by reducing the cost differential 
estimate of 40 percent by a factor 1.1 to account for the current 
payment differential of 10 percent. This would yield an unaccounted-for 
cost differential of approximately 30 percent (1.4 divided by 1.1 is 
1.27 which we are rounding to 1.3). This is a reasonable estimate of 
the additional labor and supply costs, which are not accounted for by 
the current case-mix adjusters, incurred by ESRD facilities furnishing 
renal dialysis services to Pediatric ESRD Patients.
(4) Transitional Pediatric ESRD Add-On Payment Adjustment
    As we stated in the CY 2024 ESRD PPS proposed rule, despite the 
high margin of error of the cost regression using PSM, we believe that 
30 percent cost is the most reasonable estimate of the unaccounted-for 
costs incurred in treating Pediatric ESRD Patients compared to adult 
ESRD patients. Creating a new add-on payment adjustment using this 
figure would provide pediatric ESRD facilities with Medicare payments 
proportional to their estimated costs for a temporary period while we 
collect additional data. However, due to the high margin of error of 
the model, increasing Medicare payments to ESRD facilities such that 
payments are 40 percent higher for Pediatric ESRD Patients compared to 
all patients would risk making payments higher than appropriate. We 
noted that when we conduct the analysis with the more comprehensive 
cost report data provided by the cost report changes implemented for CY 
2023, we might find that our analysis overestimated the cost of 
furnishing renal dialysis services to Pediatric ESRD Patients (that is, 
that the additional 30 percent payment adjustment was too large). We 
further stated that if we finalized the transitional add-on payment 
adjustment for Pediatric ESRD Patients as proposed, pediatric ESRD 
facilities should be prepared for the possibility that the payment rate 
for Pediatric ESRD Patients could decrease in the future, should that 
be indicated by future data analysis and finalized through notice-and-
comment rulemaking. We discussed the alternative to propose a smaller, 
more cautious add-on payment adjustment based on the 20 percent lower 
bound of the confidence interval, leading to an additional 10 percent 
transitional add-on payment adjustment after accounting for the current 
payment rate. This option would still represent a significant increase 
in Medicare payments to ESRD facilities for Pediatric ESRD Patients 
without much risk of making payments higher than appropriate. However, 
this alternative option may lead to underpayment to ESRD facilities 
serving Pediatric ESRD Patients, which is contrary to our goal of 
aligning resource use with payment. We invited comments on the most 
appropriate amount for the proposed transitional add-on payment 
adjustment.
    We proposed in the CY 2024 ESRD PPS proposed rule a new 
transitional add-on payment adjustment of 30 percent (adjustment factor 
of 1.3) for dialysis treatments furnished to Pediatric ESRD Patients 
for 3 CYs, effective January 1, 2024. We stated that based on the time 
lag for cost report data, 3 years should allow for enough time for CMS 
to get more detailed data from the changes to the cost reports 
described previously. After that period, we would evaluate the more 
comprehensive cost report data from the first year of cost reporting 
periods beginning on or after January 1, 2023, to refine our 
methodology for determining the payment rate for pediatric ESRD 
dialysis. As proposed, this would be a separate, additional add-on 
payment adjustment of 30 percent of the per treatment payment amount 
under Sec.  413.230, which reflects the other patient and facility 
level adjustments. This adjustment would not be part of the case-mix 
adjusters. This payment adjustment would only apply to the ESRD bundled 
payment and not to any outlier adjustments. Due to the multiplicative 
nature of the case-mix adjusters it would function similarly to a 30 
percent increase to the expanded bundle case-mix adjusters. For 
comparison, the effective case-mix adjusters are presented in Table 8.
[GRAPHIC] [TIFF OMITTED] TR06NO23.011


[[Page 76378]]


    We noted that the exact magnitude of the increase in payment would 
vary based on the age of the patient and the wage index of a given 
area; we estimated approximately $80 for (hemodialysis-equivalent) 
peritoneal dialysis treatments and $100 for hemodialysis treatments. 
This would represent a substantial increase in payment for renal 
dialysis services furnished to Pediatric ESRD Patients and would 
account for the extra costs that this population incurs temporarily 
until additional cost data is available. This payment adjustment would 
apply for all dialysis treatments furnished to ESRD patients under the 
age of 18, not solely treatments furnished in pediatric ESRD 
facilities. This is warranted because many of the additional costs 
related to the treatment of Pediatric ESRD Patients are not specific to 
treatments furnished in pediatric ESRD facilities.
    We proposed to call this the Transitional Pediatric ESRD Add-on 
Payment Adjustment (TPEAPA) and make this adjustment budget neutral. We 
explained that, in general, add-on payment adjustments under section 
1881(b)(14)(D)(iv) of the Act are not statutorily required to be budget 
neutral under the ESRD PPS, but we stated that we believed in this 
instance that budget neutrality is appropriate, due to the way this 
adjustment is derived. We noted that other non-budget neutral add-on 
payment adjustments that we have established under this authority 
generally account for costs that were not used for the construction of 
the ESRD PPS bundled payment, such as the TDAPA for calcimimetics (80 
FR 69013 through 69027). We explained that we have also established 
certain non-budget neutral add-on payment adjustments for items or 
services that were not commonplace, and therefore not adequately 
represented in cost reports, such as home dialysis training (75 FR 
49063). However, we noted that we have implemented other payment 
adjustments under this authority in a budget neutral manner; for 
example, the changes to the wage index in the CY 2023 ESRD PPS final 
rule were implemented in a budget neutral manner as they represented a 
shifting of cost allocations, rather than new costs not originally 
included in the ESRD PPS bundled payment (87 FR 67157). We stated that 
this TPEAPA is primarily for costs that would have been included in the 
cost reports used in the analysis conducted when we created the ESRD 
PPS bundled payment in the CY 2011 ESRD PPS final rule. We explained 
that the methodology used both in that analysis, and when updating the 
case-mix adjusters, attributed pediatric ESRD renal dialysis services 
costs to the general population. Therefore, we explained, it would be 
appropriate to reduce the ESRD PPS base rate to account for the new 
allocation of costs. Furthermore, we stated that any changes to the 
case-mix adjustments are required by section 1881(b)(14)(A)(ii) of the 
Act to be budget neutral, which means that any future modifications to 
the pediatric case-mix adjusters would be budget neutral. The proposed 
budget neutrality adjustment factor for the proposed TPEAPA consisting 
of 30 percent of the per treatment payment amount was 0.999532. We 
explained that applying this budget neutrality factor to the proposed 
ESRD PPS base rate would reduce the ESRD PPS base rate by an estimated 
$0.12. We stated that under the alternative 10 percent TPEAPA discussed 
in the proposed rule (88 FR 42464), the budget neutrality factor 
adjustment would be 0.999847. We explained that applying this budget 
neutrality factor to the proposed ESRD PPS base rate would reduce the 
ESRD PPS base rate by an estimated $0.04.
    To establish this new TPEAPA, we proposed to amend Sec.  413.235 by 
splitting current paragraph (b) into paragraphs (b)(1) and (2). 
Paragraph (b)(1) would set forth the established age and modality of 
treatment case mix adjustment methodology as currently stated in 
paragraph (b). Paragraph (b)(2) would state that beginning January 1, 
2024, we will provide a per-treatment transitional add-on payment 
adjustment of 30 percent of the per treatment payment amount under 
Sec.  413.230 for renal dialysis services furnished to Pediatric ESRD 
Patients during CYs 2024, 2025, and 2026. We also proposed to revise 
the current language of Sec.  413.235(b) to use the term ``Pediatric 
ESRD Patients,'' which is defined at Sec.  413.171, to improve clarity 
for this section.
(5) Costs and Benefits for a Transitional Pediatric ESRD Add-On Payment 
Adjustment (TPEAPA)
    As we explained in the CY 2024 ESRD PPS proposed rule, we believe 
CMS could better align the resource use of pediatric ESRD renal 
dialysis services with payment. Our analysis using the methodology 
outlined previously found that costs for Pediatric ESRD Patients 
receiving renal dialysis services are estimated to be 40 percent higher 
than for adult patients and that the current payment adjusters account 
for 10 percent higher costs. Implementing a transitional 30 percent 
add-on payment adjustment for renal dialysis services furnished to 
Pediatric ESRD Patients would improve payment equity for these patients 
by increasing payments to align with the estimated costs of treatment 
more closely. A 30 percent increase in ESRD PPS payments for pediatric 
ESRD renal dialysis services would represent approximately $80 to $100 
per pediatric ESRD dialysis treatment, although the exact magnitude of 
the increase would depend on age, modality, and the wage index of the 
area. This payment increase would have beneficial health equity impacts 
on this population by improving access to care and quality of care. 
Some ESRD facilities may not be able to absorb the additional expense 
of the Pediatric ESRD Patient population. Patients may need to travel 
to a limited number of primarily hospital-based ESRD facilities where 
pediatric ESRD dialysis is performed. As a result, this population may 
be underserved and disadvantaged with respect to access to ESRD care. 
We stated that additional payment to those ESRD facilities treating 
Pediatric ESRD Patients would thereby benefit this potentially 
underserved and disadvantaged population of Pediatric ESRD patients. 
Additionally, this would have a beneficial financial impact on the ESRD 
facilities, both pediatric and non-pediatric, that serve this pediatric 
population.
    We proposed that this payment adjustment be budget neutral, which 
would lead to an estimated decrease of $0.12 to the ESRD PPS base rate, 
corresponding to a budget neutrality factor of 0.99954. This relatively 
small adjustment would represent less than a twentieth of a percent of 
the total ESRD PPS base rate. However, we recognized that any decrease 
in the ESRD PPS base rate would represent a monetary loss to ESRD 
facilities. As stated previously, our analysis indicated that this 
transfer would be reasonable given the likelihood that the methodology 
used in the case-mix adjusters attributed some pediatric costs to the 
general population. However, we noted, should future analysis of the 
stratified pediatric cost data indicate that pediatric ESRD renal 
dialysis services costs are less than 40 percent higher than adult 
costs, this budget neutral decrease would mean that the treatments for 
adult patients with ESRD were slightly underpaid during this 3-year 
period. In either case there would be a risk of underpayment for one 
group of patients. We stated that we believe using the mean estimate of 
the analysis will provide us with the best approach for achieving 
payment accuracy while we collect additional data. Additionally, the 
health equity

[[Page 76379]]

implications of potentially underpaying for Pediatric ESRD Patients 
receiving dialysis by 20 percent would be significantly higher than the 
implications of potentially underpaying for adult patients by less than 
0.1 percent. We noted that in CY 2021 there were 116 ESRD facilities 
that furnished more than 2 percent of their dialysis treatments to 
Pediatric ESRD Patients, out of 7882 total ESRD facilities. These ESRD 
facilities are a relatively small group, but they are critical for the 
care of Pediatric ESRD Patients. For these reasons, we stated that we 
believe the expected benefits for the TPEAPA would outweigh the costs.
    We explained that we believe providing this 30 percent TPEAPA for 
CYs 2024, 2025, and 2026 would be the best approach for improving 
payment accuracy until more precise data is available. However, we 
acknowledged that in any case there is a risk of making payments which 
are higher or lower than appropriate. Therefore, in the CY 2024 ESRD 
PPS proposed rule we requested comments on our proposal, including on 
(1) the alternative adjustment amount; and (2) the budget neutrality of 
the proposal.
    We received 30 comments in response to our proposed Transitional 
Pediatric ESRD Add-on Payment Adjustment (TPEAPA) for pediatric ESRD 
patients receiving renal dialysis services. Respondents included large 
and small dialysis organizations, non-profit organizations, an advocacy 
organization, a coalition of dialysis organizations, a large non-profit 
health system, and individual providers. The comments on our proposal 
and our responses are set forth below.
    Comment: We received several comments that supported CMS 
establishing an add-on payment adjustment for pediatric ESRD patients. 
Most commenters expressed their belief that an add-on payment 
adjustment of this nature is necessary to support the higher costs 
associated with providing for the unique care needs and specialized 
support required for renal dialysis services in the ESRD PPS pediatric 
population. Physician commenters cited the unique challenges in caring 
for this population that are not reflected in the current ESRD PPS 
payment models. Numerous commenters expressed their support for using 
an ESRD PPS add-on payment adjustment to improve patient access and 
equity among this vulnerable subpopulation of patients with ESRD. A 
pediatric ESRD facility noted that money invested in this population 
lowers avoidable adverse outcomes and complications from ESRD and 
facilitates a faster path towards transplantation, ultimately yielding 
both cost savings and healthier adults.
    Response: We thank the commenters for their support and dedication 
to improving access and equity for the pediatric patient population 
with ESRD receiving renal dialysis services.
    Comment: We received several comments regarding the proposed TPEAPA 
payment amount, calculation, and length of payment period. Most 
commenters supported the implementation of the 30 percent add-on 
payment adjustment as a reasonable estimate of the unaccounted-for 
costs incurred in treating pediatric ESRD patients. An LDO expressed 
concern that PSM does not provide for an accurate computation of the 
costs incurred in providing specialized pediatric care; while a 
pediatric nephrology society agreed that in the absence of accurate 
pediatric cost data, the PSM methodology seems reasonable. A pediatric 
nephrology society reported the 30 percent add-on to be consistent with 
anecdotal cost data collected by the society from around the country. 
An LDO urged CMS to implement a three-year period of analysis after the 
proposed 30 percent adjustment. Another LDO requested more transparency 
on the data and assumptions used to calculate the pediatric adjustment.
    Response: We thank the commenters for their support and 
suggestions. Payment accuracy has been historically difficult for 
pediatric ESRD dialysis because of the small sample size of pediatric 
patients receiving renal dialysis services paid for under the ESRD PPS. 
Obtaining reliable data on the additional costs that pediatric patients 
with ESRD incur would facilitate the creation of a permanent payment 
adjustment based on resource use to bring relative Medicare payments 
more in line with relative costs. We recognize that while our use of 
PSM unavoidably leads to larger variance in parameter estimates because 
only a small subset of the broader provider population is utilized in 
the estimation, this approach is useful because it provides a means of 
comparison with less biased estimates and as suggested by commenters 
the 30 percent estimate is in line with anecdotal data. We plan to 
share data and assumptions through notice-and-comment rulemaking for 
potential future pediatric payment adjustments to ESRD facilities.
    Comment: Most commenters urged CMS to reconsider implementing the 
payment adjustment as a budget neutral add-on. An LDO expressed that it 
would be inappropriate to cut payment rates for service provided to 
adult patients, whose population is comprised of a significant 
percentage of patients from racial or ethnic minority groups, of low-
socioeconomic status, and living in medically underserved areas. A 
health system expressed concerns that the add-on payment adjustment 
would shift funding away from ESRD facilities exclusively providing 
adult services. An LDO expressed that applying the add-on in a budget-
neutral manner would effectively penalize all ESRD facilities for the 
inability of existing cost report data to improve payment accuracy. A 
nephrology society expressed concerns that while younger patients 
require more support, that does not mean that adults requiring dialysis 
require less support than they are already receiving. A non-profit 
dialysis association expressed that the budget neutral application of 
the adjustment is contrary to the Administration's stated health equity 
goals, because it would cut payments for one medically vulnerable group 
to increase payments for another medically vulnerable group.
    Response: We examined the potential impact of the proposed TPEAPA 
as a budget neutral adjustment. As we noted in the CY 2024 ESRD PPS 
proposed rule, add-on payment adjustments under section 
1881(b)(14)(D)(iv) of the Act are not statutorily required to be budget 
neutral under the ESRD PPS, but we believe in this instance that budget 
neutrality is appropriate due to the way this adjustment is derived. As 
explained in section II.B.1.g.(4) of this final rule, this TPEAPA is 
primarily for costs that would have been included in the cost reports 
used in the analysis conducted when we created the ESRD PPS bundled 
payment in the CY 2011 ESRD PPS final rule. We explained that the 
methodology used both in that analysis, and when updating the case-mix 
adjusters, attributed pediatric ESRD renal dialysis services costs to 
the general population. CMS has therefore determined it to be 
appropriate to reduce the ESRD PPS base rate to account for the new 
allocation of costs. We note that the adjustment would decrease the 
ESRD PPS base rate by a budget neutrality factor of 0.999503, a sum 
total of $0.14, due to the application of the budget neutrality factor. 
We further note that the adjustment does not rely on any assumption 
that resource use by adult patients has decreased over time; rather it 
assumes that the ESRD PPS payment rate as applied to adults has since 
its inception incorporated some amount of costs that were more properly 
attributable to treatment of pediatric

[[Page 76380]]

ESRD patients. The TPEAPA therefore makes the ESRD PPS payment more 
reflective of relative costs by reallocating payments associated with 
those costs from the payment amounts for adults to pediatric ESRD 
patients.
    Comment: An ESRD facility urged CMS to extend the add-on payment 
adjustment to pediatric AKI patients to ensure these patients receive 
the same additional support.
    Response: We appreciate the suggestion to apply the TPEAPA to 
pediatric AKI patients. As we discussed in the CY 2017 ESRD PPS final 
rule, we have 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. Therefore, we 
have not historically applied these ESRD PPS adjustments and policies 
to AKI payments (81 FR 77959). We did not propose to apply the TPEAPA 
to pediatric AKI patients for the same reason.
    Comment: We received several additional comments regarding the 
TPEAPA implementation. Commenters suggested that CMS create and 
implement pediatric ESRD-specific metrics for the pediatric ESRD 
programs. A pediatric nephrology society requested CMS utilize means of 
communication such as the Medicare Learning Network to educate 
children's hospitals on completing costs reports. A professional 
nursing association urged CMS to promote a shift towards pediatric ESRD 
dialysis care moving towards home-based settings. The association also 
urged investment into the field of pediatric nephrology, as there are 
limited qualified health care providers and recommended the inclusion 
(we assume in cost reports) of pediatric nurse practitioners. The 
association also recommended CMS consider direct patient labor 
categories when determining costs for pediatrics, as there are 
additional training and requirements necessary for the pediatric 
population. As an extension of labor categories, the association noted 
the shortage of pediatric nephrologists and suggested that CMS include 
pediatric nurse practitioners who can assist in meeting the needs of 
the youngest and most vulnerable individuals on dialysis. These 
commenters did not specify how CMS should include pediatric nurse 
practitioners or how such inclusion would relate to the ESRD PPS 
bundled payment.
    Response: We thank the commenters for their input. As the TPEAPA is 
a temporary adjustment until we can fully analyze the costs associated 
with pediatric dialysis, we did not include any proposals regarding 
shifts to home-based settings, or the inclusion of a pediatric nurse 
practitioner in the CY 2024 ESRD PPS proposed rule. However, as we 
continue to analyze how best to collect pediatric specific metrics and 
the payment for Pediatric ESRD Patients to facilitate future 
refinements, we will consider these comments for potential future ESRD 
PPS payment policies. We appreciate the suggestion about using Medicare 
Learning Networks to educate children's hospitals on completing costs 
report. CMS is considering a number of options on how best to provide 
educational outreach on this topic.
    Final Rule Action: We did not receive any comments on our proposal 
to revise the language of Sec.  413.235(b) to use the term ``Pediatric 
ESRD Patients'' to improve clarity. As such we are finalizing this 
change as proposed. In addition, after consideration of the comments 
received and for reasons outlined in the CY 2024 ESRD PPS proposed rule 
and previously in this section of the final rule, we are finalizing our 
proposal to establish this new TPEAPA on a budget-neutral basis. Under 
our authority at section 1881(b)(14)(D)(iv) of the Act, we will adjust 
the per treatment base rate for Pediatric ESRD Patients to provide a 
per-treatment transitional add-on payment adjustment of 30 percent of 
the per treatment payment amount under Sec.  413.230 for renal dialysis 
services furnished to Pediatric ESRD Patients during CYs 2024, 2025, 
and 2026. CMS is codifying this payment adjustment in the regulations 
at Sec.  413.235(b)(2). The budget-neutrality factor for the CY 2024 
TPEAPA is 0.999503. This change will be effective January 1, 2024, as 
proposed.
h. Reporting Policy for Discarded Amounts of Renal Dialysis Drugs and 
Biological Products Paid for Under the ESRD PPS
(1) Background
    As discussed in the CY 2023 PFS final rule (87 FR 69710), many 
drugs and biological products that are payable under Medicare Part B 
are dosed in a variable manner such that the entire amount identified 
on the vial or package is not administered to the patient. For example, 
many drugs are dosed based on the patient's body weight or body surface 
area (BSA). Often, these drugs are available only in single-dose 
containers. As stated in U.S. Food and Drug Administration (FDA) 
guidance for

[[Page 76381]]

industry,\22\ a single-dose container is designed for use with a single 
patient as a single injection or infusion. The labeling for a drug 
packaged in a single-dose container typically includes statements 
instructing users to discard unused portions. When the labeling 
instructs a health care provider to discard the amount of drug that was 
unused (that is, the discarded amount) from a single-dose container or 
other single-use package of a drug after administering a dose to a 
Medicare beneficiary, the program provides payment for the unused and 
discarded amount, as well as the dose administered, up to the amount of 
the drug indicated on the vial or package labeling. On a Medicare Part 
B claim, the JW modifier (drug amount discarded/not administered to any 
patient) is a Healthcare Common Procedure Coding System (HCPCS) Level 
II modifier used to report the amount of a drug that is discarded and 
eligible for payment.
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    \22\ https://www.fda.gov/media/117883/download.
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    Beginning on January 1, 2017, CMS revised the Medicare Part B JW 
modifier policy to require the uniform use of the modifier for all 
claims for separately payable drugs with discarded drug amounts from 
single-dose containers or single-use packages payable under Part B, in 
order to more effectively identify and monitor billing and payment for 
discarded amounts of drugs.^{23 24} The policy does not apply 
to drugs that are not separately payable, such as packaged hospital 
outpatient prospective payment system (OPPS) drugs or those 
administered in federally qualified health centers (FQHCs) or rural 
health clinics (RHCs).
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    \23\ CR6603: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3538CP.pdf.
    \24\ MLN Matters[supreg] Number MM9603: https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/mm96033.pdf.
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    In the CY 2023 PFS final rule (87 FR 69718 through 69719), we 
codified our existing policy as discussed in the prior paragraph in 
Chapter 17 of the Medicare Claims Processing Manual,\25\ and required 
that billing providers report the JW modifier for all separately 
payable drugs with discarded drug amounts from single-dose containers 
or single-use packages payable under Part B, beginning January 1, 2023. 
These changes were promulgated in connection with the implementation of 
the discarded drug refund program under section 90004 of the 
Infrastructure Investment and Jobs Act (Pub. L. 117-9, November 15, 
2021). In that same CY 2023 PFS final rule (87 FR 69722), we responded 
to commenters who requested we exempt drugs paid for under the ESRD PPS 
bundled payment from the discarded drug refund policy. One commenter 
expressed concern regarding how implementation of the discarded drug 
refund might inadvertently impact ESRD products, including those used 
by home dialysis patients. In response to those comments, we clarified 
that units for drugs that are packaged under the Medicare ESRD PPS were 
not subject to the JW modifier policy or the discarded drug refund.
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    \25\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
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    In the same CY 2023 PFS final rule, CMS also finalized a proposal 
to require billing providers to report the JZ modifier for all such 
drugs with no discarded drug amounts, beginning no later than July 1, 
2023. Specifically, as discussed in the CY 2023 PFS proposed rule (87 
FR 46058), we proposed to require the use of a separate modifier, the 
JZ modifier, to attest that there were no discarded amounts. We stated 
that to align with the JW modifier policy, the JZ modifier would be 
required when there are no discarded amounts from single-dose 
containers or single-use packages payable under Part B for which the JW 
modifier would be required if there were discarded amounts. Table 9 
provides additional information about these modifiers.
[GRAPHIC] [TIFF OMITTED] TR06NO23.012

    We explained that on all claims for single-dose containers or 
single-use packages payable under Part B, either the JW modifier would 
be used (on a separate line) to identify any discarded amounts or the 
JZ modifier (on the claim line with the administered amount) would be 
present to attest that there were no discarded amounts. We noted that 
we believed the JZ modifier requirement would not increase burden on 
the provider, because under the current JW modifier policy, the 
provider already needs to determine whether there are any discarded 
units from a single-dose container or single-use package, record 
discarded amounts in the patient medical record, and specify 
administered and discarded amounts on the claim form. We finalized the 
JZ modifier requirement in the CY 2023 PFS final rule. Lastly, we noted 
in the CY 2023 PFS final rule that we would begin claims edits for both 
the JW and JZ modifier beginning October 1, 2023 (87 FR 69179). 
Additional details can be found in Chapter 17 of the Medicare Claims 
Processing Manual and the JW/JZ modifier frequently asked questions 
(FAQ) document.\26\
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    \26\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/JW-Modifier-FAQs.pdf.
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(2) Current Reporting of the JW Modifier Under the ESRD PPS
    As we discussed in the CY 2024 ESRD PPS proposed rule, the Medicare 
Part B JW modifier policy generally does not apply to drugs that are 
not separately payable. The ESRD PPS statute generally requires a 
single bundled payment for renal dialysis services. Specifically, 
section 1881(b)(14)(A)(i) 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. The only exception is

[[Page 76382]]

for oral-only drugs, as defined at Sec.  413.234(a), which are 
currently paid separately under Medicare Part D. 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 drugs and 
biological products cannot be made under the ESRD PPS bundled payment 
prior to January 1, 2025. We noted that although the ESRD PPS includes 
certain add-on payment adjustments such as the TDAPA and TPNIES, these 
are adjustments to the ESRD PPS base rate and therefore part of the 
single payment made under the ESRD PPS; these payment adjustments are 
not separate payments. For example, as described in our TDAPA 
implementation guidance issued August 4, 2017, and updated January 10, 
2018, available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R1999OTN.pdf, the 
methodology used to calculate the per treatment payment amount 
incorporates the cost of the drugs that are paid for using the TDAPA.
    Although renal dialysis drugs and biological products paid for 
under the ESRD PPS are not considered ``separately billable'' and are 
not subject to the general Part B JW modifier policy discussed in the 
prior paragraph, CMS has previously issued guidance on the use of the 
JW modifier on ESRD PPS claims for certain circumstances. Chapter 8, 
section 60.4.5.1 of the Medicare Claims Processing Manual pertains to 
self-administered supplies of ESAs.\27\ Under current guidance, when 
billing for discarded amounts of drugs in accordance with the policy in 
chapter 17 of this manual, section 40.1, the provider must bill for 
discarded amounts on a separate line item with the modifier JW. The 
line-item date of service should be the date of the last covered 
administration according to the plan of care or, if the patient dies, 
use the date of death. More specifically, in Chapter 17, section 40.1 
of the Medicare Claims Processing Manual,\28\ we state that multi-use 
vials are not subject to payment for discarded amounts of drug or 
biological products, with the exception of self-administered ESAs by 
Method I home dialysis patients, for whom an ESRD facility furnishes 
and bills for renal dialysis services.\29\ Current guidance in Chapter 
17, section 40.1 of the Medicare Claims Processing Manual states that 
the ESRD facility must bill the program using the JW modifier for the 
amount of ESAs appropriately discarded if the home dialysis patient 
must discard a portion of the ESA supply due to expiration of a vial, 
because of interruption in the patient's plan of care, or unused ESAs 
on hand after a patient's death. We noted that separate payment is not 
made for ESAs under the ESRD PPS; however, ESAs are eligible for 
outlier payments when the criteria in Sec.  413.237 are met.
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    \27\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c08.pdf.
    \28\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
    \29\ Prior to the ESRD PPS, a Medicare ESRD beneficiary could 
elect to obtain home dialysis equipment and supplies from a supplier 
that was not a Medicare approved dialysis facility. This was 
referred to as Method II home dialysis. In the CY 2011 ESRD PPS 
final rule (75 FR 49061), we stated that all costs associated with 
home dialysis services (both Method I and Method II) are included in 
the composite portion of the two equation model, and we stated that 
effective January 1, 2011, all home ESRD patients would be 
considered Method I home patients and all Medicare payments for home 
dialysis services would be made to the ESRD facility.
---------------------------------------------------------------------------

    Most recently, the March 15, 2022, Change Request \30\ that 
established the TDAPA for Korsuva[supreg] (difelikefalin) instructs 
facilities to use the JW modifier to report the amount of difelikefalin 
that is discarded and eligible for payment under the ESRD PPS. We noted 
that based on the latest available data at the time of the CY 2024 ESRD 
PPS proposed rule, nearly 40 percent of the TDAPA expenditures for 
those drugs that were reported in 2022 represented discarded amounts 
reported using the JW modifier, which represented approximately $1.3 
million in TDAPA expenditures for discarded amounts of difelikefalin. 
Overall, our analysis of Medicare claims data from 2017 to 2021 found 
that approximately 2 percent of ESRD PPS claims indicate discarded or 
unused portions of drugs or biological products through use of the JW 
modifier. We estimated that the total amount of unused product billed 
from 2017 to 2021 and paid for under the ESRD PPS is approximately $22 
million.
---------------------------------------------------------------------------

    \30\ https://www.cms.gov/files/document/r11295CP.pdf.
---------------------------------------------------------------------------

    We explained in the CY 2024 ESRD PPS proposed rule that, under our 
current policy, we do not reduce the single payment under the ESRD PPS 
for any discarded amounts of renal dialysis drugs or biological 
products that are reported with the JW modifier. Furthermore, when 
calculating any adjustments to the ESRD PPS base rate for the TDAPA or 
outlier payments, we include all units of renal dialysis drugs and 
biological products billed on the claim for which an adjustment is 
made, including any discarded amounts of such drugs and biological 
products. Additionally, we have previously established in the CY 2012 
ESRD PPS final rule (76 FR 70243 through 70244) that ESRD facilities 
may only report units and charges for drugs and biological products 
purchased and may not bill for overfill units of drugs and biological 
products which exceed the amount indicated on the vial or package 
labeling.\31\ Additionally, we explained that consistent with prior 
rulemaking, under our authority in section 1881(b)(14)(D)(ii) of the 
Act, we were adopting the average sales price (ASP) policy on overfill 
for purposes of calculating the outlier payment. That is, we adopted a 
policy to exclude overfill units of drugs and biological products which 
exceed the amount indicated on the vial or package labeling from 
consideration for the purposes of calculating outlier payments. We 
stated we believe the use of the ASP policy for purposes of calculating 
the outlier payment is appropriate because we believe overfill does not 
represent a cost to the ESRD facility; thus, overfill should not factor 
into our determination of outlier payments.
---------------------------------------------------------------------------

    \31\ We explained in the CY 2011 PFS final rule (75 FR 73466) 
that we had become aware of situations where manufacturers 
intentionally included a small amount of overfill in drug 
containers, and that this overfill is provided at no extra charge to 
the provider. We also noted that we understood the intent of the 
intentional overfill was to compensate for product loss during the 
proper preparation and administration of a drug. We explained that 
ASP calculations are based on data reported by manufacturers, 
including ``volume per item''. Therefore, providers may only bill 
for the amount of drug product actually purchased and the cost that 
the product represents (75 FR 73467).
---------------------------------------------------------------------------

    In summary, our longstanding policy for payment under the ESRD PPS, 
including the calculation of the TDAPA and outlier payment adjustments, 
includes payment for units of renal dialysis drugs and biological 
products billed with the JW modifier, but does not allow payment for 
overfill units. That is, the current ESRD PPS payment policy is 
consistent with the broader Medicare Part B policy to pay for the 
unused and discarded amount, as well as the dose administered, up to 
the amount of the drug indicated on the vial or package labeling.
(3) ESRD PPS Policy for Reporting of Discarded Amounts of Renal 
Dialysis Drugs and Biological Products
    As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42464) 
and in section II.B.1.j of this final rule, we are undertaking analysis 
of ESRD PPS claims and cost report data to better understand the 
patient-specific costs associated with furnishing renal dialysis 
services to Medicare beneficiaries. We

[[Page 76383]]

stated in the proposed rule that in considering potential refinements 
to the ESRD PPS case-mix adjustments in the future, it is important to 
understand and have consistent data about the costs associated with the 
quantities of the renal dialysis drugs and biological products that are 
used by ESRD beneficiaries. This is consistent with our longstanding 
policy principles, which are reflected by our policy for billing for 
unused amounts of renal dialysis drugs and biological products under 
the ESRD PPS. In the CY 2016 ESRD PPS final rule (80 FR 69033), we 
discussed our existing policy since the inception of the ESRD PPS that 
all renal dialysis service drugs and biological products prescribed for 
ESRD patients, including the oral forms of renal dialysis injectable 
drugs, must be reported by ESRD facilities, and the units reported on 
the monthly claim must reflect the amount expected to be taken during 
that month. We stated that ESRD facilities should use the best 
information they have in determining the amount expected to be taken in 
a given month, including fill information from the pharmacy and the 
patient's plan of care. We noted that any billing system changes to 
effectuate this change needed to be made as soon as possible, as this 
requirement had been in effect since the ESRD PPS began in 2011. This 
policy is also discussed in the Medicare Benefits Policy Manual, Pub. 
100-02, Chapter 11, section 20.3.C.\32\
---------------------------------------------------------------------------

    \32\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/bp102c11.pdf.
---------------------------------------------------------------------------

    Consistent with our longstanding billing policies for unused 
amounts of drugs and biological products and consistent with the 
requirements for the uniform use of the JW modifier for all claims for 
separately payable drugs under Part B since 2017, to more effectively 
identify and monitor billing and payment for discarded amounts of 
drugs, in the CY 2024 ESRD PPS proposed rule, we proposed to require 
ESRD facilities to report accurate and consistent data about discarded 
amounts of single-dose renal dialysis drugs and biological products 
paid under the ESRD PPS. Further, section 1881(b)(2)(B) of the Act 
requires the Secretary to prescribe in regulations any methods and 
procedures to determine the costs incurred by ESRD facilities in 
furnishing renal dialysis services to beneficiaries with ESRD, and to 
determine payment amounts for Part B services furnished by such ESRD 
facilities.
    We noted that, under our longstanding policy, payment is made under 
the ESRD PPS bundled payment for discarded amounts of renal dialysis 
drugs and biological products, and such discarded amounts are included 
in the calculation of the ESRD PPS base rate and any applicable 
adjustments, such as the TDAPA and the outlier adjustment. Therefore, 
consistent with the current JW and JZ reporting requirements that were 
finalized in the CY 2023 PFS final rule for separately payable Part B 
drugs, we proposed to require that beginning no later than January 1, 
2024, ESRD facilities must report information on ESRD PPS claims about 
the total number of billing units of any discarded amount of a renal 
dialysis drug or biological product from a single-dose container or 
single-use package that is paid for under the ESRD PPS, using the JW 
modifier (or any successor modifier that includes the same data). We 
also proposed that ESRD facilities must document any discarded amounts 
in the beneficiary's medical record. Additionally, we proposed to 
require ESRD facilities to report the JZ modifier for all such renal 
dialysis drugs and biological products with no discarded amounts, 
beginning no later than January 1, 2024. We proposed to codify these 
reporting requirements in regulation at Sec.  413.198(b)(5) and (6).
    We proposed the amount of a renal dialysis drug or biological 
product from a single-dose container or single-use package that is 
administered would be billed on one line (reflected as billing units in 
the unit field) and any discarded amounts would be billed on a separate 
line with the JW modifier (reflected as billing units in the unit 
field). If a renal dialysis drug or biological product from a single-
dose container or single-use package is administered and there are no 
discarded amounts, then we proposed that a single line would be billed 
on the claim form with the JZ modifier and the billing units in the 
unit field. Therefore, on all claims for renal dialysis drugs and 
biological products from single-dose containers or single-use packages 
payable under the ESRD PPS, we proposed that either the JW modifier 
would be used (on a separate line) to identify any discarded amounts or 
the JZ modifier (on the claim line with the administered amount) would 
be present to attest that there were no discarded amounts. We proposed 
that claims for renal dialysis drugs and biological products from 
single-dose containers or single-use packages that do not report either 
the JW or JZ modifier may be returned as un-processable until claims 
are properly resubmitted.\33\ We also stated that if this proposal is 
finalized, CMS would publish information about which HCPCS codes would 
be identified as single-dose containers or single-use package renal 
dialysis drugs and biological products subject to required reporting of 
the JW or JZ modifier. We also stated that we would plan to issue 
guidance regarding additional operational considerations and billing 
instructions specific to the reporting requirements for these products.
---------------------------------------------------------------------------

    \33\ Under the basic requirements for all claims at Sec.  
424.32(a)(1), a claim must be filed with the appropriate 
intermediary or carrier on a form prescribed by CMS in accordance 
with CMS instructions. Chapter 1 of the Medicare Claims Processing 
Manual, section 70.2.3.1 states that submissions that are found to 
be incomplete or invalid are returned to the provider (RTP).
---------------------------------------------------------------------------

    We further clarified that, under our proposal, ESRD facilities 
would not be required to document in the beneficiary's medical record 
when there are no discarded amounts. We reiterated in the CY 2024 ESRD 
PPS proposed rule that, as discussed in the CY 2023 PFS final rule (87 
FR 69722), units for renal dialysis drugs and biological products that 
are bundled under the Medicare ESRD PPS would not be subject to the 
Medicare Part B discarded drug refund program and would continue to be 
exempted from the Medicare Part B discarded drug refund. We also 
clarified that for any oral-only drugs, as defined in Sec.  413.234(a), 
to the extent that any such drugs are produced in single-dose 
containers or single-use packaging, this proposed reporting requirement 
would not apply until such drugs are paid for under the ESRD PPS.
    We stated that we believe this reporting requirement would enable 
CMS to obtain more reliable information about the extent to which the 
costs of providing renal dialysis drugs and biological products 
represent amounts that beneficiaries use as well as amounts that are 
discarded. We explained that we believe this is particularly important 
because under Medicare Part B, beneficiaries are responsible for paying 
a 20 percent coinsurance. As noted previously, nearly 40 percent of 
TDAPA expenditures in CY 2022 represented discarded amounts of renal 
dialysis drugs and biological products. Medicare beneficiaries, 
therefore, paid approximately $260,000 in copayments for these 
discarded amounts. While this currently represents a small amount of 
payments overall, the cost for discarded renal dialysis drugs and 
biological products is borne by a very small population of 
beneficiaries. We stated that it is important for CMS to

[[Page 76384]]

understand the full scope of expenditures, including expenditures that 
may be incurred by beneficiaries, for discarded amounts of renal 
dialysis drugs and biological products in the future, which may be more 
expensive or more widely used than the current drug that is being paid 
for using the TDAPA under the ESRD PPS. Thus, we did not propose in the 
CY 2024 ESRD PPS proposed rule to alter payments to ESRD facilities 
based on the amounts of discarded renal dialysis drugs and biological 
products reported, but noted that data collected through adoption of 
the JW and JZ modifier reporting requirements discussed in that section 
of the proposed rule may inform future payment policies, which would be 
proposed through future notice and comment rulemaking if appropriate.
    Based on our analysis of ESRD PPS claims, as well as the billing 
guidance in sections 8 and 17 of the Medicare Claims Processing Manual, 
we stated that we believe the JW modifier requirement reflects current 
practices for ESRD facilities and would not significantly increase 
burden for ESRD facilities. Additionally, we stated that we believe the 
JZ modifier requirement would not increase burden on ESRD facilities, 
because under the current guidance provided regarding use of the JW 
modifier, the ESRD facility should already have processes in place to 
determine, in the case of certain drugs and biological products, 
whether or not there are any discarded units from a single-dose 
container or single-use package, record discarded amounts in the 
patient medical record, and specify administered and discarded amounts 
on the claim form. Furthermore, we noted that while renal dialysis 
drugs and biological products that are paid under the ESRD PPS are not 
considered separately payable, ESRD facilities are permitted to bill 
and receive separate payment using the AY modifier for drugs and 
biological products that are not related to the treatment of ESRD. 
Although we noted that renal dialysis drugs and biological products 
paid under the ESRD PPS are not subject to the Medicare Part B drug 
refund program or the current JW or JZ reporting requirements, any 
separately payable drugs, or biological products that ESRD facilities 
bill for using the AY modifier would be subject to such policies under 
Medicare Part B. Therefore, we explained that we believe most ESRD 
facilities should already be reporting the JW and JZ modifiers in such 
circumstances and would reasonably be able to report these modifiers 
for renal dialysis drugs and biological products as well. We invited 
comments on this assumption and on the proposed JW and JZ reporting 
requirements for the ESRD PPS.
    We received public comments on our proposal to require the 
reporting of the JW and JZ modifiers on ESRD PPS claims. The comments 
on our proposal and our responses are set forth below.
    Comment: Several commenters raised concerns about the lead time 
needed to operationalize the proposed changes to report the JW and JZ 
modifiers on ESRD PPS claims. Commenters expressed that a minimum of 
six months after the publication of detailed guidance would be needed 
to reprogram systems and train staff to comply with the proposed 
requirements. Other commenters noted that, especially for independent 
ESRD facilities, a longer lead time of one year may be appropriate. 
Specifically, commenters expressed that ESRD facilities would need to 
implement extensive changes to their policies and procedures, including 
aligning information from numerous independent medical record systems, 
and that such activities could not begin in earnest until detailed 
guidance about these reporting requirements is available. Several 
commenters urged CMS to commit to publishing guidance by January 1, 
2024, and to modify the effective date of the proposed JW and JZ 
modifier reporting requirement to begin no earlier than January 1, 
2025.
    Response: We thank commenters for their detailed comments regarding 
the operational changes needed to comply with the proposed reporting 
requirement. As commenters pointed out, although ESRD facilities may 
have processes in place to track amounts of discarded drugs, these 
processes may not be uniformly applied to all drugs. We recognize the 
importance of providing ESRD facilities the appropriate amount of time 
to adjust systems and train staff to expand the scope of drugs to which 
existing processes are applied. In light of the operational needs that 
commenters described, we are modifying the effective date of this 
reporting requirement to begin January 1, 2025, instead of January 1, 
2024. Commenters indicated that for certain independent facilities, 1 
year would provide sufficient time to train staff and update systems as 
needed to comply with the reporting requirements we are finalizing in 
this final rule. We believe extending the effective date of the 
requirement by 1 year strikes an appropriate balance between the need 
to collect this data and ESRD facilities' need to make operational 
changes. We intend to publish detailed operational guidance regarding 
this requirement no later than January 1, 2024.
    Comment: Many commenters stated that although they understand and 
agree with CMS's need to better understand patient-specific costs 
associated with furnishing renal dialysis services to Medicare 
beneficiaries, they did not agree that the proposed collection of 
information about the JW and JZ modifiers on claims was appropriate or 
relevant. Several commenters expressed their belief that Medicare 
beneficiaries do not incur additional coinsurance for renal dialysis 
drugs and biological products that are paid under the ESRD PPS bundled 
payment, and therefore information about discarded amounts would not be 
relevant to ESRD PPS payment. Several commenters encouraged CMS to 
withdraw the proposed reporting requirement.
    Response: We appreciate the concerns raised by commenters. We are 
not withdrawing the proposed reporting requirement. We do not agree 
with the commenters' assertion that discarded amounts of renal dialysis 
drugs and biological products paid under the ESRD PPS have no impact on 
payment, or that Medicare beneficiaries do not incur additional 
coinsurance for such discarded amounts. As we discussed in the CY 2024 
ESRD PPS proposed rule, certain ESRD PPS payment adjustments, 
specifically the outlier adjustment and the TDAPA, are dependent upon 
the amount of renal dialysis drugs and biological products billed on an 
ESRD PPS claim. For renal dialysis drugs and biological products from 
single-dose containers or single-use packaging which are eligible for 
such payment adjustments, discarded amounts contribute directly to 
increased ESRD PPS payment as well as increased beneficiary copays. 
Furthermore, because the ESRD PPS base rate includes payment for renal 
dialysis drugs and biological products, discarded amounts of renal 
dialysis drugs and biological products from single-dose containers and 
single-use packaging contribute to overall increases in the ESRD PPS 
base rate and the amount of beneficiary coinsurance.
    Comment: Several commenters expressed concerns about the 
application of the proposed reporting requirements for home dialysis 
patients and for any oral-only drugs from single-dose containers or 
single-use packaging that may, after January 1, 2025, be paid under the 
ESRD PPS. Commenters expressed concern about ESRD facilities' ability 
to accurately document the discarded amounts of such drugs and 
biological products that are not administered at the ESRD facility. One

[[Page 76385]]

commenter noted that CMS's current policy applies to a very limited 
number of patients and ESAs, but the proposed expansion of this policy 
could apply to a broader range of ESAs, calcimimetics, intravenous 
iron, and more products. The same commenter noted that most home 
dialysis patients use multi-use vials, to which the current JW 
requirement does not apply. Commenters urged CMS to exempt oral-only 
drugs and renal dialysis drugs and biological products used by home 
dialysis patients from the proposed reporting requirements or clarify 
that ESRD facilities can report the amount of such drugs in good faith.
    Response: We thank commenters for their detailed comments regarding 
the applicability of the proposed reporting requirement for renal 
dialysis drugs and biological products paid under the ESRD PPS that are 
administered outside of an ESRD facility. Consistent with our 
longstanding policy discussed in the CY 2016 ESRD PPS final rule (80 FR 
69033), all renal dialysis service drugs and biological products 
prescribed for ESRD patients, including the oral forms of renal 
dialysis injectable drugs, must be reported by ESRD facilities, and the 
units reported on the monthly claim must reflect the amount expected to 
be taken during that month. Accordingly, with respect to reporting 
discarded amounts of renal dialysis drugs and biological products that 
are administered to home dialysis patients and oral forms of renal 
dialysis drugs and biological products, ESRD facilities should use the 
best information they have in determining the amount expected to be 
discarded in a given month, including fill information from the 
pharmacy and the patient's plan of care. Consistent with current 
guidance in Chapter 17, section 40.1 of the Medicare Claims Processing 
Manual, ESRD facilities must bill the program using the JW modifier for 
the amount of ESAs appropriately discarded if the home dialysis patient 
must discard a portion of the ESA supply due to expiration of a vial, 
because of interruption in the patient's plan of care, or unused ESAs 
on hand after a patient's death. In response to the commenter's 
statement about the use of multi-use vials by home dialysis patients, 
we are reiterating that discarded amounts should only be reported for 
drugs and biological products from single-dose containers or single-use 
packaging. ESRD facilities should not report discarded amounts of renal 
dialysis drugs or biological products from multi-use vials. Discarded 
amounts of renal dialysis drugs and biological products from multi-use 
vials should not be billed on ESRD PPS claims.
    Comment: Many commenters requested that CMS provide additional 
clarity about how information about discarded drug amounts may be used 
in the future to inform payment policy. Commenters pointed out that 
packaging for drugs and biological products is controlled by 
manufacturers and FDA, rather than by ESRD facilities, and expressed 
concern that data collected under this proposed reporting policy would 
be used in the future to reduce ESRD PPS payments. Commenters stated 
that ESRD facilities are already incentivized, by the nature of the 
ESRD PPS, to minimize the amount of discarded renal dialysis drugs and 
biological products to the extent possible. One commenter stated that 
the underlying issue of waste can only be solved by holding the 
manufacturers responsible. Some commenters requested clarification on 
whether CMS intends to apply penalties for non-compliance with the JW 
and JZ modifier reporting requirements.
    Response: As we noted in the CY 2024 ESRD PPS proposed rule, we did 
not propose any reduction to ESRD PPS payments based on the amounts of 
discarded renal dialysis drugs and biological products reported using 
the JW modifier. As we noted in the CY 2024 ESRD PPS proposed rule, we 
intend to analyze information about discarded amounts in the broader 
context of changes to the ESRD PPS case-mix adjustments and may propose 
changes in future rulemaking if appropriate. We appreciate and agree 
with commenters' assertions that ESRD facilities have limited control 
over the amount of discarded renal dialysis drugs and biological 
products, and that ESRD facilities are required to discard any 
remaining amounts from a single-dose container or single-use packaging 
that are not used by the patient. As we discussed in the CY 2024 ESRD 
PPS proposed rule, we have previously established in the CY 2012 ESRD 
PPS final rule (76 FR 70243 through 70244) that ESRD facilities may 
only report units and charges for drugs and biological products 
purchased and may not bill for overfill units of drugs and biological 
products which exceed the amount indicated on the vial or package 
labeling. We recognize that manufacturers of renal dialysis drugs and 
biological products are ultimately responsible for decisions about 
packaging, which drive the magnitude of discarded amounts. As some 
commenters noted, current provisions at Sec. Sec.  414.902 and 414.940, 
which require refunds from manufacturers for discarded amounts of 
drugs, apply only to separately payable drugs and biological products 
and do not apply to drugs and biological products paid for under the 
ESRD PPS. We believe that collecting more complete information about 
discarded amounts of renal dialysis drugs and biological products from 
single-dose containers and single-use packaging will help CMS to more 
fully evaluate the impact that such discarded amounts have on both 
Medicare payments and beneficiary copayments.
    Lastly, we are reiterating that we are not applying any penalties 
for noncompliance with this reporting requirement for discarded 
amounts; however, as we noted in the CY 2024 ESRD PPS proposed rule (88 
FR 42455), claims for renal dialysis drugs and biological products from 
single-dose containers or single-use packages that do not report either 
the JW or JZ modifier may be returned as un-processable until the 
claims are properly resubmitted.
    Final Rule Action: We are finalizing the proposed reporting 
requirement for discarded amounts of renal dialysis drugs and 
biological products from single-dose containers and single-use 
packaging, with a modified effective date of January 1, 2025. 
Therefore, consistent with the current JW and JZ reporting requirements 
that were finalized in the CY 2023 PFS final rule for separately 
payable Part B drugs, we are finalizing that beginning no later than 
January 1, 2025, ESRD facilities must report information on ESRD PPS 
claims about the total number of billing units of any discarded amount 
of a renal dialysis drug or biological product from a single-dose 
container or single-use package that is paid for under the ESRD PPS, 
using the JW modifier (or any successor modifier that includes the same 
data). We are also finalizing that ESRD facilities must document any 
discarded amounts in the beneficiary's medical record. Additionally, we 
are finalizing that ESRD facilities must report the JZ modifier for all 
such renal dialysis drugs and biological products with no discarded 
amounts, beginning no later than January 1, 2025. We are finalizing a 
modification to the proposed regulation text to clarify that for renal 
dialysis drugs and biological products from single-dose containers and 
single-use packaging that are administered to home dialysis patients or 
that are oral forms of renal dialysis injectable drugs, the ESRD 
facility should report the amount of such drugs and biological products 
expected to be discarded. We are finalizing our

[[Page 76386]]

proposal to codify these reporting requirements in regulation at Sec.  
413.198(b)(5) and (6), with changes to indicate that the January 1, 
2025, effective date applies to each of these requirements.
i. New Add-On Payment Adjustment for Certain New Renal Dialysis Drugs 
and Biological Products After the TDAPA Period Ends
(1) Background on the TDAPA
    Section 217(c) of PAMA required the Secretary to establish a 
process for including new injectable and intravenous (IV) products into 
the ESRD PPS bundled payment as part of the CY 2016 ESRD PPS 
rulemaking. Therefore, in the CY 2016 ESRD PPS final rule (80 FR 69013 
through 69027), we finalized a process based on our longstanding drug 
designation process that allowed us to include new injectable and 
intravenous products into the ESRD PPS bundled payment and, when 
appropriate, modify the ESRD PPS payment amount. We codified this 
process in our regulations at Sec.  413.234. We finalized that the 
process is dependent upon the ESRD PPS functional categories, 
consistent with the drug designation process we have followed since the 
implementation of the ESRD PPS in 2011. As we explained in the CY 2016 
ESRD PPS final rule (80 FR 69014), when we implemented the ESRD PPS, 
drugs and biological products were grouped into functional categories 
based on their action. This was done to add new drugs or biological 
products with the same functions to the ESRD PPS bundled payment as 
expeditiously as possible after the drugs are commercially available, 
so beneficiaries have access to them. As we stated in the CY 2011 ESRD 
PPS final rule, we did not specify all the drugs and biological 
products within these categories, because we did not want to 
inadvertently exclude drugs that may be substitutes for drugs we 
identified, and we wanted the ability to reflect new drugs and 
biological products developed or changes in standards of practice (75 
FR 49052).
    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 that if a new renal dialysis injectable 
or IV product falls within an existing functional category, the new 
injectable drug 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. We noted in 
that rule that the productivity-adjusted ESRDB market basket update is 
used to increase the ESRD PPS base rate annually and accounts for price 
changes of the drugs and biological products. We also finalized in the 
CY 2016 ESRD PPS final rule that, if the new renal dialysis injectable 
or IV product does not fall within an existing 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 codified 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 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. The new injectable or IV product is not 
eligible as an outlier service during the TDAPA period. We established 
that following the TDAPA period, 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.
    In the 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, we revised the 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. In addition, we 
revised Sec.  413.234(b) and (c) to expand the TDAPA to all new renal 
dialysis drugs and biological products, rather than just those in new 
ESRD PPS functional categories. In the CY 2020 ESRD PPS final rule, we 
revised Sec.  413.234(b) and added paragraph (e) to exclude from TDAPA 
eligibility generic drugs approved by FDA under section 505(j) of the 
Federal Food, Drug, and Cosmetic 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, effective 
January 1, 2020.
    Under our current TDAPA policy at Sec.  413.234(c), a new renal 
dialysis drug or biological product that falls within an existing ESRD 
PPS functional category is considered included in the ESRD PPS base 
rate and is paid the TDAPA for 2 years. After the TDAPA period, the 
ESRD PPS base rate will not be modified. If the new renal dialysis drug 
or biological product does not fall within an existing ESRD PPS 
functional category, it is not considered included in the ESRD PPS base 
rate, and it will be paid the TDAPA until sufficient claims data for 
rate setting analysis is available, but not for less than 2 years. 
After the TDAPA period, the ESRD PPS base rate will be modified, if 
appropriate, to account for the new renal dialysis drug or biological 
product in the ESRD PPS bundled payment.
    As discussed in the CY 2019 and CY 2020 ESRD PPS final rules, for 
new renal dialysis drugs and biological products that fall into an 
existing ESRD PPS functional category, the TDAPA helps ESRD facilities 
to incorporate new drugs and biological products and make appropriate 
changes in their businesses to adopt such products, provides additional 
payments for such associated costs, and promotes competition among the 
products within the ESRD PPS functional categories, while focusing 
Medicare resources on products that are innovative (83 FR 56935; 84 FR 
60654). For new renal dialysis drugs and biological products that do 
not fall within an existing ESRD PPS functional category, the TDAPA is 
a potential pathway toward a potential ESRD PPS base rate modification 
(83 FR 56935). For the complete history of the TDAPA policy, including 
the pricing methodology, see the CY 2016 ESRD PPS final rule (80 FR 
69023 through 69024), CY 2019 ESRD PPS final rule (83 FR 56932 through 
56948), and CY 2020 ESRD PPS final rule (84 FR 60653 through 60681).
(2) Request for Information in the CY 2023 ESRD PPS Proposed Rule
    In the CY 2023 ESRD PPS proposed rule (87 FR 38522 through 38523), 
we summarized the concerns of interested parties and issued a request 
for information about methods that could be used to develop an add-on 
payment adjustment for certain new renal dialysis drugs and biological 
products after the end of the TDAPA. We explained that since 2019, 
dialysis associations and pharmaceutical representatives have expressed 
concerns

[[Page 76387]]

to CMS about payment following the TDAPA period for new renal dialysis 
drugs and biological products that are paid for using the TDAPA. We 
noted that these interested parties have asserted that unless money is 
added to the ESRD PPS base rate for these drugs and biological 
products, like what occurred with calcimimetics (85 FR 71406 through 
71410), then it is unlikely that ESRD facilities would be able to 
sustain the expense of these drugs and biological products when the 
TDAPA period ends. Further, these interested parties cautioned that 
uncertainty about payment could affect ESRD facility adoption of these 
drugs and biological products during the TDAPA period. We noted that to 
date, calcimimetics are the only renal dialysis drugs or biological 
products that have been paid for using the TDAPA and incorporated into 
the ESRD PPS bundled payment following the TDAPA payment period. We 
stated that there have been no other renal dialysis drugs or biological 
products that have completed their TDAPA payment period, and as a 
result, CMS does not yet have data on other drugs or biological 
products to evaluate the specific risks and access challenges that 
interested parties have raised.
    We also discussed that, as mentioned in the CY 2019 (83 FR 56941) 
and CY 2020 (84 FR 60672 and 60693) ESRD PPS final rules, many 
commenters have suggested a rate-setting exercise at the end of the 
TDAPA period for all new renal dialysis drugs and biological products. 
We responded to those comments by noting that we do not believe adding 
dollars to the ESRD PPS base rate would be appropriate for new drugs 
that fall into the ESRD PPS functional categories, given that the 
purpose of the TDAPA for these drugs is to help ESRD facilities 
incorporate new drugs and biological products and make appropriate 
changes in their businesses to adopt such products, provide additional 
payments for such associated costs, and promote competition among the 
products within the ESRD PPS functional categories. In addition, we 
explained that the ESRD PPS base rate already includes money for renal 
dialysis drugs and biological products that fall within an existing 
ESRD PPS functional category. We stated that under a PPS, Medicare 
makes payments based on a predetermined, fixed amount that reflects the 
average patient, and that there would be patients whose treatment costs 
at an ESRD facility would be more or less than the ESRD PPS payment 
amount. We noted that a central objective of the ESRD PPS and of 
prospective payment systems in general is for ESRD facilities to be 
efficient in their resource use.
    We also noted that price changes to the ESRD PPS bundled payment 
are updated annually by the productivity-adjusted ESRDB market basket 
update, which includes a pharmaceutical cost category weight. In 
addition, we explained that our analysis of renal dialysis drugs and 
biological products paid for under the ESRD PPS has found costs and 
utilization to have decreased over time for some high volume formerly 
separately billable renal dialysis drugs, relative to overall ESRDB 
market basket growth. Therefore, we stated that we believe that any 
potential methodology for an add-on payment adjustment in these 
circumstances should adapt to changes in price and utilization over 
time.
    We noted that section 1881(b)(14)(D)(iv) of the Act provides that 
the ESRD PPS may include such other payment adjustments as the 
Secretary determines appropriate, such as a payment adjustment--(1) for 
pediatric providers of services and renal dialysis facilities; (2) by a 
geographic index, such as the index referred to in section 
1881(b)(12)(D), as the Secretary determines to be appropriate; and (3) 
for providers of services or renal dialysis facilities located in rural 
areas. Regarding the patient access concerns that we discussed in the 
CY 2023 ESRD PPS proposed rule, we stated that we were considering 
whether it would be appropriate to establish an add-on payment 
adjustment for certain renal dialysis drugs and biological products in 
existing ESRD PPS functional categories after their TDAPA period ends. 
We noted that any add-on payment adjustment would be subject to the 
Medicare Part B beneficiary coinsurance payment under ESRD PPS.
    In the CY 2023 ESRD PPS proposed rule, we presented four potential 
methods that we were considering, which we noted could be used to 
develop an add-on payment adjustment for these drugs and biological 
products. We noted that the methods presented differed in terms of 
which formerly separately billable renal dialysis drugs and biological 
products would be considered for methodological inclusion in a 
potential add-on payment adjustment. We further noted that under the 
potential options presented, we would apply a reconciliation 
methodology only when an add-on payment adjustment would align resource 
use with payment for a renal dialysis drug or biological product in an 
existing ESRD PPS functional category.
    Following the discussion in the CY 2023 ESRD PPS proposed rule 
about these potential methodologies, we issued a request for 
information within that proposed rule (87 FR 38523) to seek feedback 
from the public on the need for an add-on payment adjustment of this 
kind and the potential methodologies for calculating such an add-on 
payment adjustment. We noted that while we would not be responding to 
specific comments submitted in response to this RFI, we intended to use 
this input to inform future policy development. We stated that any 
potential payment policies related to this RFI would be proposed 
through a separate notice and comment rulemaking.
    We provided a high-level summary of responses to this RFI in the CY 
2023 ESRD PPS final rule (87 FR 67219 through 67220) and noted that we 
would publish more detailed information about the commenters' 
recommendations in a future posting on the CMS website located at the 
following link: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Educational_Resources. We noted that we received 27 
public comments regarding our RFI, including from large, small, and 
non-profit dialysis organizations; an advocacy organization; a 
coalition of dialysis organizations; a large, non-profit health system; 
and MedPAC.
    In the CY 2023 ESRD PPS final rule, we stated that most commenters 
expressed their belief that an add-on payment adjustment of this nature 
is necessary to support the adoption of new renal dialysis drugs and 
biological products, and that most commenters stated that they 
supported CMS allowing all new renal dialysis drugs and biological 
products to be eligible to receive an add-on payment adjustment after 
the TDAPA period ends. However, we noted that MedPAC opposed this type 
of add-on payment adjustment by stating that it would undermine 
competition with existing drugs in the ESRD PPS bundled payment and 
encourage higher launch prices. We also noted that MedPAC recommended 
that CMS limit the add-on payment adjustment to new renal dialysis 
drugs and biological products that show a substantial clinical 
improvement compared with existing products reflected in the ESRD PPS 
bundled payment.
    We further noted in the CY 2023 ESRD PPS final rule that several 
commenters stated they supported reconciling the expenditure of the new 
renal dialysis drug or biological product with any reduction in 
expenditures for other formerly separately billable renal

[[Page 76388]]

dialysis drugs that are clinically or statistically related to the 
introduction of the new renal dialysis drug in the bundle. Several 
commenters expressed their belief that the FDA-approved label should be 
used to determine the primary indication and clinical association, 
rather than end-action effect. MedPAC expressed opposition to 
calculating any add-on payment adjustment for new renal dialysis drugs 
and biological products in existing ESRD PPS functional categories 
after the TDAPA period ends but noted that if an add-on payment 
adjustment were applied, it would be appropriate to use an offset, like 
the approach used with the TPNIES, to avoid duplicative payment for 
renal dialysis services already included in the ESRD PPS base rate.
(3) Add-On Payment Adjustment for Certain New Renal Dialysis Drugs and 
Biological Products After the TDAPA Period Ends
    As discussed previously, section 1881(b)(14)(D)(iv) of the Act 
provides that the ESRD PPS may include such other payment adjustments 
as the Secretary determines appropriate. Based on the public comments 
received regarding the RFI in the CY 2023 ESRD PPS proposed rule,\34\ 
we stated in the CY 2024 ESRD PPS proposed rule (88 FR 42458) that we 
believe it is appropriate to propose, beginning January 1, 2024, an 
add-on payment adjustment for new renal dialysis drugs and biological 
products in existing ESRD PPS functional categories after the end of 
the TDAPA period. We noted that this proposed payment adjustment would 
not apply to new renal dialysis drug or biological products used to 
treat or manage a condition for which there is not an ESRD PPS 
functional category, because we have already established a policy to 
modify the ESRD PPS base rate for such products, if appropriate, after 
the TDAPA period ends, to account for the products in the ESRD PPS 
bundled payment (Sec.  413.234(c)(2)(i)).
---------------------------------------------------------------------------

    \34\ https://www.cms.gov/files/document/cy-2023-esrd-pps-payment-after-tdapa-rfi-summary-comments.pdf.
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    We stated that we agreed with commenters who expressed concerns 
that the ESRD PPS' current mechanisms may not fully account for the 
costs of these new drugs. We noted that several commenters asserted 
that the outlier adjustment and the ESRDB market basket updates cannot 
adequately account for these costs, and several organizations noted 
that if renal dialysis drugs and biological products with significant 
costs were adopted under the outlier policy, the threshold to qualify 
for outlier payments would increase dramatically, thus adversely 
affecting access to products traditionally eligible for the outlier 
payment adjustment. We described comments which expressed that this 
increase in the outlier threshold may also raise health equity concerns 
because, as we noted in the CY 2023 ESRD PPS final rule (87 FR 67170 
through 67171), the outlier adjustment protects access for 
beneficiaries whose care is unusually costly. We stated that we 
recognize that if the outlier threshold were to increase significantly 
due to significant use of a new renal dialysis drug or biological 
product after the end of the TDAPA, then ESRD facilities might be 
incentivized to avoid treating costlier beneficiaries. Additionally, we 
described several comments that raised concerns about the ability of 
the ESRDB market basket update to account for the cost of new renal 
dialysis drugs and biological products. These commenters referred to a 
Moran study \35\ suggesting that the drug price proxies used in the 
ESRDB market basket have not adequately accounted for the costs of non-
ESA drugs under existing functional categories. We explained that while 
we continue to believe that the market basket price proxies are the 
best available information for projecting the future price growth of 
renal dialysis drugs and biological products, and that they provide an 
adequate mechanism for projecting future ESRD PPS price growth, we 
recognize that there is additional uncertainty about future trends in 
the expenditures for new renal dialysis drugs and biological products, 
including trends in pricing and utilization of such drugs and any 
functionally equivalent substitutes such as generic drugs.\36\ We 
stated that we believe these trends could be more effectively analyzed 
by collecting additional ESRD facility cost data following the 2-year 
TDAPA period. We stated that we recognize that although the TDAPA for 
drugs and biological products in existing ESRD PPS functional 
categories enables ESRD facilities to incorporate new renal dialysis 
drugs and biological products into their businesses, additional support 
may be needed to assure continued access to such drugs and biological 
products for Medicare beneficiaries and to support ESRD facilities' 
long-term planning and budgeting. We also recognized the importance of 
providing an appropriate pathway for ESRD facilities to incorporate new 
renal dialysis drugs and biological products into their business 
operations. We noted that in the CY 2019 ESRD PPS final rule in which 
we first established the 2-year TDAPA period for new renal dialysis 
drugs and biological products in an existing ESRD PPS functional 
category (83 FR 56934), we acknowledged that ESRD facilities have 
unique circumstances regarding incorporation of new drugs and 
biological products into their standards of care. For example, we 
stated that when new drugs are introduced to the market, ESRD 
facilities need to analyze their budget and engage in contractual 
agreements to accommodate the new therapies in their care plans. We 
noted that newly launched drugs and biological products can be 
unpredictable regarding their uptake and pricing, which makes these 
decisions challenging for ESRD facilities. Furthermore, we stated that 
practitioners should have the ability to evaluate the appropriate use 
of a new product and its effect on patient outcomes. We noted that we 
agreed this uptake period would be best supported by the TDAPA pathway 
because it would help ESRD facilities transition or test new drugs and 
biological products in their businesses under the ESRD PPS. In the CY 
2024 proposed rule, we stated that we continue to believe the 2-year 
TDAPA period is appropriate and achieves its stated goals. However, we 
also recognized that continuity and predictability is an integral part 
of ESRD facilities' ongoing business operations. We stated that we 
agree with commenters' concerns that a sudden decrease in payments 
after the end of the TDAPA for these products could result in a 
decrease in access for these new renal dialysis drugs and biological 
products. We therefore proposed to establish a new transitional add-on 
payment adjustment that would provide an appropriate transition of the 
level of payment following the TDAPA period for these drugs. For ease 
of reference, we proposed to refer to this add-on payment adjustment as 
the post-TDAPA add-on payment adjustment. We stated that our goals for 
the post-TDAPA add-on payment adjustment are to support Medicare 
beneficiaries' access to new renal dialysis drugs or biological 
products that are used to treat or manage a condition for which there 
is an ESRD PPS functional category and that are therefore considered 
included in the ESRD PPS bundled payment. We

[[Page 76389]]

also stated that we want to support ESRD facilities' long-term planning 
with respect to continuing to budget and plan for new renal dialysis 
drugs and biological products that ESRD facilities have incorporated 
into their businesses during the TDAPA period. In addition, we 
explained that in accordance with the goals of prospective payment 
under the ESRD PPS, our goal for the post-TDAPA add-on payment 
adjustment is to incentivize ESRD facilities to be efficient in the use 
of resources.
---------------------------------------------------------------------------

    \35\ Kidney Care Partners. August 4, 2022. Comment Letter. 
https://kidneycarepartners.org/wp-content/uploads/2022/08/KCP-PPS-Comment-Letter-Part-1-Final.pdf. Accessed May 16, 2023.
    \36\ https://www.fda.gov/drugs/frequently-asked-questions-popular-topics/generic-drugs-questions-answers.
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    We proposed to calculate the post-TDAPA add-on payment adjustment 
following the methodology described in the following subsections for 
any new renal dialysis drug or biological product that is paid for 
using the TDAPA under Sec.  413.234(c)(1). We proposed that the post-
TDAPA add-on payment adjustment would be applied for a period of 3 
years following the end of the TDAPA period for those products. We 
stated that we believe a 3-year payment period would provide sufficient 
time for CMS to analyze cost reports that include costs for the new 
renal dialysis drug or biological product paid for using the TDAPA 
under the ESRD PPS, to incorporate changes as appropriate to the ESRDB 
market basket price proxies. The ESRDB market basket is a fixed-weight, 
Laspeyres-type price index. A Laspeyres-type price index measures the 
change in price, over time, of the same mix of goods and services 
purchased in the base period. We stated that the proposed 3-year 
payment period for the post-TDAPA add-on payment adjustment would allow 
CMS to evaluate how the new drug or biological product affects the 
overall mix of renal dialysis drugs and biological products in the 
ESRDB market basket and to determine the appropriate price proxies for 
such new drug or biological product. We noted that for new renal 
dialysis drugs and biological products that are not considered included 
in the ESRD PPS base rate, the TDAPA is paid until sufficient claims 
data for rate setting analysis for the new renal dialysis drug or 
biological product is available, but not for less than 2 years. 
Similarly, as described earlier in this paragraph, we proposed a 3-year 
payment period for the post-TDAPA add-on payment adjustment, which 
would enable the collection and analysis of sufficient Medicare cost 
report information and would address the concerns that commenters 
raised about the effectiveness of the ESRDB market basket price proxies 
to reflect the prices of new renal dialysis drugs and biological 
products going forward by allowing CMS to incorporate data showing 
trends in use over an adequate period of time. Additionally, we stated 
that we believe a 3-year period for the post-TDAPA add-on payment 
adjustment would be appropriate and consistent with the transition 
period that we finalized at the beginning of the ESRD PPS, when ESRD 
facilities were transitioned from receiving payments under the 
composite rate payment system to receiving payments under the ESRD PPS 
(79 FR 49162). We finalized the transition period for CY 2011 through 
CY 2013 to comply with the requirement of section 1881(b)(14)(E)(i) of 
the Act to provide a 4-year phase-in of the payment amount under the 
ESRD PPS, where full implementation of the ESRD PPS payment would occur 
beginning in the fourth year, CY 2014. We proposed a similar timeline 
to provide an appropriate transition for new renal dialysis drugs and 
biological products in existing ESRD PPS functional categories, which 
are not eligible for a modification to the ESRD PPS base rate. Based on 
the experience of ESRD facilities during the 4-year phase-in from CY 
2011 to CY 2014, ESRD facilities would be familiar with this timeline 
for phasing in major changes that impact their long-term planning and 
budgeting. Lastly, in the interest of transparency, we noted that this 
3-year period would provide time for analysis of utilization data for 
public awareness about the potential need for refinements to the ESRD 
PPS. Therefore, we proposed to calculate and apply the post-TDAPA add-
on payment adjustment for a period of 3 years following the end of the 
TDAPA period, with no post-TDAPA add-on payment adjustment calculated 
beginning in the 4th year.
    We proposed that this post-TDAPA add-on payment adjustment would 
not be budget neutral, as discussed later in this section of the final 
rule. We noted that this post-TDAPA add-on payment adjustment, if 
finalized, would be calculated for Korsuva[supreg], the only renal 
dialysis drug currently receiving the TDAPA, and that payment of this 
post-TDAPA add-on payment adjustment, if finalized, would begin April 
1, 2024, at the end of the TDAPA period for Korsuva[supreg].
    We received several public comments on our proposal to establish a 
post-TDAPA add-on payment adjustment beginning in CY 2024. The comments 
on our proposal and our responses are set forth below.
    Comment: Many commenters, including LDOs, drug manufacturers, 
patient advocacy organizations, coalitions of dialysis organizations, 
and patients, expressed support for establishing a post-TDAPA add-on 
payment adjustment. Commenters expressed that adequate payment is 
necessary to support Medicare beneficiaries' access to both current and 
future new and innovative renal dialysis drugs and biological products.
    Response: We appreciate the support for the proposed post-TDAPA 
add-on payment adjustment. We agree with commenters about the 
importance of adequate payment. As we discussed in the CY 2024 ESRD PPS 
proposed rule and in the following section of this final rule, we 
believe the proposed payment methodology provides a significant level 
of payment that adequately supports beneficiaries' access to drugs and 
biological products after the TDAPA period ends, while sharing a 
significant portion of the cost with ESRD facilities, thereby 
incentivizing ESRD facilities to allocate resources efficiently.
    Comment: MedPAC reiterated several concerns that it previously 
raised in response to the RFI on this topic in the CY 2023 ESRD PPS 
proposed rule. First, MedPAC reiterated its strong opposition to the 
establishment of a post-TDAPA add-on payment adjustment as proposed, 
stating that such a payment adjustment would be duplicative of payment 
under the ESRD PPS base rate. MedPAC specifically identified that when 
Mircera[supreg] (an ESA) became available in 2015, beneficiary access 
to the new drug was not impeded when the agency included it in the ESRD 
PPS bundled payment (in a budget-neutral manner). Between 2015 and 
2020, use of Mircera[supreg] significantly and steadily increased. 
MedPAC further noted that, with respect to Mircera[supreg], one LDO 
announced its intent to have more than 70 percent of the company's ESA 
patients (110,000 patients) switched to Mircera[supreg] (from epoetin 
alfa) by the end of the first quarter of 2016, and sources suggest that 
this LDO reduced its total ESA costs. In addition, MedPAC also 
reiterated its concerns that CMS would not apply a clinical superiority 
standard when implementing the post-TDAPA payment adjustment policy and 
stated that beneficiaries and taxpayers would pay for a new drug 
without evidence that the new product is an advance in medical 
technology that substantially improves beneficiaries' outcomes relative 
to technologies in the ESRD PPS.
    Response: We thank MedPAC for its comments. We recognize and agree 
with MedPAC about the importance of avoiding making payments under a 
post-TDAPA add-on payment adjustment that would be duplicative of 
payment under the ESRD PPS base rate

[[Page 76390]]

or that would undermine competition between new and existing renal 
dialysis services. We anticipate that the post-TDAPA add-on payment 
adjustment will provide appropriate payment that supports Medicare 
beneficiaries' access to new renal dialysis drugs and biological 
products, create stability in payments to ESRD facilities after the end 
of the TDAPA, and appropriately align incentives to promote competition 
between new and existing renal dialysis services. The proposed post-
TDAPA add-on payment adjustment would not be duplicative of payment 
under the ESRD PPS base rate, because it would specifically support 
access to new renal dialysis services at the level observed during the 
most recent 12 months, providing a glidepath for new renal dialysis 
drugs and biological products in existing functional categories 
following the TDAPA, since under Sec.  413.234(c)(1), there is no 
modification to the ESRD PPS base rate. As further discussed below, the 
proposed application of a risk-sharing methodology would account for 
existing substitute drugs and biological products included in the ESRD 
PPS.
    There are several important distinctions between the historical 
inclusion of Mircera[supreg] into the ESRD PPS bundled payment and the 
inclusion of renal dialysis drugs and biological products in existing 
ESRD PPS functional categories that receive TDAPA payment, for which we 
have proposed to calculate the post-TDAPA add-on payment adjustment 
beginning in CY 2024. First, when Mircera[supreg] was incorporated into 
the ESRD PPS bundled payment, CMS had not yet established any TDAPA 
policies, which are integral to the current ESRD PPS drug designation 
process. As we previously stated, section 217(c) of PAMA required the 
Secretary to establish a process for including new injectable and 
intravenous products into the ESRD PPS bundled payment, which CMS 
finalized in the CY 2016 ESRD PPS final rule (80 FR 69013 through 
69027) and codified in our regulations at Sec.  413.234. Under current 
law, new renal dialysis drugs and biological products in existing 
functional categories which qualify for TDAPA payment are generally 
paid for using the TDAPA for a period of 2 years, after which such 
drugs and biological products are considered included in the ESRD PPS 
base rate with no modification to the base rate. As we stated in the CY 
2024 ESRD PPS proposed rule, we recognize continuity and predictability 
are integral parts of ESRD facilities' ongoing business operations. We 
stated that we agree with commenters' concerns that a sudden decrease 
in payments after the end of the TDAPA for these products could result 
in a decrease in access for these new renal dialysis drugs and 
biological products. We therefore proposed to establish a new 
transitional add-on payment adjustment that would provide an 
appropriate transition of the level of payment following the TDAPA 
period for these drugs.
    Importantly, we note that under current regulations at Sec.  
413.234, Mircera[supreg] would not have been eligible for payment under 
the TDAPA, because it was approved under an NDA type that is excluded 
from TDAPA eligibility under Sec.  413.234(e). In contrast to renal 
dialysis drugs and biological products that are paid for using the 
TDAPA, Mircera[supreg] was seen as a direct and less expensive 
substitute for existing renal dialysis drugs included in the ESRD PPS, 
specifically Amgen's anemia management drug Epogen[supreg].\37\ 
Accordingly, as MedPAC noted in its comment letter, ESRD facilities 
broadly adopted Mircera[supreg] into their business practices without 
the need for additional payment. However, as explained earlier, we do 
not consider Mircera[supreg] to be an appropriate comparison to new 
renal dialysis drugs and biological products for which we propose to 
calculate the post-TDAPA add-on payment adjustment, because under 
current regulation Mircera[supreg] would not be eligible to receive 
either the TDAPA or a post-TDAPA add-on payment adjustment.
---------------------------------------------------------------------------

    \37\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4090042/.
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    As we stated in the CY 2024 ESRD PPS proposed rule, we anticipate 
that the structure of the proposed post-TDAPA payment methodology will 
serve to incentivize the use of drugs that represent a substantial 
improvement over existing drugs, which will promote competition between 
new and existing renal dialysis drugs and biological products and drive 
down prices of such new renal dialysis drugs and biological products 
over time. We expect that our methodology for the post-TDAPA add-on 
payment adjustment will incentivize ESRD facilities' efficient use of 
resources, because payment for an individual claim will not be 
dependent on individual utilization of the new renal dialysis drug or 
biological product. Accordingly, we anticipate that under our 
methodology, for new renal dialysis drugs and biological products that 
are not a substantial clinical improvement over existing renal dialysis 
drugs and biological products, utilization will diminish over time and 
the amount of the post-TDAPA add-on payment adjustment will decline 
accordingly.
    In addition, we stated in the CY 2024 ESRD PPS proposed rule that 
we recognize that continuity and predictability is integral to ESRD 
facilities' operations, and we do not think that this principle applies 
only to renal dialysis drugs and biological products that show a 
substantial clinical improvement. As we previously explained in the CY 
2023 ESRD PPS final rule (87 FR 67189), the intent of the ESRD PPS 
functional category framework is to be broad and to facilitate adding 
new drugs to the therapeutic armamentarium of the treating physician. 
As we further explained in the CY 2023 ESRD PPS final rule, the 
functional category structure helps to ensure the ESRD patient has 
broad access to all renal dialysis service drugs, which is a distinct 
benefit to the patient. In addition, the structure of the functional 
categories helps to ensure the treating physician has a broad array of 
drugs to meet the specific, individual needs of each ESRD patient, 
including differing pharmaceutical profiles, comorbidities, contra-
indications with other drugs the patient may be taking, and personal 
patient preference (87 FR 67189). We do not think that limiting the 
post-TDAPA add-on payment adjustment based on CMS's determination of 
substantial clinical improvement would align with this stated intent of 
the ESRD PPS functional category framework to support broad access to 
all renal dialysis service drugs. We further note that the current 
TDAPA exclusion criteria under Sec.  413.234(e) consider FDA's 
determination of the drug's NDA type or approval under section 505(j) 
of the Federal Food, Drug, and Cosmetic Act, which is less subjective 
than a determination of substantial clinical improvement. Therefore, we 
continue to be of the view that the proposed methodology most 
appropriately balances the need to provide adequate payment with the 
concerns that MedPAC raised regarding duplicative payment and clinical 
superiority or substantial clinical improvement.
    Comment: Many commenters expressed concerns about the proposed 3-
year duration for the post-TDAPA add-on payment adjustment. Several 
commenters stated that the 3-year period would create a new payment 
cliff at the end of the 3-year post-TDAPA period and advocated for a 
permanent, non-budget neutral payment adjustment.
    Response: We appreciate the concerns that commenters raised about 
the

[[Page 76391]]

proposed 3-year period for the post-TDAPA add-on payment adjustment. We 
recognize that the policy would not permanently maintain increased 
payments for new renal dialysis drugs and biological products that 
receive the TDAPA, and we do not believe that such a permanent increase 
in payments would be appropriate. The TDAPA for renal dialysis drugs 
and biological products in existing functional categories is inherently 
transitional in nature and therefore not permanent. As we discussed in 
the CY 2019 and CY 2020 ESRD PPS final rules (83 FR 56935; 84 FR 
60654), for new renal dialysis drugs and biological products that fall 
into an existing ESRD PPS functional category, the TDAPA helps ESRD 
facilities to incorporate the new drugs and biological products and 
make appropriate changes in their businesses to adopt such products. We 
also explained that the TDAPA provides additional payments for such 
associated costs and promotes competition among the products within the 
ESRD PPS functional categories, while focusing Medicare resources on 
products that are innovative. Accordingly, we proposed a post-TDAPA 
add-on payment adjustment beginning in CY 2024 that is similarly 
transitional in nature and which provides a glidepath for inclusion of 
such new renal dialysis drugs and biological products into the ESRD 
PPS. In the CY 2024 ESRD PPS proposed rule, we stated that a 3-year 
period for the post-TDAPA add-on payment adjustment would be consistent 
with the transition period that was finalized at the beginning of the 
ESRD PPS, when ESRD facilities were transitioned from receiving 
payments under the composite rate payment system to receiving payments 
under the ESRD PPS (79 FR 49162). We finalized the transition period 
for CY 2011 through CY 2013, with full implementation in CY 2014, to 
comply with the requirement of section 1881(b)(14)(E)(i) of the Act to 
provide a 4-year phase-in of the payment amount under the ESRD PPS. We 
proposed a similar timeline for the post-TDAPA add-on payment 
adjustment to provide an appropriate transition for new renal dialysis 
drugs and biological products in existing ESRD PPS functional 
categories, which are not eligible for a modification to the ESRD PPS 
base rate.
    Comment: MedPAC encouraged CMS to clarify why an additional period 
of 3 years is appropriate for the proposed post-TDAPA add-on payment 
adjustment, as compared to the established 2-year TDAPA period for new 
renal dialysis drugs and biological products in existing functional 
categories. MedPAC stated that a post-TDAPA period is not needed to 
collect and analyze cost report data, and that if CMS has concerns 
about the price proxies for ESRD drugs used in the ESRDB market basket, 
CMS can conduct the necessary analyses, without creating the post-TDAPA 
add-on payment adjustment policy. In addition, MedPAC questioned the 
utility of current cost reports to evaluate whether the ESRDB market 
basket accounts for price changes of new ESRD drugs, since Medicare 
cost reports do not require providers to report the cost of each new 
item or product paid under a TDAPA or a TPNIES.
    Response: As we previously discussed, we proposed to pay the post-
TDAPA add-on payment adjustment for a period of 3 years following the 
payment of TDAPA for 2 years, to allow more complete cost reporting 
information to become available. CMS routinely rebases and revises the 
ESRDB market basket and price proxies, usually every four to five 
years, incorporating more recent cost report information. We agree with 
MedPAC that a post-TDAPA period is not strictly necessary to collect 
more recent cost report information. However, as we stated in the CY 
2024 ESRD PPS proposed rule, we think that providing a post-TDAPA add-
on payment adjustment during this period would provide stability in 
ESRD PPS payments while CMS analyzes such information.
    The existing 2-year TDAPA period provides useful information about 
ESRD facilities' spending on drugs and biological products paid for 
using the TDAPA, but due to lags in the timing of when ESRD facilities 
submit their cost reports, such data would not become available in ESRD 
facilities' cost report information until after the end of the TDAPA 
period. For example, CMS generally uses Medicare cost report data that 
lags by approximately 3 to 4 years prior to the rulemaking year. 
Therefore, complete Medicare cost report data for CY 2023 or CY 2024 
could be used to consider changes to market basket cost categories, 
cost weights, and price proxies for the CY 2026 or CY 2027 rulemaking 
cycle. As proposed, the post-TDAPA add-on payment adjustment would 
begin to be paid on April 1, 2024, based on utilization of 
Korsuva[supreg], the only renal dialysis drug currently receiving the 
TDAPA, and would end no later than March 31, 2027. CMS would be able to 
analyze Medicare cost report data for CY 2023 and CY 2024 to consider 
changes to the ESRDB market basket for CY 2027 rulemaking, if 
appropriate. The proposed post-TDAPA add-on payment adjustment would 
provide appropriate payment stability for ESRD PPS payments to ESRD 
facilities during the intervening years, which would support 
beneficiaries' continued access to new renal dialysis drugs and 
biological products.
    With respect to the question of the utility of Medicare cost report 
data, we think that more recent cost reports, which would include 
information about total drug spending across categories, would provide 
meaningful information about how new renal dialysis drugs and 
biological products affect ESRD facilities' costs. Although TDAPA and 
TPNIES costs are not reported separately, if spending for new renal 
dialysis drugs and biological products is driving significant increases 
in ESRD facilities' costs, more recent Medicare cost report data will 
inform CMS's understanding of how such spending affects the ESRDB 
market basket composition. We would also evaluate Part B spending data 
to determine the mix of the types of drugs and the appropriate price 
proxy based on changes to the relative mix of drugs used in the ESRD 
facility setting. Nevertheless, we recognize the limitations of the 
current Medicare cost reports that MedPAC identified, and we may 
consider changes in the future to improve the data that we collect 
through the Medicare cost report.
    Final Rule Action: After consideration of the comments, we are 
finalizing as proposed to establish, beginning for CY 2024, a post-
TDAPA add-on payment adjustment for any new renal dialysis drug or 
biological product that is considered included in the ESRD PPS base 
rate that is paid for using the TDAPA under Sec.  413.234(c)(1). This 
post-TDAPA add-on payment adjustment will be applied for a period of 3 
years following the end of the TDAPA period for those products.
(a) Calculation of the Post-TDAPA Add-On Payment Adjustment
    As discussed earlier in this section of the final rule, we proposed 
to establish a new add-on payment adjustment for certain new renal 
dialysis drugs and biological products in existing ESRD PPS functional 
categories after the end of the TDAPA period. In the CY 2024 ESRD PPS 
proposed rule, we proposed to apply the post-TDAPA add-on payment 
adjustment to all ESRD PPS payments beginning at the end of a new renal 
dialysis drug or biological product's TDAPA period. Specifically, we 
proposed that the post-TDAPA add-on payment adjustment would begin 8 
calendar quarters after the beginning of

[[Page 76392]]

the first calendar quarter in which TDAPA payment is made for the new 
renal dialysis drug or biological product in an existing ESRD PPS 
functional category and would end no later than the 12th calendar 
quarter after the last calendar quarter in which TDAPA payment is made. 
We stated that we believe our calculation of the post-TDAPA add-on 
payment adjustment would be the most appropriate to address the patient 
access concerns we discussed in the CY 2023 ESRD PPS proposed rule and 
in this section of the final rule, and the most consistent with the 
principles of prospective payment. We stated that this proposal would 
apply the patient-level adjustment factors to the post-TDAPA add-on 
payment adjustment amount paid on each claim, which would ensure that 
ESRD PPS payment would support access to new renal dialysis drugs and 
biological products for beneficiaries with conditions that are costlier 
to treat, in alignment with our goals as stated earlier in this final 
rule. We proposed to codify the payment of the post-TDAPA add-on 
payment adjustment as part of the per treatment payment amount at Sec.  
413.230(f). We proposed to codify the methodology for calculating the 
post-TDAPA add-on payment adjustment at Sec.  413.234(g). We proposed 
to make additional changes under Sec.  413.234(b) and (c) to address 
payment of the post-TDAPA payment adjustment.
    In determining the calculation of the post-TDAPA add-on payment 
adjustment, we considered the comments that we received regarding the 
RFI in the CY 2023 ESRD PPS proposed rule. Some commenters expressed 
that new and innovative drugs may only be used by a small percentage of 
the dialysis population and suggested that an add-on payment adjustment 
should address patient-specific needs to support access.
    First, we considered calculating the post-TDAPA add-on payment 
adjustment as the average cost for patients that used the new renal 
dialysis drug or biological product that was previously paid for using 
the TDAPA under the ESRD PPS and applying the post-TDAPA add-on payment 
adjustment only to claims that include the new renal dialysis drug or 
biological product. However, we were concerned that such an approach 
would not align with the principles of prospective payment under the 
ESRD PPS. As we noted previously, a central objective of the ESRD PPS 
(and of prospective payment systems in general) is for ESRD facilities 
to be efficient in their resource use. Under a PPS, Medicare makes 
payments based on a predetermined, fixed amount that reflects the 
average patient, and CMS acknowledges there will be patients whose 
treatment costs at an ESRD facility will be more or less than the ESRD 
PPS payment amount. Additionally, we were concerned that such an 
approach would result in a substantial cost burden for beneficiaries 
who use the new renal dialysis drug or biological product, because they 
incur a 20 percent coinsurance under Part B for renal dialysis 
services. We stated that we do not believe this approach would align 
with our priorities to reduce drug costs for Medicare beneficiaries. In 
contrast, our proposed methodology would apply the post-TDAPA add-on 
payment adjustment to all ESRD PPS payments, which would result in a 
minimal increase in per-treatment coinsurance amounts for all 
beneficiaries. As discussed later in this section, we proposed to apply 
the ESRD PPS patient-level adjustments to the post-TDAPA add-on payment 
adjustment for each treatment.
    Next, we considered applying the post-TDAPA add-on payment 
adjustment based only on claims from ESRD facilities that used the new 
renal dialysis drug or biological product during the TDAPA period. 
However, like the previous option, we stated that we believe limiting 
application of this add-on payment adjustment to claims from ESRD 
facilities that include the new renal dialysis drug or biological 
product would be inconsistent with the principles of prospective 
payment. As we discussed in the CY 2011 ESRD PPS final rule, there are 
patients whose medical treatment results in more costly care as well as 
those with less costly care, and the ESRD PPS bundled base rate 
reflects Medicare payment for the average ESRD patient (75 FR 49045). 
Further, we were concerned that limiting the post-TDAPA add-on payment 
adjustment to claims from ESRD facilities that use the new renal 
dialysis drug or biological product could result in substantial 
overestimation of the post-TDAPA add-on payment adjustment, if more 
ESRD facilities begin using the new renal dialysis drug or biological 
product. As we discuss later in this final rule, we proposed to apply 
this post-TDAPA add-on payment adjustment in a non-budget neutral 
manner. Therefore, we stated in the CY 2024 ESRD PPS proposed rule that 
we were concerned that an overestimation of the post-TDAPA add-on 
payment adjustment could result in an inappropriate increase in 
Medicare expenditures. As we discussed in the CY 2019 and CY 2020 ESRD 
PPS final rules (83 FR 56935; 84 FR 60654), for new renal dialysis 
drugs and biological products that fall into an existing ESRD PPS 
functional category, the TDAPA helps ESRD facilities to incorporate the 
new drugs and biological products and make appropriate changes in their 
businesses to adopt such products, provides additional payments for 
such associated costs, and promotes competition among the products 
within the ESRD PPS functional categories, while focusing Medicare 
resources on products that are innovative. We stated that we believe 
after the end of the TDAPA period, ESRD facilities will have made 
appropriate changes in their business models to adopt such products, 
and therefore any approach to a post-TDAPA add-on payment adjustment 
should apply equally to all ESRD PPS treatments, in order to apply the 
appropriate incentive structures for ESRD facilities' utilization of 
renal dialysis drugs and biological products and to continue to promote 
competition among the products within the ESRD PPS functional 
categories, including the new renal dialysis drug or biological product 
that was previously paid for using the TDAPA under the ESRD PPS. 
Furthermore, we stated that we believe that such an approach would help 
to support access to new renal dialysis drugs and biological products 
to the widest scope of beneficiaries. This is in line with CMS's 
commitment to advance health equity by supporting access to renal 
dialysis services.
    Accordingly, we proposed to apply the post-TDAPA add-on payment 
adjustment to each ESRD PPS treatment, and to adjust it for patient 
characteristics. In other words, the post-TDAPA add-on payment 
adjustment would be multiplied by the ESRD PPS patient-level 
adjustments under Sec.  413.235. We stated that we believe this 
approach would appropriately adjust aggregate ESRD PPS payment to 
account for the new renal dialysis drugs and biological products in a 
way that is consistent with the principles of prospective payment and 
would support beneficiary access to new renal dialysis drugs and 
biological products by recognizing the additional patient-specific 
needs associated with the existing ESRD PPS case-mix adjusters. We 
noted that to calculate an appropriate post-TDAPA add-on payment 
adjustment, we would apply a case-mix standardization factor to the 
post-TDAPA add-on payment adjustment amount as discussed in the 
following paragraphs.
    In addition, we explained that we considered the public comments 
regarding the need to reconcile

[[Page 76393]]

estimated expenditures for a new renal dialysis drug or biological 
product with the declines in expenditures for related drugs. We noted 
that commenters expressed support for establishing a methodology that 
would consider the decline in estimated expenditures for drugs that are 
clinically or empirically related to the new renal dialysis drug or 
biological product. We explained that such a methodology would be 
highly complex and less transparent than other potential options that 
commenters suggested. We also explained that commenters in the past 
noted various ideas that CMS would need to consider when attempting to 
establish the offsetting financial effects of drugs and biological 
products that are either clinically or empirically related to the new 
renal dialysis drug or biological product. For example, most commenters 
suggested that CMS use drugs with the same FDA clinical indication to 
offset the payment adjustment, in the interest of transparency and 
objectivity. However, some commenters, including MedPAC, noted that 
they do not believe that FDA determinations or ESRD PPS functional 
categories should be the basis of eligibility for the post-TDAPA 
payment adjustment, as CMS should make these determinations based on 
the specific needs of the Medicare population. We stated that we 
believe such considerations based on specific population needs could be 
less transparent than alternative approaches, especially in situations 
when there could, in the future, be multiple new renal dialysis drugs 
or biological products for which we would be calculating multiple 
offset adjustments. We stated that we anticipate it would be 
challenging for CMS to determine, within the annual rulemaking 
timeframes, the extent to which changes in the utilization of existing 
renal dialysis drugs and biological products are clinically or 
empirically related to utilization of a new renal dialysis drug or 
biological product paid for using the TDAPA. We noted that the latest 
available data at the time of the proposed rulemaking included less 
than a full year of TDAPA utilization. We explained that we anticipate 
that as additional data are collected, CMS will be able to analyze 
trends and may be able to retrospectively determine the extent of any 
substitution effects between new and existing renal dialysis drugs and 
biological products. Furthermore, we noted that the calculation of 
these offsets could involve multiple overlapping periods of time, which 
would further increase complexity and reduce transparency. As an 
alternative, we explained that we considered MedPAC's suggestion to 
align the methodology closer to that of the ESRD PPS TPNIES, wherein 
CMS pays a reduced percentage of the estimated incremental cost of a 
new product as a risk-sharing mechanism with ESRD facilities and to 
provide a disincentive for significant increases in drug prices. Under 
the TPNIES, CMS calculates the TPNIES amount as 65 percent of the MAC-
determined price for certain new and innovative equipment and supplies 
(Sec.  413.236(f)). We stated that we believe this approach would have 
the same general effect of accounting for declines in other drug 
expenditures, while being significantly less complex and more 
transparent. In the CY 2020 ESRD PPS final rule that established the 65 
percent cost-sharing proportion for the TPNIES, we stated that the goal 
of the TPNIES was to support ESRD facility use of new and innovative 
renal dialysis equipment and supplies (84 FR 60692). In that same CY 
2020 ESRD PPS final rule, we further stated in response to comments 
that we believe that we need to balance this goal with sharing risk for 
the new product (84 FR 60697). We noted that one goal of the post-TDAPA 
add-on payment adjustment is to support continued access to new renal 
dialysis drugs and biological products and to support ESRD facilities' 
long-term planning and budgeting for such drugs after the TDAPA period. 
Additionally, we stated that our goal is also to incentivize efficient 
use of resources, consistent with the principles of prospective payment 
under the ESRD PPS. We explained that we believe applying a cost-
sharing proportion of 65 percent to the post-TDAPA add-on payment 
adjustment would effectively achieve these goals, because it would 
provide a significant level of payment that supports access for 
beneficiaries and long-term planning for ESRD facilities, while 
incentivizing ESRD facilities to efficiently allocate resources by 
sharing a significant portion of the cost with ESRD facilities. 
Furthermore, we stated that this 65 percent cost-sharing factor would 
serve to further reduce the minimal cost-sharing burden of new renal 
dialysis drugs and biological products for beneficiaries, under the 
post-TDAPA add-on payment methodology. Lastly, we noted that for home 
dialysis machines that are capital-related assets that qualify for the 
TPNIES, our policy is to apply an offset to account for such capital-
related assets in the ESRD PPS base rate. As we discussed previously, 
we considered applying an offset to the post-TDAPA add-on payment 
adjustment; however, we believe that considerations based on specific 
population needs could be less transparent than applying a simple 65-
percent risk-sharing percentage. Additionally, we noted that in the 
future, there could be multiple new renal dialysis drugs or biological 
products for which we would be calculating multiple offset adjustments, 
which would further increase complexity and reduce transparency. We 
solicited comments on whether there are other ways CMS could consider 
calculating an offset amount for the post-TDAPA payment adjustment. 
Alternatively, we sought comment on if there are other ways CMS could 
ensure any growth in post-TDAPA add-on payment adjustment amounts is 
reasonable, such as not allowing increases to exceed inflation or other 
relevant metrics.
    We proposed to calculate the post-TDAPA add-on payment adjustment 
annually, based on the latest available full calendar quarter of 
average sales price (ASP) data, which would be consistent with the 
current policy for determining the basis of payment for the TDAPA. We 
stated that under current policy, finalized in the CY 2020 ESRD PPS 
final rule (84 FR 60679), we pay the TDAPA based on 100 percent of ASP. 
If ASP is not available, we base the TDAPA payment adjustment on 
wholesale acquisition cost (WAC), and if WAC is not available, then we 
base payment on invoice pricing. As we stated in the CY 2020 ESRD PPS 
final rule, we continue to believe that after the TDAPA period, 
calculating the post-TDAPA add-on payment adjustment for new renal 
dialysis drugs based on ASP, as compared to WAC or invoice pricing, 
would be the most appropriate choice for the ESRD PPS, and would strike 
the right balance in supporting ESRD facilities in their uptake of 
innovative, new renal dialysis drugs and biological products and 
limiting increases to Medicare expenditures. We proposed to address the 
annual calculation of the post-TDAPA add-on payment adjustment in the 
annual proposed and final ESRD PPS rules for future years.
    As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42472), 
under current TDAPA policy, if CMS stops receiving ASP during the TDAPA 
period, then CMS will stop paying the TDAPA after 2 calendar quarters. 
Similarly, we explained that if drug manufacturers were to stop 
submitting ASP data for products that are included in the calculation 
of the post-TDAPA add-on payment adjustment, and we had to revert to 
basing calculation of the post-TDAPA add-on payment

[[Page 76394]]

adjustment on WAC or invoice pricing, we believe we would be overpaying 
for the add-on payment adjustment. Therefore, we proposed to make 
payment of the post-TDAPA add-on payment adjustment conditional on 
receiving ASP data. Because the post TDAPA add-on payment adjustment 
would be calculated annually rather than quarterly, we proposed that if 
CMS does not receive the latest full calendar quarter of ASP data for a 
drug that would be included in the calculation of the post-TDAPA add-on 
payment adjustment, then CMS would not include that drug in the 
calculation of the post-TDAPA add-on payment adjustment for any future 
years. We also proposed that if CMS stops paying the TDAPA for a drug 
or biological product because CMS stops receiving the latest full 
calendar quarter of ASP data, then we would not include that drug or 
biological product in the calculation of the post-TDAPA add-on payment 
adjustment for the next CY or any future CY. Consistent with our policy 
for calculating the TDAPA, as discussed in section II.B.1.k of the 
proposed rule, we proposed that in situations when a manufacturer 
reports zero or negative sales, we would consider CMS to have received 
the latest full calendar quarter of ASP data, but we would calculate 
the post-TDAPA payment adjustment based on WAC, or if WAC is not 
available, on invoice pricing, in such circumstances.
    Finally, we proposed that for each of the 3 years for which this 
post-TDAPA add-on payment adjustment would be paid, we would update the 
amount of the post-TDAPA add-on payment adjustment by the productivity-
adjusted ESRDB market basket update to account for estimated future 
input price changes faced by ESRD facilities. We solicited comment on 
whether it would be more appropriate to consider using the growth in 
the price proxy for the pharmaceuticals cost category in the ESRDB 
market basket, rather than the productivity-adjusted ESRDB market 
basket update. We also provided a detailed set of steps for calculating 
the amount of the proposed post-TDAPA add-on payment adjustment for CY 
2024, which we calculated at $0.0961 for the proposed rule. We 
solicited comments on this proposed methodology for a post-TDAPA add-on 
payment adjustment and its appropriateness for CY 2024 and future 
years.
    We received public comments on our proposed methodology for 
calculating the post-TDAPA add-on payment adjustment. The comments on 
our proposal and our responses are set forth below.
    Comment: Many commenters, including LDOs, drug manufacturers, and 
patient advocacy organizations, expressed concerns that the proposed 
methodology would not support access to new and innovative renal 
dialysis drugs and biological products. Commenters stated that the 
proposed amount would provide a level of funding that supports the 
provision of drugs and biological products currently paid for using the 
TDAPA to only a small proportion of patients and would not support 
expanded access to such drugs. One commenter stated that CMS policy 
must recognize that practice follows payment and provided an example of 
certain payment policy changes in the SNF PPS, specifically the recent 
transition from the SNF Resource Utilization Group payment system to 
the Patient-Driven Payment Model (83 FR 39162), which the commenter 
stated drove subsequent utilization patterns in that system by reducing 
incentives for overutilization of certain rehabilitative therapies.
    Response: We disagree with commenters who stated that the amount of 
the proposed post-TDAPA add-on payment adjustment would not support 
access to new and innovative renal dialysis drugs and biological 
products. Because the proposed methodology is based on the latest 
available price and utilization information, we believe it provides an 
adequate level of funding to maintain access to new renal dialysis 
drugs and biological products after the end of the TDAPA period. We 
note that the proposed amount of the post-TDAPA add-on payment 
adjustment for CY 2024 reflects utilization of current TDAPA drugs by a 
small proportion of ESRD beneficiaries, amounting to less than 1 
percent of all treatments. Although the payment per treatment is a 
relatively small amount, an ESRD facility's aggregate payments under 
the proposed post-TDAPA add-on payment adjustment methodology would 
nonetheless help to support the utilization for new renal dialysis 
drugs and biological products at the level of utilization observed 
during the TDAPA period. We note that, as discussed later in this final 
rule, we are calculating the final amount of the post-TDAPA add-on 
payment adjustment for CY 2024 to be significantly higher than the CY 
2024 ESRD PPS proposed rule, based on the latest available price and 
utilization data.
    Lastly, we appreciate the concerns that the commenter raised 
regarding utilization patterns as the result of payment policies, and 
we are acutely aware of the importance of establishing payment 
adjustments in the ESRD PPS that are aligned with the principles of 
prospective payment. We anticipate that the post-TDAPA payment 
methodology that we are finalizing will provide an appropriate level of 
funding to support access to new renal dialysis drugs and biological 
products after the end of the TDAPA, without providing a direct 
incentive to use any particular new drug or biological product, which 
we anticipate could result in overutilization.
    Comment: MedPAC stated that although it strongly disagrees with the 
implementation of a post-TDAPA add-on payment adjustment, it recognizes 
that CMS's proposed per claim add-on payment approach provides better 
incentives for more judicious use of a new renal dialysis drug rather 
than a per use add-on payment approach. MedPAC reiterated that paying 
on a per unit basis for a drug incentivizes its use (to the extent 
clinically possible) and recommended that if CMS finalizes the post-
TDAPA add-on payment adjustment, the agency should proceed with a per 
claim add-on payment. MedPAC also expressed support for the proposed 65 
percent risk-sharing percentage as an incentive for price competition.
    Response: We appreciate MedPAC's qualified support for the proposed 
methodology. We agree with MedPAC that the proposed per-treatment 
methodology would appropriately align incentives for ESRD facilities to 
be efficient with their resources, and as a result it would foster 
competition between new and existing renal dialysis drugs and 
biological products. We also agree that the proposed application of a 
risk-sharing percentage would provide a further incentive for price 
competition between drugs within an ESRD PPS functional category. As we 
discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42462), we 
anticipate that the proposed risk sharing percentage of 65 percent 
would be appropriate, as it would provide a significant level of 
payment that supports access for beneficiaries and long-term planning 
for ESRD facilities, while incentivizing ESRD facilities to allocate 
resources efficiently.
    Comment: Several commenters advocated for an alternative 
methodology that would calculate an add-on payment adjustment based on 
the average cost for patients that use the new renal dialysis drug or 
biological product. Commenters stated that the proposed methodology for 
the post-TDAPA add-on payment adjustment, and the structure of the ESRD 
PPS overall, do not address the needs of the non-average patient. 
Several

[[Page 76395]]

commenters drew parallels to the comprehensive ambulatory payment 
classification (C-APC) complexity adjustment in the Hospital OPPS as an 
example of a payment policy that adjusts payment based on patient 
characteristics.
    Response: We appreciate the suggested methodology for which these 
commenters advocated but do not agree that such a methodology would be 
appropriate, because it would directly incentivize utilization of a 
particular drug or biological product, which can result in 
overutilization. As we discussed earlier in this final rule, we believe 
that the proposed methodology provides the most appropriate incentives 
for ESRD facilities to be efficient with resources, while providing an 
appropriate level of payment that supports access to new renal dialysis 
drugs and biological products.
    Additionally, we disagree with several of the premises that 
commenters offered with respect to the proposed methodology for 
calculating the post-TDAPA add-on payment adjustment. Specifically, 
commenters stated that both the proposed post-TDAPA methodology and the 
ESRD PPS are designed to meet the needs of the average patient and do 
not meet the needs of the non-average patient. In fact, the ESRD PPS 
base rate is not constructed to address the needs of the average 
patient, but rather to provide a level of payment that reflects the 
average per-treatment costs of renal dialysis services. As we discussed 
in the CY 2011 ESRD PPS final rule (75 FR 49037), in response to 
concerns that bundling payment for drugs like EPO and oral medications 
would limit nephrologists from prescribing what is necessary, we stated 
that the ESRD PPS would establish a bundled payment system based on the 
average cost of care with adjustments that target more payment to more 
resource intensive ESRD patients. We further explained that in 
situations where costs for treating patients exceed an established 
threshold, the outlier policy would apply. Later in the same CY 2011 
ESRD PPS final rule (75 FR 49047) we explained that the ESRD PPS 
provides an opportunity for ESRD facilities to make financially sound 
decisions while providing necessary care, recognizing that some 
patients may utilize less renal dialysis items and services while 
others may use more. In other words, while some patients cost more than 
average and others cost less, an ESRD facility's aggregate payments 
under the ESRD PPS are reflective of the overall cost of providing 
renal dialysis services to its patients. The ESRD PPS includes patient-
level and facility-level adjustments that better align payment with 
resource use for facilities that incur higher costs due to their 
patient population or geographic location.
    We do not believe that the OPPS C-APC complexity adjustment is an 
appropriate comparison to the proposed post-TDAPA payment amount, which 
as we previously noted will be applied in a non-budget-neutral manner 
and is intended to provide a transitional level of payment that 
supports ESRD facilities' long-term planning and budgeting and supports 
beneficiaries' access to new renal dialysis drugs and biological 
products. In contrast, the OPPS C-APC complexity adjustment is budget 
neutral under the OPPS and is intended to provide increased payment 
when certain service combinations represent a complex, costly, or more 
resource-intensive version of the primary service. As an example, we 
believe a more appropriate payment mechanism to recognize the 
additional costs of treating ESRD patients with pruritus may be a 
patient-level adjustment under the ESRD PPS. As we discuss in section 
II.B.1.j of this final rule, we are collecting additional information 
on dialysis duration and may consider future revisions to the ESRD PPS 
case-mix adjustments, if appropriate.
    Comment: Several commenters responded to our comment solicitation 
on the methodology for applying the productivity-adjusted ESRDB market 
basket update, or an alternative update factor, to the proposed post-
TDAPA add-on payment adjustment. Commenters generally advocated for 
applying a pharmaceutical price proxy, rather than the productivity-
adjusted ESRDB market basket update, stating that a pharmaceutical 
price proxy would be more representative of anticipated future price 
growth for new renal dialysis drugs and biological products. Commenters 
requested clarification about whether CMS would recalculate the post-
TDAPA add-on payment adjustment annually for each of the three years, 
in addition to applying an update factor as proposed. Several 
commenters requested that CMS calculate the post-TDAPA add-on payment 
adjustment at the end of the TDAPA period, and then annually update 
that amount based on an update factor such as a pharmaceutical price 
proxy. MedPAC expressed concern about a payment methodology in which 
the payment amount would only increase and suggested alternative 
approaches to update the amount of the post-TDAPA add-on payment 
adjustment annually.
    Response: We thank commenters for their comments regarding the 
proposed update methodology for the post-TDAPA add-on payment 
adjustment. We proposed to use the most recent available price and 
utilization information to determine a per-treatment amount for each of 
the three years during which a post-TDAPA add-on payment adjustment 
would apply. We are clarifying in this rule that we would annually 
recalculate the post-TDAPA add-on payment adjustment, based on the most 
recent available price and utilization information at the time of 
rulemaking. Accordingly, the post-TDAPA add-on payment adjustment 
amount could increase or decrease from year to year, depending on 
changes in pricing and utilization. We note that although we proposed 
to apply the productivity-adjusted ESRDB market basket update, we 
proposed to do so only for the purpose of updating the post-TDAPA add-
on payment adjustment to reflect anticipated prices in the target year. 
We did not propose, and are not finalizing, the application of an 
update factor to update the amount of the post-TDAPA add-on payment 
adjustment from one payment year to the next.
    We appreciate the comments recommending the use of the 
pharmaceutical price proxy rather than the productivity-adjusted market 
basket update. We agree with commenters that a pharmaceutical price 
proxy would more effectively track the change in prices for new renal 
dialysis drugs and biological products than would the market basket 
update. We are finalizing that for each year that we calculate a post-
TDAPA add-on payment adjustment, we will apply the projected growth in 
the ESRDB market basket price growth for pharmaceuticals, which 
reflects the weighted blend of the ESA and non-ESA price proxies in the 
2020-based ESRDB market basket, to reflect anticipated pricing for the 
target year. We refer readers to the CY 2023 ESRD PPS final rule (87 FR 
67149) for a detailed discussion of the construction of this price 
proxy.
    Comment: Several commenters opposed the application of a 65 percent 
risk sharing percentage and urged CMS to instead calculate and apply an 
offset based on actual utilization of related drugs. Many commenters 
suggested that CMS limit the calculation of an offset to the post-TDAPA 
add-on payment adjustment that accounts for the actual spending for 
products that are in the same ESRD PPS functional category as the new 
renal dialysis drug or biological

[[Page 76396]]

product and are directly impacted by the drug or biological product.
    Response: As we discussed in the CY 2024 ESRD PPS proposed rule, we 
did not propose to calculate an offset based on utilization, because we 
are concerned that this approach would be more burdensome and less 
transparent than the proposed 65 percent risk-sharing percentage. We do 
not believe it would be appropriate to limit the calculation of an 
offset to just drugs and biological products in the same functional 
category, because we recognize that utilization of drugs in one 
functional category can affect the utilization of drugs in other 
functional categories. For example, utilization of drugs in the bone 
and mineral metabolism functional category can indirectly affect the 
incidence of itching among dialysis patients. However, if we were to 
apply a per-treatment offset based on changes in spending for all 
formerly separately billable drugs and biological products, it would be 
difficult to determine definitively which reductions in spending were 
related to a new renal dialysis drug or biological product.
    Comment: One commenter pointed out that the CY 2024 ESRD PPS 
proposed rule does not indicate whether the ESRD PPS outlier adjustment 
would apply to products for which a post-TDAPA add-on payment 
adjustment is calculated.
    Response: We appreciate the request for clarification regarding 
outlier eligibility for drugs and biological products during the post-
TDAPA period. Under current policy, after the end of the TDAPA period, 
a drug or biological product is considered an eligible outlier service 
only if it meets the requirements of Sec.  413.237(a)(1). We are 
clarifying that any renal dialysis drug or biological product included 
in the calculation of the post-TDAPA add-on payment adjustment would be 
considered an eligible ESRD outlier service only if it meets the 
requirements of Sec.  413.237(a)(1). However, we are further clarifying 
that under current policy, Korsuva[supreg], the only renal dialysis 
drug whose TDAPA period will end in CY 2024, will not be considered an 
eligible outlier ESRD service after the end of its TDAPA period, 
because it is a substitute for diphenhydramine hydrochloride, which was 
included in the composite rate prior to 2011, and therefore does not 
meet the requirements of Sec.  413.237(a)(1) (that is, it would not 
have been, prior to January 1, 2011, separately billable under Medicare 
Part B).
    Final Rule Action: After considering the comments, we are 
finalizing as proposed the methodology to calculate the amount of the 
post-TDAPA add-on payment adjustment, except that, as noted previously, 
we will apply the price growth of the pharmaceutical cost category, 
reflecting a weighted blend of the ESA and non-ESA price proxies in the 
2020-based ESRDB market basket, to adjust the amount of the post-TDAPA 
add-on payment adjustment to reflect anticipated pricing for the target 
year rather than using the productivity-adjusted ESRDB market basket 
update. Therefore, we will use the following calculation to determine 
the amount of the post-TDAPA add-on payment adjustment to be applied to 
each ESRD PPS treatment.
     Step 1, using the most recent available 12 months of 
claims data, calculate the total expenditure of the new renal dialysis 
drug or biological product being paid for using the TDAPA under the 
ESRD PPS. Total expenditure is calculated by multiplying the latest 
available full calendar quarter of ASP data for the new renal dialysis 
drug or biological product by the quantity of units billed. If CMS does 
not receive the latest available calendar quarter of ASP data for a 
drug or biological product, then CMS would not apply the post-TDAPA 
add-on payment adjustment for that drug or biological product. As we 
noted earlier, if the latest available full calendar quarter of ASP 
data reflects zero or negative sales, CMS will calculate the post-TDAPA 
add-on payment adjustment based on WAC, or if WAC is not available, 
invoice pricing.
     Step 2, divide the total expenditure of the new renal 
dialysis drug or biological product from Step 1 by the total number of 
ESRD PPS treatments furnished during the same 12-month period as used 
in Step 1. The resulting quotient from Step 2 is the post-TDAPA add-on 
payment adjustment amount for each treatment, before applying the 
reduction factor to account for case-mix standardization, as described 
in Step 4.
     Step 3, calculate the dollar amount of the total aggregate 
case-mix adjusted post-TDAPA add-on payment adjustment amount by 
multiplying the post-TDAPA add-on payment adjustment amount from Step 2 
by the applicable patient-level adjustments for each ESRD PPS treatment 
furnished during the 12-month period.
     Step 4, divide the aggregate case-mix adjusted add-on 
payment adjustment amount from Step 3 by total expenditure from Step 1. 
The resulting quotient is the reduction factor applied to the post-
TDAPA add-on payment adjustment amount to account for case-mix 
standardization.
     Step 5, apply the reduction factor from Step 4 to the 
post-TDAPA add-on payment adjustment amount from Step 2.
     Step 6, apply the 65 percent risk-sharing factor to the 
amount from Step 5 to calculate the case-mix adjusted post-TDAPA add-on 
payment adjustment amount.
     Step 7, multiply the case-mix adjusted post-TDAPA add-on 
payment adjustment amount by the growth in the ESRDB market basket 
price proxy for pharmaceuticals to account for anticipated price growth 
to the target year.
    We are amending Sec.  413.234 by revising Sec.  413.234(c)(1)(i) 
and adding regulations at Sec.  413.234(b)(1)(iii), (c)(1)(ii), (c)(3), 
and (g) that describe the post-TDAPA add-on payment adjustment and the 
calculation we will use to determine the post-TDAPA add-on payment 
adjustment amount, as described previously. In addition, we are 
amending Sec.  413.230 by adding reference to the post-TDAPA add-on 
payment adjustment in the calculation of the ESRD PPS per treatment 
payment amount.
    We will follow these steps to calculate the case-mix adjusted post-
TDAPA add-on payment adjustment amount for CY 2024 and future years, 
when appropriate. We will include in the calculation of the case-mix 
adjusted post-TDAPA add-on payment adjustment amount any new renal 
dialysis drugs and biological products in existing ESRD PPS functional 
categories that are eligible for payment using the TDAPA described in 
Sec.  413.234(c). We will begin making payment under this new post-
TDAPA add-on payment adjustment 8 calendar quarters after the beginning 
of the TDAPA payment period for the new renal dialysis drug or 
biological product. Payment of the post-TDAPA add-on payment adjustment 
will end no later than 12 calendar quarters after the end of the TDAPA 
payment period for the new renal dialysis drug or biological product.
(b) Example of the Final Post-TDAPA Add-On Payment Adjustment 
Calculation for CY 2024
    Following the methodology finalized in the previous section, we 
will apply a post-TDAPA add-on payment adjustment to all ESRD PPS 
treatments beginning April 1, 2024, when the TDAPA payment period for 
Korsuva[supreg] ends. We will calculate the amount of this post-TDAPA 
add-on payment adjustment based on the most recent available 12 months 
of utilization data for Korsuva[supreg] and the most recent

[[Page 76397]]

available 12 months of ESRD PPS claims data for this final rule. As we 
proposed, we will use updated data for this ESRD PPS final rule. We 
will apply the ESRD PPS patient-level adjustment factors for 
determining the amount of the post-TDAPA add-on payment adjustment for 
each ESRD PPS claim.
    Based on the latest available data, which includes utilization of 
Korsuva[supreg] from July 2022 through June 2023, we estimate that 
total expenditure for Korsuva[supreg] is $11,948,389 and that 
28,450,178 total ESRD PPS treatments were furnished during the same 
time period. In addition, as discussed earlier in this final rule, we 
are finalizing the application of the growth in the ESRDB market basket 
price proxy for pharmaceuticals to adjust the amount of the post-TDAPA 
add-on payment adjustment to reflect anticipated pricing for CY 2024. 
The ESRDB pharmaceutical price proxy used for this CY 2024 ESRD PPS 
final rule is 1.3 percent. Accounting for the existing ESRD PPS 
patient-level adjustment factors and the TPEAPA as discussed in section 
II.B.1.g of this final rule, the reduction to the post-TDAPA add on 
payment adjustment to account for case-mix standardization for this 
time period is 0.901653. Accordingly, we will calculate a case-mix 
adjusted post-TDAPA add-on payment adjustment for CY 2024 equal to 
(($11,948,389)/(28,450,178)) x (0.901653) x (0.65) x (1.013) = $0.2493. 
Estimates for the impact of this post-TDAPA add-on payment adjustment 
for CY 2024 are included in section VII.D.5 of this final rule.
(c) Considerations Related to Budget Neutrality for the Post-TDAPA Add-
On Payment Adjustment
    As discussed in the CY 2024 ESRD PPS proposed rule and earlier in 
this final rule, the ESRD PPS includes other add-on payment adjustments 
based on the authority in section 1881(b)(14)(D)(iv) of the Act, which 
are not statutorily required to be budget neutral. In the case of 
existing add-on payment adjustments under the ESRD PPS, these generally 
account for costs that were not included in cost reports used for the 
construction of the ESRD PPS bundled payment. These include items that 
either did not exist at the time of the construction of the ESRD PPS 
bundled payment, like new drugs and equipment, or services that were 
not commonplace that the add-on payment adjustment is meant to 
encourage, like home dialysis training. In the proposed rule, we stated 
that we expect this increased payment would support ESRD facilities in 
providing the new renal dialysis drug or biological product to all 
beneficiaries for whom it is reasonable and medically necessary. We 
noted that we believe it is also important to support access to new 
renal dialysis drugs and biological products while minimizing the 
financial impact to beneficiaries, who incur a 20 percent coinsurance 
for renal dialysis services under the ESRD PPS.
    As discussed previously, we considered and proposed this new post-
TDAPA add-on payment adjustment in response to concerns that a sudden 
decrease in payment for certain new renal dialysis drugs and biological 
products after the end of the TDAPA period could negatively affect 
Medicare beneficiaries' access to such new renal dialysis drugs and 
biological products. Although we have noted that the ESRD PPS base rate 
already includes money for renal dialysis drugs and biological products 
that fall within an existing ESRD PPS functional category, we stated 
that proposing a budget neutral payment adjustment would not be 
appropriate for the post-TDAPA add-on payment adjustment. Because we 
proposed to apply the post-TDAPA add-on payment adjustment to every 
ESRD PPS treatment, budget neutralizing this final add-on payment 
adjustment would effectively undo the adjustment and leave aggregate 
payments at the same level they would have been without an adjustment, 
which as we previously noted could negatively affect beneficiaries' 
access to such drugs and biological products. In contrast, applying 
this add-on payment adjustment in a non-budget neutral manner would 
increase aggregate ESRD PPS expenditures to a level that reflects the 
most recent 12 months' utilization of the new renal dialysis drug or 
biological product, which we believe would support beneficiary access. 
By applying the post-TDAPA add-on payment adjustment in a non-budget 
neutral way, we would effectively maintain expenditures for these new 
renal dialysis drugs and biological products at 65 percent of the level 
of expenditures paid during the TDAPA period. We stated that we believe 
this approach would provide consistency and predictability in a way 
that would support beneficiaries' continued access to new renal 
dialysis drugs and biological products, while appropriately reducing 
expenditures for such drugs after the TDAPA period ends both for the 
Medicare program and for individual beneficiaries, as discussed earlier 
in this section. Accordingly, we proposed that this post-TDAPA add-on 
payment adjustment would not be budget neutral. We invited comments on 
the budget neutrality aspect of this proposal.
    Comment: Several commenters expressed support for applying the 
post-TDAPA add-on payment adjustment in a non-budget neutral way. These 
commenters agreed with CMS that calculating the post-TDAPA add-on 
payment budget neutrally would be counterproductive, as it would 
effectively undo the impact of the proposed adjustment.
    Response: We agree, and we thank the commenters for their support.
    Final Rule Action: After considering the comments we received, we 
are finalizing the application of the post-TDAPA add-on payment 
adjustment as a non-budget neutral payment adjustment, beginning for CY 
2024.
j. Requirement of ``Time on Machine'' Hemodialysis Treatment Data as a 
Recordkeeping and Cost Reporting Requirement for Outpatient Maintenance 
Dialysis
    We proposed certain new recordkeeping and cost reporting 
requirements for outpatient maintenance dialysis at proposed Sec.  
413.198(b)(5). Specifically, we proposed to require patient-level 
reporting on resource use involved in furnishing hemodialysis treatment 
in-center in ESRD facilities that would serve to apportion composite 
rate costs for use in the case-mix adjustment. Importantly, this new 
data would be used to disaggregate facility-level composite rate costs 
(as obtained from the cost reports) and assign them to the patient-
month level, which would enable a refined single-equation estimation 
methodology. The integrity of the ESRD PPS is dependent on our ability 
to monitor payment accuracy and make refinements to the payment system, 
as needed. Under this proposal, CMS would require ESRD facilities to 
report information on ESRD PPS claims for renal dialysis services about 
the duration of time in minutes that ESRD beneficiaries spend in center 
receiving hemodialysis treatment (hereafter referred to in this section 
as ``time on machine''). We would use time on machine data to help us 
evaluate and monitor the accuracy of our payments for patient-level 
adjustment factors. CMS would also evaluate whether the data could be 
used to inform future refinements to the existing patient-level 
adjustment factors set forth at Sec.  413.235(a), which include patient 
age, body mass index (BMI), body surface area (BSA), and co-morbidities 
such as sickle cell anemia. Finally, CMS would review the data for its 
potential to

[[Page 76398]]

identify any disparities from a health equity perspective that may 
support proposing in future rulemaking new patient-level adjustment 
factors, including potential social determinants of health (SDOH) 
factors. As described in section II.B.1.h of this final rule, we 
proposed the addition of Sec.  413.198(b)(5), which states that ESRD 
facilities must submit data and information in the formats established 
by CMS for the purpose of estimating patient-level and facility level 
variation in resource use. Under this paragraph, we proposed to require 
ESRD facilities to report ``time on machine'' as when a patient the 
begins dialysis treatment and ends dialysis treatment. We proposed to 
require ESRD facilities to report this information using the D6 value 
code on ESRD PPS claims.
(1) Background
(a) Statutory Authorities for Recordkeeping, Cost Reporting, and Case-
Mix Adjustments Under the ESRD PPS
    Section 1881(b)(2)(B) of the Act generally directs the Secretary to 
prescribe in regulations any methods and procedures to determine the 
costs incurred by providers of services and renal dialysis facilities 
in furnishing covered services to individuals with ESRD, and to 
determine, on a cost-related or other economical and equitable basis, 
payment amounts for Medicare part B services furnished by such 
providers and facilities to individuals with ESRD. To that end, CMS 
promulgated Sec.  413.198,\38\ which specifies certain recordkeeping 
and cost reporting requirements for ESRD facilities that meet the 
conditions for coverage under 42 CFR part 494.\39\ The recordkeeping 
and cost reporting requirements at Sec.  413.198 enable CMS to 
determine the costs incurred in furnishing outpatient maintenance 
dialysis and support the two-equation payment model that is currently 
used as the basis for the ESRD PPS.
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    \38\ We note that Sec.  413.198 was promulgated prior to the 
establishment of the ESRD PPS. It was initially set forth in 1983 at 
42 CFR 405.441 (48 FR 21254), to implement section 2145 of the 
Omnibus Budget Reconciliation Act of 1981 (Pub. L. 97-35). Section 
405.441 was later redesignated in 1986 as 42 CFR 413.174 (51 FR 
34790-01), and the requirements were moved again, from Sec.  413.174 
to Sec.  413.198, in a reorganization of subpart H of part 413 (62 
FR 43657).
    \39\ Likewise, under section 1881 of the Act, CMS established 
related data and information requirements at 42 CFR 494.180(h).
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    Section 1881(b)(14)(D)(i) of the Act requires that the ESRD PPS 
include a payment adjustment based on case-mix that may consider 
patient weight, BMI, comorbidities, length of time on dialysis, age, 
race, ethnicity, and other appropriate factors. We implemented this 
statutory requirement in Sec.  413.235, which sets forth certain 
patient characteristics for which the per treatment ESRD PPS base rate 
may be adjusted, specifically where those patient characteristics 
result in higher costs for ESRD facilities. The patient characteristics 
at Sec.  413.235(a) include: patient age, BSA, low BMI, onset of renal 
dialysis (new patient), and co-morbidities. The Secretary is also 
authorized, under section 1881(b)(14)(D)(iv) of the Act, to apply such 
other payment adjustments under the ESRD PPS as the Secretary 
determines appropriate. Per Sec.  413.196, we publish notice of any 
proposed changes to payment adjustments, including adjustments to the 
composite rate,\40\ in the Federal Register. We last updated the 
payment multipliers for the ESRD PPS patient-level adjustment factors 
in the CY 2016 ESRD PPS final rule (80 FR 68968, at 68973 through 
68984), for age, BSA, low BMI, sex, four co-morbidity categories (that 
is, pericarditis; gastrointestinal tract bleeding with hemorrhage; 
hereditary hemolytic or sickle cell anemias; and myelodysplastic 
syndrome), and the onset of renal dialysis. We also established payment 
adjustments for pediatric patients and for facilities treating a low 
volume of patients with ESRD.
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    \40\ As explained in the CY 2011 ESRD PPS final rule (75 FR 
49030 at 49032), the composite rate is the method by which CMS 
determines prospectively the amounts of payments for renal dialysis 
services furnished by providers of services and by renal dialysis 
facilities to individuals in a facility and to such individuals at 
home. The composite rate is a single composite weighted formula that 
is combined with separately billable services under a single 
payment, adjusted to reflect patient differences in resource needs 
or case-mix.
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    Finally, the collection of data from ESRD claims, cost reports and 
record keeping, has been instrumental in identifying underserved 
populations and establishing that ESRD disproportionately affects 
African American/Black men relative to their share of the total 
population. The proposal to collect and evaluate time on machine data 
would provide additional information concerning resource use to enable 
CMS to identify, assess, and address potential health disparities. This 
proposal therefore may support the Secretary's efforts to evaluate race 
and ethnicity data and provide recommendations for improving the 
quality of the data, as required under section 1809 of the Act, 
previously discussed in the CY 2011 ESRD PPS final rule (75 FR 49030 at 
49108 through 49113).
    In the CY 2024 ESRD PPS proposed rule (88 FR 42464 through 42472), 
we noted that, if the proposed requirement to collect time on machine 
data were to be finalized, we would issue corresponding guidelines. We 
stated that such guidance would provide instructions regarding the 
applicable administrative requirements for reporting a value code on an 
electronic claim, here value code D6, connected to the number of 
minutes of hemodialysis treatment provided in-center in an ESRD 
facility. We further noted that the National Uniform Billing Committee 
(NUBC) has approved and is prepared for ESRD facilities' use of value 
code D6 on claim form CMS-1450 (UB-04) (OMB-0938-0997) to report the 
total number of minutes of hemodialysis provided during the billing 
period.
(b) Case-Mix Adjustments Background and the Two-Equation ESRD PPS Model
    The ESRD PPS includes patient-level adjustments that adjust the 
ESRD PPS base rate for certain patient characteristics. The current 
ESRD PPS case-mix adjustments are derived from a case-mix adjustment 
model involving two equations. In the CY 2011 ESRD PPS final rule (75 
FR 49083), we discussed the two-equation methodology used to develop 
the adjustment factors that would be applied to the ESRD PPS base rate 
to calculate each patient's case-mix adjusted payment per treatment. 
The two-equation approach used to develop the ESRD PPS included a 
facility-based regression model for services historically paid for 
under the composite rate as indicated in ESRD facility cost reports, 
and a patient-month-level regression model for services historically 
billed separately. One significant limitation, which in large part 
drove the development of the two-equation model, was that there was no 
way to reliably identify, using claims data, the costs for composite 
rate services--that is, items and services such as staff labor, 
dialysate, capital-related assets such as renal dialysis machines, and 
certain drugs and laboratory tests that are used in the provision of 
outpatient maintenance dialysis for the treatment of ESRD and that were 
included in the composite payment system established under section 
1881(b)(7) of the Act and the basic case-mix adjusted composite payment 
system established under section 1881(b)(12) of the Act.
    In the CY 2016 ESRD PPS final rule, we updated the payment 
multipliers for the ESRD PPS patient-level adjustment factors for age, 
BSA, low BMI, sex, four co-morbidity categories (that is,

[[Page 76399]]

pericarditis; gastrointestinal tract bleeding with hemorrhage; 
hereditary hemolytic or sickle cell anemias; and myelodysplastic 
syndrome), and the onset of renal dialysis. We also established payment 
adjustments for pediatric patients and for ESRD facilities treating a 
low-volume of ESRD patients (80 FR 68968 at 68973 through 68984). In 
that CY 2016 ESRD PPS final rule, we discussed and responded to several 
public comments in which commenters expressed concerns about the 
continued use of the two-equation model (80 FR 68974 through 68976). 
One comment from MedPAC suggested that CMS develop a one-equation model 
for the ESRD PPS. In response, we noted that the ESRD PPS is not 
currently able to utilize a one-equation method, because ESRD 
facilities do not report charges associated with the components of 
renal dialysis treatment costs that vary across patients such as time 
on machine. In other words, patient-level claims provide line-item 
detail on the use of the formerly separately billable services but do 
not provide any information regarding variation across patients in the 
use of the formerly composite rate services. In addition, we stated 
that we believed that capturing the resource cost for furnishing renal 
dialysis services is complex since Medicare has historically paid an 
ESRD PPS base rate (that is, composite rate payment) to account for 
those costs that were never itemized on a claim but were reported 
through the cost report (80 FR 68975 through 68976).
(c) Background on CMS Efforts To Explore the Use of ``Time on Machine'' 
Data To Refine the Case-Mix Adjustment Model
    Interested parties, including MedPAC, have long expressed concerns 
about the complexity of the two-equation model underpinning the ESRD 
PPS and have questioned the validity of assuming that the composite 
rate costs for all patients at an ESRD facility are the same. 
Interested parties have encouraged CMS to develop a patient cost model 
that is based on a single patient-level cost variable that accounts for 
all composite rate and formerly separately billable services. 
Additionally, interested parties have expressed concerns that the 
existing case-mix adjustors might not correlate well with the current 
cost of renal dialysis treatment and have encouraged CMS to explore a 
refinement.
    In response, CMS has explored the feasibility of collecting time on 
machine data on patient claims from ESRD facilities and the potential 
for using such data. These efforts include: a Technical Expert Panel 
(TEP) held on December 6, 2018, a Request for Information (RFI) 
published in the ESRD PPS CY 2020 ESRD PPS proposed rule (84 FR 38399), 
and more recently, an RFI published in the ESRD PPS CY 2022 proposed 
rule (86 FR 36322, 36399 through 36400). In addition, CMS issued sub-
regulatory guidance in Transmittal 10368, from September 24, 2020, to 
begin collecting time on machine data, but it later rescinded that 
guidance.
(i) Technical Expert Panel (TEP) December 2018
    As we discussed in the CY 2020 ESRD PPS proposed rule (84 FR 38396 
through 38400), a TEP was held on December 6, 2018, to discuss options 
for improving data collection to refine the ESRD PPS case-mix 
adjustment model. In that CY 2020 ESRD PPS proposed rule, we discussed 
the purpose of the TEP and the topics that were discussed, including 
several data collection options.\41\
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    \41\ The final TEP report from December 2018 and other materials 
can be found at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Educational_Resources.
---------------------------------------------------------------------------

    In the CY 2020 ESRD PPS proposed rule, we noted that CMS's data 
contractor's pre-TEP analysis of CY 2016 cost report data showed that 
composite rate costs comprise nearly 90 percent of average total 
treatment costs, with capital, direct patient care labor, and 
administrative costs representing approximately 88 percent of total 
average composite rate cost per treatment. The data contractor provided 
examples of ways that longer duration of renal dialysis time might be 
associated with increased treatment costs, including utility costs, 
accelerated depreciation on equipment, and lower daily census counts, 
which, among other things, would result in increased per-treatment 
capital costs. The analysis suggested that additional labor hours for a 
patient with longer treatments on average could increase per-treatment 
labor costs, and that patients with increased use of dialysate and 
water treatment supplies or equipment likely have higher average per-
treatment supply costs. We noted that, under current reporting 
practices, there are no data on the patient-and treatment-level 
variation in the cost of composite rate items and services. We 
explained that these findings underscore the importance of identifying 
variation in these costs to inform the development of a refined case-
mix adjustment model.
    CMS published the findings from the December 2018 TEP in a report 
dated June 2019.\42\ The 2018 TEP report provided examples of ways that 
extended treatment duration could affect cost components. First, an 
imputed cost per treatment was calculated using a combination of 
treatment duration data from CROWNWeb \43\ (now the ESRD Quality 
Reporting System, or EQRS) and facility cost per-minute data from cost 
reports to infer differences in costs reported across patient-months. 
An average interquartile range of 34.6 minutes was observed from 
CROWNWeb duration data, indicating significant within-facility 
variation in dialysis treatment time. Significant variation in average 
imputed cost per hemodialysis sessions also was observed, with an 
across-facility interquartile range of $62.62. Overall, it was found 
that costs increased with longer treatment times, and this pattern was 
consistent for the individual cost report components as well. 
Facilities with a higher proportion of beneficiaries receiving 
treatments >= 4.5 hours duration were found to have higher average 
costs for each cost component, except for cost report drugs.\44\
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    \42\ The final TEP report from December 2018 is found directly 
at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/esrdpayment/downloads/esrd-pps-tep-summary-report-june-2019.pdf.
    \43\ In 2008, CMS introduced an electronic Web-based data 
collection system, Consolidated Renal Operations in a Web-enabled 
Network (CROWNWeb) which was designed to collect clinical 
performance measures data from dialysis facilities (73 FR 20370, at 
20372). CrownWeb is now ``EQRS''--that is, the ESRD Quality 
Reporting System (OMB Control Number 0938-1289).
    \44\ Acumen LLC. ESRD PPS Case-Mix Adjustment Technical Expert 
Panel (TEP). Slide Presentation Slide 42. December 2018. See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Downloads/ESRD-PPS-TEP-Presentation.pdf.
---------------------------------------------------------------------------

    CMS presented further discussion into collection of time on machine 
data for each dialysis session in the CY 2020 ESRD PPS proposed rule 
(84 FR 38396 through 38400), where we further identified this potential 
data set as a singular option that would provide sufficient data to 
develop a refined case-mix adjustment model. If renal dialysis session 
time were reported for each renal dialysis treatment, cost report and 
treatment-level data could be integrated to infer differences in 
composite rate costs across patients. In this paradigm, patient-level 
differences in composite rate costs could be attributed to two discrete 
categories: differences due to renal dialysis treatment duration 
(measured in units of time); and differences unrelated to treatment 
duration. To alleviate concerns from interested parties, we noted that 
time on machine data would not be used to

[[Page 76400]]

directly adjust ESRD PPS payment, rather, it would be used to apportion 
composite rate costs (currently only observable at the facility level 
to the patient or treatment level) for use in the case-mix adjustment. 
Time on machine data would allow for a higher proportion of composite 
rate costs to be allocated to patients with longer renal dialysis 
treatment times, and ultimately inform CMS refinements to existing 
patient-level adjusters, including age and comorbidities.
    We further explained that, in the December 2018 TEP, the data 
contractor proposed two approaches to collect time on machine data: (1) 
Use existing data from Consolidated Renal Operations in a Web-Enabled 
Network (CROWNWeb) (now EQRS) on delivered renal dialysis minutes 
during the monthly session when a laboratory specimen is drawn to 
measure blood urea nitrogen (BUN); or (2) have ESRD facilities report 
time on machine data on Medicare claims. For the latter, we suggested 
that time on machine data could be reported by using a new HCPCS or 
revenue center code to indicate units of treatment time for each renal 
dialysis treatment or by updating the definition of the existing 
revenue center code for renal dialysis treatments so that the units 
correspond to treatment time instead of the number of treatments. We 
noted that ESRD facilities already reported to CMS a single monthly 
treatment time in CROWNWeb for in-facility treatments, indicating that 
ESRD facilities currently collect time on machine data.\45\ Moreover, 
we stated that we were aware that many ESRD facilities' electronic 
health records (EHR) systems automatically collect this information for 
every renal dialysis treatment, minimizing additional burden of 
reporting this metric on claims.
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    \45\ Centers for Medicare & Medicaid Services (CMS) End-Stage 
Renal Disease Quality Incentive Program (ESRD QIP) Payment Year (PY) 
2021 Measure Technical Specifications. Page 23. Available at: 
https://www.cms.gov/files/document/cy-2021-final-technical-specifications-20201130.pdf.
---------------------------------------------------------------------------

    The December 2018 TEP participants preferred that the data be 
collected on Medicare claims (84 FR 38398). They did not support using 
the then-existing CROWNWeb data for time on machine data, as there were 
too many questions about its completeness and timeliness. They agreed 
that if time on machine data is collected on claims that it should be 
reported in actual minutes dialyzed and not, for example, in 15-minute 
increments. We explained that the TEP participants cautioned that 
reporting time on renal dialysis on the claims would place additional 
burden on ESRD facilities. However, we stated that we believed that, 
for ESRD facilities with EHRs, the burden associated with the 
collection of renal dialysis treatment time is expected to be small and 
temporary, because the information is already being collected. We noted 
that collecting time on machine data could be difficult to accomplish 
for ESRD facilities that do not use EHRs. Lastly, we stated that some 
participants maintained that certain factors related to patient 
complexity--such as comorbidities and mental health status--that are 
associated with treatment costs are unrelated to treatment duration.
(ii) Request for Information (RFI) in the CY 2020 ESRD PPS Proposed 
Rule
    In addition to presenting the findings from the December 2018 TEP, 
we solicited comments in the CY 2020 ESRD PPS proposed rule (84 FR 
38399) on the option of collecting time on machine data. As discussed 
in the CY 2020 ESRD PPS final rule (84 FR 60648, 60782), commenters 
responding to the RFI opposed the use of time on machine data, 
maintaining that other factors were more directly related to cost of 
treatment. Commenters claimed that many subgroups of patients are 
challenged to stay on renal dialysis for the prescribed treatment time 
because of their physical status or other limitations, leading to more 
frequent treatment and/or higher costs related to patients' special 
circumstances and comorbidities and not to treatment duration. 
Regarding patient-level factors contributing to high costs of care, 
commenters expressed that patient-level adjusters should be based on 
sound, empirical evidence of their contribution to cost of care and 
opposed the use of time on machine data as a single, patient-level 
factor to estimate variation in composite rate costs. Some commenters 
expressed the objection that use of this measure would not be 
productive because there was great homogeneity in treatment times 
across patients.
(iii) CMS Sub-Regulatory Guidance in Transmittal 10368 (September 24, 
2020) (Now Rescinded)
    In Transmittal 10368, published September 24, 2020, CMS instructed 
the MACs to implement a new value code D6, which reflects the total 
number of minutes of dialysis provided during the billing period. See 
Transmittal 10368, CR 11871 (Changes to the End Stage Renal Disease 
(ESRD) PRICER to Accept the New Outpatient Provider Specific File 
Supplemental Wage Index Fields, the Network Reduction Calculation and 
New Value Code for Time on Machine), effective January 1, 2021. At the 
same time, CMS announced a new requirement for ESRD facilities to 
report value code D6 on ESRD claims, for in-facility or home 
hemodialysis maintenance, training, or retraining treatments. Shortly 
after making these contractor directions public, CMS issued a Medicare 
Learning Network (MLN) Matters guidance document (MLN Matters No. 
MM11871) advising ESRD facilities of the new requirement to include 
treatment time on claims. However, after a large dialysis organization 
submitted a petition \46\ pursuant to the HHS Good Guidance Practices 
Regulation,\47\ HHS issued a finding that notice-and-comment rulemaking 
was required for CMS to impose such a requirement. Consequently, CMS 
rescinded Transmittal 10368 and replaced it with Transmittal 10576, 
dated January 20, 2021, withdrawing the requirement for reporting time 
on the dialysis machine with value code D6. Although the guidance to 
report time on machine data was rescinded, the value code D6 for the 
time on machine in minutes remains approved by the NUBC and remains on 
CMS's claim form CMS-1450 (UB-04) (OMB-0938-0997), in a deactivated 
status.
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    \46\ The petition (dated December 23, 2020) is attached as 
Exhibit A to HHS's petition response (January 8, 2021) which can be 
found at https://www.hhs.gov/sites/default/files/davita-petition-response-and-exhibit.pdf.
    \47\ The HHS ``Good Guidance Practices'' final rule appeared in 
the Federal Register on December 7, 2020 (85 FR 78770) and was later 
rescinded July 25, 2022 (87 FR 44002).
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(iv) Request for Information (RFI) in the CY 2022 ESRD PPS Proposed 
Rule
    CMS revisited the topic of time on machine in the 2020 TEP and 
discussed the case-mix adjusters.\48\ Interested parties continued 
expressing concerns that the existing case-mix adjustors might not 
align with resource-intensive patient-level services such as isolation 
rooms, behavioral issues, or neurocognitive issues. We sought 
additional public input in the ESRD PPS CY 2022 proposed rule, 
requesting information on the methodology used to calculate the case-
mix adjustment (86 FR 36322, 36399 through 36400) and the methodology 
to collect data to reflect patient-level differences in composite rate 
costs, including the use of a value

[[Page 76401]]

code to collect time on machine on the claim.\49\
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    \48\ https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-summary-report-april-2021.pdf.
    \49\ We published a summary of the responses to the CY 2022 ESRD 
PPS RFI (86 FR 36322, 36399 through 36400) for the current case-mix 
methodology in the ESRD PPS CY 2022 final rule (86 FR 61874, 61997) 
and provided greater detail on CMS's website at https://www.cms.gov/files/document/cy-2022-esrd-pps-rfi-summary-comments.pdf.
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    We received similar comments on this RFI to those expressed in 
response to the CY 2020 ESRD PPS proposed rule. As discussed in the CY 
2022 ESRD PPS final rule, commenters cited concerns that apportioned 
composite rate costs (such as labor and capital related costs) from the 
cost reports, used in the case-mix adjustments, were currently only 
observable at the facility-level and did not include patient or 
treatment-level variations.
    Like previously mentioned concerns regarding the collection of time 
on machine data, commenters suggested this data element would be 
burdensome and complex (especially for those dialyzing at home) and 
would not identify high-cost patients. They stated that what little 
variation might be identified would not be worth the burden of 
collecting the information. In addition, these commenters stated that 
ESRD facilities' staffing is based on prescribed time, not on the 
actual time a patient is on the machine. They stated that the 
prescription approach is the most rational way to determine staffing 
levels, because ESRD facilities do not have time on machine in advance. 
According to these commenters, ESRD facilities would only have the 
prescribing physician's prescription to use.
    A provider advocacy organization opposed the use of time on machine 
data for purposes of ESRD PPS primarily because certain patients 
benefit from shorter, more frequent dialysis, such as patients with 
catheter-related access issues, non-compliant patients, patients with 
chronic pain or diarrhea, and patients suffering from certain 
comorbidities. They expressed significant concern that use of time on 
machine data for differentiating treatment cost variability creates 
inappropriate incentives for certain ESRD facilities to ``game the 
system'' by: (1) putting patients on renal dialysis longer than 
necessary; or (2) placing patients on the cheapest dialyzer and keeping 
them on it for all five possible hours of dialysis. Another small renal 
dialysis organization agreed, pointing out that most renal dialysis 
treatments, regardless of time, will have similar composite rate costs. 
In other words, they asserted that if a treatment is 3.5 hours compared 
to 5 hours, the composite rate costs for those treatments will be very 
similar. The only difference in cost between those two treatments would 
be 1.5 hours more use of utilities, dialysate and bicarbonate solution, 
machine depreciation, and a small amount of labor to check on the 
patient. Most of the labor for renal dialysis treatments is putting the 
patient on and taking the patient off dialysis. Therefore, in both 
previously described scenarios, the commenter asserted that cost would 
remain the same. Further, they pointed out that some patients will not 
remain for their full renal dialysis treatment, and they generally 
cannot force a patient to remain for their full prescribed treatment 
time. Therefore, in their view, using actual treatment time for cost 
allocation is not realistic.
    A small renal dialysis organization within a large non-profit 
health system commented that reporting treatment times would be 
difficult and confusing and identified many factors that would need to 
be addressed by CMS, including: identifying renal dialysis start time, 
early removal from renal dialysis, inadvertent lack of time on machine 
information, data inclusion on a claim form, and staff training. They 
also expressed concern about the reporting of time on machine creating 
opportunities for ESRD facilities to game the system by having the 
renal dialysis run a few extra minutes to move into the next highest 
level.
    Several commenters recommended changes or removal of the case-mix 
adjusters, including refinement of the age and weight (BSA and BMI) 
adjustments and removal of the comorbidity adjustments, based on 
declining frequency of claims containing comorbidities. Some comments 
recommended removal of the comorbidity adjustments, because they report 
the adjustments are not utilized. They recommended CMS refine the age 
and weight (BSA and BMI) adjusters to better capture and designate 
higher cost patients. Many commenters expressed the belief that the 
comorbidity categories no longer protect beneficiary access and no 
longer correlate with increased costs. A non-profit renal dialysis 
association recommended that CMS minimize resources devoted to 
adjusters. The commenters suggested including only the minimum needed 
to deliver quality patient care, restore significant funding to the 
ESRD PPS base rate for the benefit and care of all beneficiaries, and 
focus retained adjusters only on those that are clearly linked to 
patient cost of care or clear barriers to access. Specifically, they 
recommended that CMS: retire the remaining comorbid case mix adjusters; 
revise the weight adjusters to maintain a low-BMI adjuster; create a 
high-BMI adjuster; eliminate the BSA adjuster; retire the age adjuster 
(which they believe is not methodologically sound and does not resonate 
with clinician or renal dialysis facility experience of care); maintain 
the adjuster for low volume facilities; consider expanding the adjuster 
to a second tier of facilities providing fewer than 6,000 treatments 
per year; eliminate the rural adjuster; and maintain the onset of renal 
dialysis adjuster to support the resource intensive needs of patients 
starting dialysis. Other commenters stated it would be too preliminary 
to eliminate the case-mix adjusters entirely, and instead they 
recommended that CMS initiate a discussion of the adjusters that are 
true drivers of high costs and how the use of adjusters can be 
operationalized for practical purposes. One payment adjustment that was 
universally supported by commenters was the onset adjustment.
    MedPAC recommended that CMS develop a one-equation regression model 
in place of the two-equation model currently used as the basis for the 
ESRD PPS. MedPAC also recommended that CMS consider removing the 
comorbidity adjustments and revise the body size adjustment. MedPAC 
further recommended that CMS address the inherent correlation between 
BSA and BMI by jointly estimating the association of BSA and BMI with 
treatment cost. Both BSA and BMI are calculated based on patient height 
and weight. MedPAC's analyses found that BSA and BMI values are 
correlated such that patients with low BMI also tend to have low BSA, 
and that these variables have a joint effect on treatment costs that is 
different from the sum of independent effects as currently implemented. 
We reiterated in the CY 2022 ESRD PPS final rule our current inability 
to implement such a model given the absence of data on the charges 
associated with the components of renal dialysis treatment costs that 
vary across patients in the use of the formerly composite rate 
services. A non-profit renal dialysis association agreed with MedPAC.
(2) Health Equity Considerations Supporting the Proposed Collection of 
Time on Machine Data
    In the CY 2024 ESRD PPS proposed rule (88 FR 42468), we stated that 
CMS prioritizes expansion of the collection, reporting, and analysis of 
standardized data as a key means to advance health

[[Page 76402]]

equity.\50\ We explained that by increasing our understanding of the 
needs of those we serve, CMS aims to ensure all individuals have access 
to equitable care and coverage. We noted that CMS's proposal to collect 
time on machine data supports these priorities. We stated that we 
believe the proposed data reporting requirements would support our 
ability to assess whether, and to what extent, our programs and 
policies may perpetuate or exacerbate systemic barriers to 
opportunities and benefits for underserved communities.
---------------------------------------------------------------------------

    \50\ https://www.cms.gov/about-cms/agency-information/omh/health-equity-programs/cms-framework-for-health-equity.
---------------------------------------------------------------------------

    As noted previously, as part of CMS's December 2018 TEP and in the 
ESRD PPS CY 2020 final rule, CMS's EQRS data (formerly collected under 
CROWNWeb) is reported once per patient-month. CMS's proposal to collect 
time on machine data, which would require duration of treatment data 
reported for every renal dialysis treatment, would provide a more 
granular set of standardized data for analyzing (and potentially 
apportioning) composite rate costs for use in the case-mix adjustment. 
We noted that we would also look to time on machine data as a source to 
monitor claims data and identify disparities in care that could be 
mitigated by potential future adjustments that would incentivize 
equitable care within the framework of the ESRD PPS.
    As we noted in the CY 2024 ESRD PPS proposed rule, ESRD PPS reform 
is an ongoing multi-year effort to refine payment adjustments and 
methodologies under the ESRD PPS. Section 1881(b)(2)(B) of the Act 
provides that the Secretary shall prescribe in regulations any methods 
and procedures to determine the amounts of payments to be made for part 
B services (which include renal dialysis services), on a cost-related 
basis or other economical and equitable basis. Section 1881(b)(14)(D) 
of the Act requires the ESRD PPS to include a payment adjustment based 
on case mix that may consider various patient characteristics and other 
appropriate factors.
    Since the establishment of the ESRD PPS in the CY 2011 ESRD PPS 
final rule (75 FR 49030), CMS has been engaged in ongoing monitoring 
and analysis of the ESRD PPS. CMS publishes these monitoring results 
regularly.\51\ CMS's monitoring activities have involved analysis of 
ESRD facility cost reports and patient claims to determine the most 
accurate adjustments and methodologies as well as to identify trends in 
beneficiary health outcomes. Similarly, we noted that the proposal in 
the CY 2024 ESRD PPS proposed rule to collect more-detailed 
standardized data (that is, the proposed time on machine reporting) 
than is presently available for analysis supports our ability to 
evaluate potential disparities in health care provided to our 
beneficiaries.
---------------------------------------------------------------------------

    \51\ Since the implementation of the ESRD PPS in January 2011, 
CMS has monitored outcomes, through a claims-based monitoring 
program, for Medicare beneficiaries receiving outpatient maintenance 
dialysis. See https://www.cms.gov/medicare/medicare-fee-for-service-payment/esrdpayment/esrd-claims-based-monitoring.
---------------------------------------------------------------------------

    Presently, CMS adjusts the per-treatment ESRD PPS base rates to 
account for variation in the case mix, as set forth in Sec.  413.235. 
These adjustments account for patient age, BSA, low BMI, onset of renal 
dialysis (new patient), and comorbidities (for example, sickle cell 
anemia), as specified by CMS. We explained in the CY 2024 ESRD PPS 
proposed rule that the data and information that inform these 
adjustments are derived from cost reports, which are submitted to CMS 
on the facility level. However, we noted that time on machine data 
would be provided to CMS at the patient level on patient claims. This 
change would shift CMS's focus to a more patient-centered paradigm. We 
stated that we believe time on machine data would provide the insights 
we need to develop (and propose) potential amendments to the payment 
multipliers for the current, and potential future, patient-level 
adjustments, including new SDOH factors or health conditions (such as 
profound post-dialytic exhaustion) as patient-level adjustments. More 
immediately, however, time on machine data would significantly enhance 
CMS's insight into whether our current payment adjusters are 
appropriately aligning with actual resource use for individuals and 
communities who are underserved or disadvantaged and who may have 
multiple patient-level characteristics that necessitate longer renal 
dialysis times.
    For example, CMS is aware of anecdotal evidence and published 
studies showing that patients with the comorbidity of sickle cell 
anemia may need a longer renal dialysis treatment time as well as 
additional resources from medical staff to attend to the manifestations 
of sickle cell that occur during dialysis. In fact, renal dialysis 
patients with sickle cell anemia may have frequent pain attacks during 
the actual renal dialysis treatment.\52\ Such an attack, known as a 
vaso-occlusive pain crisis, precipitates a series of medical 
interventions involving intravenous fluids, analgesia, as well as the 
treatment of any precipitant and/or acute comorbid state.\53\ CMS would 
be able to use time on machine data for patients with sickle cell 
anemia to evaluate its alignment with the patient-level adjuster for 
the corresponding co-morbidity.
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    \52\ Benjamin Jacob et al. Management of the Dialysis Patient 
with Sickle Cell Disease (Seminars in Dialysis 14 July 2015, https://doi.org/10.1111/sdi.12403).
    \53\ Derebail VK, Lacson EK Jr, Kshirsagar AV, Key NS, Hogan SL, 
Hakim RM, et al.: Sickle trait in African American hemodialysis 
patients and higher erythropoiesis-stimulating agent dose. J Am Soc 
Nephrol 25: 819-826, 2014.
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    In addition to re-evaluating and potentially updating the payment 
multiplier for the patient-level adjuster for the co-morbidity of 
sickle cell anemia, we noted that we anticipate that there could be 
other instances where patients need more time on renal dialysis to 
avoid uncomfortable post-dialytic sequela, such as profound post-
dialytic exhaustion. In instances of profound post-dialytic exhaustion, 
for example, CMS would evaluate the forthcoming time on machine data 
for the potential correlations between additional hemodialysis 
treatment time and decreased incidence of profound post-dialytic 
exhaustions, which may have cost implications. We stated that we are 
aware there may be a need for a future patient-level payment adjuster 
associated with post-dialysis fatigue.
(3) Requirement for Reporting Time on Machine Data To Evaluate Accuracy 
of Current Payment Adjusters Aligned With Resource Use
    In the CY 2024 ESRD PPS proposed rule (88 FR 42469), we proposed to 
require patient-level reporting on resource use involved (time on 
machine) in furnishing in-center hemodialysis treatment in ESRD 
facilities, which would serve as a proxy to apportion composite rate 
costs (capital, labor, and administrative costs, as well as drugs, 
laboratory tests, and supplies necessary to administer the dialysis 
treatment) for use in the case-mix adjustment. This would allow us to 
more precisely estimate the average costs of the various earlier-
mentioned components of a renal dialysis treatment that cannot 
currently be captured because payment for these items is bundled, and 
claims data do not contain detail on the use of these items and 
services. We stated that CMS would review the patient-level resource 
use data, including time on machine data, to evaluate and monitor the 
accuracy of the methods and procedures, including the payment 
methodology for the patient-level adjustment factors,

[[Page 76403]]

enhancing the integrity of the ESRD PPS. In addition, we stated that 
CMS would evaluate whether the data could be used to inform future 
refinements to the existing patient-level adjustment factors set forth 
at Sec.  413.235(a), which may include age, BMI, BSA, and co-
morbidities such as sickle cell anemia. Finally, we stated that CMS 
would review the data for its potential to identify any disparities 
from a health equity perspective and to support the future proposal of 
any new patient-level adjustment factors, including potential SDOH 
factors. We noted that such data may also be used to inform potential 
future refinements to the facility-level adjustment factors, if 
appropriate. We stated that per Sec.  413.196, we would publish notice 
of any proposed changes to payment adjustments, including adjustments 
to the composite rate, in the Federal Register.
(a) Changes to 42 Sec.  413.198
    We proposed to amend Sec.  413.198 by adding language at Sec.  
413.198(b)(5) that would require each ESRD facility to submit data and 
information, under existing paragraph Sec.  413.198(b)(3) describing 
allowable costs, of the types and in the formats established by CMS, 
for the purpose of estimating patient-level and facility-level 
variation in resource use, such as data and information on the duration 
of hemodialysis treatment (that is, time on machine data) involved in 
furnishing hemodialysis treatment in center in an ESRD facility. For 
additional context, we noted that, under Sec.  413.198(b)(3), allowable 
cost is the reasonable cost related to renal dialysis treatments. 
Reasonable cost includes all necessary and proper expenses incurred by 
the ESRD facility in furnishing the renal dialysis treatments, such as 
administrative costs, maintenance costs, and premium payments for 
employee health and pension plans. Reasonable cost includes both direct 
and indirect costs and normal standby costs.
    We also proposed to update Sec.  413.198(a) by adding a reference 
to section 1881(b)(14) of the Act to acknowledge the statutory 
provisions for the ESRD PPS.
(b) Additional Background Considerations for, and Comments and 
Responses Thereto on, the Proposed Reporting of Time on Machine Data
    As we noted in the CY 2024 ESRD PPS proposed rule, CMS reviewed 
past comments from its TEPs and RFIs and considered the approach of our 
now-rescinded sub-regulatory guidance in Transmittal 10368 and the 
complexities of reporting the number of minutes of hemodialysis 
treatment on patient claims. With this background in mind, we further 
refined our proposed requirements at Sec.  413.198(b)(5) in a way that 
would result in the reporting of the most useful, high value data.
    Considering past comments questioning the feasibility and accuracy 
of time on machine reporting for home dialysis patients, we proposed a 
reporting requirement that would only apply to patients receiving an 
in-center hemodialysis treatment. We explained that we believe this 
approach would ensure greater uniformity to the recording process and 
thus greater consistency in the data reported.
    CMS also considered past comments responding to its RFI in the CY 
2020 ESRD PPS final rule (84 FR 60648, 60782) regarding patient-level 
factors that contribute to high costs of care. We stated that we agree 
with commenters that expressed that patient-level adjusters should be 
based on sound, empirical evidence of their contribution to cost of 
care.
    We noted in the CY 2024 ESRD PPS proposed rule that we agree that 
the payment multipliers for patient-level adjusters should be grounded 
in strong evidence, and we recognize that each patient will have unique 
needs, with some being more costly to treat and others with fewer 
costs, given their medical backgrounds. We emphasized and again 
clarified that time on machine data would not be directly used to 
determine payment for renal dialysis services, nor would higher 
payments be made for longer treatments.
    We also considered comments suggesting that a ``time on machine'' 
data element would not identify high-cost patients and comments 
suggesting such a data element would not be productive as described 
earlier in this section. We stated that we agree with commenters that 
treatment times and costs may be similar across most patients based on 
our analysis and the comments of TEP participants. However, we would 
not expect to find that ESRD facilities are treating ESRD patients in a 
homogeneous fashion, but on a case-by-case basis determined by patient-
centered plans of care. We noted that a review of CY 2016 cost report 
data, conducted as part of the December 2018 TEP,\54\ showed that 
overall costs of renal dialysis services (within the ESRD facility cost 
reports) increased with longer treatment times, and that this pattern 
was consistent for the individual cost report components.
---------------------------------------------------------------------------

    \54\ As presented on Slide 42 from the December 2018 TEP, 
overall costs of renal dialysis services (within the ESRD facility 
cost reports) increased with longer treatment times. See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Downloads/ESRD-PPS-TEP-Presentation.pdf.
---------------------------------------------------------------------------

    We stated in the CY 2024 ESRD PPS proposed rule that we anticipate 
that the data that would become available under the proposed 
requirement, if finalized, for reporting time on machine data would 
provide insight into meaningful, measurable variabilities in certain 
costs associated with patient-level characteristics.
    We stated that the significance of the time on machine data is 
dependent upon the collection of data from a preponderance of patient 
claims for in-facility hemodialysis. We further noted that while most 
patient claims may come from patients with similar profiles and 
treatment plans, the needs of the more complex and resource-intensive 
patients can only be identified by CMS through the collection of 
patient-level data from across the ESRD PPS patient population. We 
stated that complex and resource-intensive patients are frequently 
encountered in the ESRD dialysis treatment setting, but it is not 
possible to obtain precise estimates of the higher costs of these 
patients' hemodialysis treatments from currently reported data. We 
identified that cost reports and claims are the two data sources from 
which per treatment costs can be estimated. Since cost reports 
aggregate data at the facility level, we explained that patient-level 
differences in resource use are not detectable as higher medical needs, 
and related costs are masked by averages. Further, analysis of claims 
data from 2016 found that roughly 99 percent of ESRD facilities 
reported 10 or fewer distinct charge values across all patients and 
treatment modalities.\55\ Routinely collected, ESRD patient population-
based data on time on machine for each in-facility hemodialysis 
treatment would enable CMS to assess variation in the use of composite 
rate items and services at the patient level and to identify high-need 
and high-cost patients. In addition, the time on machine data set would 
enable CMS to further determine what trends or causal relationships may 
exist between certain patient-level characteristics and the

[[Page 76404]]

number of minutes of hemodialysis treatment received by such patients. 
CMS would evaluate whether specific patient characteristics are 
associated with increased length of dialysis treatment, which 
contribute to cost.
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    \55\ See page 9 of the December 2018 TEP Report at https://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/
Downloads/ESRD-PPS-TEP-Summary-Report-June-2019.pdf. See also Slide 
27 from the December 2018 TEP Presentation at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Downloads/ESRD-PPS-TEP-Presentation.pdf.
    And see Slide 30 from the December 2019 TEP Presentation at 
https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-presentation-december-2019.pdf.
---------------------------------------------------------------------------

    We also considered comments that the costs to ESRD facilities for 
providing dialysis treatment could be better measured by looking at 
costs based on prescribed time, and not on the actual time a patient is 
on the dialysis machine. The commenters stated their view that looking 
to prescribed time(s) would be the most rational way to determine 
staffing levels (and costs), because ESRD facilities plan for dialysis 
session length based on the prescribed time. Although CMS recognizes 
ESRD facilities' labor practices to align staffing with the stated 
prescription times, CMS is concerned that, for some patients, their 
prescription times are not aligning with actual usage and thus may not 
be the best predictor of ESRD facilities' costs. For example, we noted 
that we are aware that patients who experience severe itching or have 
certain psychological disorders may be less likely to receive dialysis 
for the full prescribed time. For such patients, only the collection of 
time on machine data for the number of minutes of hemodialysis 
treatment received would facilitate CMS's understanding of their 
complex needs and the implications for the ESRD PPS. For such patients, 
a pattern of shorter treatment times may ultimately result in worse 
patient outcomes and higher patient costs to the ESRD facility as well 
as to Medicare. We stated that CMS is also aware that patients with 
certain characteristics, such as higher BSA quartiles, may be more 
likely to need longer dialysis times.\56\ Additionally, CMS has been 
made aware of instances in which ESRD facilities may avoid treating 
complex patients or patients with higher costs generally (thereby 
favoring average or lower cost patients). We noted that prescribed 
dialysis times would not provide insight into costs for dialysis 
sessions for patients whose individual needs or circumstances might 
necessitate a dialysis treatment time that differs in practice from the 
prescribed dialysis time. Therefore, identifying actual resource usage, 
as correlated with the needs, health outcomes, and patient-level 
characteristics of complex patients would enable CMS to better align 
the payment multipliers with resource use within the ESRD PPS.
---------------------------------------------------------------------------

    \56\ See slide 31 from the 2020 ESRD TEP presentation, which can 
be found here: https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-presentation-december-2020.pdf.
---------------------------------------------------------------------------

    We stated that we anticipate that our proposed requirement would 
generate the data we would need to evaluate a potential adjustment of 
the payment multipliers for patient level adjustments, thereby allowing 
us to counteract possible financial disincentives to serving those 
patients. We noted that we expect that such adjustments may thereby 
enhance access to renal dialysis services for such resource-intensive 
patients. We also believe that collecting time on machine data is 
preferable to collecting prescribed times, since we recognize that 
patients' actual experiences do not always align with their doctors' 
orders.
    We recognized that a new reporting requirement would require 
uniformity in its implementation across ESRD facilities. We noted that 
the proposed ``time on machine'' requirement is for the reporting of 
the number of minutes of hemodialysis treatment a beneficiary receives, 
and it refers to only the minutes (reported in whole minutes) spent 
dialyzing, while the patient is connected to the dialysis machine. We 
stated that we would address such details in operational guidance.
    We received numerous public comments on our proposal in the CY 2024 
ESRD PPS proposed rule to require reporting of time on machine data 
from a broad array of interested parties. Commenters included 
professional associations, advocacy organizations, large dialysis 
organizations, independent and regional dialysis providers, individual 
physicians, other healthcare providers, and patients.
    The majority of the commenters generally opposed the requirement, 
but some commenters expressed support. Many commenters were supportive 
of CMS's effort to develop a patient cost model and to pursue future 
refinements that would advance health equity in the ESRD PPS. However, 
commenters questioned the utility of time on machine data and expressed 
concern for the additional administrative burden collecting and 
reporting the data would entail. Commenters expressed concerns about 
the adverse effects on specific populations. The comments on our 
proposal and our responses are set forth below.
    Comment: Some commenters expressed support for establishing a 
patient cost model that is based on a single patient-level cost 
variable. MedPAC reiterated its support for collection of time on 
machine data, which the commission previously noted in their comments 
on the CY 2022 ESRD PPS proposed rule. MedPAC agreed with CMS that 
these data could be used in the future to apportion composite rate 
costs (including labor and capital-related costs) that are currently 
only observable at the facility-level to the patient- or treatment- 
level for use in case-mix adjustment. One large dialysis organization 
expressed appreciation for CMS's acknowledgement that the current two-
equation payment model has intricacies that can be mitigated by moving 
toward a single patient-level cost variable. This commenter asserted 
that using a patient-level cost variable would more accurately align 
treatment cost to payment. Further, the commenter urged transparency 
and inclusion of the dialysis community in moving forward with the 
development of a patient-level cost variable.
    Response: CMS appreciates the support expressed by MedPAC and other 
commenters for moving toward a patient cost model. As we discussed in 
the CY 2024 ESRD PPS proposed rule and reiterate in this final rule, 
the proposed requirement for reporting time on machine data is the 
first step toward creating the kind of patient cost model that 
commenters acknowledged would have advantages over the current cost 
model. As we discuss later in this final rule, we intend to analyze 
time on machine data for the purposes of creating a patient-level cost 
variable for potential future refinement to the ESRD PPS case mix 
adjusters. We intend to undertake further rulemaking in subsequent 
years to address various considerations, including the methodology for 
allocating composite rate costs to patients for the development of a 
patient-level cost variable. Interested parties would have the 
opportunity to comment on the methodology used in CMS's analysis to 
support such development at that time. We look forward to actively 
engaging with the public throughout that process in the future.
    Comment: Several commenters, including a network of dialysis 
organizations, State regional offices, a non-profit organization of 
ESRD networks, an individual commenter, a national organization of 
patients and kidney health care professionals, MedPAC, an ESRD 
facility, and patients advocated for evaluating disparities in the ESRD 
PPS, to refine case-mix adjusters in a way that would improve payment 
accuracy, promote health equity, and ensure quality of patient care. A 
national organization of patients and kidney health care professionals 
voiced support for aligning patient characteristics and co-morbidities 
more accurately to case-mix adjusters to

[[Page 76405]]

establish that patients are receiving patient-centered care.
    One commenter explained that his research has demonstrated that 
slower, longer dialysis sessions have a positive impact on patient 
health and mortality. In addition, several commenters described serious 
issues with shortened dialysis treatments contributing to reduced 
quality of care. One patient reported an incident in which they lost 
consciousness during treatment and no staff member responded. Several 
patients indicated they did not receive education regarding home 
modalities for years after beginning dialysis treatment. Two patients 
reported disregard and lack of education by physicians. Several 
patients reported additional quality of care issues, including starting 
dialysis treatment late or being removed from dialysis treatment early, 
being requested to move their treatment time frequently, being moved to 
another ESRD facility for treatment, and even being requested to skip 
dialysis treatment.
    Response: We appreciate the support for advancing health equity and 
quality of care through refinements to the ESRD PPS case mix adjusters. 
We believe that time on machine data, which we proposed to collect 
beginning January 1, 2025, would support CMS's analysis of disparities 
and support potential future refinements to advance health equity. Time 
on machine data can help inform CMS's understanding of the relationship 
between resource use and many of the issues reported by patients 
related to lack of staff time to address education or side effects of 
dialysis treatments. Monitoring time on machine data will enable CMS to 
address patient concerns about the possibility of being removed from 
treatment early or started late and receiving shortened treatments. Any 
potential new case-mix adjusters or changes to the case-mix adjusters 
would be the subject of separate rulemaking, and as we noted earlier in 
this final rule, interested parties would have the opportunity to 
comment on the methodology used in CMS's analysis to support such 
development at that time.
    Comment: MedPAC recommended that CMS consider the collection of 
time on machine data for Medicare Advantage (MA) dialysis 
beneficiaries, as the share of dialysis beneficiaries enrolled in MA 
plans now exceeds 40 percent. Doing so, MedPAC explained, would enable 
the agency to identify, assess, and address potential health 
disparities among both FFS and MA beneficiaries.
    Response: We appreciate the recommendation from MedPAC to collect 
time on machine data for MA beneficiaries, but we note that the 
collection of data related to services provided to beneficiaries 
enrolled in MA is outside the scope of this final rule.
    Comment: Several commenters, including a coalition of dialysis 
organizations, a non-profit kidney care alliance, and a non-profit 
dialysis organization, raised various concerns about the validity and 
sufficiency of time on machine data for the purpose of measuring 
patient resource use. One large dialysis organization requested details 
about how CMS would validate the time on machine data it proposes to 
collect. Several commenters claimed that shorter time on machine does 
not correlate with lower costs, and that time on machine data is not an 
accurate predictor of facility-level composite rate costs, since time 
on machine does not capture the full scope of services rendered. 
Specifically, commenters noted that time on machine fails to capture 
services provided before and after the actual dialyzing time, such as 
time spent working with social workers. Commenters expressed concern 
that use of such data would misinform payment model refinements.
    Commenters also noted that patient characteristics such as pain, 
co-morbidities, or an inability to adhere to the prescribed length of 
dialysis time, all contribute to variation in time on machine. A 
coalition of dialysis organizations asserted that the costs of all 
these patients would remain the same regardless of their time on 
machine. Several commenters expressed concern regarding the accuracy of 
data for patients that require the dialysis treatment to be suspended 
or for dialysis treatment to be ended early due to medical or other 
needs. One non-profit treatment and research center expressed that some 
patients may have personal needs that require working with staff while 
they are not connected to a dialysis machine, that some patients may 
need to have dialysis treatment interrupted for a variety of needs, 
such as mechanical issues, bathroom breaks, and blood pressure issues; 
therefore, some patients do not complete the full dialysis treatment 
ordered by the physician.
    Various commenters, including a professional organization of 
nephrologists, a non-profit dialysis association, and a large dialysis 
organization, suggested that CMS exclude certain types of dialysis from 
the proposed reporting requirement because of concerns about data 
quality. Commenters suggested excluding time on machine data collection 
for home dialysis patients, AKI patients, and nocturnal dialysis 
patients. Furthermore, several commenters expressed their concern that 
underserved or disadvantaged populations would be allocated fewer 
resources because of inaccuracies in time on machine data. 
Specifically, commenters noted that pediatric patients require highly 
individualized prescription time due to patient size and blood volume, 
which would not be indicative of health disparities. Lastly, one large 
dialysis organization requested that CMS track disasters and remove any 
data related to shortened treatments from the data.
    Response: We appreciate the concerns that commenters raised 
regarding the validity and sufficiency of the data. Many of the 
concerns that commenters raised about potential issues of data quality 
can be addressed through CMS's analysis of the data. We note that 
methodological considerations related to allocating costs based on time 
on machine data or any other data would be addressed in future notice 
and comment rulemaking.
    First, regarding the question about how CMS intends to validate the 
data, it is not clear whether the commenter is referring to validating 
that ESRD facilities are reporting accurate and complete information, 
or ensuring the statistical validity of aggregated data CMS uses for 
analysis. In the former case, as we noted in the CY 2024 ESRD PPS 
proposed rule, requiring reporting of time on machine data on a claim, 
by definition, would involve an attestation that the information 
submitted is correct and that the items represent expenses for 
medically necessary services. CMS reserves the right to request 
documentation from the provider validating the time on machine data, 
and to recoup payment if this documentation is not provided or 
supportable, as well as to take other administrative actions, as 
appropriate. We note that prescription data and historically reported 
monthly time on machine data is available in EQRS and can be used for 
the purposes of comparison. In the case of ensuring the statistical 
validity of data used for future analysis, we note that CMS has 
historically applied statistical trims to remove outlier values and 
erroneous data and could employ similar methods for future analyses.
    As commenters rightly pointed out, time on machine data does not 
account for costs that ESRD facilities incur before and after the time 
spent dialyzing. As we previously discussed in the CY 2020 ESRD PPS 
proposed rule (84 FR 38396 through 38400), patient-level differences in 
composite rate costs could be attributed to two discrete

[[Page 76406]]

categories: differences due to renal dialysis treatment duration 
(measured in units of time); and differences unrelated to treatment 
duration. The collection of time on machine data for each dialysis 
session would support the development of a patient-level cost model, 
with respect to the portion of composite rate costs that are 
attributable to dialysis duration. We would consider additional data 
and information to inform our allocation of costs that are not related 
to dialysis duration, such as time spent with social workers. 
Importantly, however, without a measure of dialysis duration, which we 
have proposed to collect as time on machine data reported on claims, it 
would not be possible to develop a comprehensive patient-level cost 
model in the future.
    We disagree with the commenter that the cost to care for patients 
is unchanged regardless of pain, co-morbidities, or adherence to 
prescribed dialysis treatment schedule based on time on machine. CMS 
published the findings from the December 2018 TEP in a report dated 
June 2019.\57\ The 2018 TEP report provides clear evidence that in 
general, longer treatment duration is associated with higher costs. 
First, as discussed in the 2018 TEP report, an imputed cost per 
treatment was calculated using a combination of treatment duration data 
from CROWNWeb \58\ (now EQRS) and facility cost per-minute data from 
cost reports to infer differences in costs across patient-months. An 
average interquartile range of 34.6 minutes was observed from CROWNWeb 
duration data, indicating significant within-facility variation in 
dialysis treatment time. Significant variation in average imputed cost 
per hemodialysis sessions also was observed, with an across-facility 
interquartile range of $62.62. Overall, it was found that costs 
increased with longer treatment times, and this pattern was consistent 
for the individual cost report components as well. Facilities with a 
higher proportion of beneficiaries receiving treatments >=4.5 hours 
duration were found to have higher average costs for each cost 
component, except for cost report drugs.\59\
---------------------------------------------------------------------------

    \57\ The final TEP report from December 2018 is found directly 
at: https://www.cms.gov/medicare/medicare-fee-for-service-payment/esrdpayment/downloads/esrd-pps-tep-summary-report-june-2019.pdf.
    \58\ In 2008, CMS introduced an electronic Web-based data 
collection system, Consolidated Renal Operations in a Web-enabled 
Network (CROWNWeb) which was designed to collect clinical 
performance measures data from dialysis facilities (73 FR 20370, at 
20372). CROWNweb is now ``EQRS''--that is, the ESRD Quality 
Reporting System (OMB Control Number 0938-1289).
    \59\ Acumen LLC. ESRD PPS Case-Mix Adjustment Technical Expert 
Panel (TEP). Slide Presentation Slide 42. December 2018. See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Downloads/ESRD-PPS-TEP-Presentation.pdf.
---------------------------------------------------------------------------

    Lastly, we recognize that the unique needs of particular 
subpopulations such as pediatric patients, AKI patients, nocturnal 
patients, and patients with social needs may affect time on machine 
data. We intend to consider such patient characteristics when proposing 
a methodology for allocating composite rate costs in the future. We do 
not believe it would be appropriate to exclude these subpopulations 
from the analysis entirely, because doing so would result in 
refinements to the ESRD PPS that in no way account for the unique needs 
of these subpopulations. Rather, we intend to look for ways to analyze 
and understand the impacts of such patient characteristics on treatment 
duration. For example, because commenters have indicated time on 
machine may be shortened due to social factors, we would encourage ESRD 
facilities to use Z codes when submitting ESRD PPS claims as 
appropriate to note when social factors affect treatment time or other 
aspects of treatment. For instance, if a patient has transportation 
issues necessitating removal from treatment early, the ESRD facility 
could include Z59.82 (Transportation insecurity), or if the patient has 
difficulty in understanding the education provided related to the 
importance of completing treatments the ESRD facility could use Z55 
(Problems related to education and literacy) to indicate the 
psychosocial need to be addressed. The coding of this type of 
information, when clinically appropriate, would support CMS's efforts 
to understand the impact of social determinants of health, and other 
factors, on treatment duration and patient-level cost.
    Comment: Many commenters stated that collecting time on machine 
data would place a significant administrative burden on ESRD 
facilities, including for facilities that utilize EHR systems, but 
especially for smaller facilities and facilities that lack EHR 
capabilities. Commenters expressed that the time-consuming task of 
reporting time on machine would add to ESRD facilities' costs and would 
have a negative impact on time available for patient care during a 
prolonged period of workforce shortage.
    Several commenters suggested alternative data sources that CMS 
could consider using in order to avoid the burden associated with the 
proposed collection of time on machine on claims. Some commenters 
suggested that existing CrownWeb (now EQRS) clinical data on time on 
machine, collected once monthly in conjunction with blood urea nitrogen 
(BUN) laboratory testing, could be used instead, reducing the burden on 
providers to collect data for each treatment. A non-profit kidney care 
alliance indicated while time on machine data may be interesting, there 
may be superior alternatives as a proxy to apportion composite rate 
costs; however, they did not provide any alternatives to time on 
machine as a proxy. Some commenters encouraged the use of physician 
prescribed time, rather than actual time on machine, as it reflects how 
ESRD facilities are staffed. One commenter suggested defining time on 
machine as blood volume processed >0, as this would enable CMS to 
capture resources expended on sequential ultrafiltration.
    Several other commenters suggested limiting the scope of the 
proposed data collection to reduce burden. Some commenters suggested 
limiting time on machine data collection to a subset of dialysis 
facilities or treatments. MedPAC urged CMS to be mindful of the 
potential for increased administrative burden on ESRD facilities and 
consider collecting these data for a finite period of time, only as 
long as needed to explore refining the payment adjustment factors.
    Response: We acknowledge that collecting time on machine data will 
increase administrative burden for ESRD facilities, especially those 
for whom the collection of such data will have to be done manually. 
However, we do not agree that the proposed reporting requirement will 
substantially impact time available for patient care, as some 
commenters suggested. We anticipate that ESRD facilities will employ 
medical records technicians or similar non-direct-care staff to 
aggregate time on machine data and report it on claims. Furthermore, as 
we stated in the CY 2024 ESRD PPS proposed rule (88 FR 42466), for 
facilities that have already automated the collection of machine-
generated data directly into the patient electronic medical record, 
this burden should be minimal. CMS will work to provide timely 
operational guidance about the reporting requirement for time on 
machine information so that facilities may prepare their information 
technology (IT) or EHR systems or other processes to collect and report 
complete time on machine data by January 1, 2025. We have revised our 
burden estimate in the regulatory impact

[[Page 76407]]

analysis in section VII.D.2.a of this final rule to reflect the 
additional burden associated with aggregating time on machine data from 
the patient record and reporting it on the claim.
    We appreciate commenters' suggestions regarding alternative sources 
of data. As we discuss earlier in this final rule, we believe time on 
machine is the most appropriate source of data for our proposed 
purpose. In contrast to the sources that commenters suggested, time on 
machine data would provide more comprehensive information about the 
actual quantity of dialysis that a patient receives each month. As we 
have previously noted, past analysis has demonstrated a statistically 
significant relationship between a patient's total time on machine and 
resource utilization.
    In addition, we appreciate the suggestion to limit time on machine 
data collection to a subset of dialysis facilities to drive the 
revision of case-mix adjusters. However, we believe this would be 
counterproductive, because analysis of a subset of facilities could 
skew the data and impact the accuracy of case-mix adjusters for the 
ESRD PPS in its entirety. We also appreciate the recommendation from 
MedPAC to limit the duration of data collection to the length of time 
necessary to develop methodology to use for case-mix adjustment. 
Without collection, review, and assessment of the time on machine data, 
we cannot provide an estimate of the length of time CMS will need to 
collect the data. We will consider the recommendation from MedPAC and 
the level of burden that reporting places on ESRD facilities in the 
future. We intend to monitor and potentially propose modifications to 
this policy, as appropriate, through future notice and comment 
rulemaking.
(c) Using a Medicare Claims Data Field To Report Time on Machine Data
    In the CY 2024 ESRD PPS proposed rule (88 FR 42471), we proposed 
that ESRD facilities report the number of minutes of hemodialysis 
treatment received in center in an ESRD facility using the D6 value 
code on the Medicare 72X type of bill (TOB) that is part of CMS's claim 
form CMS-1450 (UB-04) (OMB-0938-0997). While our proposal limited the 
time on machine reporting requirement to in-center claims, to address 
the concerns previously raised by interested parties about the burden 
and complexity of home dialysis reporting, we noted that time on 
machine for home dialysis data could nonetheless be voluntarily 
reported using the D6 value code on claims.
    This approach would address long-standing concerns, including such 
concerns raised by MedPAC and other interested parties, that CMS should 
move to a one-equation model. We stated that we agree with interested 
parties that a single-equation model, to be constructed at the patient 
level, would reduce the complexity of the current model, and would 
better align payment with costs. The current two-equation model's 
payment adjusters are derived using weighted averages of the 
coefficients from the facility-level and patient-level equations. 
Because the composite rate items currently comprise roughly 90 percent 
of the payment, we stated that we are seeking a more detailed 
understanding of patients' utilization of such treatment resources. We 
noted that we anticipate that the time on machine data would provide a 
useful proxy for these composite rate items.
    Furthermore, we noted that the proposal to collect time on machine 
data on patient claims would address past comments on whether such a 
reporting requirement could create perverse incentives for ESRD 
facilities to amend actual reported time on machine. Another past 
commenter expressed concern about whether an ESRD facility might have 
the renal dialysis run a few extra minutes to increase the payment. 
However, we noted that requiring the reporting of time on machine data 
on a claim, by definition, would involve an attestation that the 
information submitted is correct and that the items presented represent 
medically necessary expenses. The False Claims Act (31 U.S.C. 3729 to 
3733) establishes civil liability for knowingly presenting a false or 
fraudulent claim to the government for payment.
    We noted that if the requirement to report time on machine 
information on claims is finalized, we would issue operational guidance 
in support of the requirement. We stated that such guidance would 
describe the applicable instructions for reporting a value code (in 
this case, the D6 \60\ value code) connected to the number of minutes 
of hemodialysis treatment provided to a patient in center.
---------------------------------------------------------------------------

    \60\ Value code D6 on claim form CMS-1450 (UB-04) (OMB-0938-
0997), for reporting the total number of minutes of dialysis 
provided during the billing period.
---------------------------------------------------------------------------

    The majority of the commenters expressed concerns about the need 
for specific operational guidance and about exclusions and missing 
data. The comments on our proposal and our responses are set forth 
below.
    Comment: Several commenters, including a non-profit kidney care 
alliance, a coalition of dialysis providers, and large dialysis 
organizations requested clarification about the scope and 
specifications of the proposed reporting requirement. Commenters 
requested CMS to clarify its proposed definition of time on machine and 
how ESRD facilities would be expected to collect and report such data 
under the proposed requirement. A coalition of dialysis providers 
stated that there are inconsistencies in the methodology used across 
health care providers for the collection of time on machine data and 
that CMS will need to provide guidance to ensure data is accurately 
provided. Two large dialysis organizations recommended CMS define time 
on machine data collection using an approach like that used in the ESRD 
Measures Specification Manual associated with the ESRD QIP.\61\ One 
large dialysis organization recommended using ``clock time'' to measure 
time on machine. We note that the commenter did not specify a meaning 
for the term ``clock time''; however, we interpret this to mean the 
total number of minutes between the beginning of dialysis and the end 
of dialysis, without accounting for any interruptions. Clock time, the 
commenter suggested, could be utilized by all ESRD facilities, since it 
would not require networked electronic medical records. Another large 
dialysis organization requested confirmation that ESRD facilities would 
be required to report time on machine for all in-center dialysis 
treatments, including those provided under special circumstances for 
patients who normally perform dialysis treatments at home.
---------------------------------------------------------------------------

    \61\ https://www.cms.gov/files/document/cy-2023-final-technical-specifications-20230613.pdf.
---------------------------------------------------------------------------

    Response: We appreciate these requests for clarification from the 
commenters. Although we intend to publish detailed operational 
guidance, we are taking the opportunity in this final rule to respond 
directly to the questions that commenters posed. First, while we 
appreciate the recommendation that we use the ESRD Measures 
Specification Manual as a guide to define data collection, we note that 
the manual does not define time on machine in a way that is useful for 
our purposes. Rather, for the purposes of this reporting requirement, 
we are clarifying that we generally define time on machine as the total 
number of minutes between the beginning of dialysis and the end of 
dialysis, without accounting for any interruptions, which

[[Page 76408]]

we believe one commenter referred to as ``clock time'', as noted 
earlier. We do not intend for ESRD facilities to track minutes for 
interruption during dialysis due to frequent alarms or when a patient 
is removed from dialysis treatment to go to the bathroom, nor do we 
expect facilities to subtract those minutes of interruption from the 
time on machine that is reported. We expect these episodes to be 
infrequent and time-limited, and generally not a significant driver of 
aggregate variation in total time on machine between patients. Thus, 
time on machine for each dialysis treatment can be calculated by 
subtracting the time the dialysis treatment started from the time the 
treatment ended. For each ESRD PPS claim, the ESRD facility should 
report in the D6 value code the total number of minutes across all 
treatments provided to the patient during the billing period, which is 
typically a month. Lastly, regarding the comment about in-center 
dialysis treatments provided under special circumstances for patients 
who normally perform dialysis treatments at home, we are clarifying 
that time on machine data must be reported for all dialysis treatments 
that are provided in-center, even if the patient usually uses a home 
modality. In such circumstances, the ESRD facility should be billing 
for in-center dialysis treatments on a separate claim from any home 
dialysis treatments, with the appropriate indicators to reflect that 
the treatment is being provided in-center.
    Comment: Several commenters requested clarification about how to 
report time on machine in various exceptional circumstances. One large 
dialysis organization stated that CMS should provide guidance regarding 
how to report time on machine during certain infrequent anomalous 
circumstances such as power outages, network failures, mechanical 
issues or failures, or emergency circumstances when treatments must be 
shortened. One large dialysis organization requested CMS to 
differentiate between when time on machine data is captured manually 
and when it is captured electronically. Commenters also expressed 
concern about whether ESRD facilities would be paid for treatments for 
which time on machine was missing and requested that payment should not 
be withheld for missing time on machine data (that is, claims with no 
D6 value). One large dialysis organization requested CMS consider 
allowing an error rate of ten percent of total treatments to allow for 
unforeseen circumstances.
    Response: We appreciate the concerns that commenters raised about 
exceptional circumstances. We recognize that circumstances such as 
power outages, network failures, mechanical issues or failures, 
emergency circumstances, and human error can result in disruptions to 
standard workflows and consequently, missing time on machine data for 
individual dialysis treatments. We are clarifying that since data for 
time on machine is reported as an aggregate value for all dialysis 
treatment sessions in one month, we will not return claims that lack 
reporting of individual sessions. We will only return claims that have 
nothing reported in the D6 value code. Therefore, although we 
appreciate the suggestion to allow a ten percent error rate, we believe 
it is neither necessary nor appropriate to do so.
    At this time, we have not established any specific indicators to 
differentiate between time on machine that is collected manually versus 
electronically. Nor have we established any identifiers for 
circumstances when a patient needs to end his or her dialysis session 
earlier than the prescribed time; however, as we discussed earlier in 
this final rule, we believe additional information already reported on 
claims, such as ICD-10 codes, could provide relevant context for such 
circumstances. We may consider developing additional indicators to 
identify circumstances like the ones that commenters described, and we 
would discuss any such changes in future notice and comment rulemaking.
(d) Use of Time on Machine Data for the ESRD PPS
    In our CY 2024 ESRD PPS proposed rule (88 FR 42470), we emphasized 
and again clarified that time on machine data would not be directly 
used to determine payment for renal dialysis services, nor would higher 
payments be made for longer treatments. Rather, we stated that time on 
machine data would allow for patient-specific calculation of costs for 
composite rate services, including labor costs, costs for the use of 
renal dialysis machines and related equipment, and costs for such items 
as dialysate and other essential supplies. We noted that, in this way, 
time on machine data would be used to disaggregate facility-level 
composite rate costs (as obtained from the cost reports) and assign 
them to the patient-month level, which would enable a refined, single-
equation estimation methodology. The refined, single-equation 
regression analysis (currently under development) would still be used 
to determine the inclusion/exclusion and magnitude of payment 
multipliers for patient-level case-mix flags that are associated with 
higher costs. We wrote that final payment adjustments would still only 
depend on existing patient-level case-mix adjustors, rather than a 
factor directly derived from time on machine data.
    Several of the commenters expressed concerns about how the 
resultant time on machine data would be used in the model refinement 
process to potentially determine payment. The comments on our proposal 
and our responses are set forth below.
    Comment: Several commenters requested further clarification about 
how CMS intends to use the time on machine data. A not-for-profit 
dialysis organization expressed concern that reporting time on machine 
data would lead to a payment methodology based on minutes of dialysis 
provided.
    Response: In the proposed rule and this final rule, we have clearly 
stated how data collected from time on machine will be used. We will 
use time on machine data to help us evaluate and monitor the accuracy 
of our payments for patient-level adjustment factors. CMS will also 
evaluate whether the data could be used to inform future refinements to 
the existing patient-level adjustment factors set forth at Sec.  
413.235(a), which include patient age, BMI, BSA, and co-morbidities 
such as sickle cell anemia. Finally, CMS will review the data for its 
potential to identify any disparities from a health equity perspective 
that may support proposing, in future rulemaking, new patient-level 
adjustment factors, including potential SDOH factors.
(e) Request for Information About Effective Date
    In the CY 2024 ESRD PPS proposed rule, we proposed a January 1, 
2025, effective date for this new reporting requirement. We stated that 
we are aware that all ESRD facilities record the time a patient has 
received hemodialysis treatment into a patient's medical record, and 
that, for most ESRD facilities, this time is automatically recorded 
into the patient's EHR. We noted that we further understand that ESRD 
facilities can transfer data from EHRs into the patient-specific claims 
that are submitted to Medicare for payment. However, we recognized that 
some ESRD facilities with limited resources may need to make 
modifications to their record keeping and reporting systems to 
facilitate the transfer of a patient's recorded hemodialysis treatment 
time in the patient's medical record to the Medicare claim. Although we 
did receive a past comment indicating that a facility's

[[Page 76409]]

implementation time would involve training staff on how to count and 
track time, we stated that we do not expect that the manual recording 
of a patient's hemodialysis treatment time into their health record is 
widespread. Finally, we noted that ESRD facilities are already 
reporting extensive information from patient EHRs into Medicare 
institutional claim form CMS-1450 (UB-04) (OMB-0938-0997), and we would 
not expect implementation to be overly burdensome to ESRD facilities. 
We stated that we recognize that some ESRD facilities would need to 
establish a new pathway from patient EHRs to the Medicare claim form, 
in addition to making simpler programming updates to add a field for 
the total number of minutes of dialysis provided during the billing 
period. Based on our findings in the TEP from December 2018, we noted 
that we anticipate that the implementation challenges that ESRD 
facilities might experience would be small and temporary, as a 
patient's time receiving dialysis treatment is already collected for 
the patient's medical record. We solicited comment on whether an 
earlier effective date, such as January 1, 2024, would be feasible and 
would provide ESRD facilities with adequate time to implement this new 
reporting requirement.
    The majority of the commenters expressed concerns about the ability 
to make the necessary changes to internal IT systems by a January 1, 
2024, reporting requirement. The comments on our proposal and our 
responses are set forth below.
    Comment: Commenters expressed strong opposition to any start date 
earlier than January 1, 2025. A large dialysis organization expressed 
that making the necessary operational changes to report time on machine 
data would require considerable effort and would not be possible prior 
to January 1, 2025. Several commenters called for CMS to allow for at 
least one year before implementation for ESRD facilities, including 
large dialysis organizations, to program the new requirements into 
their IT and EHR systems, and to provide comprehensive guidance before 
finalizing this policy. A few commenters also suggested that 
operational guidance be issued in conjunction with the CY 2024 ESRD PPS 
final rule, and that implementation of the proposed time on machine 
reporting requirement be delayed until interested parties have an 
opportunity to comment on such guidance.
    Response: CMS understands the concerns that commenters raised 
regarding lead time needed to develop IT systems and processes in order 
to collect and report accurate and complete time on machine data. As we 
noted in the CY 2024 ESRD PPS proposed rule, we have proposed an 
implementation date of January 1, 2025, for this reporting requirement 
to provide what we believe will be sufficient lead time for ESRD 
facilities to make these necessary changes to their systems and 
operations. Commenters indicated that it would take 1 year for ESRD 
facilities to update their systems after the provision of operational 
guidance due to systems updates and staff education. We believe that 
the 1 year implementation timeline strikes a balance between the need 
to collect this data and ESRD facilities' need to make operational 
changes.
    We also appreciate the concerns of commenters who requested 
specific operational guidance, and the opportunity to comment on such 
guidance, before the effective date of the proposed reporting 
requirement. In this final rule, we have addressed many of the 
operational questions that commenters posed. Additionally, as we noted 
earlier in this final rule, we intend to issue detailed operational 
guidance no later than January 1, 2024. This operational guidance will 
address topics such as instructions for the collection and reporting of 
time on machine data, detailed billing requirements, including the 
types of ESRD PPS claims subject to required reporting of the D6 value 
code, and guidance on how to proceed when time on machine for a 
qualifying treatment is missing or otherwise unavailable. The proposed 
1-year lead time between the issuance of detailed operational guidance 
and the effective date of the proposed reporting requirement will 
afford CMS the opportunity to engage in further dialogue with 
interested parties about such guidance during the CY 2025 rulemaking 
cycle. CMS has responded to specific concerns about operational 
guidance earlier in this section of this final rule. Further guidance 
will be provided by the MACs. Additionally, interested parties may 
reach out to CMS to request meetings to discuss and resolve specific 
concerns.
    Final Rule Action: We are finalizing our proposal to require the 
reporting of in-center hemodialysis duration on ESRD PPS claims, 
beginning January 1, 2025. Specifically, we are finalizing our proposal 
to require ESRD facilities to report ``time on machine,'' with certain 
changes to clarify that ESRD facilities are required to report the 
number of minutes between the start and end of hemodialysis treatment, 
without accounting for interruptions, a beneficiary receives during the 
billing period in center in an ESRD facility. We are finalizing our 
proposal to require ESRD facilities to report this information using 
the D6 value code on ESRD PPS claims. We are codifying this requirement 
in regulation at Sec.  413.198(b)(5)(i). As discussed in section 
II.B.1.h of this final rule, we are finalizing the addition of Sec.  
413.198(b)(5), which states that ESRD facilities must submit data and 
information in the formats established by CMS for the purpose of 
estimating patient-level and facility level variation in resource use.
(4) Technical Change to Sec.  413.198
    We proposed to fix a typographical error in Sec.  
413.198(b)(3)(iii), which currently refers to ``luxury items or 
servicess''. We proposed to change this to ``luxury items or 
services''. CMS did not receive any comments regarding correcting this 
typographical error in Sec.  413.198(b)(3)(iii). We are finalizing our 
proposal to revise the typographical error in Sec.  413.198(b)(3)(iii), 
which currently refers to ``luxury items or servicess'' to ``luxury 
items or services''.
k. Clarification to TDAPA Average Sales Price (ASP) Policy
    In the CY 2020 ESRD PPS final rule, we finalized a conditional 
policy for TDAPA payment based on the availability of ASP data (84 FR 
60679). In that final rule, we explained that if drug manufacturers 
were to stop submitting full quarters of ASP data for products that are 
eligible for the TDAPA, and we had to revert to basing the TDAPA on the 
wholesale acquisition cost (WAC) or invoice pricing, we believed we 
would be overpaying for the TDAPA for those products. We stated that we 
would no longer apply the TDAPA for a new renal dialysis drug or 
biological product if a drug manufacturer submits a full calendar 
quarter of ASP data into CMS within 30 days after the last day of the 
3rd calendar quarter after the TDAPA is initiated for the product, but 
at a later point during the applicable TDAPA period specified in Sec.  
413.234(c)(1) or (2), stops submitting a full calendar quarter of ASP 
data into CMS. We explained that once we determine that the latest full 
calendar quarter of ASP is not available, we would stop applying the 
TDAPA for the new renal dialysis drug or biological product within the 
next 2-calendar quarters. For example, we stated that if we began 
paying the TDAPA on January 1, 2021 for an eligible new renal dialysis 
drug or biological product, and a full calendar quarter of ASP data is 
made available to CMS by October 30, 2021 (30 days after

[[Page 76410]]

the close of the 3rd quarter of paying the TDAPA), but a full calendar 
quarter of ASP data is not made available to CMS as of January 30, 2022 
(30 days after the close of the 4th quarter of paying the TDAPA), we 
would stop applying the TDAPA for the product no later than June 30, 
2022 (2 quarters after the 4th quarter of paying the TDAPA).
    We adopted this conditional policy to avoid overpaying for the 
TDAPA on an ongoing basis and to ensure that TDAPA payment is based on 
the most appropriate data, that is, ASP. Specifically, we explained in 
the CY 2020 ESRD PPS proposed rule (84 FR 38349) and final rule (84 FR 
60680) that we were concerned about (1) increases to Medicare 
expenditures due to the TDAPA for calcimimetics; (2) drug manufacturers 
not reporting ASP data for products eligible for TDAPA; and (3) our 
TDAPA policy potentially incentivizing drug manufacturers to withhold 
ASP data from CMS.
    In the CY 2024 ESRD PPS proposed rule (88 FR 42472), we discussed 
that our existing regulation at Sec.  413.234(c) does not specifically 
address the application of the TDAPA conditional policy in situations 
in which the manufacturer of the new renal dialysis drug or biological 
product submitted ASP data to CMS and reported zero or negative sales. 
Zero or negative sales may occur for a variety of reasons, including no 
sales, recalls of a product, or repurchases of sold products. In the CY 
2012 PFS final rule (76 FR 73296), CMS clarified that zero or negative 
values are valid for ASP, ASP units, and WAC. Therefore, when such a 
scenario occurs for separately payable Medicare Part B drugs, we 
consider the submission of zero or negative sales to fulfill the 
reporting requirements of manufacturer ASP data to CMS as set forth in 
sections 1927(b)(3)(A)(iii) and 1847A(f) of the Act. We noted that in 
situations when zero sales are submitted, CMS guidance \62\ instructs 
the manufacturer to report ``0.000'' for the ASP and the number of ASP 
units. The payment allowance limits for drugs and biologicals that are 
not included in the ASP Medicare Part B Drug Pricing File or Not 
Otherwise Classified Pricing File, other than new drugs that are 
produced or distributed under a new drug application (or other 
application) approved by the U.S. FDA, are based either on the 
published WAC or invoice pricing (except under OPPS, where the payment 
allowance limit is 95 percent of the published average wholesale price 
(AWP)). In determining the payment limit based on WAC, the contractors 
follow the methodology specified in Publication 100-04, Chapter 17, 
section 20.4 Drugs and Biologicals, for calculating the AWP, but 
substitute WAC for AWP. The payment limit is 106 percent of the lesser 
of the lowest-priced brand or median generic WAC.\63\ Therefore, for 
purposes of the TDAPA conditional policy, in circumstances where a 
manufacturer submitted ASP data reflecting zero or negative sales 
during the TDAPA period, we clarified that we consider CMS to have 
received the latest full calendar quarter of ASP data, and we would not 
discontinue TDAPA payment under the conditional policy in Sec.  
413.234(c). Consistent with the pricing methodologies for separately 
payable Medicare Part B drugs, we would set the TDAPA payment amount 
based on WAC, or if WAC is not available, invoice pricing, for the 
quarter in which zero or negative sales were reported.
---------------------------------------------------------------------------

    \62\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/Downloads/ASP_Data_Collection_Validation_Macro_User_Guide.pdf.
    \63\ Medicare Claims Processing Manual Chapter 17, section 
20.1.3 https://www.cms.gov/Regulations-and-Guidance/Guidance/
Manuals/Downloads/clm104c17.pdf.
---------------------------------------------------------------------------

    Comment: We received two comments on our proposal to clarify the 
ASP data submission requirement. Both commenters, a coalition of 
dialysis organizations and a drug manufacturer, agreed with CMS that a 
submission reflecting zero or negative sales should not lead to a 
discontinuation of TDAPA payment. Both commenters supported this 
clarification. The comment from the coalition of dialysis organizations 
stated that this policy would support continued patient access to a 
drug or biological product that is in the TDAPA period. The comment 
from the drug manufacturer expressed further support for the use of 
WAC, or if WAC is not available, invoice pricing, when ASP data is not 
usable for the purposes of determining the TDAPA payment amount and 
post-TDAPA payment amount.
    Response: We thank commenters for their support and for their 
insight into the importance and impact of this policy.
    Final Rule Action: We are finalizing the clarification to the TDAPA 
ASP payment policy as proposed; for purposes of the TDAPA conditional 
policy, in circumstances where a manufacturer submitted ASP data 
reflecting zero or negative sales during the TDAPA period, we consider 
CMS to have received the latest full calendar quarter of ASP data, and 
we will not discontinue TDAPA payment under the conditional policy in 
Sec.  413.234(c). Consistent with the pricing methodologies for 
separately payable Medicare Part B drugs, in such circumstances, we 
will set the TDAPA payment amount based on WAC, or if WAC is not 
available, invoice pricing, for the quarter in which zero or negative 
sales were reported.

C. Transitional Add-On Payment Adjustment for New and Innovative 
Equipment and Supplies (TPNIES) Clarifications and Application for CY 
2024 Payment

1. Background
    In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), CMS 
established the transitional add-on payment adjustment for new and 
innovative equipment and supplies (TPNIES) under the ESRD PPS, under 
the authority of section 1881(b)(14)(D)(iv) of the Act, to support ESRD 
facility use and beneficiary access to these new technologies. We 
established this add-on 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 TPNIES.
    In the CY 2020 ESRD PPS final rule (84 FR 60650), we established in 
Sec.  413.236(b) that for dates of service occurring on or after 
January 1, 2020, we would 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 granted marketing authorization by the FDA on or after 
January 1, 2020; (3) is commercially available by January 1 of the 
particular CY, 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 CY; (5) is 
innovative, meaning it meets the substantial clinical improvement 
criteria specified in the Inpatient Prospective Payment System (IPPS) 
regulations at 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).

[[Page 76411]]

    Regarding the innovation requirement in Sec.  413.236(b)(5), in the 
CY 2020 ESRD PPS final rule (84 FR 60690), we stated that we would use 
the following criteria to evaluate substantial clinical improvement for 
purposes of the TPNIES under the ESRD PPS based on the IPPS substantial 
clinical improvement criteria in Sec.  412.87(b)(1) and related 
guidance:
    A new technology represents an advance that substantially improves, 
relative to renal dialysis services previously available, the diagnosis 
or treatment of Medicare beneficiaries. First, CMS considers the 
totality of the circumstances 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. 
Second, 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
     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; an improved 
quality of life; or (6) 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.
    Third, evidence from the following published or unpublished 
information sources from within the United States 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.
    Fourth, the medical condition diagnosed or treated by the new renal 
dialysis equipment or supply may have a low prevalence among Medicare 
beneficiaries.
    Fifth, the new renal dialysis equipment or supply may represent an 
advance that substantially improves, relative to services or 
technologies 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.
    In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), we 
also established a process modeled after IPPS's process of determining 
if a new medical service or technology meets the substantial clinical 
improvement criteria specified in Sec.  412.87(b)(1). As we discussed 
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 payment adjustments similar to the IPPS New 
Technology Add-On Payment and to provide stakeholders with standard 
criteria for both inpatient and ESRD facility 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. We would 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 would 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. In the CY 2020 ESRD PPS final rule, we 
also specified certain deadlines for the application requirements. We 
noted that we would only consider a complete application received by 
February 1 prior to the particular CY. In addition, we required that 
FDA marketing authorization for the equipment or supply must occur by 
September 1 prior to the particular CY. We also stated in the CY 2020 
ESRD PPS final rule (84 FR 60690 through 60691) that we would establish 
a workgroup of CMS medical and other staff to review the materials 
submitted as part of the TPNIES application, public comments, FDA 
marketing authorization, and HCPCS application information and assess 
the extent to which the product provides substantial clinical 
improvement over current technologies.
    In the CY 2020 ESRD PPS final rule, we established Sec.  413.236(d) 
to provide a payment adjustment for certain new and innovative renal 
dialysis equipment or supplies. We stated that the TPNIES is paid for 
two CYs. 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.
    Regarding the basis of payment for the TPNIES, in the CY 2020 ESRD 
PPS final rule, we finalized at Sec.  413.236 that the TPNIES is based 
on 65 percent of the price established by the MACs, using the 
information from the invoice and other specified sources of 
information.
    In the CY 2021 ESRD PPS final rule (85 FR 71410 through 71464), we 
made several changes to the TPNIES eligibility criteria at Sec.  
413.236. First, we revised the definition of new at Sec.  413.236(b)(2) 
as within 3 years beginning on the date of the FDA marketing 
authorization. Second, we changed the deadline for TPNIES applicants' 
HCPCS Level II code application submission from September 1 of the 
particular CY to 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 CY. 
In addition, a copy of the applicable 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

[[Page 76412]]

CMS website in order for the equipment or supply to be eligible for the 
TPNIES the following year. Third, we revised Sec.  413.236(b)(5) to 
remove a reference to related guidance on the substantial clinical 
improvement criteria, as the guidance had already been codified.
    Finally, in the CY 2021 ESRD PPS final rule, we expanded the TPNIES 
policy to include certain capital-related assets that are home dialysis 
machines when used in the home for a single patient. We explained that 
capital-related assets 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). We noted that examples of capital-related assets for 
ESRD facilities are dialysis machines and water purification systems. 
We explained that, although we stated in the CY 2020 ESRD PPS proposed 
rule (84 FR 38354) that 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 are generally used for multiple patients, there were a 
number of other factors we considered that led us to consider expanding 
eligibility for these technologies in the CY 2021 ESRD PPS rulemaking. 
We explained that, following publication of the CY 2020 ESRD PPS final 
rule, 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 considered various HHS home 
dialysis initiatives, Executive Orders to transform kidney care, and 
how the risk of COVID-19 for particularly vulnerable ESRD beneficiaries 
could be mitigated by encouraging home dialysis.
    After closely considering these issues, we proposed a revision to 
Sec.  413.236(b)(6) in the CY 2021 ESRD PPS proposed rule 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.  413.235(b), and finalized 
the exception as proposed in the CY 2021 ESRD PPS final rule. We 
finalized the same determination process for TPNIES applications for 
capital-related assets that are home dialysis machines as for all other 
TPNIES applications; that we will consider whether the new home 
dialysis machine meets the eligibility criteria specified in Sec.  
413.236(b) and announce the results in the Federal Register as part of 
our annual updates and changes to the ESRD PPS. In accordance with 
Sec.  413.236(c), we will only consider, for additional payment using 
the TPNIES for a particular CY, an application for a capital-related 
asset that is a home dialysis machine received by February 1 prior to 
the particular CY. If the application is not received by February 1, 
the application will be denied and the applicant is able to reapply 
within 3 years beginning on the date of FDA marketing authorization to 
be considered for the TPNIES, in accordance with Sec.  413.236(b)(2).
    In the CY 2021 ESRD PPS final rule, at Sec.  413.236(f), we 
finalized a pricing methodology for capital-related assets that are 
home dialysis machines when used in the home for a single patient, 
which requires the MACs to calculate the annual allowance and the 
preadjusted per treatment amount. 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.\64\ 
We finalized that this amount would be updated on an annual basis so 
that it is consistent with how the ESRD PPS base rate is updated.
---------------------------------------------------------------------------

    \64\ The CY 2023 TPNIES offset amount was $9.79. CMS finalized a 
CY 2024 TPNIES offset amount of $10.00, as discussed in section 
II.B.1.e of this final rule.
---------------------------------------------------------------------------

    We revised 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.
    We revised Sec.  413.236(d)(2) to reflect 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 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.
    In summary, under the current eligibility requirements in Sec.  
413.236(b), CMS provides for a 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 within 3 years beginning on the date of the FDA 
marketing authorization; (3) is commercially available by January 1 of 
the particular CY, meaning the year in which the payment adjustment 
would take effect; (4) has a complete 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 DMEPOS items and services as specified in 
the HCPCS Level II coding guidance on the CMS website prior to the CY; 
(5) is innovative, meaning it meets the criteria specified in Sec.  
412.87(b)(1); and (6) is not a capital-related asset, except for 
capital-related assets that are home dialysis machines.
2. Clarifications Regarding CMS's Evaluation of the TPNIES Eligibility 
Criteria
    This section of the final rule discusses clarifications to our 
policies for evaluating the TPNIES eligibility criteria under Sec.  
413.236(b).
a. Sequential Order of CMS Review of the TPNIES Eligibility Criteria 
(Sec.  413.236(b))
    As stated previously, we consider whether a new renal dialysis 
supply or equipment meets the TPNIES eligibility criteria as part of 
the annual ESRD PPS rulemaking and announce the results in ESRD PPS 
final rule. To qualify for the TPNIES, an applicant must meet each of 
the TPNIES eligibility criteria set forth in Sec.  413.236(b)(1) 
through (6). An applicant that fails to demonstrate that it meets each 
of the six eligibility criteria is not eligible for the TPNIES.
    In the CY 2021 ESRD PPS final rule, we focused our analysis of the 
TPNIES eligibility criteria on those that were not met. That is, for 
the Theranova Dialyzer, we included our analysis of how the applicant 
did not meet the innovation criterion under Sec.  413.236(b)(5), and 
for the Tablo[supreg] cartridge, we included our analysis of how the 
applicant did not meet the newness criterion under Sec.  413.236(b)(2) 
and innovation criterion under Sec.  413.236(b)(5) (85 FR 71444 through 
71464). In the CY 2022 and CY 2023 ESRD PPS final rules, we expanded 
our analysis to include our determination as to whether the applicants 
met each of the six criteria. In doing so, we analyzed the TPNIES 
eligibility criteria in the sequence that is provided in Sec.  
413.236(b)(1) through (6) (86 FR 61889 through 61906 and 87 FR 67193 
through 67216).
    In the CY 2024 ESRD PPS proposed rule (88 FR 42475 through 42476), 
we stated that we are clarifying that our analysis of the TPNIES 
eligibility criteria would continue to proceed in sequential order. 
Specifically, in the annual ESRD PPS proposed rule, we would continue 
to summarize the information from the application regarding each of the 
six eligibility criteria and include any questions or

[[Page 76413]]

concerns that we identify during our analysis of the application.
    Based on information provided by the applicant and from public 
comments during the annual ESRD PPS rulemaking cycle, we would continue 
to analyze the TPNIES eligibility criteria in sequential order in the 
annual ESRD PPS final rule. However, the change that we proposed is 
that once it has been established that one criterion has not been met, 
we would not discuss or make specific determinations on the subsequent 
criteria for that item in the annual ESRD PPS final rule. We noted that 
the criteria set forth in Sec.  413.236(b) are intentionally listed in 
the order in which they appear. The first criterion is foundational in 
that an equipment or supply that is not a renal dialysis service would 
not be paid for under the ESRD PPS and therefore would not fit within 
the TPNIES payment pathway. As such, it would not be pertinent to 
evaluate the remaining TPNIES criteria for that item. TPNIES criteria 
two through four are objective and not subject to interpretation in 
that they each require date evidence to demonstrate newness, commercial 
availability, and the submission of a HCPCS application, respectively. 
The TPNIES innovation criterion under Sec.  413.236(b)(5) requires the 
most significant CMS evaluation. We explained that, under our TPNIES 
policy and Sec.  412.87(b)(1)(i), CMS is required to consider the 
totality of the circumstances 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. In 
doing so, we consider various non-objective circumstances in our review 
of the TPNIES applications, including the state of the ESRD landscape 
and the particular challenges and vulnerabilities of patients with ESRD 
(86 FR 61905). We noted that we believe it is prudent to reserve our 
in-depth analysis of the TPNIES innovation criterion only for 
applications that provide the necessary evidence to demonstrate that 
they meet the earlier foundational and objective TPNIES criteria.
    As described previously in the background section of this final 
rule, the TPNIES innovation criterion in Sec.  413.236(b)(5) 
incorporates the substantial clinical improvement criteria in the IPPS 
regulations at Sec.  412.87(b)(1) for the new technology add-on payment 
(NTAP). This sequential approach for reviewing eligibility criteria is 
also in place for the NTAP pathway. The FY 2009 IPPS final rule (73 FR 
48561 through 48563) discussed the way in which CMS evaluates the NTAP 
eligibility criteria for new medical service or technology add-on 
payment applications. That is, we first determine whether a medical 
service or technology meets the newness criterion, and only if so, do 
we then make a determination as to whether the technology meets the 
cost threshold and represents a substantial clinical improvement over 
existing medical services or technologies. The NTAP cost criterion is 
not applicable in analyzing TPNIES eligibility. However, consistent 
with our approach under NTAP, we stated that we believe that the most 
prudent use of CMS resources would be to reserve our analysis and 
determination regarding whether a new equipment or supply meets the 
TPNIES innovation criterion by representing a substantial clinical 
improvement over existing technologies until after we determine the new 
equipment or supply meets the earlier criteria.
    Under this proposal, we would first determine whether an equipment 
or supply meets the renal dialysis service criterion in Sec.  
413.236(b)(1) and present our analysis of this first criterion in the 
final rule. In instances where CMS determines that Sec.  413.236(b)(1) 
has been met, we would proceed in assessing the newness criterion in 
Sec.  413.236(b)(2) and present our analysis of this second criterion 
in the final rule. In instances where CMS determines that Sec.  
413.236(b)(2) has been met, we would proceed in assessing whether the 
commercial availability criterion in Sec.  413.236(b)(3) has either 
been met or the applicant expects that it will be met by January 1 of 
the particular CY and present our analysis of this third criterion in 
the final rule. In instances where CMS determines that Sec.  
413.236(b)(3) has been met or the applicant expects that it will be met 
by January 1 of the particular CY, we would proceed in assessing the 
HCPCS Level II code application criterion in Sec.  413.236(b)(4) and 
present our analysis of this fourth criterion in the final rule. In 
instances where CMS determines that Sec.  413.236(b)(4) has been met, 
we would proceed in assessing the innovation criteria in Sec. Sec.  
413.236(b)(5) and 412.87(b)(1) and present our analysis of this fifth 
criterion in the final rule. In instances where CMS determines that 
Sec.  413.236(b)(5) has been met, we would proceed in assessing the 
non-capital-related asset (except home dialysis machines) criterion in 
Sec.  413.236(b)(6) and present our analysis of this sixth criterion in 
the final rule. In instances where CMS determines that Sec.  
413.236(b)(6), as well as each of the five preceding criteria in Sec.  
413.236(b)(1) through (5) as discussed previously have been met, the 
equipment or supply would qualify for and would be paid for under the 
ESRD PPS using the TPNIES per Sec.  413.236(d) beginning in the year 
that is the subject of the rulemaking.
    In summary, we proposed to clarify that as CMS proceeds through the 
sequential analysis of the six TPNIES eligibility criteria in the ESRD 
PPS final rule for a particular equipment or supply, once we determine 
that the item has failed to demonstrate having met one of the 
eligibility criteria, the item would be ineligible for the TPNIES. We 
would limit our analysis in the final rule to the TPNIES criterion that 
is not met and any preceding criteria that have been determined to have 
been met. We would not include the analysis of the remaining criteria 
in the final rule. This policy would be effective January 1, 2024 and 
would apply to our analysis of TPNIES applications for CY 2025 payment.
    We received six comments regarding our proposed clarification of 
the sequential order of CMS review of the TPNIES eligibility criteria 
at Sec.  413.236(b). These comments and CMS's responses are set forth 
below.
    Comment: One commenter supported our proposal with the 
understanding that all criteria would be discussed in full in the 
annual ESRD PPS proposed rule. Other commenters requested CMS 
confirmation that we would continue to summarize the information from 
each TPNIES application, including any questions and concerns regarding 
each of the six eligibility criteria, in the annual CY ESRD PPS 
proposed rule. Commenters also requested clarification that in the 
annual CY ESRD PPS final rule, CMS would limit its analysis to the 
criterion not met as well as any preceding criteria that are met. 
Several other commenters expressed concern that our proposal would deny 
applicants CMS's analysis of each criterion, eliminating the 
opportunity for the public to review the latter eligibility criteria 
and limiting applicants' ability to correct deficiencies prior to the 
next TPNIES application cycle.
    Response: We thank the commenters for their input and confirm that 
we will continue to include our analysis of each TPNIES eligibility 
criterion in sequential order in the annual CY ESRD PPS proposed rule. 
We believe that identifying our comments or concerns with each of the 
eligibility criteria in the proposed rule provides the public with 
sufficient information and ample opportunity to review and respond to

[[Page 76414]]

our analysis and provides the applicant with the opportunity to correct 
deficiencies, as needed.
    If a TPNIES applicant who is denied reapplies in a later 
application cycle, we will continue to provide a full analysis of all 
the eligibility criteria once again in the annual ESRD PPS proposed 
rule to allow the applicant an opportunity to correct any additional 
deficiencies for all the eligibility criteria, as needed.
    As stated in the CY 2024 ESRD PPS proposed rule (88 FR 42475), an 
applicant that fails to demonstrate that it meets each of the six 
eligibility criteria is not eligible for the TPNIES. Therefore, we 
believe that reviewing the TPNIES eligibility criteria in sequential 
order allows CMS to reserve our in-depth analysis of the TPNIES 
innovation criterion only for applications that provide the necessary 
evidence to demonstrate that they meet the earlier foundational and 
objective TPNIES criteria. This approach is consistent with the way 
that NTAP applications are assessed in the annual IPPS rule.
    Final Rule Action: After consideration of the public comments 
received, we are finalizing our clarification regarding the sequential 
order of CMS review of the TPNIES eligibility criteria as proposed. In 
the annual ESRD PPS proposed rule, we will continue to summarize the 
information from the application regarding each of the six eligibility 
criteria and include any questions or concerns that we identify during 
our analysis of the application. As CMS proceeds through the sequential 
analysis of the six TPNIES eligibility criteria in the ESRD PPS final 
rule for a particular equipment or supply, once we determine that the 
item has failed to demonstrate having met one of the eligibility 
criteria, the item will be ineligible for the TPNIES. We will limit our 
analysis in the final rule to the TPNIES criterion that is not met and 
any preceding criteria and will not include the analysis of the 
remaining criteria in the final rule. This policy will be effective 
January 1, 2024 and will apply to our analysis of TPNIES applications 
for CY 2025 payment.
b. Clarifications Regarding the TPNIES Newness Criterion (Sec.  
413.236(b)(2))
    As stated previously, applicants must meet the newness criterion in 
Sec.  413.236(b)(2) to qualify for the TPNIES. CMS defines the TPNIES 
newness criterion at Sec.  413.236(b)(2) as within 3 years beginning on 
the date of the FDA marketing authorization. In the CY 2024 ESRD PPS 
proposed rule (88 FR 42476), we clarified two distinct aspects of the 
criterion that are consistent with our current TPNIES policies and 
would not represent any changes to the eligibility criteria: (1) the 3-
year newness period and (2) FDA marketing authorization.
    First, with respect to the 3-year newness period, we stated in the 
CY 2021 ESRD PPS final rule that by defining new as within 3 years 
beginning on the date of the FDA marketing authorization, we limit 
eligibility for the TPNIES to new technologies but allow prospective 
TPNIES applicants 3 years beginning on the date of FDA marketing 
authorization in which to submit their applications (85 FR 71410 
through 71464).
    To further clarify the timeframe during which a prospective TPNIES 
applicant is eligible to apply, in the CY 2024 ESRD PPS proposed rule 
(88 FR 42476), we proposed to modify our regulation to specify that the 
applicant would have 3 years from the date of FDA marketing 
authorization to apply for the TPNIES, based on the date the 
application is submitted. We noted that this modification is consistent 
with current policy, and while it is not a change in policy, we believe 
that clarifying the regulation text would help to eliminate any 
confusion about the 3-year newness period. As indicated in Sec.  
413.236(c), February 1 prior to the particular CY is the annual TPNIES 
application submission deadline. We proposed to clarify that the 3-year 
newness period is only for submission of the complete application. An 
applicant does not have to ensure that CMS renders its determination 
through notice and comment rulemaking within the 3-year newness period. 
Specifically, we proposed to revise Sec.  413.236(b)(2) to clarify that 
the equipment or supply is new if a complete application has been 
submitted to CMS under Sec.  413.236(c) within 3 years of the date of 
the FDA marketing authorization.
    Second, with respect to the requirement in Sec.  413.236(b)(2) that 
the equipment or supply must have FDA marketing authorization, we 
proposed to clarify that an equipment or supply with FDA Exempt status 
would not meet the newness criterion and therefore would not be 
eligible for the TPNIES. As described on the FDA website, the Medical 
Device Amendments of 1976 to the Federal Food, Drug, and Cosmetic Act 
established three regulatory classes for medical devices: Class I, 
Class II, and Class III. The three classes are based on the degree of 
control necessary to assure the various types of devices are safe and 
effective.\65\ Most Class 1 and some Class II devices, as noted on 
FDA's website, are exempt from premarket notification (510(k)) 
requirements, subject to certain limitations.\66\ As we stated in the 
CY 2023 ESRD PPS final rule (87 FR 67202 through 67023), devices that 
receive FDA marketing authorization have met regulatory standards that 
provide a reasonable assurance of safety and effectiveness for the 
devices. For exempt devices, FDA has determined that a premarket 
notification is not required to provide a reasonable assurance of 
safety and effectiveness for the devices. However, generally a Class I 
or Class II device that is exempt from 510(k) requirements still must 
comply with certain regulatory controls (known as ``general controls'') 
to provide a reasonable assurance of safety and effectiveness for such 
devices. In limiting the TPNIES policy to items that have received FDA 
marketing authorization, we intended to exclude devices that lack FDA 
marketing authorization (87 FR 38511). In the absence of evidence that 
the renal dialysis equipment or supply is new, meaning a complete 
application has been submitted to CMS under Sec.  413.236(c) within 3 
years of the date of the FDA marketing authorization, the equipment or 
supply would not meet the TPNIES newness criterion under Sec.  
413.236(b)(2).
---------------------------------------------------------------------------

    \65\ Food & Drug Administration. Learn if a Medical Device Has 
Been Cleared by FDA for Marketing. Available at: https://www.fda.gov/medical-devices/consumers-medical-devices/learn-if-medical-device-has-been-cleared-fda-marketing. Accessed on March 14, 
2023.
    \66\ Food & Drug Administration. Class I and Class II Device 
Exemptions. Available at: https://www.fda.gov/medical-devices/classify-your-medical-device/class-i-and-class-ii-device-exemptions. 
Accessed on May 30, 2023.
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    We received 11 comments on our proposed clarifications regarding 
the TPNIES newness criterion at Sec.  413.236(b)(2). These comments and 
CMS's responses are set forth below.
    Comment: In general, commenters supported both TPNIES 
clarifications. Commenters supported our proposal to revise Sec.  
413.236(b)(2) to clarify that the equipment or supply is new if a 
complete application has been submitted to CMS under Sec.  413.236(c) 
within 3 years of the date of the FDA marketing authorization and 
stated that basing the three-year newness period on the date of the 
TPNIES application submission, and not the date of CMS's determination 
through notice and comment rulemaking would ensure that months of 
eligibility are not taken up by the determination process.
    With respect to our proposal that an equipment or supply with FDA 
Exempt status would not meet the newness criterion and therefore would 
not be

[[Page 76415]]

eligible for the TPNIES, one commenter stated that this policy would 
limit access to the TPNIES. The commenter stated that because exempt 
devices must still comply with general controls to provide a reasonable 
assurance of safety and effectiveness, these devices have no need to 
apply for FDA marketing authorization, and an FDA determination should 
not exclude these devices from the TPNIES. This commenter asserted that 
CMS should incentivize innovation in the ESRD space by allowing all 
relevant and appropriate technologies an opportunity to apply for the 
TPNIES.
    Response: We appreciate the commenters' overall support for our 
clarifications regarding the TPNIES newness criterion. Regarding our 
proposed clarification that an equipment or supply with FDA Exempt 
status would not meet the newness criterion, we emphasize that for the 
purposes of the TPNIES, we rely on FDA marketing authorization to 
ensure that devices have met regulatory standards that provide a 
reasonable assurance of safety and effectiveness. While a Class I or 
Class II device that is exempt from 510(k) requirements still must 
comply with certain regulatory controls (known as ``general controls'') 
to provide reasonable assurance of safety and effectiveness for such 
devices, we do not believe devices with Exempt status offer the level 
of assurance that is provided with FDA marketing authorization. As 
such, we maintain that our original intent was to exclude devices that 
lack FDA marketing authorization (87 FR 38511).
    Final Rule Action: After considering public comments, we are 
finalizing as proposed our proposal to revise Sec.  413.236(b)(2) to 
clarify that the equipment or supply is new if a complete application 
has been submitted to CMS under Sec.  413.236(c) within 3 years of the 
date of the FDA marketing authorization. We are also finalizing as 
proposed our proposed clarification that an equipment or supply with 
FDA Exempt status would not meet the newness criterion and therefore 
would not be eligible for the TPNIES. In the absence of evidence that 
the renal dialysis equipment or supply is new, meaning a complete 
application has been submitted to CMS under Sec.  413.236(c) within 3 
years of the date of the FDA marketing authorization, the equipment or 
supply would not meet the TPNIES newness criterion under Sec.  
413.236(b)(2).
    We received one application for the TPNIES for CY 2024. A 
discussion of the application is presented below.
3. CY 2024 TPNIES Application for Buzzy[supreg] Pro
    Pain Care Labs^TM submitted an application for the TPNIES 
for Buzzy[supreg] Pro for CY 2024. Buzzy[supreg] Pro is one of several 
models of the Buzzy[supreg] device. The Buzzy[supreg] device is 
intended to control pain associated with needle procedures and for 
temporary relief of minor injuries. Buzzy[supreg] Pro is a palm-sized 
external use vibration device used with unique ice packs and is 
intended to temporarily desensitize and physiologically block pain 
associated with dialysis cannulation. The applicant stated that 
dialysis cannulation pain affects 12 to 80 percent of dialysis patients 
and is a substantial contributor to reduced quality of 
life.^{67 68} The applicant further stated that cannulation 
pain is associated with fear of the cannulation process, the decision 
to undergo hemodialysis and sometimes the hemodialysis itself.
---------------------------------------------------------------------------

    \67\ Kosmadakis G, Amara I, Costel G. Pain on arteriovenous 
fistula cannulation: A narrative review. Semin Dial 2021;34(4):275-
84 doi: 10.1111/sdi.12979 [published Online First: 20210507].
    \68\ Kosmadakis G, Amara B, Costel G, Lescure C. Pain associated 
with arteriovenous fistula cannulation: Still a problem. Nephrol 
Ther 2022;18(1):59-62 doi: 10.1016/j.nephro.2021.05.002 [published 
Online First: 20210618].
---------------------------------------------------------------------------

    The applicant described the steps for using Buzzy[supreg] Pro 
during dialysis: (1) thread the hands free strap or regular tourniquet 
through the ice pack and the device so that the ice pack is on the 
concave side of the device; (2) attach the device and the ice directly 
over the site; (3) activate the vibration toggle switch and leave in 
place 30 to 120 seconds; (4) during cannulation, move the device 
proximally so the dot on the side opposite the switch is 2 to 3 cm 
proximal to the cannulation site; (5) clean the site per cannulation 
protocol; and (6) remove the device after the painful part of procedure 
is completed.
a. Renal Dialysis Service Criterion (Sec.  413.236(b)(1))
    Regarding the first TPNIES eligibility criterion in Sec.  
413.236(b)(1), that the item has been designated by CMS as a renal 
dialysis service under Sec.  413.171, pain management associated with 
dialysis cannulation is a service that is furnished to individuals for 
the treatment of ESRD and is essential for the delivery of maintenance 
dialysis. We consider Buzzy[supreg] Pro a renal dialysis service under 
Sec.  413.171.
b. Newness Criterion (Sec.  413.236(b)(2))
    With respect to the second TPNIES eligibility criterion in Sec.  
413.236(b)(2), that the item is new, meaning within 3 years beginning 
on the date of the FDA marketing authorization, the applicant stated 
that it is seeking 510(k) marketing authorization from the FDA for a 
new utility and design of Buzzy[supreg] created for dialysis fistulae 
sites, patented in 2022 under the name Buzzy[supreg] Pro. To be 
eligible for the TPNIES, the applicant must apply within 3 years of the 
FDA marketing authorization date and receive FDA marketing 
authorization by the HCPCS Level II deadline of July 3, 2023.
    The applicant submitted the indications for use portion of its FDA 
510(k) application that identifies Buzzy[supreg] as all Buzzy[supreg] 
models: Mini Healthcare, XL Healthcare, Mini Personal, XL Personal and 
Pro to control pain associated with needle procedures including 
dialysis and the temporary relief of minor injuries. The applicant 
provided supplemental information in a document titled ``510(k) 
Summary'' that included a comparison table of the Predicate Device 
(K130631) to the Subject Device (K202993). The document indicated that 
only the Buzzy[supreg] Pro model is recommended for dialysis. The 
document also indicated that Buzzy[supreg] Pro is identical to the 
predicate device in terms of materials, vibration motor, circuitry, 
functionality, and intended use; differs only in shape but is 
comparable in size to the predicate device; and Buzzy[supreg] Pro is 
distinguished by its rectangular shape to offer users a more 
professional looking alternative to the bee-shape of the other device. 
In the CY 2024 ESRD PPS proposed rule, we stated that we would be 
interested in better understanding the way in which the Buzzy[supreg] 
Pro, that is the subject of this TPNIES application, differs from the 
other Buzzy[supreg] models and whether Buzzy[supreg] Pro is indicated 
for adult versus pediatric patients, or both. We noted that to satisfy 
the newness criterion, the FDA 510(k) marketing authorization must have 
been issued within 3 years covering the specific device and model that 
is the subject of the TPNIES application. We invited public comment on 
this issue in the proposed rule.
    Comment: The applicant submitted a comment to demonstrate that the 
device meets the newness criterion. With respect to our question 
regarding the way in which the Buzzy[supreg] Pro, which is the subject 
of this TPNIES application, differs from the other Buzzy[supreg] 
models, the applicant provided a table comparing Buzzy[supreg] Pro and 
predicate Buzzy[supreg] devices and stated that Buzzy[supreg] Pro is 
identical to the predicate devices in terms of materials, vibration 
motor, circuitry, functionality, curvature to fit the angle of the arm, 
and the mnemonic design with a ``dot'' to put near the

[[Page 76416]]

``shot.'' The applicant stated that Buzzy[supreg] Pro is thinner, 
lighter, and has dual arms to attach to the cannulation site compared 
to the predicate device; and Buzzy[supreg] Pro offers users a more 
professional looking alternative to the bee-shape of the other device.
    With respect to FDA marketing authorization, the applicant 
indicated that Buzzy[supreg] Pro received FDA 510(k) approval on May 
15, 2023, to control pain associated with needle procedures (for 
example, injections, vascular access, cannulation, lab draws, blood 
donation, dialysis, cosmetic and dental injections).
    Response: We appreciate the applicant's clarification regarding 
Buzzy[supreg] Pro's similarity to its predicate devices and 
confirmation of FDA marketing authorization. Based on the information 
provided by the applicant, we agree that Buzzy[supreg] Pro meets the 
newness criterion.
c. Commercial Availability Criterion (Sec.  413.236(b)(3))
    Regarding the third TPNIES eligibility criterion in Sec.  
413.236(b)(3), that the item is commercially available by January 1 of 
the particular CY, meaning the year in which the payment adjustment 
would take effect, the applicant stated that it expects Buzzy[supreg] 
Pro would be commercially available immediately after receiving FDA 
marketing authorization.
    Comment: The applicant submitted a comment indicating that as of 
May 15, 2023, Buzzy[supreg] Pro is commercially available.
    Response: Based on the information provided by the applicant, 
Buzzy[supreg] Pro meets the commercial availability criterion.
d. HCPCS Level II Application Criterion (Sec.  413.236(b)(4))
    Regarding the fourth TPNIES eligibility criterion in Sec.  
413.236(b)(4) requiring that the applicant submit a complete HCPCS 
Level II code application by the HCPCS Level II application deadline of 
July 3, 2023, the applicant stated that it intends to apply by the 
deadline.
    Comment: The applicant submitted a comment indicating that the 
HCPCS Level II code application was submitted to CMS on July 1, 2023.
    Response: We appreciate the applicant's confirmation of having 
submitted the HCPCS Level II code application and confirm that CMS 
received the application by the deadline. Therefore, we agree the 
applicant has met the HCPCS Level II application criterion.
e. Innovation Criteria (Sec. Sec.  413.236(b)(5) and 412.87(b)(1))
(1) Substantial Clinical Improvement Claims and Sources
    With regard to the fifth TPNIES eligibility criterion under Sec.  
413.236(b)(5), that the item is innovative, meaning it meets the 
substantial clinical improvement criteria specified in Sec.  
412.87(b)(1), the applicant presented two substantial clinical 
improvement claims. First, the applicant stated that Buzzy[supreg] Pro 
controls needle pain for dialysis. Specifically, per the applicant, 
Buzzy[supreg] Pro makes cannulation pain relief available to dialysis 
patients, which significantly improves clinical outcomes related to 
depression and discontinuation of dialysis due to needle pain. Second, 
the applicant stated that Buzzy[supreg] Pro reduces needle fear.
    With respect to the claim that Buzzy[supreg] Pro controls needle 
pain for dialysis, the applicant stated that currently, the most 
effective options for dialysis cannulation pain are the topical 
anesthetic, EMLA[supreg] and vapocoolant spray.\69\ Per the applicant, 
systematic reviews recommend against vapocoolant use due to lack of 
efficacy \70\ and EMLA[supreg] incurs $15 cost per use and takes 1 hour 
to become effective. The applicant asserted that the Buzzy[supreg] 
device has been shown to be superior to vapocoolant spray \71\ and 
equivalent to topical anesthetics EMLA[supreg] and LMX[supreg] at a 
fraction of the cost and time.^{72 73} The applicant stated 
that while ice is effective for reducing dialysis pain for both adults 
and children, it is messy and inferior. The applicant further stated 
that a Buzzy[supreg] device cannulation study in adults found that ice 
is only 10 percent of the effect, with the mechanical gate control 
neuromodulation (vibration) providing 90 percent of the pain 
relief.\74\
---------------------------------------------------------------------------

    \69\ [Ccedil]elik G, [Ouml]zbek O, Y[inodot]lmaz M, Duman I, 
[Ouml]zbek S, Apiliogullari S. Vapocoolant spray vs lidocaine/
prilocaine cream for reducing the pain of venipuncture in 
hemodialysis patients: a randomized, placebo-controlled, crossover 
study. Int J Med Sci 2011;8(7):623-7 doi: 10.7150/ijms.8.623 
[published Online First: 20111012].
    \70\ Hogan ME, Smart S, Shah V, Taddio A. A systematic review of 
vapocoolants for reducing pain from venipuncture and venous 
cannulation in children and adults. J Emerg Med 2014;47(6):736-49 
doi: 10.1016/j.jemermed.2014.06.028 [published Online First: 
20140829].
    \71\ Baxter AL, Leong T, Mathew B. External thermomechanical 
stimulation versus vapocoolant for adult venipuncture pain: pilot 
data on a novel device. Clin J Pain 2009;25(8):705-10 doi: 10.1097/
AJP.0b013e3181af1236 [published Online First: 2009/11/19].
    \72\ Lescop K, Joret I, Delbos P, et al. The effectiveness of 
the Buzzy[supreg] device to reduce or prevent pain in children 
undergoing needle-related procedures: The results from a 
prospective, open-label, randomised, non-inferiority study. Int J 
Nurs Stud 2021;113:103803 doi: 10.1016/j.ijnurstu.2020.103803 
[published Online First: 20201019].
    \73\ Potts DA, Davis KF, Elci OU, Fein JA. A Vibrating Cold 
Device to Reduce Pain in the Pediatric Emergency Department: A 
Randomized Clinical Trial. Pediatr Emerg Care 2017 doi: 10.1097/
pec.0000000000001041 [published Online First: 2017/01/26].
    \74\ Abidin NH. Assessing The Effectiveness Of A 
Thermomechanical Device (Buzzy[supreg]) In Reducing Venous 
Cannulation Pain In Adult Patients. Middle East Journal of 
Anesthesiology 2018;25(1):61-67.
---------------------------------------------------------------------------

    With respect to the claim that Buzzy[supreg] Pro reduces needle 
fear, the applicant stated that 25 to 47 percent of chronic kidney 
patients have needle fear.\75\ The applicant further stated that CDC 
recommends vibrating cold devices for needle fear in children, and cold 
devices with a buzzer for adults.\76\ The applicant also stated that 
meta-analyses demonstrate significant fear reduction with Buzzy[supreg] 
device,\77\ and a New Zealand study demonstrated improved adherence to 
Bicillin injections with fear reduced 50 percent after three uses of 
Buzzy[supreg] device.\78\ The applicant also stated that Buzzy[supreg] 
device is indicated by Health Canada to ``control pain and fear from 
needles'' and is used for fearful dialysis patients in the Netherlands.
---------------------------------------------------------------------------

    \75\ Duncanson E, Le Leu RK, Shanahan L, et al. The prevalence 
and evidence-based management of needle fear in adults with chronic 
disease: A scoping review. PLoS One 2021;16(6):e0253048 doi: 
10.1371/journal.pone.0253048 [published Online First: 20210610].
    \76\ Easy to Read: Needle Phobia. Available at: https://www.cdc.gov/ncbddd/humandevelopment/covid-19/needle-phobia/. Accessed March 9, 2023.
    \77\ Ballard A, Khadra C, Adler S, Trottier ED, Le May S. 
Efficacy of the Buzzy[supreg] Device for Pain Management during 
Needle-Related Procedures: A Systematic Review and Meta-analysis. 
Clin J Pain 2019 doi: 10.1097/ajp.0000000000000690 [published Online 
First: 2019/03/05].
    \78\ Russell K, Nicholson R, Naidu R. Reducing the pain of 
intramuscular benzathine penicillin injections in the rheumatic 
fever population of Counties Manukau District Health Board. J 
Paediatr Child Health 2014;50(2):112-7 doi: 10.1111/jpc.12400 
[published Online First: 2013/10/19].
    \79\ Attia, A., Hassan, A. Effect of cryotherapy on pain 
management at the puncture site of arteriovenous fistula among 
children undergoing hemodialysis. International Journal of Nursing 
Sciences 2017; (4) 46-51.
---------------------------------------------------------------------------

    The applicant submitted 33 unique sources of evidence with its 
application in support of its claims of substantial clinical 
improvement. Thirty of the sources that were submitted examined the 
effect of external cold and vibration devices, including the 
Buzzy[supreg] device, though not Buzzy[supreg] Pro, during needle 
procedures other than dialysis cannulation. One article examined the 
effect of cryotherapy on pediatric pain management at the arteriovenous 
fistula site during hemodialysis.\79\ Because the

[[Page 76417]]

study did not examine the effect of external cold and vibration devices 
such as the Buzzy[supreg] device or more specifically the device that 
is the subject of this TPNIES application, Buzzy[supreg] Pro, in 
managing dialysis related pain or fear, it was not directly applicable 
to the applicant's substantial clinical improvement claims. One article 
evaluated the effectiveness of distraction cards, in pediatrics in 
reducing pain and anxiety during intramuscular injection.\80\ Because 
the study did not examine the effect of external cold and vibration 
devices such as the Buzzy[supreg] device or the Buzzy[supreg] Pro 
device in managing dialysis-related pain or fear, it was not directly 
applicable to the applicant's substantial clinical improvement claims. 
One document labeled as Dutch guidelines was submitted in non-English 
text and thus, was not readily accessible to our review team.
---------------------------------------------------------------------------

    \80\ Sahiner, N., Turkmen, A. The Effect of Distraction Cards on 
Reducing Pain and Anxiety During Intramuscular Injection in 
Children. Worldviews on Evidence-Based Nursing 2019; 1-6.
---------------------------------------------------------------------------

    The applicant also submitted a list of references, referred to as a 
literature review, that pertained to the applicant's products, among 
which, the Buzzy[supreg] device was listed as relieving or reducing 
needle pain and fear and for needle procedures and for musculoskeletal 
pain.
    In a document titled ``Summary of Clinical Evidence--relief of 
needle pain and fear,'' the applicant presented the study objectives 
and key features of 29 \81\ of the 30 submitted sources that examined 
the effect of external cold and vibration devices, including the 
Buzzy[supreg] device, though not Buzzy[supreg] Pro, during needle 
procedures other than dialysis cannulation. The document identified 
several additional sources that were not submitted by the applicant. 
Finally, the applicant submitted a document titled ``Buzzy Fear 
reduction rationale and table'' that duplicated information already 
captured in the ``Summary of Clinical Evidence--relief of needle pain 
and fear'' document. Table 10 lists the 29 sources that were both 
identified by the applicant in the ``Summary of Clinical Evidence--
relief of needle pain and fear'' document and that were submitted. We 
have not included sources that were mentioned by the applicant, but not 
submitted to us.
---------------------------------------------------------------------------

    \81\ The following source was not included in the summary table: 
Redfern RE, Chen JT, Sibrel S, Effects of Thermomechanical 
Stimulation during Vaccination on Anxiety, Pain, and Satisfaction in 
Pediatric Patients: A Randomized Controlled Trial. J Pediatr 
Nurs.2018.38: 1-7.
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BILLING CODE 4120-01-C

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(2) CMS Assessment of Substantial Clinical Improvement Claims and 
Sources
    As discussed in the CY 2024 ESRD PPS proposed rule (88 FR 42484 
through 42485), we summarized our specific concerns regarding 
application of the substantial clinical improvement criteria under 
Sec. Sec.  413.236(b)(5) and 412.87(b)(1) in connection with the 
submission.
    As stated previously, the applicant must demonstrate that the 
equipment or supply meets at least one of the following three 
substantial clinical improvement criteria in order to be eligible for 
the TPNIES: (1) the item offers a treatment option for a patient 
population unresponsive to, or ineligible for, currently available 
treatment; (2) the item offers the ability to diagnose a medical 
condition in the 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; or (3) the item significantly improves clinical 
outcomes relative to services or technologies previously available. The 
applicant stated that Buzzy[supreg] Pro makes dialysis cannulation pain 
relief available to dialysis patients, which significantly improves 
clinical outcomes related to depression and discontinuation of dialysis 
due to needle pain. Therefore, in the proposed rule, we noted our 
belief that the applicant was targeting the clinical outcomes criterion 
(previously noted number (3)). The applicant also stated that 
Buzzy[supreg] Pro reduces needle fear. In the proposed rule, we also 
noted that we did not identify evidence within the application or the 
submitted materials documenting improved clinical outcomes related to 
depression or dialysis adherence but would be interested in reviewing 
such evidence.
    With respect to the submitted evidence, we noted that it did not 
appear that the studies reflected the use of (1) Buzzy[supreg] Pro, the 
device that is the subject of the TPNIES application, nor (2) 
Buzzy[supreg] Pro in the context of dialysis cannulation. Specifically, 
the applicant submitted an application for Buzzy[supreg] Pro, 
indicating that Buzzy[supreg] Pro is a new design created for dialysis 
fistulae sites, patented in 2022. However, the sources submitted were 
dated prior to the 2022 new design patent date for dialysis fistulae 
sites. As such, we stated that it appeared that the sources submitted 
reflected the use of a predecessor Buzzy[supreg] device. In addition, 
while the applicant's ``Summary of Clinical Evidence'' document 
presented sources as evaluating Buzzy[supreg] Pro's efficacy in 
managing vascular access pain or fear, we noted that none of these 
sources appear to evaluate vascular access in the context of dialysis 
cannulation. The studies evaluated pain and fear in the context of 
other types of needle procedures, including vaccine or medication 
injections, blood specimen collection, and intravenous catheter 
insertion.
    We noted that it was unclear whether findings of pain or fear 
reduction from the use of the Buzzy[supreg] device in non-dialysis 
needle procedures could be extrapolated to dialysis cannulation pain or 
fear. There are several unique features to dialysis cannulation that 
may limit generalizability. These include the need for regular 
punctures several times per week, the maintenance of cannulation for 
several hours during dialysis treatments, the use of substantially 
larger needle sizes in dialysis, and complications that are associated 
with frequent vascular access cannulation, such as infections and 
thrombosis. As such, we questioned whether outcomes could reasonably be 
extrapolated as applicable to patients undergoing dialysis cannulation.
    As identified in the table, most of the studies provided in support 
of the applicant's claims reflect pediatric patient experiences. We 
noted that pediatric patients comprise a small proportion, just 0.14 
percent, of the total Medicare ESRD patient population (87 FR 67222). 
As such, we noted that the data that was heavily weighted towards the 
pediatric population may have limited generalizability to the non-
pediatric majority of the ESRD patient population.
    While the applicant stated that the Buzzy[supreg] devices are less 
expensive than topical anesthetic, we noted that cost is not an 
eligibility criterion for the TPNIES.
    We also noted that it was unclear whether a single Buzzy[supreg] 
Pro device and its components (for example, tourniquet and ice pack) 
are intended for single versus multiple patient use in the ESRD 
facility setting. To the extent that the device or its components are 
intended for use among multiple patients, we noted that we would be 
interested in data that examines the risk of infection associated with 
the use of Buzzy[supreg] Pro in the dialysis patient population. 
Additionally, we noted that we were not aware of any data that examines 
the risk of harm to the dialysis access site or any other adverse 
events associated with use of the Buzzy[supreg] Pro in the dialysis 
patient population, including access and bloodstream infections and 
thromboses but would be interested in the results of such data.
    In addition, the applicant stated that currently, the most 
effective options for dialysis cannulation pain are topical anesthetics 
and vapocoolant spray. We noted that we would be interested in studies 
comparing the use of Buzzy[supreg] Pro to topical anesthetics or 
vapocoolant and that demonstrate that Buzzy[supreg] Pro significantly 
improves clinical outcomes of dialysis patients relative to existing 
available treatments.
    We invited public comments on whether the Buzzy[supreg] Pro meets 
the substantial clinical improvement criteria for the TPNIES.
    Comment: We received a comment from the applicant in support of a 
TPNIES approval for Buzzy[supreg] Pro. The applicant stated that there 
are seven literature-supported parameters by which Buzzy[supreg] Pro 
meets the substantial clinical improvement criteria, any one of which 
independently would satisfy the standard. The applicant presented the 
following table highlighting the ways in which Buzzy[supreg] 
significantly improves clinical outcomes relative to renal dialysis 
services previously available.
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    \82\ Russell K, Nicholson R, Naidu R. Reducing the pain of 
intramuscular Benzathine penicillin injections in the rheumatic 
fever populations of Counties Manukau District Health Board. J 
Paediatr Child Health 2014;50(2):112-7 doi: 10.1111/jpc.12400 
[published Online First: 2013/10/19].

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[[Page 76426]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.020

    With respect to the more rapid beneficial resolution of the disease 
process treatment, the applicant stated that chronic patients consider 
a reduction in their procedural time a clinically significant 
improvement.
    With respect to improved quality of life, the applicant stated that 
Buzzy[supreg] devices have been shown to be clinically superior to 
vapocoolant spray for pain relief in adults and 
children,^{83 84} and that vapocoolant spray lacks efficacy and 
is associated with potential risks of frostbite or triggering a sickle 
cell crisis. The applicant stated that EMLA is effective for 
cannulation pain but requires 60 minutes to become effective and is 
associated with potential risks, including petechiae and skin breakdown 
from the occlusive dressing used after applying the cream. The 
applicant stated that Buzzy[supreg] is equivalent to the topical 
anesthetics EMLA and LMX by patient and parent report and at a fraction 
of the time.^{85 86 87 88}
---------------------------------------------------------------------------

    \83\ Baxter AL, Cohen LL, McElvery HL, Lawson ML, von Baeyer CL. 
An integration of vibration and cold relieves venipuncture pain in a 
pediatric emergency department. Pediatr Emerg Care 2011;27(12):1151-
6 doi: 10.1097/PEC.0b013e318237ace4.
    \84\ Baxter AL, Leong T, Mathew B. External thermomechanical 
stimulation versus vapocoolant for adult venipuncture pain: pilot 
data on a novel device. Clin J Pain 2009;25(8):705-10 doi: 10.1097/
AJP.0b013e3181af1236 [published Online First: 2009/11/19].
    \85\ Bahorski JS, Hauber RP, Hanks C, et al. Mitigating 
procedural pain during venipuncture in a pediatric population: A 
randomized factorial study. Int J Nurs Stud 2015;52(10):1553-64 doi: 
10.1016/j.ijnurstu.2015.05.014 [published Online First: 20150610].
    \86\ Lescop K, Joret I, Delbos P, et al. The effectiveness of 
the Buzzy([supreg]) device to reduce or prevent pain in children 
undergoing needle-related procedures: The results from a 
prospective, open-label, randomised, non-inferiority study. Int J 
Nurs Stud 2021;113:103803 doi: 10.1016/j.ijnurstu.2020.103803 
[published Online First: 20201019].
    \87\ Potts DA, Davis KF, Elci OU, Fein JA. A Vibrating Cold 
Device to Reduce Pain in the Pediatric Emergency Department: A 
Randomized Clinical Trial. Pediatr Emerg Care 2019;35(6):419-25 doi: 
10.1097/pec.0000000000001041 [published Online First: 2017/01/26].
    \88\ Baxter AL, Cohen LL, Tsze D. Buzzy versus EMLA: Abstract 
omits clinical noninferiority and time and cost savings: A 
commentary on Lescop et al. (2021). Int J Nurs Stud 2021;121:104011 
doi: 10.1016/j.ijnurstu.2021.104011 [published Online First: 
20210626].
---------------------------------------------------------------------------

    The applicant stated that Buzzy[supreg] decreases fear as compared 
to other interventions, citing multiple meta-analyses indicating that 
Buzzy[supreg] reduces fear and anxiety in pediatric venipuncture 
^{89 90} and that Buzzy[supreg] was also effective in adult 
venipuncture patients with needle fear or anxiety.^{91 92} The 
applicant referred to a generic recommendation for ``buzzing devices'' 
for adult needle fear on the CDC website.\93\
---------------------------------------------------------------------------

    \89\ Ballard A, Khadra C, Adler S, Trottier ED, Le May S. 
Efficacy of the Buzzy Device for Pain Management during Needle-
Related Procedures: A Systematic Review and Meta-analysis. Clin J 
Pain 2019 doi: 10.1097/ajp.0000000000000690 [published Online First: 
2019/03/05].
    \90\ Su HC, Hsieh CW, Lai NM, Chou PY, Lin PH, Chen KH. Using 
Vibrating and Cold Device for Pain Relieves in Children: A 
Systematic Review and Meta-analysis of Randomized Controlled Trials. 
J Pediatr Nurs 2021;61:23-33 doi: 10.1016/j.pedn.2021.02.027 
[published Online First: 20210316].
    \91\ Baxter AL, Leong T, Mathew B. External thermomechanical 
stimulation versus vapocoolant for adult venipuncture pain: pilot 
data on a novel device. Clin J Pain 2009;25(8):705-10 doi: 10.1097/
AJP.0b013e3181af1236 [published Online First: 2009/11/19].
    \92\ Redfern RE, Micham J, Sievert D, Chen JT. Effects of 
Thermomechanical Stimulation During Intravenous Catheter Insertion 
in Adults: A Prospective Randomized Study. J Infus Nurs 
2018;41(5):294-300 doi: 10.1097/nan.0000000000000294.
    \93\ https://www.cdc.gov/ncbddd/humandevelopment/covid-19/needle-phobia/healthcare-providers.html Accessed September 8, 2023.
---------------------------------------------------------------------------

    The applicant stated that 43 percent of dialysis patients 
experienced pain despite EMLA use \94\ and that Buzzy[supreg] patients 
like the sense of control of being able to hold the device in the right 
spot for the best pain relief.
---------------------------------------------------------------------------

    \94\ https://www.youtube.com/watch?v=1moJgluvS7c&t=350s Accessed 
September 8, 2023.
---------------------------------------------------------------------------

    In support of the claim that Buzzy[supreg] reduces at least one 
clinically significant adverse event, the applicant stated that 
vibration over 150Hz results in vasodilation, which can reduce the 
likelihood of a needle side-walling a vein, causing pain or vasovagal 
stimulation.\95\ The applicant referred to a recent study presented in 
2023, which found that in 360 teenagers who received vaccination,\96\ 
Buzzy[supreg] reduced severe vasovagal symptoms 25 percent and improved 
vasodilation, potentially reducing vessel wall trauma.
---------------------------------------------------------------------------

    \95\ Skoglund CR. Vasodilatation in human skin induced by low-
amplitude high-frequency vibration. Clin Physiol 1989;9(4):361-72.
    \96\ Smith MJ, Broder KR, Chung RJ, et al. Preventing Post-
Vaccination Presyncope and Syncope in Adolescents Using Simple 
Clinic-Based Interventions: a Randomized-Controlled Trial. Pediatric 
Academic Societies Meeting. Washington, DC, 2023.
---------------------------------------------------------------------------

    The applicant also provided responses to CMS's concerns identified 
in the CY 2024 proposed rule. In response to the CMS concern regarding 
a lack of evidence documenting improved clinical outcomes related to 
depression or dialysis adherence, the applicant stated that increased 
feelings of control are correlated with reduced depression. The 
applicant specified that

[[Page 76427]]

because studies of patients with chronic pain with or without 
depression have identified self-efficacy as a primary component of 
effective interventions \97\ and because chronic pain and depression 
are common in dialysis patients,^{98 99} a fast intervention 
that allows self-adjustment and relief optimization should be more 
appropriate and effective among patients receiving dialysis than among 
patients undergoing single, small gauge, and less risky cannulations. 
The applicant stated that adherence to regular cannulation reduces 
hospitalization.\100\ The applicant also stated that needle fatigue can 
lead to nonadherence to a treatment plan and that nonadherence 
increases healthcare costs, emergency department visits, disease 
complications, and in extreme cases, the likelihood of death.\101\
---------------------------------------------------------------------------

    \97\ Borsbo B, Gerdle B, Peolsson M. Impact of the interaction 
between self-efficacy, symptoms and catastrophising on disability, 
quality of life and health in with chronic pain patients. Disability 
and rehabilitation 2010;32(17):1387-96 doi: 10.3109/
09638280903419269 [published Online First: 2010/06/02].
    \98\ Davison SN, Jhangri GS. The impact of chronic pain on 
depression, sleep, and the desire to withdraw from dialysis in 
hemodialysis patients. J Pain Symptom Manage 2005;30(5):465-73 doi: 
10.1016/j.jpainsymman.2005.05.013.
    \99\ Masi[agrave]-Plana A, Juviny[agrave]-Canal D, Su[ntilde]er-
Soler R, Sitjar-Su[ntilde]er M, Casals-Alonso C, Mantas-
Jim[eacute]nez S. Pain, Anxiety, and Depression in Patients 
Undergoing Chronic Hemodialysis Treatment: A Multicentre Cohort 
Study. Pain Manag Nurs 2022;23(5):632-39 doi: 10.1016/
j.pmn.2022.03.005 [published Online First: 20220422].
    \100\ Russell K, Nicholson R, Naidu R. Reducing the pain of 
intramuscular benzathine penicillin injections in the rheumatic 
fever population of Counties Manukau District Health Board. J 
Paediatr Child Health 2014;50(2):112-7 doi: 10.1111/jpc.12400 
[published Online First: 2013/10/19].
    \101\ Lee K, Kim D, Lee H, Lee E. The effect of using 
vapocoolant spray for pain reduction in arteriovenous fistula 
cannulation among patients undergoing hemodialysis: A randomized 
control trial. Appl Nurs Res 2023;71:151674 doi: 10.1016/
j.apnr.2023.151674 [published Online First: 20230317].
---------------------------------------------------------------------------

    In response to the CMS concern that the sources submitted reflected 
the use of a predecessor Buzzy[supreg] device, the applicant stated 
that because Buzzy[supreg] Pro received FDA 510(k) approval on May 15, 
2023, there are no studies specific to Buzzy[supreg] Pro.
    In response to the CMS concern that it is unclear whether findings 
of pain or fear reduction from the use of the Buzzy[supreg] device in 
non-dialysis needle procedures could be extrapolated to dialysis 
cannulation pain or fear, the applicant asserted that because emergency 
department venipuncture studies typically involve anxiety, they are 
appropriate comparators for dialysis, where anxiety is common. The 
applicant further noted that many dialysis studies do not find a 
benefit the first time an intervention is attempted. The applicant also 
stated that adult dialysis cannulation studies that use vapocoolant and 
topical anesthetic do not evaluate anxiety, and the only studies 
evaluating anxiety and dialysis cannulation used lavender oil as a 
comparator.
    In response to the CMS interest in studies comparing the use of 
Buzzy[supreg] Pro to topical anesthetics or vapocoolant and that 
demonstrate that Buzzy[supreg] Pro significantly improves clinical 
outcomes of dialysis patients relative to existing available 
treatments, the applicant provided the following two summary tables and 
stated that the numbers given in the tables allow relative comparison 
between interventions and the pain reported with dialysis cannulation 
and adult emergency department trials of Buzzy[supreg]. The first table 
summarizes studies of pain or anxiety relief specific to dialysis 
cannulation and identifies the significant differences in bold text. 
The second table summarizes Buzzy[supreg] outcomes including pain, 
anxiety, and vasovagal symptom relief in various types of cannulations 
and identifies the significant differences in bold text.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR06NO23.021


[[Page 76428]]


[GRAPHIC] [TIFF OMITTED] TR06NO23.022

BILLING CODE 4120-01-C
    In response to the CMS concern that the data heavily weighted 
towards the pediatric population may have limited generalizability to 
the non-pediatric majority of the ESRD patient population, the 
applicant referred to materials submitted with its application and 
asserted that these demonstrate significant pain and fear reduction 
with the Buzzy[supreg] device, superiority to vapocoolant, and 
equivalency to topical anesthetics but in a shorter period of time. The 
applicant stated that five independent peer reviewed studies on adult 
venipuncture using Buzzy[supreg]

[[Page 76429]]

demonstrate the following: vibration is the primary active ingredient; 
improved efficacy in patients with needle fear; superiority to 
vapocoolant spray; and pain reduction and improved satisfaction.
    In response to our clarification that cost is not a TPNIES 
eligibility criterion, the applicant acknowledged our clarification but 
stated that cost is a barrier to the use of EMLA. The applicant 
compared the cost of EMLA at $6.48 per cannulation to the cost of 
Buzzy[supreg] at $0.375 per cannulation. The applicant concluded that 
increased access to pain relief is a substantial clinical benefit that 
is not currently available due to cost.
    In response to the CMS question as to whether a single 
Buzzy[supreg] Pro device and its components (for example, tourniquet 
and ice pack) are intended for single versus multiple patient use in 
the ESRD facility setting, the applicant stated that Buzzy[supreg] and 
Buzzy[supreg] Pro are made of medical grade plastic in accordance with 
ISO-13485 and MDSAP standards and can be disinfected with 
chlorhexidine, alcohol swabs, or any hospital grade cleanser in 
accordance with the requirements applied to a stethoscope or blood 
pressure cuff. The applicant further noted that the ice packs are 
medical grade, intended for a single patient, but can be reused 
hundreds of times. Per the applicant, the straps are also intended for 
single-patient use but can be used multiple times in a home setting.
    The applicant stated that infection control varies widely based on 
regional idiosyncrasies and may involve the use of an infection control 
bag around the ice pack; not using the ice pack; using an infection 
control bag around both the device and the ice pack; having patients 
bring their own ice pack; giving the ice pack to the patient following 
the procedure; or discarding the ice pack.
    In response to the CMS interest in data that examines the risk of 
infection associated with the use of Buzzy[supreg] Pro in the dialysis 
patient population and the CMS interest in data that examines the risk 
of harm to the dialysis access site or any other adverse events 
associated with use of the Buzzy[supreg] Pro in the dialysis patient 
population, including access and bloodstream infections and thromboses, 
the applicant stated that to date, with conservatively over 114,000,000 
needle procedures, there are no reported instances of Buzzy[supreg] 
being associated with a vascular access mishap. Per the applicant, the 
standard risks of vascular damage may be reduced because of the 
vasodilation. The applicant also stated that because the device goes 
proximal to the cannulation site when it is being cleaned and accessed, 
there is never a time when Buzzy[supreg] is placed on the area of 
recent cannulation. The applicant also stated that Buzzy[supreg] has 
been used for dialysis in the Netherlands for four years with only 
positive reports of efficacy, efficiency, and safety.
    The applicant also provided additional information explaining the 
pain transmission process and its belief that that Buzzy[supreg] Pro's 
mechanical stimulation is an innovative approach in pain management. 
Specifically, the applicant stated that pain is transmitted to the 
spine on fast pain nerves and that local mechanisms to reduce pain 
transmission from skin to spine include lidocaine, cold spray or ice. 
Per the applicant, as cold travels to the brain on slow C-fibers it 
activates pain inhibition, which is most effective when applied at 
temperatures ranging from 0-4C, for a duration of 30 seconds or more, 
and when applied proximal or distant to the area of pain. The applicant 
also identified the mechanical stimulation of the fibers which transmit 
touch sensations as a mechanism for reducing pain, noting that optimal 
stimulation occurs between 180 and 250Hz. Per the applicant, 
Buzzy[supreg] units provide mechanical stimulation using a 200 Hz 
vibration motor.
    The applicant also presented a new substantial clinical improvement 
claim, asserting that Buzzy[supreg] Pro offers a treatment option for a 
patient population unresponsive to, or ineligible for currently 
available treatment options. Specifically, the applicant stated that 
cost and time are barriers to patients accessing the currently 
available treatment options for dialysis cannulation pain control and 
asserted that Buzzy[supreg] Pro addresses these barriers. As stated 
previously, the applicant compared the cost of EMLA at $6.48 per 
cannulation to the cost of Buzzy[supreg] at $0.375 per cannulation and 
concluded that Buzzy[supreg] addresses the cost barrier to patients 
accessing dialysis cannulation pain relief. The applicant also asserted 
that the time requirement for using EMLA reduces the likelihood of its 
use in busy dialysis clinics or if the patient comes in late. The 
applicant stated that because patients prescribed EMLA for home 
application prior to treatment at the dialysis clinic often misuse the 
product, they are unresponsive to EMLA. Per the applicant, 
Buzzy[supreg] works on contact and can easily be applied by the 
patient. The applicant stated that given the short, 30 to 60 second 
duration of pain relief obtained from vapocoolant spray, needle pain is 
a barrier to receiving treatment in the home setting. The applicant 
also stated that the pain from the mechanical pressure of the dialysis 
needle inside the vessel cannot be treated with EMLA or vapocoolant 
spray. The applicant stated that because Buzzy[supreg] Pro works 
proximally to the pain, it is effective for patients who otherwise are 
unable to access pain control.
    We also received several comments from patient advocates supporting 
the applicant's two substantial clinical improvement claims that 
Buzzy[supreg] Pro reduces pain and anxiety associated with dialysis. A 
few commenters offered anecdotal experience regarding the use of 
Buzzy[supreg] Pro in the context of dialysis cannulation and stated 
that Buzzy[supreg] Pro's benefits are supported by peer-reviewed 
scientific literature. Commenters stated that Buzzy[supreg] Pro would 
promote patient choice by providing fast onset dialysis cannulation 
pain relief without the hassles and expense of topical anesthetics. One 
commenter suggested that the In-Center Hemodialysis Consumer Assessment 
of Healthcare Providers and Systems (CAHPS) Survey should be updated to 
capture patient experience with dialysis cannulation pain.
    Response: We appreciate the applicant and other commenters' input 
regarding whether Buzzy[supreg] Pro meets the TPNIES innovation 
criterion at Sec.  413.236(b)(5) and substantial clinical improvement 
criteria at Sec.  412.87(b)(1). While the applicant stated that there 
are seven literature-supported parameters by which Buzzy[supreg] Pro 
meets the substantial clinical improvement criteria, it was not clear 
to us to which parameters or sources of literature the applicant was 
referring.
    In response to our request for evidence of improved clinical 
outcomes related to depression or dialysis adherence, the applicant 
stated that because increased feelings of control are correlated with 
reduced depression, an intervention that allows for self-adjustment and 
relief should be more effective among patients receiving dialysis than 
patients undergoing other types of needle cannulations. However, the 
applicant did not provide direct evidence that interventions to reduce 
pain in dialysis populations would subsequently reduce depression or 
that Buzzy[supreg] Pro specifically reduces depression. In addition, 
while the applicant stated that adherence to regular cannulation 
reduces hospitalization, the evidence cited by the applicant does not 
pertain to improved dialysis adherence or reductions in 
hospitalizations. We are not aware of evidence demonstrating

[[Page 76430]]

that the use of Buzzy[supreg] Pro is associated with the clinical 
outcome of improved dialysis adherence. Therefore, our request for 
evidence of improved clinical outcomes related to depression or 
dialysis adherence associated with the use of Buzzy[supreg] Pro in the 
dialysis patient population has not been sufficiently addressed.
    We appreciate the applicant's confirmation that the evidence 
submitted pertained to studies of the predicate device, Buzzy[supreg] 
and that there are no studies specific to Buzzy[supreg] Pro. We also 
appreciate the applicant's responses to our concern about the absence 
of evidence that evaluates Buzzy[supreg] Pro's efficacy in managing 
pain or fear in the context of dialysis cannulation rather than in the 
context of non-dialysis needle procedures. The applicant asserted that 
emergency department venipuncture studies typically involve anxiety and 
are therefore appropriate comparators for dialysis, where anxiety is 
common. We do not believe that the presence of anxiety renders 
emergency department venipuncture a suitable proxy for dialysis 
cannulation. In addition, the applicant did not address the unique 
features of dialysis or the differences between venipuncture and 
dialysis cannulation that may limit generalizability, including the use 
of substantially larger needle sizes in dialysis, repeated cannulations 
thrice weekly, continued cannulation throughout a dialysis session, and 
complications associated with frequent vascular access cannulation such 
as infections and thrombosis. As such, we do not believe it is possible 
to extrapolate outcomes achieved with Buzzy[supreg] Pro in the context 
of non-dialysis needle procedures to dialysis cannulation.
    We also appreciate the comments from patient advocates offering 
anecdotal experience with Buzzy[supreg] Pro in the context of dialysis 
cannulation but would be especially interested in additional detail, 
including the numbers of patients involved and the specific outcomes 
that they experienced from Buzzy[supreg] Pro. While some commenters 
asserted that Buzzy[supreg] Pro's benefits for the renal dialysis 
patient population are supported by peer-reviewed scientific 
literature, because such sources were not provided by the commenters, 
we were unable to verify these assertions.
    While Buzzy[supreg] Pro may demonstrate similar results to that of 
its predicate devices, our primary concern regarding the lack of direct 
evidence that Buzzy[supreg] results in pain or fear reduction in the 
context of dialysis cannulation pain or fear has not been sufficiently 
addressed.
    In response to our request for studies comparing Buzzy[supreg] Pro 
to topical anesthetics or vapocoolant spray and that demonstrate that 
Buzzy[supreg] Pro significantly improves clinical outcomes of dialysis 
patients relative to existing available treatments, the applicant's 
first summary table reflects outcomes specific to dialysis but does not 
reflect experiences with Buzzy[supreg] Pro. While the second table 
reflects outcomes specific to Buzzy[supreg], it does not capture 
experience in the dialysis setting. Not all studies included in the 
summary tables shown previously in this rule were provided with the 
application or public comment. However, none of the studies appear to 
specifically examine Buzzy[supreg] Pro's efficacy in improving clinical 
outcomes of dialysis patients as compared to topical anesthetics or 
vapocoolant spray.
    Regarding our concern that data in support of the applicant's 
claims may have limited generalizability to the non-pediatric majority 
of the ESRD patient population, the applicant reiterated references 
from its application to independent peer reviewed studies on adult 
venipuncture using Buzzy[supreg]. These studies compared Buzzy[supreg] 
to no intervention and Buzzy[supreg] to vapocoolant or cold 
interventions. We also note that the applicant referred to a source 
labeled ``Abedin et. al.,'' but we did not receive the study or the 
complete citation for this source. Because the studies did not compare 
Buzzy[supreg] to lidocaine and did not take place in the dialysis 
setting, the applicant has not sufficiently addressed our concern about 
the generalizability of these studies.
    Regarding the applicant's additional evidence since the application 
submission, we acknowledge the reference to the 1989 study pertaining 
to vasodilation in human skin and the 2023 study pertaining to the 
prevention of post-vaccine syncope. While these studies were not 
submitted to us, similarly to the evidence previously submitted, it 
does not appear that they assessed the efficacy of Buzzy[supreg] Pro in 
the context of dialysis cannulation.
    We appreciate the applicant's clarification regarding use among 
single vs. multiple patients in the ESRD facility setting and 
confirmation that to date, there are no reported instances of 
Buzzy[supreg] being associated with a vascular access mishap. However, 
because the applicant did not specify the percentage of the 114,000,000 
needle procedures performed with Buzzy[supreg] that pertained to 
dialysis cannulation, our concern about the lack of data examining the 
risk of harm to the access site or any other adverse events associated 
with the use of Buzzy[supreg] Pro in the renal dialysis patient 
population has not been sufficiently addressed.
    For the reasons noted previously, we do not believe that there is 
sufficient evidence to demonstrate that Buzzy[supreg] Pro significantly 
improves clinical outcomes relative to renal dialysis services 
previously available.
    With respect to the applicant's new substantial clinical 
improvement claim that Buzzy[supreg] Pro offers a treatment option for 
a patient population unresponsive to, or ineligible for, currently 
available treatments, we acknowledge that patients may appreciate the 
option of a rapid acting form of dialysis cannulation pain relief. 
While the applicant stated that Buzzy[supreg] offers a more rapid 
beneficial resolution of the disease process treatment than currently 
available options, the applicant did not provide additional evidence 
demonstrating the clinical superiority of Buzzy[supreg] Pro over 
topical lidocaine in the context of dialysis cannulation. Although the 
applicant stated that lidocaine requires an hour to take full effect, 
it did not provide evidence that Buzzy[supreg] Pro is superior to 
lidocaine after shorter time frames in the dialysis setting, that 
shorter timeframes do not provide adequate pain control with topical 
lidocaine, or that patients are unable to apply lidocaine an hour 
before their scheduled dialysis treatment. With respect to the 
applicant's assertion that the higher cost of EMLA as compared to 
Buzzy[supreg] is a barrier to pain relief, we note that because topical 
lidocaine is included in the pain management category of drugs/
biological products included in the ESRD PPS, dialysis facilities would 
be expected to provide it when determined necessary for the treatment 
of graft site pain. While cost may be a practical barrier to access for 
some patients, we do not equate this barrier with either 
unresponsiveness or ineligibility. In summary, based on the information 
provided, we are not able to conclude that there is sufficient evidence 
to demonstrate that Buzzy[supreg] Pro offers a treatment option for a 
patient population unresponsive to, or ineligible for, currently 
available treatments.
    Finally, we note that the comment suggesting that the CAHPS Survey 
should be updated to capture patient experience with dialysis 
cannulation pain is beyond the scope of this proposed rule.
    In accordance with TPNIES policy and Sec.  412.87(b)(1)(i), we 
consider the totality of the circumstances when making a determination 
that a new renal dialysis equipment or supply represents

[[Page 76431]]

an advance that substantially improves, relative to renal dialysis 
services previously available, the diagnosis or treatment of Medicare 
beneficiaries. In addition, per Sec.  412.87(b)(1)(iii), CMS considers 
a range of evidence from published or unpublished information sources, 
including other appropriate information sources not otherwise listed 
under Sec.  412.87(b)(1)(iii).
    After carefully reviewing the application, the information 
submitted by the applicant addressing our concerns raised in the CY 
2024 ESRD PPS proposed rule, and comments submitted by the public, we 
have determined that Buzzy[supreg] Pro has not shown that it represents 
an advance that substantially improves, relative to renal dialysis 
services previously available, the treatment of Medicare beneficiaries. 
For the reasons discussed previously, we conclude that Buzzy[supreg] 
Pro does not meet the TPNIES innovation criteria under Sec.  
413.236(b)(5) and Sec.  412.87(b)(1).
f. Capital-Related Assets Criterion (Sec.  413.236(b)(6))
    With respect to the sixth TPNIES eligibility criterion under Sec.  
413.236(b)(6), limiting capital-related assets from being eligible for 
the TPNIES, except those that are home dialysis machines, we note that 
Buzzy[supreg] Pro does not meet the definition of a capital-related 
asset under Sec.  413.236(a)(2), because it is not an asset that the 
ESRD facility has an economic interest in through ownership that is 
subject to depreciation.\102\
---------------------------------------------------------------------------

    \102\ See also CMS Provider Reimbursement Manual, Chapter 1, 
section 104.1. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.
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    Comment: The applicant submitted a comment indicating that 
Buzzy[supreg] Pro is not an asset that the ESRD facility has an 
economic interest in through ownership that is subject to depreciation.
    Response: We agree that Buzzy[supreg] Pro does not meet the 
definition of a capital-related asset under Sec.  413.236(a)(2).
    Final Rule Action: After a consideration of all the public comments 
received, we have determined that the evidence and public comments 
submitted are not sufficient to demonstrate that Buzzy[supreg] Pro 
meets all eligibility criteria to qualify for the TPNIES for CY 2024. 
As a result, Buzzy[supreg] Pro will not be paid for using the TPNIES 
per Sec.  413.236(d). We note that in the CY 2021 ESRD PPS final rule 
(85 FR 71412), CMS indicated that entities would have 3 years beginning 
on the date of FDA marketing authorization in which to submit their 
applications for the TPNIES. Based on the Buzzy[supreg] Pro FDA 
marketing authorization date of May 15, 2023, the applicant may be 
eligible to apply for the TPNIES for CYs 2025, 2026, or 2027, and CMS 
would review any new information provided for the applicable rulemaking 
cycle.
4. Other Public Comments on the TPNIES
    We received several comments regarding the TPNIES policies, 
including the length of the TPNIES payment period and suggestions for 
new payment adjustments. Commenters urged CMS to extend the TPNIES 
payment period to at least three years to allow for two full years of 
data collection, and then increase the ESRD PPS base rate to account 
for the new technology. Commenters suggested that CMS issue an RFI 
seeking public feedback on a post-TPNIES add-on payment adjustment and 
adopt a post-TPNIES payment adjustment in future rulemaking.
    Commenters suggested revisions to existing TPNIES policies, such as 
extending the TPNIES to all capital-related assets, expanding the 
TPNIES for home dialysis devices that are acquired through operating 
leases, removing the TPNIES offset amount, and developing further 
guidance explaining the way in which CMS evaluates TPNIES applicants' 
substantial clinical improvement data.
    Commenters suggested that we clarify the way in which MACs 
determine and provide payment rates for items approved for the TPNIES. 
Commenters suggested that these rates should be provided no later than 
March 31 of the first year of TPNIES eligibility and that MACs should 
provide clear and timely TPNIES claims processing guidance to the 
dialysis facilities.
    Finally, we received comments suggesting that CMS develop a 
Transitional Laboratory Add-on Payment Adjustment (TLAPA) to 
incentivize innovation in laboratory services for beneficiaries with 
ESRD.
    While we are not providing detailed responses to these comments in 
this final rule because they are out of scope of the proposed rule, we 
thank the commenters for their input and will potentially consider the 
recommendations for future rulemaking.

D. Continuation of Approved Transitional Add-On Payment Adjustments for 
New and Innovative Equipment and Supplies for CY 2024

    In this section of the final rule, we identify any items previously 
approved for the TPNIES and for which payment is continuing for CY 
2024. As described in the CY 2023 ESRD PPS final rule, payment for the 
one item approved for the TPNIES, the Tablo[supreg] Hemodialysis 
System, as described by HCPCS code E1629, expires on December 31, 2023 
(87 FR 67216). As such there are no items previously approved for the 
TPNIES for which payment is continuing in CY 2024.
    Comment: Several commenters requested that CMS extend the TPNIES 
payment period for the Tablo[supreg] Hemodialysis System beyond the 
December 31, 2023, end date to December 31, 2024. Commenters stated 
that implementation difficulties with the first CMS-approved TPNIES 
application resulted in lower than anticipated uptake of the 
Tablo[supreg] System. Commenters stated that MACs demonstrated variable 
levels of understanding about the Capital Related Assets (CRA) for the 
TPNIES and that providers lacked clear guidance on what information 
ESRD facilities were to include on their claims. The commenters stated 
that these challenges contributed to claim denials and an 
administrative burden on ESRD facilities.
    Response: CMS did not propose to extend the 2-CY TPNIES payment 
period as established in Sec.  413.236(d)(1) in the CY 2024 ESRD PPS 
proposed rule, and we are not finalizing any such change in this final 
rule. However, we acknowledge the commenters' concerns pertaining to 
TPNIES claims processing related matters and have issued Change Request 
12347 to the MACs outlining the way in which the CRA for the TPNIES is 
calculated for claims processing purposes.\103\ In addition, in August 
2022, CMS instructed MACs to adjust ESRD claims following CMS 
deployment of a corrected ESRD Pricer and to ensure that their systems 
were properly set up to suspend the claim for manual pricing. CMS 
provided a Medicare Learning Network (MLN) article instructing 
providers on how to submit Tablo[supreg] Systems claims.\104\ This 
article was supplemented with an MLN Connects newsletter reminding

[[Page 76432]]

providers to submit the invoice for the CRA for the TPNIES to their MAC 
and report the appropriate revenue code and HCPCS code with modifier on 
the claim for treatments in which the CRA for the TPNIES was used. 
Providers were also reminded to address any issues returned to them by 
their MAC and resubmit the effected claims.\105\
---------------------------------------------------------------------------

    \103\ Change Request 12347. Implementation of the Capital 
Related Assets Adjustment (CRA) for the Transitional Add-on Payment 
Adjustment for New and Innovative Equipment and Supplies (TPNIES) 
Under the End Stage Renal Disease Prospective Payment System (ESRD 
PPS). https://www.cms.gov/files/document/r11533otn.pdf.
    \104\ MLN Matters Article. Implementation of the Capital Related 
Assets (CRA) Adjustment for the Transitional Add-on Payment 
Adjustment for New and Innovative Equipment and Supplies (TPNIES) 
Under the End Stage Renal Disease Prospective Payment System (ESRD 
PPS). https://www.cms.gov/files/document/mm12347-implementation-capital-related-assets-cra-adjustment-transitional-add-payment-adjustment-new.pdf.
    \105\ MLN Connects Newsletter. ESRD: Submitting Dialysis Claims 
the Include Capital Related Assets Eligible for the TPNIES https://www.cms.gov/training-education/medicare-learning-network/newsletter/2023-09-14-mlnc#_Toc145581414.
---------------------------------------------------------------------------

E. Continuation of Approved Transitional Drug Add-On Payment 
Adjustments for CY 2024

    Under Sec.  413.234(c)(1), a new renal dialysis drug or biological 
product that is considered included in the ESRD PPS base rate is paid 
the TDAPA for 2 years. In December 2021, CMS approved Korsuva[supreg] 
(difelikefalin) for the TDAPA under the ESRD PPS, effective April 1, 
2022. Implementation instructions are specified in CMS Transmittal 
11295,\106\ dated March 15, 2022, and available at: https://www.cms.gov/files/document/r11295CP.pdf.
---------------------------------------------------------------------------

    \106\ CMS Transmittal 11295 rescinded and replaced CMS 
Transmittal 11278, dated February 24, 2022.
---------------------------------------------------------------------------

    In July 2023, after the CY 2024 ESRD PPS proposed rule appeared in 
the Federal Register on June 30, 2023, CMS approved Jesduvroq 
(daprodustat) for the TDAPA under the ESRD PPS, effective October 1, 
2023. Implementation instructions are specified in CMS Transmittal 
12157, dated July 27, 2023, and available at: https://www.cms.gov/files/document/r12157cp.pdf.
    Table 11 identifies the two new renal dialysis drugs for which the 
TDAPA payment period as specified in Sec.  413.234(c)(1) will continue 
in CY 2024: Korsuva[supreg] (difelikefalin) that was approved for the 
TDAPA effective in CY 2022, and Jesduvroq (daprodustat) that was 
approved for the TDAPA effective in CY 2023. Table 11 also identifies 
the products' HCPCS coding information as well as the payment 
adjustment effective dates and end dates.
[GRAPHIC] [TIFF OMITTED] TR06NO23.023

III. Calendar Year (CY) 2024 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 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 to implement subsection (r) of section 1834 of the 
Act and the amendments to section 1861(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 2024 Payment for Renal Dialysis Services 
Furnished to Individuals With AKI

    The CY 2024 ESRD PPS proposed rule, 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, and End-Stage Renal 
Disease Treatment Choices Model'' (88 FR 42430-42544), referred to as 
the ``CY 2024 ESRD PPS proposed rule,'' appeared in the June 30, 2023 
version of the Federal Register, with a comment period that ended on 
August 25, 2023. In that proposed rule, we proposed to update the AKI 
dialysis payment rate for CY 2024. We received 10 public comments on 
our proposal. In this final rule, we provide a summary of each proposed 
provision, a summary of public comments received and our responses to 
them, and the policies we are finalizing for CY 2024 payment for renal 
dialysis services furnished to individuals with AKI.

[[Page 76433]]

C. Annual Payment Rate Update for CY 2024

1. CY 2024 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 update, geographic wage adjustments, and any other 
discretionary adjustments, for such year. We note that ESRD facilities 
can 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.1.d of this final rule, the ESRD PPS 
base rate is $271.02, which reflects the application of the CY 2024 
wage index budget-neutrality adjustment factor of 0.999534 and the CY 
2024 ESRDB market basket percentage increase of 2.4 percent reduced by 
the productivity adjustment of 0.3 percentage point, that is, 2.1 
percent. Accordingly, we are finalizing a CY 2024 per treatment payment 
rate of $271.02 (($265.57 x 0.999534) x 1.021 = $271.02) for renal 
dialysis services furnished by ESRD facilities to individuals with AKI. 
This final payment rate is further adjusted by the wage index, as 
discussed in the next section of this final rule.
2. Geographic Adjustment Factor
    Under section 1834(r)(1) of the Act and regulations at Sec.  
413.372, the amount of payment for AKI renal 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 ESRDB market basket 
percentage increase and reduced by the 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.1.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 ESRD 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. We also apply the wage index 
policies regarding the 0.600 wage index floor (87 FR 67161 through 
67166) and the 5 percent cap on wage index decreases (87 FR 67159 
through 67161) to AKI dialysis payments to ESRD facilities.
    We received 10 public comments on our proposal to update the 
payment rate for renal dialysis services furnished to individuals with 
AKI. Commenters included a coalition of dialysis organizations, a non-
profit dialysis organization, a trade association, a renal product 
development company, and multiple large dialysis organizations. The 
comments on our proposal and our responses are set forth below.
    Comment: Some commenters expressed support for the CY 2024 proposed 
payment rate for individuals with AKI, which is to say the commenters 
supported increasing payments for AKI by the proposed productivity-
adjusted ESRDB market basket update of 1.7 percent. Many commenters 
requested that CMS allow for AKI patients to select home dialysis 
modalities by eliminating the current prohibition. Some commenters also 
expressed concerns that the proposed market basket increase is 
insufficient to account for inflation. One commenter suggested that any 
forecast error adjustment applied to the ESRD PPS should also be 
applied to payments for AKI patients.
    Response: We appreciate the commenters' support for the proposed CY 
2024 productivity-adjusted ESRDB market basket update of 1.7 percent. 
We acknowledge the request for AKI patients to select home dialysis 
modalities, and we thank commenters for their input. We note that 
currently, CMS will only pay for renal dialysis services at an ESRD 
facility for patients with AKI, and we did not propose to change this 
policy in the CY 2024 ESRD PPS proposed rule. Current AKI dialysis 
payment policy was implemented under the CY 2017 ESRD PPS final rule 
(81 FR 77866 through 77872, and 77965). Over the years, we have 
received several comments regarding the site of renal dialysis services 
for Medicare beneficiaries with AKI. We have solicited comments in the 
recent past, including in the CY 2022 ESRD PPS proposed rule (86 FR 
36322, 36408), when we requested information regarding potentially 
modifying the site of renal dialysis services for patients with AKI and 
payment for AKI in the home setting. CMS continues to believe that this 
population requires close medical supervision by qualified staff during 
their dialysis treatment. We recognize commenters' concerns that the 
proposed ESRDB market basket update is insufficient given inflation. As 
discussed in section II.B.1.a.(2)(c) of this final rule, we believe the 
final CY 2024 ESRDB market basket update using the 2020-based ESRDB 
adequately reflects the average change in the price of goods and 
services ESRD facilities purchase to provide renal dialysis services 
and is technically appropriate to use as the ESRD PPS payment update 
factor, which determines the payment rate for renal dialysis services 
furnished to patients with AKI at ESRD facilities. We appreciate the 
commenter's suggestion that any forecast error adjustment applied to 
payments under the ESRD PPS should also be applied to payments for AKI 
patients. As discussed in section II.B.1.a.(2)(e) of this final rule, 
we are not finalizing a forecast error adjustment for the ESRD PPS for 
several reasons, but we will consider this suggestion for potential 
future rulemaking.
    Final Rule Action: We are finalizing our proposal to base the AKI 
payment rate on the finalized ESRD PPS base rate, adjusted by the ESRD 
facility's wage index. Specifically, the final CY 2024 ESRD PPS base 
rate is $271.02 as finalized in section II.B.1.d of this final rule. 
Accordingly, we are finalizing a CY 2024 per treatment payment rate of 
$271.02 for renal dialysis services furnished by ESRD facilities to 
individuals with AKI. Additionally, we are finalizing our proposal to 
apply the updated the ESRD PPS wage index for CY 2024 payments for 
renal dialysis services furnished by ESRD facilities to individuals 
with AKI as finalized in section II.B.1.b of this final rule.

IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)

A. Background

    For a detailed discussion of the 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 previous ESRD QIP rules at: 75 FR 49030; 76 FR 628; 76 FR 70228; 77 
FR 67450; 78 FR 72156; 79 FR 66120; 80 FR 68968; 81 FR 77834; 82 FR 
50738; 83 FR 56922; 84 FR 60648; 85 FR 71398; 86 FR 61874; and 87 FR 
67136.
    We have also codified many of our policies for the ESRD QIP at 
Sec. Sec.  413.177 and 413.178.

B. Updates to the Regulation Text for the ESRD QIP

1. Revision to the Definition of ``Minimum Total Performance Score 
(mTPS)'' at Sec.  413.178(a)(8)
    In the CY 2019 ESRD PPS final rule, we codified a number of key 
terms used in the ESRD QIP at Sec.  413.178(a) of our regulations (83 
FR 56980 through 56982). One of these terms is ``minimum total 
performance score'' (mTPS), which we defined at Sec.  413.178(a)(8) 
``with

[[Page 76434]]

respect to a payment year'' \107\ as ``the total performance score that 
an ESRD facility would receive if, during the baseline period, it 
performed at the 50th percentile of national ESRD facility performance 
on all clinical measures and the median of national ESRD facility 
performance on all reporting measures.''
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    \107\ In the CY 2023 ESRD PPS final rule, we revised Sec.  
413.178(a)(8) to exempt PY 2023 (87 FR 67229).
---------------------------------------------------------------------------

    In the CY 2024 ESRD PPS proposed rule, we stated that we have 
recently reevaluated this definition and determined that it should be 
revised to more accurately capture how we calculate the median of 
national ESRD facility performance on reporting measures (88 FR 42487). 
We noted that, although we use data prior to the performance period to 
calculate these medians, the data may not be from the same time period, 
or ``baseline period'' (see Sec.  413.178(a)(2)) used to calculate the 
50th percentile of national ESRD facility performance on the clinical 
measures. Instead, our policy has been to calculate the median of 
national ESRD facility performance on the ESRD QIP reporting measures 
using the most recently available data prior to the applicable 
performance period for the payment year. If there were no data 
available prior to the first performance period of a new reporting 
measure, as was the case for the Clinical Depression Screening and 
Follow-Up reporting measure, we would use a proxy median for purposes 
of including the reporting measure in our calculation of the mTPS. We 
stated that we selected the values for these proxy medians based on the 
availability of previous measure data, a facility's familiarity with 
similar measures or requirements, and considerations regarding a 
facility's ability to comply with new reporting measure requirements 
during the initial performance periods for a new reporting measure.
    In the CY 2024 ESRD PPS proposed rule, we proposed to update the 
definition of ``minimum total performance score'' at Sec.  
413.178(a)(8) so that it accurately captures these policies (88 FR 
42487). We also proposed that, with respect to the adoption of future 
reporting measures, including the reporting measures proposed in the CY 
2024 ESRD PPS proposed rule, if there is an insufficient quantity of 
data available prior to the first performance period of a new reporting 
measure, we will set a proxy median of zero for the reporting measure 
until we have sufficient data to calculate the median. We stated our 
belief that this proposal will provide facilities with additional 
predictability and transparency regarding our calculation of the mTPS 
for a payment year. We noted that, although many facilities score much 
higher than zero during the initial performance periods of a new 
reporting measure, we believe that setting the proxy median at zero 
where we do not have sufficient data available will account for the 
possibility that new reporting measures may have different reporting 
requirements. For example, a new reporting measure may require a 
facility to report new or additional data in CMS's ESRD Quality 
Reporting System (EQRS) to be eligible for scoring on the reporting 
measure. Additionally, a new reporting measure may require that a 
facility reconsider its internal processes to comply with the reporting 
requirements and be eligible for scoring. In the proposed rule, we 
stated that we believe that using a median of zero for new reporting 
measures would ensure that the mTPS is calculated based on the worst-
case scenario, rather than assuming a median higher than what may be 
observed once data are available. We noted that setting the proxy 
median at zero until we have sufficient data available to calculate the 
median would allow the timely inclusion of a new reporting measure in 
the ESRD QIP measure set, as well as our calculation of the mTPS, while 
also encouraging facilities to report the new or additional data that 
may be specified by that reporting measure so that they are able to 
receive credit for reporting.
    We welcomed public comment on this proposal. The comments we 
received and our responses are set forth below.
    Comment: A few commenters expressed support for the proposed update 
to the definition of mTPS, as it will allow for timely inclusion of new 
reporting measures and encourage facilities to report data.
    Response: We thank commenters for their support.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal as proposed.
2. Codification of the ESRD QIP Measure Adoption, Retention, and 
Removal Policies
    In the CY 2013 ESRD PPS final rule (77 FR 67475), we finalized a 
policy to retain measures from prior program years for each successive 
program year, unless otherwise proposed and finalized. In the CY 2019 
ESRD PPS final rule (83 FR 56983 through 56985), we finalized eight 
measure removal factors for the ESRD QIP, and we refer readers to that 
final rule for details. We also finalized a policy to retain a measure 
for certain specified reasons, such as when a particular measure 
addresses a gap in quality so significant that removing the measure 
could result in poor quality or when a measure addresses a statutorily-
required topic, even if one or more of the measure removal factors 
applies. In the CY 2013 ESRD PPS final rule (77 FR 67475), we also 
finalized that we would generally remove an ESRD QIP measure using 
notice and comment rulemaking unless we determined that the continued 
collection of data on the measure raised patient safety concerns. In 
that case, we stated that we would promptly remove the measure, 
immediately notify ESRD facilities and the public through the usual 
communication channels (including listening sessions, memos, email 
notification, and website postings), and publish the justification for 
the removal in the Federal Register during the next rulemaking cycle.
    In the CY 2024 ESRD PPS proposed rule, we proposed to revise Sec.  
413.178(c) such that it incorporates these measure adoption, retention, 
and removal policies (88 FR 42487). We proposed that existing Sec.  
413.178(c)(1) through (5) would be consolidated and renumbered as Sec.  
413.178(c)(1)(i) through (v), and we would add a new Sec.  
413.178(c)(1)(vi), which would codify our policy to adopt measures for 
the ESRD QIP beyond those that address the topics described at Sec.  
413.178(c)(1)(i) through (v). We also proposed to codify at Sec.  
413.178(c)(2) our policies regarding the use of endorsed measures. We 
proposed to codify at Sec.  413.178(c)(3) our policy regarding the 
updating of measure specifications. Additionally, we proposed to codify 
at Sec.  413.178(c)(4) our policy regarding measure retention. Finally, 
we proposed to codify at Sec.  413.178(c)(5) our policies regarding 
measure removal. We stated our belief that these proposals will make it 
easier for interested parties to find these policies and will further 
align the ESRD QIP regulations with the regulations we have codified 
for other quality reporting programs.
    We welcomed public comment on these proposals. The comments we 
received and our responses are set forth below.
    Comment: A few commenters expressed support for the proposals to 
codify existing measure adoption, retention, and removal policies, 
noting that these updates will provide transparency for evaluating 
measures.
    Response: We thank the commenters for their support.
    Final Rule Action: After considering public comments, we are 
finalizing our proposals as proposed.

[[Page 76435]]

C. Updates to Requirements Beginning With the PY 2026 ESRD QIP

1. PY 2026 ESRD QIP Measure Set
    In the CY 2024 ESRD PPS proposed rule, we proposed to remove the 
Ultrafiltration Rate reporting measure and the Standardized Fistula 
Rate clinical measure beginning with PY 2026 (88 FR 42499 through 
42500). We also proposed to add the Facility Commitment to Health 
Equity reporting measure to the ESRD QIP measure set beginning with PY 
2026 (88 FR 42489 through 42494). The previously finalized and proposed 
new measures are summarized in Table 12 of the proposed rule (88 FR 
42488). We describe the previously finalized measures and the measures 
we are finalizing in this final rule in Table 12. The technical 
specifications for each of these measures can be found in the CMS ESRD 
Measures Manual for the 2023 Performance Period.\108\
---------------------------------------------------------------------------

    \108\ https://www.cms.gov/files/document/esrd-measures-manual-v80.pdf.
---------------------------------------------------------------------------

BILLING CODE 4120-01-P
     
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    \109\ In previous years, we referred to the consensus-based 
entity by corporate name. We have updated this language to refer to 
the consensus-based entity more generally.

---------------------------------------------------------------------------

[[Page 76436]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.024


[[Page 76437]]


2. Adoption of the Facility Commitment to Health Equity Reporting 
Measure Beginning With the PY 2026 ESRD QIP
a. Background
    In the CY 2024 ESRD PPS proposed rule, we stated that significant 
and persistent disparities in healthcare outcomes exist in the U.S. (88 
FR 42489). For example, belonging to a racial or ethnic minority group, 
being a member of the lesbian, gay, bisexual, transgender, and queer 
(LGBTQ+) community, being a member of a religious minority, living in a 
rural area, being a person with a disability or disabilities, or being 
near or below the poverty level, is often associated with worse health 
outcomes.^{110 111 112 113 114 115 116 117 118 119} Numerous 
studies have shown that among Medicare beneficiaries, individuals who 
are racial and ethnic minorities often receive lower quality hospital 
care, report lower experiences of care, and experience more frequent 
hospital readmissions and procedural 
complications.^{120 121 122 123 124 125} Readmission rates in 
the Hospital Readmissions Reduction Program have shown to be higher 
among Black and Hispanic Medicare beneficiaries with common conditions, 
including congestive heart failure and acute myocardial 
infarction.^{126 127 128 129 130} Data indicate that, even 
after accounting for factors such as socioeconomic conditions, members 
of racial and ethnic minority groups reported experiencing lower 
quality healthcare.\131\ Evidence of differences in quality of care 
received by people from racial and ethnic minority groups show worse 
health outcomes, including a higher incidence of diabetes complications 
such as retinopathy.\132\ Additionally, inequities in the drivers of 
health affecting these groups, such as poverty and healthcare access, 
are interrelated and influence a wide range of health and quality-of-
life outcomes and risks.\133\
---------------------------------------------------------------------------

    \110\ Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission 
Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 
305(7), 675-681. Available at: doi:10.1001/jama.2011.123.
    \111\ Lindenauer PK, Lagu T, Rothberg MB, et al. (2013). Income 
Inequality and thirty-Day Outcomes After Acute Myocardial 
Infarction, Heart Failure, and Pneumonia: Retrospective Cohort 
Study. BMJ, 346. Available at: https://doi.org/10.1136/bmj.f521.
    \112\ Trivedi AN, Nsa W, Hausmann LRM, et al. (2014). Quality 
and Equity of Care in U.S. Hospitals. N Engl J Med, 371(24), 2298-
2308. Available at: doi: 10.1056/NEJMsa1405003.
    \113\ Polyakova, M, Udalova V, Kocks, G, Genadek K, Finlay K, 
Finkelstein AN. (2021). Racial Disparities In Excess All-Cause 
Mortality During The Early COVID-19 Pandemic Varied Substantially 
Across States. Health Affairs, 40(2), 307-316. Available at: https://doi.org/10.1377/hlthaff.2020.02142.
    \114\ Rural Health Research Gateway. (2018). Rural Communities: 
Age, Income, and Health Status. Rural Health Research Recap. 
Available at: https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
    \115\ HHS Office of Minority Health. (2020). Progress Report to 
Congress, 2020 Update on the Action Plan to Reduce Racial and Ethnic 
Health Disparities. Department of Health and Human Services. 
Available at: https://minorityhealth.hhs.gov/report-congress-minority-health.
    \116\ Heslin KC, Hall JE. (2021). Sexual Orientation Disparities 
in Risk Factors for Adverse COVID-19-Related Outcomes, by Race/
Ethnicity--Behavioral Risk Factor Surveillance System, United 
States, 2017-2019. MMWR Morb Mortal Wkly Rep, 70(5), 149. doi: 
10.15585/mmwr.mm7005a1.
    \117\ Poteat TC, Reisner SL, Miller M, Wirtz AL. (2020). COVID-
19 Vulnerability of Transgender Women With and Without HIV Infection 
in the Eastern and Southern U.S. medRxiv. doi: 10.1101/
2020.07.21.20159327.
    \118\ Vu M, Azmat A, Radejko T, Padela AI. (2016). Predictors of 
Delayed Healthcare Seeking Among American Muslim Women. Journal of 
Women's Health, 25(6), 586-593. doi: 10.1089/jwh.2015.5517.
    \119\ Nadimpalli SB, Cleland CM, Hutchinson MK, Islam N, Barnes 
LL, Van Devanter N. (2016). The Association Between Discrimination 
and the Health of Sikh Asian Indians. Health Psychology, 35(4), 351-
355. https://doi.org/10.1037/hea0000268.
    \120\ CMS Office of Minority Health. (2020). Racial, Ethnic, and 
Gender Disparities in Healthcare in Medicare Advantage. Baltimore, 
MD: Centers for Medicare & Medicaid Services. Available at: .
    \121\ CMS Office of Minority Health. (Updated August 2018). 
Guide to Reducing Disparities in Readmissions. Baltimore, MD: 
Centers for Medicare & Medicaid Services. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \122\ Singh JA, Lu X, Rosenthal GE, Ibrahim S, Cram P. (2014). 
Racial Disparities in Knee and Hip Total Joint Arthroplasty: An 18-
year analysis of national Medicare data. Ann Rheum Dis., 73(12), 
2107-15. Available at: doi:10.1136/annrheumdis-2013-203494.
    \123\ Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. (2019). 
Racial Disparities in Readmission Rates among Patients Discharged to 
Skilled Nursing Facilities. J Am Geriatr Soc., 67(8), 1672-1679. 
Available at: https://doi.org/10.1111/jgs.15960.
    \124\ Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission 
Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 
305(7), 675-681. Available at: doi:10.1001/jama.2011.123.
    \125\ Tsai TC, Orav EJ, Joynt KE. (2014). Disparities in 
Surgical 30-day Readmission Rates for Medicare Beneficiaries by Race 
and Site of Care. Ann Surg., 259(6), 1086-1090. Available at: doi: 
10.1097/SLA.0000000000000326.
    \126\ Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK. (2011). 
Readmission Rates for Hispanic Medicare Beneficiaries with Heart 
Failure and Acute Myocardial Infarction. Am Heart J., 162(2), 254-
261 e253. Available at: https://doi.org/10.1016/j.ahj.2011.05.009.
    \127\ Centers for Medicare & Medicaid Services. (2014). Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures. 
Available at: https://www.hhs.gov/guidance/document/medicare-hospital-quality-chartbook-performance-report-outcome-measures.
    \128\ CMS Office of Minority Health. (Updated August 2018). 
Guide to Reducing Disparities in Readmissions. Baltimore, MD: 
Centers for Medicare & Medicaid Services. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \129\ Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA. 
(2013). Chronic Obstructive Pulmonary Disease Readmissions at 
MinorityServing Institutions. Ann Am Thorac Soc., 10(6), 680-684. 
Available at: https://doi.org/10.1513/AnnalsATS.201307-223OT.
    \130\ Joynt KE, Orav E, Jha AK. (2011). Thirty-Day Readmission 
Rates for Medicare Beneficiaries by Race and Site of Care. JAMA, 
305(7), 675-681. Available at: doi:10.1001/jama.2011.123.
    \131\ Nelson AR. (2003). Unequal Treatment: Report of the 
Institute of Medicine on Racial and Ethnic Disparities in 
Healthcare. The Annals of thoracic surgery, 76(4), S1377-S1381. doi: 
10.1016/s0003-4975(03)01205-0.
    \132\ Peek, ME, Odoms-Young, A, Quinn, MT, Gorawara-Bhat, R, 
Wilson, SC, & Chin, MH. (2010). Race and Shared Decision-Making: 
Perspectives of African-Americans with diabetes. Social Science & 
Medicine, 71(1), 1-9. Available at: doi:10.1016/
j.socscimed.2010.03.014.
    \133\ Department of Health and Human Services. (2021). Healthy 
People 2020: Disparities. Available at: www.healthypeople.gov/2020/about/foundation-health-measures/Disparities.
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    In the CY 2022 ESRD PPS proposed rule (86 FR 36362 through 36369), 
we requested information on our Equity Plan for Improving Quality in 
Medicare (also referred to as the CMS Framework for Health 
Equity),\134\ which outlines our commitment to close health equity gaps 
through improved data collection, measurement, and analysis of 
disparities across programs and policies. The request for information 
requested public comment regarding the potential stratification of 
quality measure results by race and ethnicity and the potential 
creation of a hospital or facility equity score in CMS quality 
reporting and value-based purchasing programs, including the ESRD QIP. 
In the CY 2024 ESRD PPS proposed rule, we stated that we received many 
responses to that request for public comment (88 FR 42489), and we 
referred readers to the CY 2022 ESRD PPS final rule for summaries of 
those comments (86 FR 61934 through 61937). We noted in the CY 2022 
ESRD PPS final rule the value of these comments in the continuing 
development of our health equity quality measurement efforts, and we 
stated that we would take the comments

[[Page 76438]]

into account for future development and expansion of our health equity 
quality measurement efforts.
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    \134\ Centers for Medicare and Medicaid Services. (2022). CMS 
Framework for Health Equity 2022-2032. Available at: https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf. 
Centers for Medicare & Medicaid Services. (2021). Paving the Way to 
Equity: A Progress Report. Available at: https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf. Accessed on 
February 20, 2023. See also, Centers for Medicare & Medicaid 
Services Office of Minority Health. (2021). The CMS Equity Plan for 
Improving Quality in Medicare. 2015-2021. Available at: https://
www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-
CMS_EquityPlanforMedicare_090615.pdf#:~:text=The%20Centers%20for%20Me
dicare%20%26%20Medicaid%20Services%20%28CMS%29,evidence%20base%2C%20i
dentifying%20opportunities%2C%20and%20gathering%20stakeholder%20input
. Accessed on February 20, 2023.
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    The Agency for Healthcare Research and Quality (AHRQ) and The Joint 
Commission have independently concluded that facility leadership plays 
an important role in promoting a culture of quality and 
safety.^{135 136 137} AHRQ research shows that facility boards 
can influence quality and safety in a variety of ways; not only through 
strategic initiatives, but also through more direct interactions with 
frontline workers.\138\ The Joint Commission found that a leader who is 
committed to prioritizing and making patient safety visible through 
every day actions is a critical part of creating a true culture of 
safety, which in turn fosters an organizational culture in which 
patients are treated with dignity and respect.\139\ Because CMS is also 
working toward the goal of all patients receiving high-quality 
healthcare, regardless of individual characteristics, we are also 
committed to supporting healthcare organizations in building a culture 
of safety and equity that focuses on educating and empowering their 
workforce to recognize and eliminate health disparities. This includes 
patients receiving the right care, at the right time, in the right 
setting for their condition(s), regardless of those characteristics.
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    \135\ Agency for Healthcare Research and Quality. Leadership 
Role in Improving Patient Safety. Patient Safety Primer, September 
2019. Available at: https://psnet.ahrq.gov/primer/leadership-role-improving-safety.
    \136\ Joint Commission on Accreditation of Healthcare 
Organizations, USA. The essential role of leadership in developing a 
safety culture. Sentinel Event Alert. 2017 (Revised June 2021). 
Available at: https://www.jointcommission.org/-/media/tjc/documents/resources/patient-safety-topics/sentinel-event/sea-57-safety-culture-and-leadership-final2.pdf.
    \137\ See information on launch of new ``Health Care Equity 
Certification'' in July 2023 from Joint Commission on Accreditation 
of Healthcare Organizations, USA, available at: https://www.jointcommission.org/our-priorities/health-care-equity/health-care-equity-prepublication/.
    \138\ Agency for Healthcare Research and Quality. Leadership 
Role in Improving Patient Safety. Patient Safety Primer, September 
2019: Available at: https://psnet.ahrq.gov/primer/leadership-role-improving-safety.
    \139\ Joint Commission on Accreditation of Healthcare 
Organizations, USA. The essential role of leadership in developing a 
safety culture. Sentinel Event Alert. 2017 (Revised June 2021). 
Available at: https://www.jointcommission.org/-/media/tjc/documents/resources/patient-safety-topics/sentinel-event/sea-57-safety-culture-and-leadership-final2.pdf.
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    We believe that strong and committed leadership from dialysis 
facility executives and board members is essential and can play a role 
in shifting organizational culture and advancing equity goals for 
dialysis facilities. Studies demonstrate that hospital leadership can 
positively influence culture for better quality, patient outcomes, and 
experience of care.^{140 141 142} A systematic review of 122 
published studies showed that strong leadership that prioritized 
safety, quality, and the setting of clear guidance with measurable 
goals for improvement resulted in a high-performing hospital with 
better patient outcomes.\143\ We believe this conclusion also applies 
to dialysis facilities, and that the commitment of dialysis facility 
leadership to health equity would result in a reduction of health 
disparities in the ESRD population.
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    \140\ Bradley EH, Brewster AL, McNatt Z, et al. (2018) How 
Guiding Coalitions Promote Positive Culture Change in Hospitals: A 
Longitudinal Mixed Methods Interventional Study. BMJ Qual Saf., 
27(3), 218-225. doi:10.1136/bmjqs-2017-006574.
    \141\ Smith SA, Yount N, Sorra J. (2017). Exploring 
Relationships Between Hospital Patient Safety Culture and Consumer 
Reports Safety Scores. BMC Health Services Research, 17(1), 143. 
doi:10.1186/s12913-017-2078-6.
    \142\ Keroack MA, Youngberg BJ, Cerese JL, Krsek C, Prellwitz 
LW, Trevelyan EW. (2007). Organizational Factors Associated with 
High Performance in Quality and Safety in Academic Medical Centers. 
Acad Med., 82(12), 1178-86. doi: 10.1097/ACM.0b013e318159e1ff.
    \143\ Millar R, Mannion R, Freeman T, et al. (2013). Hospital 
Board Oversight of Quality and Patient Safety: A Narrative Review 
and Synthesis of Recent Empirical Research. The Milbank quarterly, 
91(4), 738-70. doi:10.1111/1468-0009.12032.
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    Our belief that a leadership commitment to health equity can lead 
to a reduction of health disparities is also supported by research 
conducted by the Institute for Healthcare Improvement (IHI), which 
studied 23 health systems throughout the U.S. and Canada. The IHI's 
research showed that health equity must be a priority championed by 
leadership teams to improve both patient access to needed healthcare 
services and outcomes among populations that have been disadvantaged by 
the healthcare system.\144\ This IHI study specifically identified 
concrete actions to make advancing health equity a core strategy, 
including establishing this goal as a leader-driven priority alongside 
organizational development structures and processes.\145\ Based upon 
these findings, we believe that dialysis facility leadership can be 
instrumental in setting specific, measurable, attainable, realistic, 
and time-based (SMART) goals to assess progress towards achieving 
equity goals and ensuring high-quality care at dialysis facilities is 
accessible to all. Based on this well-developed body of evidence, in 
the proposed rule we proposed to adopt an attestation-based structural 
reporting measure, Facility Commitment to Health Equity, for the ESRD 
QIP beginning with PY 2026 (88 FR 42490).
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    \144\ Mate KS and Wyatt R. (2017). Health Equity Must Be a 
Strategic Priority. NEJM Catalyst. Available at: https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0556.
    \145\ Mate KS and Wyatt R. (2017). Health Equity Must Be a 
Strategic Priority. NEJM Catalyst. Available at: https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0556.
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    The first pillar of our strategic priorities \146\ reflects our 
deep commitment to improvements in health equity by addressing the 
health disparities that underly our health system. In line with this 
strategic pillar, we developed this structural measure to assess 
facility commitment to health equity across five domains (see Table 13) 
using a suite of organizational competencies aimed at achieving health 
equity for all patients, including but not limited to patients who 
belong to racial and ethnic minority groups, people with disabilities, 
members of the LGBTQ+ community, individuals with limited English 
proficiency, rural populations, religious minorities, and people facing 
socioeconomic challenges. We believe these elements are actionable 
focus areas, and assessment of dialysis facility leadership commitment 
to them is foundational.
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    \146\ Brooks-LaSure, C. (2021). My First 100 Days and Where We 
Go From Here: A Strategic Vision for CMS. Centers for Medicare & 
Medicaid. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
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    We proposed to adopt the measure under section 1881(h)(2)(A)(iv) of 
the Act, which gives the Secretary broad authority to specify measures 
for the ESRD QIP (88 FR 42490). We noted that disparities in health 
equity are tied to worse patient outcomes in the ESRD community. For 
example, individuals from racial and ethnic minority groups and with 
lower incomes are less likely to receive recommended care for CKD risk 
factors and are also less likely to reduce CKD risk through recommended 
treatment goals.^{147 148 149 150}

[[Page 76439]]

Consequently, some groups are more likely to progress from CKD to ESRD 
and less likely to be under the care of a nephrologist before starting 
dialysis.\151\ Individuals from racial and ethnic minority groups with 
ESRD are more likely to have 30-day hospital readmissions when compared 
to non-Hispanic White patients.\152\ We stated that we believe that 
this measure is an appropriate measure of ESRD quality of care because 
it would improve facilities' awareness of the tie between their 
structural practices and their patient outcomes by reporting these 
data, thus informing facility practices such that their patients attain 
better outcomes. We also stated our belief that the proposed measure 
would incentivize facilities to collect and utilize their data to 
identify their own critical equity gaps, implement plans to address 
said gaps, and ensure that they dedicate resources to addressing those 
gaps. Facilities could analyze data to understand, for example, whether 
there are any demographic factors (such as race, national origin, 
primary language, and ethnicity), or social drivers of health (such as 
housing status and food security) that may be affecting access to care 
or contributing to poor outcomes in their patient populations and, in 
turn, develop appropriate solutions to improve access and outcomes. 
Thus, the measure aims to support facilities in leveraging available 
data, pursuing focused quality improvement activities, and promoting 
efficient and effective use of their resources. While the measure does 
not require facilities to take specific actions, we expect that any 
solution a facility might develop to address a gap it identifies would 
comply with all applicable Federal non-discrimination laws. We also 
note that the measure is intended to promote health equity for all 
patients and is not intended to create a conflict between a CMS 
requirement and a State's civil rights laws.
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    \147\ United States Renal Data System. 2021 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, 2021. We note that, 
following publication of the CY 2024 ESRD PPS proposed rule, the 
USRDS has published its 2022 annual report, which is available at: 
https://usrds-adr.niddk.nih.gov/2022.
    \148\ Benjamin O, Lappin SL. End-Stage Renal Disease. [Updated 
2021 Sep 16]. In: Stat Pearls [internet]. Treasure Island (FL): 
StatPearls Publishing; 2022. Available from: https://www.ncbi.nlm.nih.gov/books/NBK499861/.
    \149\ Norris, K.C., Williams, S.F., Rhee, C.M., Nicholas, S.B., 
Kovesdy, C.P., et al. (2017). Hemodialysis Disparities in African 
Americans: The Deeply Integrated Concept of Race in the Social 
Fabric of Our Society. Seminars in Dialysis 30(3):213-223. 
doi:10.1111/sdi.12589.
    \150\ CMS (2021). Chronic Kidney Disease Disparities: 
Educational Guide for Primary Care. Available at: https://www.cms.gov/files/document/chronic-kidney-disease-disparities-educational-guide-primary-care.pdf.
    \151\ Norton, J. M., Moxey-Mims, M. M., Eggers, P. W., Narva, A. 
S., Star, R. A., Kimmel, P. L., & Rodgers, G. P. (2016). Social 
Determinants of Racial Disparities in CKD. Journal of the American 
Society of Nephrology: JASN, 27(9), 2576-2595. https://doi.org/10.1681/ASN.2016010027.
    \152\ CMS (2014). Health Disparities Among Aged ESRD 
Beneficiaries, 2014. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/ESRD-Infographic.pdf.
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    The five questions of the structural measure are adapted from the 
CMS Office of Minority Health's Building an Organizational Response to 
Health Disparities framework, which focuses on data collection, data 
analysis, culture of equity, and quality improvement.\153\ We have 
already adopted this measure for the Hospital Inpatient Quality 
Reporting (IQR) Program, and we refer readers to the FY 2023 IPPS/LTCH 
PPS final rule (87 FR 49191 through 49201) for a discussion of the 
measure in that program. In the proposed rule, we stated that, other 
than replacing the term ``hospital'' with the term ``facility,'' the 
measure is identical to the Hospital IQR Program measure. The Facility 
Commitment to Health Equity measure is aligned with the Meaningful 
Measures Area of ``Equity of Care'' and the Meaningful Measures 2.0 
goal to ``Leverage Quality Measures to Promote Equity and Close Gaps in 
Care'' because it seeks to assess structural health equity issues that 
could inform facility practices such that their patients attain better 
outcomes. This measure also supports the Meaningful Measures 2.0 
objective to ``[c]ommit to a patient-centered approach in quality 
measure and value-based incentives programs to ensure that quality and 
safety measures address healthcare equity'' because the measure would 
incentivize facilities to identify their own healthcare equity gaps 
from a structural perspective.
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    \153\ Centers for Medicare & Medicaid Services. (2021). Building 
an Organizational Response to Health Disparities [Fact Sheet]. U.S. 
Department of Health and Human Services. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Health-Disparities-Guide.pdf.
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b. Overview of Measure
    The Facility Commitment to Health Equity reporting measure assesses 
dialysis facility commitment to health equity using a suite of equity-
focused organizational competencies aimed at achieving health equity 
for all populations, including those that have been disadvantaged, 
marginalized, and underserved by the healthcare system. As previously 
noted, this includes, but is not limited to: racial and ethnic minority 
groups, people with disabilities, members of the LGBTQ+ community, 
individuals with limited English proficiency, rural populations, 
religious minorities, and people facing socioeconomic challenges. Table 
13 includes the five attestation domains and the elements within each 
of those domains for which we had proposed a facility would report an 
affirmative attestation in order for the facility to receive points for 
that domain.
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BILLING CODE 4120-01-C
c. Measure Calculation
    The Facility Commitment to Health Equity measure consists of five 
attestation-based questions, each representing a separate domain of 
commitment. For a facility to affirmatively attest ``yes'' to a domain, 
and receive points for that domain, the facility would need to 
determine that it engages in all of the activities that are included as 
elements under the domain. A facility that engages in all of the 
activities for a domain would report an affirmative attestation by 
answering ``yes'' to the attestation-based question for that domain. 
There is no option for a facility to answer ``yes'' in response to an 
attestation-based question for a domain if the facility engages in 
some, but not all, of the activities included as domain elements, and 
there is also no option for a facility to answer ``no'' in response to 
any attestation-based question for a domain. The measure would be 
expressed as a fraction, and a facility can score either 0, 2, 4, 6, 8, 
or 10 for the performance period, depending on the number of domains to 
which a facility positively attests. In the proposed rule, we proposed 
that the measure denominator would be ``ten,'' with each domain being 
represented as two points out of that total ten points, and that the 
numerator would be calculated as two points for each ``yes'' answer the 
facility reports which are then summed together (88 FR 42493). We 
stated that we chose to award facilities two points for each 
affirmative response to an attestation-based question so that the 
maximum number of points a facility could receive for the measure is 
ten, which is the same maximum number of points that a facility can 
receive on other ESRD QIP measures.
    For example, for Domain 1 (``Facility commitment to reducing 
healthcare disparities is strengthened when equity is a key 
organizational priority''), a facility would evaluate and determine 
whether its strategic plan satisfies all of the elements described in 
(A) through (D) (see Table 13). If the facility's plan satisfies all 
four of these elements, the facility would respond ``yes'' to the 
attestation-based question for Domain 1 and receive two (2) points for 
that response. If the facility determined that its strategic plan 
satisfies elements (A) and (B) but not (C) and (D), the facility would 
not be able to respond ``yes'' to Domain 1 and would not receive any 
points for that domain.
    The numerator is calculated as the sum of the points the facility 
earns for responding ``yes'' to the attestation-based questions. For 
example, a facility that responds ``yes'' to all five attestation-based 
questions would receive the maximum 10 points (two points for each of 
the five ``yes'' responses). A facility that responds ``yes'' to three 
of the attestation-based questions would receive six points.
    We proposed that the Facility Commitment to Health Equity reporting 
measure would be added to the Reporting Measure Domain (88 FR 42493). 
We noted that technical specifications for the measure can be found in 
the ESRD QIP CY 2024 Technical Measure Specifications, which are 
available at: https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/esrdqip/061_technicalspecifications. Consistent 
with case minimums we have adopted for our other ESRD QIP reporting 
measures, we proposed that facilities must have 11 qualifying patients 
and a CCN open date before September 1 of the performance period that 
applies to the program year in order to be eligible for scoring on the 
Facility Commitment to Health Equity reporting measure.
d. Data Submission and Reporting
    In the proposed rule, we proposed to require facilities to submit 
data needed to calculate the Facility Commitment to Health Equity 
measure once on an annual basis using CMS's ESRD Quality Reporting 
System (EQRS) beginning with PY 2026 (88 FR 42494). We proposed that 
the deadline for submission would be the end of the EQRS December data 
reporting month for the applicable performance period, which is 
consistent with current reporting deadlines for other ESRD QIP 
measures. For example, for the PY 2026 ESRD QIP, facilities would need 
to report data on the measure by the end of the December data reporting 
month in CY 2024. As described in Table 17 of the proposed rule (88 FR 
42504) and reproduced in Table 18 of this final rule, we proposed 
performance standards for the Facility Commitment to Health Equity 
reporting measure. We also proposed a 12-month performance period for 
the measure, and note that we did not receive any comments on this 
aspect of the measure proposal. We further proposed that facilities 
would be required to follow the submission and reporting requirements 
for web-based measures for the ESRD QIP posted on the QualityNet 
website: https://qualitynet.cms.gov/esrd/esrdqip.
e. Review by the Measure Applications Partnership
    The Facility Commitment to Health Equity measure was included as a 
measure under consideration for the ESRD QIP on the publicly available 
``List of Measures Under Consideration for December 1, 2022'' (MUC 
List), a list of measures under consideration for use in various 
Medicare quality programs.\154\ The CBE-convened Measure Applications 
Partnership (MAP) Health Equity Advisory Group reviewed the MUC List 
and the Facility Commitment to Health Equity measure (MUC2022-027) in 
detail on December 6-7, 2022.\155\ The Health Equity Advisory Group 
expressed concern that this is more of a ``checklist'' measure that may 
not directly address health inequities at a systemic level, but the 
advisory group generally agreed that a structural measure such as this 
one represents progress toward improving equitable care.\156\ In 
addition, on December 8 through 9, 2022, the MAP Rural Health Advisory 
Group reviewed the 2022 MUC List, and the MAP Hospital Workgroup 
reviewed the 2022 MUC List on December 13 through 14, 2022.\157\ The 
MAP Hospital Workgroup recognized that reducing health care disparities 
would represent a substantial benefit to overall quality of care, but 
expressed reservations about the measure's link to clinical outcomes; 
the MAP Hospital Workgroup members voted to conditionally support the 
measure for rulemaking pending: (1) endorsement by a consensus-based 
entity (CBE); (2) committing to look at outcomes in the future; (3) 
providing more clarity on the measure and supplementing interpretations 
with

[[Page 76442]]

results; and (4) verifying attestation provided by the accountable 
entities.\158\ Thereafter, the MAP Coordinating Committee deliberated 
on January 24 through 25, 2023 and ultimately voted to conditionally 
support the Facility Commitment to Health Equity measure for rulemaking 
with the same conditions.\159\
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    \154\ Centers for Medicare & Medicaid Services. 2022. List of 
Measures Under Consideration for December 1, 2022. We note that the 
link provided in the CY 2024 ESRD PPS proposed rule has been 
updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \155\ Centers for Medicare & Medicaid Services. 2023. 2022-2023 
MAP Final Recommendations. We note that the link provided in the CY 
2024 ESRD PPS proposed rule has been updated, and is now available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \156\ Centers for Medicare & Medicaid Services. 2023. 2022-2023 
MAP Final Recommendations. We note that the link provided in the CY 
2024 ESRD PPS proposed rule has been updated, and is now available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \157\ [thinsp]Centers for Medicare & Medicaid Services. 2023. 
2022-2023 MAP Final Recommendations. Rural Health Advisory Group. We 
note that the link provided in the CY 2024 ESRD PPS proposed rule 
has been updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \158\ Centers for Medicare & Medicaid Services. 2023. 2022-2023 
MAP Final Recommendations. We note that the link provided in the CY 
2024 ESRD PPS proposed rule has been updated, and is now available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \159\ Centers for Medicare & Medicaid Services. 2023. 2022-2023 
MAP Final Recommendations. We note that the link provided in the CY 
2024 ESRD PPS proposed rule has been updated, and is now available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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f. Consensus-Based Entity Endorsement
    Although section 1881(h)(2)(B)(i) of the Act generally requires 
that measures specified by the Secretary for the ESRD QIP be endorsed 
by the entity with a contract under section 1890(a) of the Act, section 
1881(h)(2)(B)(ii) of the Act states that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. We reviewed CBE-endorsed 
measures and were unable to identify any other CBE-endorsed measures on 
this topic, and therefore we believe the exception in section 
1881(h)(2)(B)(ii) of the Act applies.
g. Public Display
    In the proposed rule, we proposed to publicly display the facility-
specific results for the Facility Commitment to Health Equity reporting 
measure on an annual basis through our Care Compare website at: https://www.medicare.gov/care-compare/. We stated that we anticipate making 
the first public report available in January 2026.
    We invited public comment on this proposal. The comments we 
received and our responses are set forth below.
    Comment: Several commenters expressed support for the Facility 
Commitment to Health Equity measure. A few of these commenters 
appreciated the Facility Commitment to Health Equity measure as a step 
towards requiring demonstration of equitable policies and practices. 
One commenter noted that the measure will help facilities assess 
commitment to health equity by focusing on relevant organizational 
competencies. One commenter, emphasizing the importance of strong, 
diverse, and committed leadership in advancing health equity goals at 
the facility level, stated that the measure would incentivize 
facilities to identify and address equity gaps. One commenter noted 
that the measure is a low burden first step to address inequity, 
supports Meaningful Measures 2.0, and focuses on SMART goals which are 
the basis for measuring improvement in health outcomes.
    Response: We thank commenters for their support of our proposal to 
adopt the Facility Commitment to Health Equity reporting measure. We 
agree that the measure assesses a facility's commitment to health 
equity and is intended to encourage facilities to understand their own 
health equity gaps so they can improve patient outcomes.
    Comment: A few commenters expressed support for public reporting of 
the measure.
    Response: We thank the commenters for their support.
    Comment: A few commenters who supported the adoption of the 
Facility Commitment to Health Equity measure also offered suggestions 
for possible expansion of the measure. A few commenters recommended 
expanding the scope of the measure to specifically ensure that 
facilities identify and address equity in access to home dialysis. One 
commenter recommended that the measure eventually be expanded to 
capture a greater depth of information that would provide more 
meaningful data to CMS and patients. The commenter also recommended 
that CMS include health equity requirements as part of the Conditions 
for Coverage for the Medicare program, which could potentially be used 
to require that facilities collect and stratify data on certain 
demographic elements. One commenter encouraged CMS take actions to 
further enable nurses to support health equity efforts, noting their 
critical role in patient engagement while balancing administrative 
burden.
    Response: We thank commenters for their suggestions, which we will 
consider as we continue to develop potential future policies on this 
topic.
    Comment: One commenter expressed support for the Facility 
Commitment to Health Equity measure but recommended that CMS ensure 
that there are no unintended consequences, such as disincentivizing 
facilities from operating in areas that may have greater health 
disparities.
    Response: We appreciate the commenter's support and will monitor 
this measure, as we do all ESRD QIP measures, for any unintended or 
adverse outcomes associated with implementation.
    Comment: Several commenters stated that it was unclear how the 
Facility Commitment to Health Equity measure would result in a 
reduction of social inequities. A few commenters expressed concern that 
the measure lacks follow-up and does not require facilities to take 
specific action upon identifying health equity gaps. A few commenters 
expressed concern that, without additional requirements for facilities 
to make changes based on identified health equity gaps, the Facility 
Commitment to Health Equity measure may only serve as a checklist 
measure rather than incentivizing change at the systemic level. One 
commenter expressed concern that the Facility Commitment to Health 
Equity measure is not relevant to the ESRD QIP because the measure was 
developed for the hospital setting. One commenter expressed concern 
that the measure would not promote meaningful action in patient care 
because it is not clinical.
    Response: We believe this measure is an important foundational 
measure for improving health equity for the facility's entire patient 
population, which may include patients that have been underserved by 
the healthcare system. As we discussed in section IV.C.2.a. of the 
proposed rule, there is substantial research showing differences in 
care and experiences among underserved populations (88 FR 42489 through 
42491). The measure is intended to encourage facilities to analyze 
their own data to understand whether there are demographic factors or 
other social drivers of health that may be contributing to the health 
outcomes experienced by their patients so they can develop solutions to 
improve those outcomes for all of their patients. We believe that 
adopting the measure for dialysis facilities will help improve access 
to care and outcomes for the ESRD population by making facilities more 
aware of certain potential opportunities for improvement. We also 
believe that a commitment to health equity by dialysis facility 
leadership can foster organizational competencies aimed at achieving 
health equity for the facility's patients. Although the Facility 
Commitment to Health Equity reporting measure is not a clinical 
measure, the measure could improve facility awareness of the tie 
between its structural practices and its patient outcomes, which we 
believe will lead to improved clinical outcomes for patients.

[[Page 76443]]

    Comment: Although commenters appreciated the importance of a 
commitment to health equity and expressed support for CMS's efforts to 
address health equity, a few commenters expressed concern that the 
Facility Commitment to Health Equity measure needs to be developed 
further prior to inclusion in the ESRD QIP so that it is more 
meaningful to the ESRD population and care setting. One commenter 
requested that CMS engage with stakeholders in the ESRD community to 
improve the measure so that it is more applicable to the dialysis 
facility setting.
    Response: The Facility Commitment to Health Equity measure is a 
structural measure that is designed to apply across multiple healthcare 
settings. The five measure domains (that is, equity is a strategic 
priority, data collection, data analysis, quality improvement, and 
leadership engagement) apply to dialysis facilities. Specifically, 
dialysis facilities collect data and analyze data for quality 
improvement purposes. Facilities also establish organizational plans 
that define practices and policies that impact health equity. We 
believe strong and committed leadership from dialysis facility 
leadership is essential and can play a role in advancing equity goals 
for facilities. Although we appreciate commenters' desire that the 
measure be tailored further to the ESRD population and setting, we 
believe that the measure sufficiently addresses a facility's leadership 
and its commitment to health equity in a way that encompasses the needs 
of that population and setting. The measure is intended to provide 
information to facilities on the level of unmet need among their 
patients by encouraging facilities to identify and address potential 
health equity gaps. We believe this measure is an important step toward 
assessing facility leadership commitment and a fundamental step toward 
closing the gap in equitable care for the facility's patients. We will 
continue to monitor the measure as it is implemented to ensure that it 
is meaningful to the ESRD community.
    Comment: A few commenters recommended that CMS submit the measure 
to the CBE for review and endorsement to ensure that it is useful and 
meaningful for the ESRD population and care setting.
    Response: While we recognize the value of CBE endorsement review, 
and plan to submit this measure for CBE endorsement in the future, 
measures of health equity are a priority for CMS, and we believe it is 
important to implement this measure as soon as possible. We note that 
under section 1881(h)(2)(B)(ii) of the Act the Secretary may specify a 
measure that is not endorsed by a CBE as long as due consideration is 
given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. We reviewed CBE-endorsed 
measures and were unable to identify any other CBE-endorsed measures on 
this topic, and therefore, we believe the exception in section 
1881(h)(2)(B)(ii) of the Act applies. We believe the Facility 
Commitment to Health Equity measure establishes an important foundation 
to prioritize the achievement of health equity among facilities.
    Comment: A few commenters expressed concern regarding the reporting 
burden associated with the proposed measure requirements and 
recommended that CMS weigh the potential impact on patient health 
outcomes against this new administrative burden. A few commenters 
stated that certain types of facilities, such as rural and small 
facilities, may lack the resources to implement this measure and, as a 
result, could be unfairly penalized. One commenter stated that 
compliance with the new measure will require substantial training and 
additional staff support. One commenter expressed concern that the 
reporting requirements associated with the proposed measure would take 
resources away from patient care.
    Response: We recognize the commenters' concerns about burden of new 
measure requirements in the ESRD QIP and believe that our data 
submission requirements pose minimal burden on facilities given that 
facilities will have 14 months to report the measure with respect to 
each performance period. We believe this measure reporting timeline 
will provide facilities with ample time to submit data in a timely 
manner. We also believe the benefits of this measure outweigh the 
burden of reporting it.
    Comment: One commenter requested that facilities receive full 
credit for attestation, regardless of whether the facility negatively 
or positively attests to each given domain. The commenter noted that 
this would be consistent with other reporting measures in the ESRD QIP 
measure set, which award points for reporting the data, rather than the 
results of the reported data.
    Response: We believe this measure is an important step towards 
assessing leadership commitment to health equity and a fundamental step 
towards identifying and closing gaps in quality outcomes. We also 
believe that a facility should not receive the maximum 10 points on the 
measure for a performance year if it cannot affirmatively attest to all 
five domains. We believe that the proposed scoring methodology is 
consistent with the scoring methodology we have adopted for the MedRec 
reporting measure, which requires that facilities report that 
medication reconciliation was performed and documented by an eligible 
professional during the reporting period in order to be awarded the 
maximum number of points for the measure (83 FR 57009 and 57011).
    Comment: One commenter recommended removing the term ``priority'' 
from Domain 1 to avoid implying that there are populations who are not 
priorities.
    Response: We agree with the commenter that a facility's entire 
patient population should have access to high quality ESRD care. 
However, we disagree with commenter that the term ``priority'' should 
be removed, as we believe the element focuses on populations that the 
facility may identify as having experienced health disparities at that 
particular facility. A facility has discretion to identify its own 
priority populations and develop its own solutions to support its 
equity goals. Therefore, we are finalizing the reference to ``priority 
populations'' in Domain 1 as proposed.
    Comment: Several commenters recommended that CMS update the measure 
specifications in Domain 2 so that facilities without certified EHR 
technology are able to positively attest to all domains, noting that 
dialysis facilities are not required to use certified EHR technology 
and may not have it available. These commenters expressed concern that 
public reporting of measure results for facilities that do not 
positively attest to all domains because they are without access to 
certified EHR technology could lead the public to misinterpret the 
results as a lack of commitment to health equity. A few commenters 
recommended that CMS revise the language to remove the reference to 
certified EHR technology to provide flexibility regarding the type of 
data technology used while retaining the requirement to input the data 
into structured fields. One commenter requested clarification regarding 
whether it will accept Electronic Data Interchange (EDI) in the EQRS 
for this measure.
    Response: We thank commenters for their feedback. Although the 
majority of dialysis facilities use some type of EHR technology, we 
acknowledge that dialysis facilities are not currently required to use 
EHR technology certified by the Office of the National Coordinator for 
Health Information

[[Page 76444]]

Technology (ONC) to comply with the requirements of the ESRD QIP. We 
agree with commenters that the proposed language in Domain 2 may 
prevent facilities from affirmatively attesting to Domain 2 if they can 
only affirmatively attest to the elements in (A) and (B). Therefore, we 
are finalizing a revision to the elements of Domain 2 so that 
facilities can affirmatively attest to that domain if they use EHR 
technology that is not certified by ONC. This updated language is 
provided in Table 14 below and states, ``(C) Our facility inputs 
demographic and/or social determinant of health information collected 
from patients into structured, interoperable data elements using EHR 
technology.'' Although we encourage facilities to use certified health 
IT to promote interoperability and health information exchange across 
the healthcare system, we are not requiring dialysis facilities to use 
certified EHR technology for purposes of reporting this measure. We 
note that EHR technology may include EDI, and therefore EDI may be 
accepted as part of the EHR technology requirements included under 
Domain 2.
    Comment: One commenter noted the relatively short timeframe for 
implementation and potential for error in data collection and reporting 
due to the complexity of the new data collection and reporting 
requirements. One commenter expressed concern regarding the element 
under Domain 3 that the facility have facility performance dashboards 
to affirmatively attest to that domain beginning with PY 2024, noting 
that such dashboards require thoughtful development to ensure that they 
are appropriately designed for lower patient volumes and account for 
potential clinically-related factors.
    Response: We believe that facilities should have sufficient time to 
implement any structural processes they need to report the measure. 
However, to the extent a facility may need to implement new data 
collections or update its systems to enable it to affirmatively attest 
to Domain 3 or any other domain, a facility will have until two months 
after the end of each 12-month performance period to submit its 
attestations for that performance period in EQRS. In addition, a 
facility can report an affirmative attestation for a domain as long as 
it satisfies the elements of the domain at any time during the 
applicable performance period.
    Comment: One commenter stated that all facilities participating in 
the ESRD Network Program should meet the Domain 4 requirement that 
facilities engage in quality activities and recommended that all 
dialysis facilities receive automatic credit for this domain.
    Response: We believe it is necessary for each dialysis facility to 
review its health equity practices under each domain and attest to each 
domain separately, including Domain 4. If a facility participates in 
quality improvement activities focused on reducing health disparities 
as part of a facility's participation in an ESRD Network, then a 
facility may affirmatively attest under Domain 4.
    Comment: A few commenters observed that the language in Domain 5 
does not apply to many individual dialysis facilities, as they are part 
of national groups and therefore do not have facility-level CEOs or 
boards of trustees. A few commenters also requested clarification as to 
whether the Facility Commitment to Health Equity measure requirements 
would apply to each individual dialysis facility separately, or whether 
they would apply to the larger organization which includes the 
individual dialysis facility. One commenter expressed concern regarding 
the potential burden imposed on small facilities if compliance with the 
Facility Commitment to Health Equity measure would be required at the 
facility level and recommended that small facilities be exempt from 
Facility Commitment to Health Equity reporting requirements, or that 
CMS allow such facilities that are part of a larger organization to use 
the organization's strategic plan to satisfy measure requirements. One 
commenter expressed concern that facility-level analysis of disparities 
may be insufficient to identify and address gaps in the dialysis 
setting as these facilities serve more geographically homogenous 
populations than other types of healthcare facilities, such as 
hospitals.
    Response: We thank commenters for their feedback and are finalizing 
a modified version of the Domain 5 elements. Whereas the originally 
proposed language for Domain 5 required that facilities attest to 
leadership engagement at the facility level only, we agree that 
facilities should be able to attest to leadership engagement under 
Domain 5 if their senior leadership engages in the Domain 5 elements 
and that engagement applies to the facility, regardless of whether 
those senior leaders operate at only the facility or at a larger 
organization that includes the facility. Accordingly, we are finalizing 
that the referenced facility senior leadership could be, but are not 
required to be, the facility's own chief executives or its board of 
trustees.
    Regarding commenters' requests for clarification as to whether the 
measure requirements would apply to each individual dialysis facility 
separately, or whether they would apply to the larger organization 
which includes the individual dialysis facility, we note that we 
proposed for the Facility Commitment to Health Equity reporting measure 
to apply to individual facilities. For all five measure domains, an 
individual facility may attest to both facility-level efforts as well 
as activities that are implemented by the individual facility as part 
of a larger organization's policies. For individual facilities that are 
part of larger organizations, we note that this may include leadership 
engagement at the larger organizational level as well as leadership 
engagement at the individual facility level. Specifically, the 
reporting measure would require facilities to review their own 
activities in relation to the five measure domains to identify ways to 
address disparities within the patient population they serve. We 
believe this revision will apply more broadly to accommodate the unique 
organization structures across facilities.
    The elements of the Facility Commitment to Health Equity Measure, 
including the revised language for Domains 2 and 5, are provided in 
Table 14.
BILLING CODE 4120-01-P

[[Page 76445]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.026

BILLING CODE 4120-01-C
    Comment: One commenter expressed concern regarding the Facility 
Commitment to Health Equity measure, stating that the measure 
essentially

[[Page 76446]]

served as a back-door mandate to require that facilities perform a 
specific activity and did not provide facilities with flexibility to 
achieve the ultimate goal of the measure.
    Response: We disagree with the commenter. We believe this measure 
is an important foundation for improving health equity in the provision 
of ESRD care. We believe that each of the domains provides flexibility 
for facilities to affirmatively attest without imposing overly narrow 
or prescriptive requirements. Although facilities will be required to 
affirmatively attest to each of the elements for a domain to receive 
points for that domain, a facility has the discretion to determine what 
activities will satisfy each element. We encourage facilities to 
analyze their own data to improve their awareness of whether there is a 
tie between their structural practices and the outcomes experienced by 
their patients, with the goal of attaining better outcomes for all of 
their patients.
    Final Rule Action: After considering public comments, we are 
finalizing the adoption of the Facility Commitment to Health Equity 
reporting measure with language refinements to the elements in Domains 
2 and 5 as described in Table 14 of this final rule, beginning with PY 
2026.
3. Modification of the COVID-19 Vaccination Coverage Among Healthcare 
Personnel (HCP) Measure Beginning With PY 2026
a. Background
    On January 31, 2020, the Secretary of the Department of Health and 
Human Services declared a public health emergency (PHE) for the United 
States in response to the global outbreak of SARS-COV-2, a novel (new) 
coronavirus that causes a disease named ``coronavirus disease 2019'' 
(COVID-19).\160\ Subsequently, the COVID-19 Vaccination Coverage Among 
Healthcare Personnel (HCP) measure was adopted across multiple quality 
reporting programs including the ESRD QIP (87 FR 67244 through 67248), 
the Hospital IQR Program (86 FR 45374), the Inpatient Psychiatric 
Facility Quality Reporting Program (86 FR 42633 through 42640), the 
Hospital Outpatient Quality Reporting Program (86 FR 63824 through 
63833), the PPS-Exempt Cancer Hospital Quality Reporting Program (86 FR 
45428 through 45434), the Ambulatory Surgical Center Quality Reporting 
Program (86 FR 63875 through 63883), the Long-Term Care Hospital 
Quality Reporting Program (86 FR 45438 through 45446), the Skilled 
Nursing Facility Quality Reporting Program (86 FR 42480 through 42489), 
and the Inpatient Rehabilitation Facility Quality Reporting Program (86 
FR 42385 through 42396). COVID-19 has continued to spread domestically 
and around the world with more than 103.9 million cases and 1.13 
million deaths in the United States as of June 19, 2023.\161\ In 
recognition of the ongoing significance and complexity of COVID-19, the 
Secretary renewed the PHE on April 21, 2020, July 23, 2020, October 2, 
2020, January 7, 2021, April 15, 2021, July 19, 2021, October 15, 2021, 
January 14, 2022, April 12, 2022, July 15, 2022, October 13, 2022, 
January 11, 2023, and February 9, 2023.\162\ While the PHE expired on 
May 11, 2023, HHS has stated that the public health response to COVID-
19 remains a public health priority with a whole of government approach 
to combatting the virus, including through vaccination efforts.\163\
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    \160\ U.S. Dept of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response. (2020). 
Determination that a Public Health Emergency Exists. Available at: 
https://aspr.hhs.gov/legal/PHE/Pages/2019-nCoV.aspx.
    \161\ CDC. COVID Data Tracker. Accessed June 19, 2023. Available 
at: https://covid.cdc.gov/covid-data-tracker/#datatracker-home. We 
note that we have updated in this final rule the number of cases and 
deaths provided in the proposed rule, which stated that ``COVID-19 
has continued to spread domestically and around the world with more 
than 103.9 million cases and 1.1 million deaths in the United States 
as of March 27, 2023.'' (88 FR 42494).
    \162\ U.S. Dept. of Health and Human Services. Office of the 
Assistant Secretary for Preparedness and Response. (2023). Renewal 
of Determination that a Public Health Emergency Exists. Available 
at: https://aspr.hhs.gov/legal/PHE/Pages/COVID19-9Feb2023.aspx.
    \163\ U.S. Dept. of Health and Human Services. Fact Sheet: 
COVID-19 Public Health Emergency Transition Roadmap. February 9, 
2023. Available at: https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html.
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    As we stated in the CY 2023 ESRD PPS final rule (87 FR 67244) and 
in our Revised Guidance for Staff Vaccination Requirements,\164\ 
vaccination is a critical part of the nation's strategy to effectively 
counter the spread of COVID-19. We continue to believe it is important 
to incentivize and track HCP vaccination through quality measurement 
across care settings, including dialysis facilities, to protect health 
care workers, patients, and caregivers, and to help sustain the ability 
of HCP in each of these care settings to continue serving their 
communities. Prior to the publication of the CY 2023 ESRD PPS final 
rule on November 7, 2022, the FDA had approved or issued emergency use 
authorizations (EUAs) for COVID-19 vaccines for adults manufactured by 
Pfizer-BioNTech,\165\ Moderna,\166\ and Janssen.\167\ The populations 
for which all three vaccines were authorized at that time included 
individuals 18 years of age and older, and the Pfizer-BioNTech vaccine 
was authorized for ages 12 and older. The FDA issued an approval for 
the Pfizer-BioNTech vaccine, now marketed as Comirnaty, on August 23, 
2021.\168\ Additionally, the FDA issued approval for the Moderna 
vaccine, marketed as Spikevax, on January 31, 2022 \169\ and an EUA for 
the Novavax adjuvanted vaccine on July 13, 2022.\170\ The FDA also 
issued EUAs for single booster doses of the then-authorized COVID-19 
vaccines. As of November 19, 2021,^{171 172 173} a single

[[Page 76447]]

booster dose of each COVID-19 vaccine was authorized for all eligible 
individuals 18 years of age and older. EUAs were subsequently issued 
for a second booster dose of the Pfizer-BioNTech and Moderna vaccines 
in certain populations in in March 2022.\174\ FDA first authorized the 
use of a booster dose of bivalent or ``updated'' COVID-19 vaccines from 
Pfizer-BioNTech and Moderna in August 2022.\175\ Since the publication 
of the CY 2024 ESRD PPS proposed rule, the 2023-2024 updated Pfizer-
BioNTech, Moderna, and Novavax COVID-19 vaccines were recommended by 
CDC for use in the United States.\176\ The 2023-2024 updated COVID-19 
vaccine more closely targets the XBB lineage of the Omicron variant and 
could restore protection against severe COVID-19 that may have 
decreased over time.
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    \164\ Centers for Medicare & Medicaid Services. Revised Guidance 
for Staff Vaccination Requirements QSO-23-02-ALL. October 26, 2022. 
Available at: https://www.cms.gov/files/document/qs0-23-02-all.pdf.
    \165\ Food and Drug Administration. (December 2020). FDA Takes 
Key Action in Fight Against COVID-19 By Issuing Emergency Use 
Authorization for First COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-takes-key-action-fight-against-covid-19-issuing-emergency-use-authorization-first-covid-19.
    \166\ Food and Drug Administration. (December 2020). FDA Takes 
Additional Action in Fight Against COVID-19 By Issuing Emergency Use 
Authorization for Second COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-takes-additional-action-fight-against-covid-19-issuing-emergency-use-authorization-second-covid.
    \167\ Food and Drug Administration. (February 2021). FDA Issues 
Emergency Use Authorization for Third COVID-19 Vaccine. Available 
at: https://www.fda.gov/news-events/press-announcements/fda-issues-emergency-use-authorization-third-covid-19-vaccine.
    \168\ Food and Drug Administration. (August 2021). FDA Approves 
First COVID-19 Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine.
    \169\ Food and Drug Administration. (January 2022). Coronavirus 
(COVID-19) Update: FDA Takes Key Action by Approving Second COVID-19 
Vaccine. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-key-action-approving-second-covid-19-vaccine.
    \170\ Food and Drug Administration. (July 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Emergency Use of Novavax COVID-19 
Vaccine, Adjuvanted. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-emergency-use-novavax-covid-19-vaccine-adjuvanted.
    \171\ Food and Drug Administration. (September 2021). FDA 
Authorizes Booster Dose of Pfizer-BioNTech COVID-19 Vaccine for 
Certain Populations. Available at: https://www.fda.gov/news-events/press-announcements/fda-authorizes-booster-dose-pfizer-biontech-covid-19-vaccine-certain-populations.
    \172\ Food and Drug Administration. (October 2021). Coronavirus 
(COVID-19) Update: FDA Takes Additional Actions on the Use of a 
Booster Dose for COVID-19 Vaccines. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-takes-additional-actions-use-booster-dose-covid-19-vaccines.
    \173\ Food and Drug Administration. (November 2021). Coronavirus 
(COVID-19) Update: FDA Expands Eligibility for COVID-19 Vaccine 
Boosters. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-expands-eligibility-covid-19-vaccine-boosters.
    \174\ Food and Drug Administration. (March 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Second Booster Dose of Two COVID-
19 Vaccines for Older and Immunocompromised Individuals. Available 
at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-second-booster-dose-two-covid-19-vaccines-older-and.
    \175\ Food and Drug Administration. (August 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent 
COVID-19 Vaccines for Use as a Booster Dose. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use. We note that, as of September 12, 2023, the bivalent 
COVID-19 vaccines are no longer FDA authorized. FDA. (September 11, 
2023). FDA Takes Action on Updated mRNA COVID-19 Vaccines to Better 
Protect Against Currently Circulating Variants. Available at: 
https://www.fda.gov/news-events/press-announcements/fda-takes-action-updated-mrna-covid-19-vaccines-better-protect-against-currently-circulating. The bivalent COVID-19 vaccines have been 
replaced with the updated 2023-2024 (XBB-variant) COVID-19 vaccines.
    \176\ CDC. (October 4, 2023). Stay Up to Date with COVID-19 
Vaccines. Available at: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/stay-up-to-date.html.
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    We stated in the CY 2023 ESRD PPS final rule that HCP are at risk 
of carrying COVID-19 infection to patients, experiencing illness or 
death themselves as a result of contracting COVID-19, and transmitting 
COVID-19 to their families, friends, and the general public (87 FR 
67244). While the impact of COVID-19 vaccines on asymptomatic infection 
and transmission is not yet fully known, there is now robust data 
available on COVID-19 vaccine effectiveness across multiple populations 
against symptomatic infection, hospitalization, and death. Two-dose 
COVID-19 vaccines from Pfizer-BioNTech and Moderna were found to be 88 
percent and 93 percent effective against hospitalization for COVID-19, 
respectively, over 6 months for adults over age 18 without 
immunocompromising conditions.\177\ During a SARS-COV-2 surge in the 
spring and summer of 2021, 92 percent of COVID-19 hospitalizations and 
91 percent of COVID-19-associated deaths were reported among persons 
not fully vaccinated.\178\ Real-world studies of population-level 
vaccine effectiveness indicated similarly high rates of effectiveness 
in preventing SARS-COV-2 infection among frontline workers in multiple 
industries, with a 90 percent effectiveness in preventing symptomatic 
and asymptomatic infection from December 2020 through August 2021.\179\ 
Vaccines have also been highly effective in real-world conditions 
preventing COVID-19 in HCP with up to 96 percent effectiveness for 
fully vaccinated HCP, including those at risk for severe infection and 
those in racial and ethnic groups disproportionately affected by COVID-
19.\180\ In the presence of high community prevalence of COVID-19, 
residents of nursing homes with low staff vaccination coverage had 
higher rates of COVID-19 cases and COVID-19 related deaths than those 
among residents of nursing homes with high staff vaccination 
coverage.\181\ Overall, data demonstrate that COVID-19 vaccines are 
effective and prevent severe disease, including hospitalization and 
death.
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    \177\ CDC. (September 24, 2021). Morbidity and Mortality Weekly 
Report (MMWR). Comparative Effectiveness of Moderna, Pfizer-
BioNTech, and Janssen (Johnson & Johnson) Vaccines in Preventing 
COVID-19 Hospitalizations Among Adults Without Immunocompromising 
Conditions--United States, March-August 2021. Available at: https://cdc.gov/mmwr/volumes/70/wr/mm7038e1.htm?s_cid=mm7038e1_w.
    \178\ CDC. (September 10, 2021). Morbidity and Mortality Weekly 
Report (MMWR). Monitoring Incidence of COVID-19 Cases, 
Hospitalizations, and Deaths, by Vaccination Status--13 U.S. 
Jurisdictions, April 4-July 17, 2021. Available at: https://www.cdc.gov/mmwr/volumes/70/wr/mm7037e1.htm.
    \179\ CDC. (August 27, 2021). Morbidity and Mortality Weekly 
Report (MMWR). Effectiveness of COVID-19 Vaccines in Preventing 
SARS-COV-2 Infection Among Frontline Workers Before and During 
B.1.617.2 (Delta) Variant Predominance--Eight U.S. Locations, 
December 2020-August 2021. Available at: https://www.cdc.gov/mmwr/volumes/70/wr/mm7034e4.htm.
    \180\ Pilishivi, T. et al. (December 2022). Effectiveness of 
mRNA Covid-19 Vaccine among U.S. Health Care Personnel. New England 
Journal of Medicine. 2021 Dec 16;385(25):e90. Available online at: 
https://pubmed.ncbi.nlm.nih.gov/34551224/.
    \181\ McGarry BE et al. (January 2022). Nursing Home Staff 
Vaccination and Covid-19 Outcomes. New England Journal of Medicine. 
2022 Jan 27;386(4):397-398. Available online at: https://pubmed.ncbi.nlm.nih.gov/34879189/.
---------------------------------------------------------------------------

    As SARS-COV-2 persists and evolves, our COVID-19 vaccination 
strategy must remain responsive. When we finalized adoption of the 
COVID-19 Vaccination Coverage Among HCP measure in the CY 2023 ESRD PPS 
final rule, we stated that HCP should be counted as vaccinated if they 
received COVID-19 vaccination any time from when it first became 
available in December 2020 (87 FR 67247). We noted that a completed 
vaccination course, defined for purposes of the measure as the primary 
vaccination series, may require one or more doses depending on the 
specific vaccine used, and that the NHSN application automatically 
calculates the total value for ``Any completed COVID-19 vaccine 
series.'' We also stated that, as vaccination protocols continue to 
evolve, we would continue to work with the CDC to update relevant 
measure specifications as necessary. Since we finalized the COVID-19 
Vaccination Coverage Among HCP measure in the CY 2023 ESRD PPS final 
rule, new variants of SARS-COV-2 have emerged around the world and 
within the United States. Specifically, the Omicron variant (and its 
related subvariants) is listed as a variant of concern by the CDC 
because it spreads more easily than earlier variants.\182\ Vaccine 
manufacturers initially responded to the Omicron variant by developing 
bivalent COVID-19 vaccines, which included a component of the original 
virus strain to provide broad protection against COVID-19 and a 
component of the Omicron variant to provide better protection against 
COVID-19 caused by the Omicron variant.\183\ These booster doses of the 
bivalent COVID-19 vaccines were shown to increase immune response to 
SARS-COV-2 variants, including Omicron, particularly in individuals who 
are more than 6 months removed from receipt of their primary 
series.\184\ We noted in the proposed rule that the FDA issued EUAs for 
booster doses of two bivalent COVID-19 vaccines, one from Pfizer-
BioNTech \185\ and one from

[[Page 76448]]

Moderna,\186\ and strongly encouraged anyone who is eligible to 
consider receiving a booster dose with a bivalent COVID-19 vaccine to 
provide better protection against currently circulating variants.\187\ 
Since the publication of the CY 2024 ESRD PPS proposed rule, an updated 
2023-2024 formulation of COVID-19 vaccine has been approved that more 
closely targets the XBB lineage of the Omicron variant and could 
restore protection against severe COVID-19 that may have decreased over 
time.\188\ Updated COVID-19 vaccine doses are associated with a greater 
reduction in infections among HCP and their patients relative to those 
who only received primary series vaccination,^{189 190} with a 
rate of breakthrough infections among HCP who received only a two-dose 
regimen of 21.4 percent compared to a rate of 0.7 percent among boosted 
HCP.\191\ Data from the existing COVID-19 Vaccination Coverage Among 
HCP measure demonstrate clinically significant variation in booster 
dose vaccination rates across facilities.
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    \182\ Food and Drug Administration. (August 2021). Variants of 
the Virus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/variants/.
    \183\ Food and Drug Administration. (November 2022). COVID-19 
Bivalent Vaccine Boosters.
    \184\ Oster Y et al. (May 2022). The effect of a third BNT162b2 
vaccine on breakthrough infections in health care workers: a cohort 
analysis. Clin Microbiol Infect. 2022 May;28(5):735.e1-735.e3. 
Available online at: https://pubmed.ncbi.nlm.nih.gov/35143997/.
    \185\ Food and Drug Administration. (November 2022). Pfizer-
BioNTech COVID-19 Vaccines. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/pfizer-biontech-covid-19-vaccines.
    \186\ Food and Drug Administration. (November 2022). Moderna 
COVID-19 Vaccines. Available at: https://www.fda.gov/emergency-preparedness-and-response/coronavirus-disease-2019-covid-19/moderna-covid-19-vaccines.
    \187\ Food and Drug Administration. (August 2022). Coronavirus 
(COVID-19) Update: FDA Authorizes Moderna, Pfizer-BioNTech Bivalent 
COVID-19 Vaccines for Use as a Booster Dose. Available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-moderna-pfizer-biontech-bivalent-covid-19-vaccines-use.
    \188\ CDC. (October 4, 2023). Stay Up to Date with COVID-19 
Vaccines. Available at: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/stay-up-to-date.html.
    \189\ Prasad N et al. (May 2022). Effectiveness of a COVID-19 
Additional Primary or Booster Vaccine Dose in Preventing SARS-CoV-2 
Infection Among Nursing Home Residents During Widespread Circulation 
of the Omicron Variant--United States, February 14-March 27, 2022. 
Morbidity and Mortality Weekly Report (MMWR). 2022 May 6;71(18):633-
637. Available online at: https://pubmed.ncbi.nlm.nih.gov/35511708/.
    \190\ Oster Y et al. (May 2022). The effect of a third BNT162b2 
vaccine on breakthrough infections in health care workers: a cohort 
analysis. Clin Microbiol Infect. 2022 May;28(5):735.e1-735.e3. 
Available online at: https://pubmed.ncbi.nlm.nih.gov/35143997/.
    \191\ Ibid.
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    We believe that vaccination remains the most effective means to 
prevent the worst consequences of COVID-19, including severe illness, 
hospitalization, and death. Given the availability of vaccine efficacy 
data, EUAs and Biologics License Application approvals issued by the 
FDA for updated 2023-2024 formulations of the vaccine, the continued 
presence of SARS-COV-2 in the United States, and variance among rates 
of updated vaccinations, it is important to modify the COVID-19 
Vaccination Coverage Among HCP measure to reflect recent updates that 
explicitly specify for HCP to receive primary series and updated 
vaccine doses in a timely manner. As the COVID-19 pandemic persists, we 
continue to believe that monitoring and surveillance is important and 
provides patients, beneficiaries, and their caregivers with information 
to support informed decision making. In the CY 2024 ESRD PPS proposed 
rule, we proposed to modify the COVID-19 Vaccination Coverage Among HCP 
measure to replace the term ``complete vaccination course'' with the 
term ``up to date'' in the HCP vaccination definition (88 FR 42496). We 
also proposed to update the numerator to specify the time frames within 
which an HCP is considered up to date with recommended COVID-19 
vaccines, including updated vaccine doses, beginning with PY 2026. As 
we stated in the CY 2023 ESRD PPS final rule (87 FR 67245), the COVID-
19 Vaccination Coverage Among HCP measure is a process measure that 
assesses HCP vaccination coverage rates. Unlike outcome measures, 
process measures do not assess a particular outcome.
b. Overview of Updated Measure
    The COVID-19 Vaccination Coverage Among HCP measure is a process 
measure developed by the CDC to track COVID-19 vaccination coverage 
among HCP in settings such as dialysis facilities, and the measure is 
reported via the CDC's NHSN.
    We refer readers to the CY 2023 ESRD PPS final rule (87 FR 67245 
through 67246) for more information on the initial review of the 
measure by the Measure Applications Partnership (MAP). We included an 
updated version of the measure on the Measures Under Consideration 
(MUC) list for the 2022-2023 pre-rulemaking cycle for consideration by 
the MAP. In December 2022, the MAP's Hospital Workgroup discussed the 
modified measure. The Hospital Workgroup stated that the revision of 
the current measure captures up-to-date vaccination information in 
accordance with CDC recommendations updated since its initial 
development. Additionally, the Hospital Workgroup appreciated that the 
respecified proposed measure of the target population is broader and 
simplified from seven categories of HCP to four.\192\ During review, 
the Health Equity Advisory Group highlighted the importance of COVID-19 
measures and questioned whether the measure excludes individuals with 
contraindications to FDA authorized or approved COVID-19 vaccines, and 
whether the measure will be stratified by demographic factors. The 
measure developer confirmed that HCP with contraindications to the 
vaccines are excluded from the measure denominator, but the measure 
would not be stratified since the data are submitted at an aggregate 
rather than an individual level. The Rural Health Advisory Group 
expressed concerns about data collection burden, citing that collection 
is performed manually and that small rural facilities may not have 
employee health software.\193\ The measure developer acknowledged the 
challenge of getting adequate documentation and emphasized the goal to 
ensure the measure does not present a burden on the provider. The 
developer also noted that the model used for this measure is based on 
the Influenza Vaccination Coverage Among HCP measure (CBE #0431), and 
it intends to utilize a similar approach to the modified COVID-19 
Vaccination Coverage Among HCP measure if the COVID-19 vaccination 
strategy becomes seasonal. The revised measure received conditional 
support for rulemaking from both the MAP workgroups pending testing 
indicating the measure is reliable and valid, and endorsement by the 
consensus-based entity (CBE).\194\ The MAP noted that the previous 
version of the measure received endorsement from the CBE (CBE #3636) 
\195\ and that the CDC intends to submit the updated measure for 
endorsement.
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    \192\ Centers for Medicare & Medicaid Services. MAP 2022-2023 
Preliminary Analysis Worksheet. 2022. We note that the link provided 
in the CY 2024 ESRD PPS proposed rule has been updated, and is now 
available at: https://mmshub.cms.gov/sites/default/files/map-preliminary-recommendations-2022-2023.xlsx.
    \193\ Centers for Medicare & Medicaid Services. MAP 2022-2023 
Final Recommendations. We note that the link provided in the CY 2024 
ESRD PPS proposed rule has been updated, and is now available at: 
https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \194\ In previous years, we referred to the consensus-based 
entity by corporate name. We have updated this language to refer to 
the consensus-based entity more generally.
    \195\ We note that the reference provided in the CY 2024 ESRD 
PPS proposed rule has been updated, and is now as follows: Centers 
for Medicare & Medicaid Services. Measure Specifications for 
Hospital Workgroup for the 2022 MUC List. Available at: https://mmshub.cms.gov/sites/default/files/map-hospital-measure-specifications-manual-2022.pdf.
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(1) Measure Specifications
    This reporting measure includes at least one week of data 
collection a month for each of the three months in

[[Page 76449]]

a quarter. The denominator is the number of HCP eligible to work in the 
facility for at least one day during the reporting period, excluding 
persons with contraindications to COVID-19 vaccination that are 
described by the CDC. Facilities report the following four categories 
of HCP to NHSN:
    1. Employees: includes all persons who receive a direct paycheck 
from the reporting facility (that is, on the facility's payroll), 
regardless of clinical responsibility or patient contact.
    2. Licensed independent practitioners (LIPs): This includes 
physicians (MD, DO), advanced practice nurses, and physician assistants 
only who are affiliated with the reporting facility but are not 
directly employed by it (that is, they do not receive a direct paycheck 
from the reporting facility), regardless of clinical responsibility or 
patient contact. Post-residency fellows are also included in this 
category if they are not on the facility's payroll.
    3. Adult students/trainees and volunteers: This includes all 
medical, nursing, or other health professional students, interns, 
medical residents, and volunteers aged 18 or over who are affiliated 
with the healthcare facility, but are not directly employed by it (that 
is, they do not receive a direct paycheck from the facility), 
regardless of clinical responsibility or patient contact.
    4. Other contract personnel: Contract personnel are defined as 
persons providing care, treatment, or services at the facility through 
a contract who do not fall into any of the previously discussed 
denominator categories. This also includes vendors providing care, 
treatment, or services at the facility who may or may not be paid 
through a contract. Facilities are required to enter data on other 
contract personnel for submission in the NHSN application, but data for 
this category are not included in the COVID-19 Vaccination Coverage 
Among HCP measure.\196\ The denominator excludes denominator-eligible 
individuals with contraindications as defined by the CDC.\197\ There 
are no changes to the denominator exclusions.
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    \196\ For more details on the reporting of other contract 
personnel, we refer readers to the NHSN COVID-19 Vaccination 
Protocol, Weekly COVID-19 Vaccination Module for Healthcare 
Personnel available at: https://www.cdc.gov/nhsn/pdfs/hps/covidvax/protocol-hcp-508.pdf.
    \197\ CDC. (2022). Contraindications and precautions. Available 
at: https://www.cdc.gov/vaccines/covid-19/clinical-considerations/interim-considerations-us.html#contraindications.
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    The numerator of the modified measure is the cumulative number of 
HCP in the denominator population who are considered up to date with 
recommended COVID-19 vaccines. Facilities would refer to the definition 
of up to date as of the first day of the applicable reporting quarter, 
which can be found at https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf. In the proposed rule, we provided the example 
that HCP would be considered up to date during the applicable 
performance period for the ESRD QIP if they met one of the following 
criteria:
    1. Individuals who received an updated bivalent \198\ booster dose, 
or
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    \198\ In the CY 2024 ESRD PPS proposed rule, we noted that the 
updated (bivalent) Moderna and Pfizer-BioNTech boosters targeted the 
most recent Omicron subvariants. The updated (bivalent) boosters 
were recommended by the CDC on September 2, 2022. As of the CY 2024 
ESRD PPS proposed rule, we also noted that the original, monovalent 
mRNA vaccines are no longer authorized as a booster dose for people 
ages 12 years and older. Since the proposed rule was published, the 
bivalent COVID-19 vaccines are no longer FDA authorized. FDA. 
(September 11, 2023). FDA Takes Action on Updated mRNA COVID-19 
Vaccines to Better Protect Against Currently Circulating Variants. 
Available at: https://www.fda.gov/news-events/press-announcements/fda-takes-action-updated-mrna-covid-19-vaccines-better-protect-against-currently-circulating. The bivalent COVID-19 vaccines have 
been replaced with the updated 2023-2024 (XBB-variant) COVID-19 
vaccines.
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    2a. Individuals who received their last booster dose less than 2 
months ago, or
    2b. Individuals who completed their primary series \199\ less than 
2 months ago.
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    \199\ Although in the CY 2024 ESRD PPS proposed rule we 
indicated that completing a primary series means receiving a two-
dose series of a COVID-19 vaccine or a single dose of Janssen/J&J 
COVID-19 vaccine (88 FR 42496), we note that the Janssen/J&J COVID-
19 vaccine is no longer being used in the United States. For further 
information, please see CDC. (2023). Janssen (Johnson & Johnson) 
COVID-19 Vaccine. Available at: https://www.cdc.gov/vaccines/covid-19/info-by-product/janssen/.
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    We note that since publication of the proposed rule, the CDC's 
definition for up to date vaccination has evolved. HCP would be 
considered up to date during the applicable performance period for the 
ESRD QIP if they met the following criteria:
    1. Individuals who received an updated \200\ vaccine dose.
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    \200\ The 2023-2024 updated Pfizer-BioNTech, Moderna, and 
Novavax COVID-19 vaccines were recommended by CDC for use in the 
United States. The 2023-2024 updated COVID-19 vaccine more closely 
targets the XBB lineage of the Omicron variant and could restore 
protection against severe COVID-19 that may have decreased over 
time. Individuals are also considered up to date if they received a 
bivalent vaccine or a Novavax vaccine within the last 2 months, or 
if they received a Novavax vaccine after completing a primary 
series. For further details, please see: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/stay-up-to-date.html.
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    We refer readers to https://www.cdc.gov/nhsn/pdfs/hps/covidvax/UpToDateGuidance-508.pdf for more details on the measure 
specifications.
    We noted in the proposed rule that the updated COVID-19 Vaccination 
Coverage Among HCP measure would remain a reporting measure. The 
updates to measure weighting for PY 2026 and PY 2027 are discussed 
further in sections IV.C.6 and IV.D.7 of this final rule.
(2) Consensus-Based Entity Endorsement
    The current version of the measure in the ESRD QIP received CBE 
endorsement (CBE #3636, ``Quarterly Reporting of COVID-19 Vaccination 
Coverage among Healthcare Personnel'') on July 26, 2022. Although 
section 1881(h)(2)(B)(i) of the Act generally requires that measures 
specified by the Secretary for the ESRD QIP be endorsed by the entity 
with a contract under section 1890(a) of the Act, section 
1881(h)(2)(B)(ii) of the Act states that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. In developing the CY 2024 
ESRD PPS proposed rule, we reviewed CBE-endorsed measures and were 
unable to identify any other CBE-endorsed measures on this topic; 
therefore, we believe the exception for non-CBE-endorsed measures 
applies. The CDC, as the measure developer, is pursuing endorsement for 
the modified version of the measure.
c. Data Submission and Reporting
    We refer readers to the CY 2023 ESRD PPS final rule (87 FR 67246) 
for information on data submission and reporting for the measure. We 
did not propose any changes to the existing data submission 
requirements.
    We invited public comment on this proposal. The comments we 
received and our responses are set forth below.
    Comment: Several commenters expressed support for the proposal to 
modify the COVID-19 Vaccination Coverage Among HCP reporting measure. 
Several of these commenters noted that vaccination is a critical tool 
to protect the health of HCP and patients. One commenter expressed 
support for the proposed modification, noting that continued tracking 
of up-to-date vaccination status is important to help facilities 
prepare for infectious

[[Page 76450]]

threats. One commenter expressed support for the proposed update 
because it will align the requirements between agencies.
    Response: We thank the commenters for their support. We agree that 
vaccination plays a critical part of HHS's strategy to effectively 
counter the spread of COVID-19. We continue to believe it is important 
to incentivize and track rates of vaccination among HCP through quality 
measurement across care settings, including the dialysis facility 
setting, to protect healthcare workers, patients, and caregivers, and 
to help sustain the ability of HCP in each of these care settings to 
continue serving their communities.
    Comment: Several commenters expressed concern regarding the 
reporting burden associated with the proposed changes, recommending 
that CMS weigh the potential impact on patient health outcomes against 
potential administrative burden for facilities. A few commenters 
recommended that the measure exclude staff who are not directly 
employed by the facility to reduce tracking burden. One commenter noted 
that the reporting burden associated with the measure was 
disproportionate to its weight as part of the ESRD QIP measure set.
    Response: We acknowledge commenters' concerns regarding reporting 
burden associated with the specifications of this measure specifically 
around the definition of HCP. We note that given the highly infectious 
nature of the virus that causes COVID-19, we believe it is important to 
encourage all eligible personnel within the facility, regardless of 
patient contact, role, or employment type, to receive the COVID-19 
vaccination to prevent outbreaks within the facility which may affect 
resource availability and have a negative impact on patient access to 
care. We note that the proposed updates to the COVID-19 Vaccination 
Coverage Among HCP reporting measure do not include a change to the 
definition of HCP, and that facilities have been reporting the COVID-19 
Vaccination Coverage among HCP measure since January 1, 2022. With 
regard to the commenter's concern about the proportionality of the 
measure's reporting burden to its measure weight within the ESRD QIP, 
we note that the burden associated with a given measure is only one of 
several factors taken into consideration when determining the weight of 
the measure within the ESRD QIP. We take numerous factors into account 
when determining appropriate domain and measure weights, including 
clinical evidence, opportunity for improvement, clinical significance, 
and patient and provider burden (83 FR 56995 through 56996).
    Comment: One commenter also supported aligning reporting with that 
for Influenza Vaccination Coverage Among HCP if the COVID-19 
vaccination strategy becomes seasonal. One commenter recommended 
requiring annual reporting at the end of the respiratory season.
    Response: We thank the commenter for this suggestion. As we stated 
in the CY 2024 ESRD PPS proposed rule (88 FR 42497), the model used for 
this measure is based on the Influenza Vaccination Coverage Among HCP 
measure (CBE #0431), and the measure developer intends to utilize a 
similar approach with respect to the modified version of the measure if 
the COVID-19 vaccination strategy becomes seasonal. For that reason, we 
may consider aligning reporting for the COVID-19 Vaccination Coverage 
Among HCP reporting measure with the Influenza Vaccination Coverage 
Among HCP measure in the future. We continue to monitor COVID-19 as 
part of our public health response and will consider information we 
collect to inform any potential action that may address seasonality in 
future rulemaking.
    Comment: One commenter recommended that the measure get CBE review 
and endorsement prior to inclusion in the ESRD QIP.
    Response: The current version of the measure received CBE 
endorsement (CBE #3636, ``Quarterly Reporting of COVID-19 Vaccination 
Coverage among Healthcare Personnel'') on July 26, 2022. As we stated 
in the CY 2024 ESRD PPS proposed rule (88 FR 42497 through 42498), in 
the case of a specified area or medical topic determined appropriate by 
the Secretary for which a feasible and practical measure has not been 
endorsed by the entity with a contract under section 1890(a) of the 
Act, the Secretary may specify a measure that is not so endorsed as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary. For 
this CY 2024 ESRD PPS rule cycle, we reviewed CBE-endorsed measures. 
While the current, CBE-endorsed version of the measure is available, 
the modified version of the measure more completely accounts for the 
availability of booster and bivalent doses which were not yet developed 
when the current version of the measure was adopted. Having given due 
consideration to CBE-endorsed measures, we believe the exception for 
non-CBE-endorsed measures under section 1881(h)(2)(B)(ii) of the Act 
applies. The measure steward, CDC, has submitted the modified measure 
to the CBE for endorsement and it is currently under review.
    Comment: A few commenters expressed concern regarding the COVID-19 
Vaccination Coverage Among HCP reporting measure, stating that 
facilities should not be held responsible for a HCP's decision to get 
vaccinated because those decisions are beyond the facility's control.
    Response: We understand the commenters' concern that there are many 
factors outside of a facility's control that could affect vaccination 
coverage among a facility's HCP; however, we believe that all 
facilities face such concerns and that public reporting of these data 
can help patients and their caregivers identify which facilities have 
better vaccination coverage among their HCP. We wish to emphasize that 
the measure does not require that HCP actually receive the COVID-19 
vaccine. The COVID-19 Vaccination Coverage Among HCP measure only 
requires reporting of vaccination rates.
    Comment: A few commenters recommended removing the COVID-19 
Vaccination Coverage Among HCP reporting measure from the ESRD QIP 
measure set. One commenter believed that the measure should be removed 
because the PHE has ended and CMS has also ended staff vaccination 
requirements related to COVID-19 vaccination. One commenter stated that 
the measure should be removed because it is outside the scope of the 
ESRD QIP.
    Response: As commenters noted, the PHE for COVID-19 expired on May 
11, 2023.\201\ However, the expiration of the PHE for COVID-19 has no 
bearing on this measure because vaccination continues to be an 
essential tool in preventing COVID-19 transmission, and we believe that 
monitoring and surveillance of vaccination rates through measure 
performance is important and provides patients, beneficiaries, and 
their caregivers with information to support informed decision making.
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    \201\ U.S. Dept. of Health and Human Services. Fact Sheet: 
COVID-19 Public Health Emergency Transition Roadmap. February 9, 
2023. Available at: https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html.
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    Final Rule Action: After considering public comments, we are 
finalizing our proposal to modify the COVID-19 Vaccination Coverage 
Among Healthcare Personnel (HCP) Measure.

[[Page 76451]]

4. Conversion of the Clinical Depression Screening and Follow-Up 
Reporting Measure to a Clinical Measure Beginning With the PY 2026 ESRD 
QIP
    In the CY 2015 ESRD PPS final rule, we finalized the adoption of 
the Clinical Depression Screening and Follow-Up reporting measure, 
beginning in PY 2018 (79 FR 66200 through 66203). As we noted in the CY 
2015 ESRD PPS final rule, depression is a highly prevalent condition in 
patients with ESRD, which impacts many aspects of a patient's life and 
is associated with higher rates of mortality in the ESRD population. 
Adoption of a measure that assesses whether facilities screen patients 
for depression, and develop follow-up plans when appropriate, was and 
still is an opportunity to improve the health of patients with ESRD.
    In the CY 2024 ESRD PPS proposed rule, we proposed to convert the 
Clinical Depression Screening and Follow-Up reporting measure to a 
clinical measure and to adopt a new methodology for scoring that 
measure as a clinical measure (88 FR 42498). We stated our belief that 
this proposed update would help to ensure that the measure is scored in 
a manner that more closely aligns with current clinical guidelines for 
depression screening and follow-up because it narrows the number of 
conditions on which a facility can earn points.
    Clinical guidelines indicate that providers should both screen for 
depression and develop a follow-up plan for patients who test positive 
for depression.\202\ Screening for depression is an important aspect of 
ESRD patient care, especially because ESRD and depression may present 
with similar symptoms, including but not limited to fatigue, poor 
appetite, headaches, and lack of focus.\203\ Developing a follow-up 
plan for patients who screen positive for depression is equally 
important because ESRD patients may not be aware that they can seek 
treatment or that such treatment could be beneficial.\204\ Under the 
specifications of the current Clinical Depression Screening and Follow-
Up reporting measure, facilities are required to report one of six 
conditions with respect to each eligible patient, and we calculate the 
measure rate for the facility as the percentage of eligible patients 
for which the facility reports one of those six conditions. The six 
conditions are as follows:
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    \202\ KDOQI clinical practice guidelines for cardiovascular 
disease in dialysis patients Volume 45, SUPPLEMENT 3, 16-
153, April 2005. https://doi.org/10.1053/j.ajkd.2005.01.019.
    \203\ PCORI Evidence Update. Treating Depression When You're on 
Dialysis (for Patients). July 2021. Available at: https://www.pcori.org/sites/default/files/PCORI-Evidence-Update-for-Patients-Treating-Depression-When-Youre-on-Dialysis.pdf.
    \204\ Michael J Fischer, Elani Streja, Jui-Ting Hsiung, Susan T 
Crowley, Csaba P Kovesdy, Kamyar Kalantar-Zadeh, Wissam M Kourany, 
Depression screening and clinical outcomes among adults initiating 
maintenance hemodialysis, Clinical Kidney Journal, Volume 14, Issue 
12, December 2021, Pages 2548-2555, https://doi.org/10.1093/ckj/sfab097.
---------------------------------------------------------------------------

     Screening for clinical depression is documented as being 
positive, and a follow-up plan is documented.
     Screening for clinical depression is documented as 
positive, and a follow-up plan is not documented, and the facility 
possesses documentation stating the patient is not eligible.
     Screening for clinical depression is documented as 
positive, the facility possesses no documentation of a follow-up plan, 
and no reason is given.
     Screening for clinical depression is documented as 
negative, and a follow-up plan is not required.
     Screening for clinical depression is not documented, but 
the facility possesses documentation stating the patient is not 
eligible.
     Screening for clinical depression is not documented, and 
no reason is given.
    In the proposed rule, we did not propose to revise any of these 
conditions. However, we proposed that we would convert the measure to a 
clinical measure and award credit to facilities only if they report one 
of the following four of those six conditions:
     Screening for clinical depression is documented as being 
positive, and a follow-up plan is documented.
     Screening for clinical depression is documented as 
positive, and a follow-up plan is not documented, and the facility 
possesses documentation stating the patient is not eligible.
     Screening for clinical depression is documented as 
negative, and a follow-up plan is not required.
     Screening for clinical depression is not documented, but 
the facility possesses documentation stating the patient is not 
eligible.
    In the proposed rule, we noted that if a facility selects one of 
the other two conditions (that is, ``Screening for clinical depression 
is documented as positive, the facility possesses no documentation of a 
follow-up plan, and no reason is given'' and ``Screening for clinical 
depression is not documented, and no reason is given''), the facility 
would not receive credit in the numerator (88 FR 42498). We stated that 
we believe this proposed update is important because it would assess 
facility performance on both the clinical depression screening and the 
follow-up plan, to the extent that one is needed, and would also 
incentivize facilities to report the reason for either not documenting 
that they screened for clinical depression, or why they do not possess 
documentation of a follow-up plan. We believe that the performance 
score calculation methodology changes we proposed to the Clinical 
Depression Screening and Follow-Up reporting measure would have a 
greater impact on fostering care coordination among providers and 
improving patient outcomes by incentivizing the documentation of 
depression screenings and follow-up plans, or alternatively requiring 
facilities to provide a reason why no screening or follow-up plan was 
documented. This measure update would also align with our efforts under 
the Meaningful Measures Framework, which identifies high-priority areas 
for quality measurement and improvement to assess core issues most 
critical to high-quality healthcare and improving patient 
outcomes.\205\ In 2021, we launched Meaningful Measures 2.0 to promote 
innovation and modernization of all aspects of quality, and to address 
a wide variety of settings, stakeholders, and measure 
requirements.\206\ We are addressing healthcare priorities and gaps 
with Meaningful Measures 2.0 by leveraging quality measures to increase 
efficiency, reduce burden, and close gaps in care. In the CY 2024 ESRD 
PPS proposed rule, we noted that the proposed updates to the Clinical 
Depression Screening and Follow-Up measure would support these efforts 
and would align with several Meaningful Measures Areas, including 
``Seamless Care Coordination'' and ``Behavioral Health,'' as we believe 
that incentivizing the documentation of follow-up plans would encourage 
care coordination efforts to support the behavioral health outcomes of 
ESRD patients (88 FR 42499). We stated that the proposed modifications 
would also align with the Meaningful Measures 2.0 goal to ``Leverage 
measures to drive outcome improvement through public reporting and 
payment programs'' because we believe that converting the Clinical 
Depression Screening and Follow-Up reporting measure to a clinical 
measure would help to drive outcome improvement through the ESRD QIP. 
Additionally, in the

[[Page 76452]]

proposed rule we stated that this proposed measure update would align 
with efforts to develop a Universal Foundation \207\ that would help 
implement the vision outlined in our National Quality Strategy \208\ 
and is fundamental to achieving several of the agency's quality and 
value-based care goals.\209\ We noted that our proposal to update the 
Clinical Depression Screening and Follow-Up measure would help to align 
the measure that is used in the ESRD QIP with the measure identified 
for use across multiple programs as part of the Behavioral Health 
domain of the Universal Foundation measure set.\210\
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    \205\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
    \206\ Centers for Medicare & Medicaid Services. (2021). 
Meaningful Measures 2.0: Moving from Measure Reduction to 
Modernization. Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization. We note that 
Meaningful Measures 2.0 is still under development.
    \207\ Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher, L. Aligning Quality Measures across CMS--The Universal 
Foundation. The New England Journal of Medicine, February 1, 2023. 
Available at: https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
    \208\ Schreiber M, Richards AC, Moody-Williams J, Fleisher LA. 
The CMS National Quality Strategy: a person-centered approach to 
improving quality. Centers for Medicare and Medicaid Services, June 
6, 2022 (https://www.cms.gov/blog/cms-national-quality-strategy-person-centered-approach-improving-quality).
    \209\ Jacobs D, Fowler E, Fleisher L, Seshamani M. The Medicare 
value-based care strategy: alignment, growth, and equity. Health 
Affairs, July 21, 2022 (https://www.healthaffairs.org/content/forefront/medicare-value-based-care-strategy-alignment-growth-and-equity).
    \210\ Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher, L. Aligning Quality Measures across CMS--The Universal 
Foundation. The New England Journal of Medicine, February 1, 2023. 
Available at: https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
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    We also proposed to convert the Clinical Depression Screening and 
Follow-Up measure from a reporting measure to a clinical measure 
beginning with PY 2026, and to move that measure to the Care 
Coordination Measure Domain beginning with that payment year (88 FR 
42499). We proposed to convert the Clinical Depression Screening and 
Follow-Up measure from a reporting measure to a clinical measure 
because we believe that our proposed update to the performance score 
calculation aligned with that of a clinical measure. We proposed to 
move the Clinical Depression Screening and Follow-Up measure from the 
Reporting Measure Domain to the Care Coordination Measure Domain 
because the updated clinical measure would no longer be appropriate for 
inclusion under the Reporting Measure Domain. We note that we did not 
propose to change eligibility requirements for the measure. We discuss 
our updates to measure domains and weights for PY 2026 in section 
IV.C.6 of this final rule.
    We welcomed public comment on our proposal. The comments we 
received and our responses are set forth below.
    Comment: Several commenters expressed support for the proposal to 
convert the Clinical Screening and Follow-Up reporting measure to a 
clinical measure. A few of these commenters expressed support for the 
proposed update because it will help to better identify and treat 
clinical depression in ESRD patients. One commenter noted that the 
proposed change will better align the measure with current clinical 
guidelines for depression screening and follow-up.
    Response: We thank commenters for their support.
    Comment: Several commenters expressed concern regarding the 
reporting burden associated with the proposed changes, recommending 
that CMS weigh the potential impact on patient health outcomes against 
potential administrative burden.
    Response: Although we would be converting the Clinical Depression 
Screening and Follow-Up measure from a reporting measure to a clinical 
measure and changing the methodology to score it as a clinical measure, 
we did not propose any changes that would change the reporting process 
or burden associated with the Clinical Depression Screening and Follow-
Up measure. Although facilities would be scored differently and would 
be required to provide follow-up documentation or a reason no screening 
or follow-up has been documented to receive credit on the measure, they 
would continue to report data for this measure to EQRS in the same 
manner. We believe converting this measure to a clinical measure is 
important because it will assess facility performance on the measure in 
a way that is more meaningful to patient health outcomes, and that the 
potential beneficial impact on patient health outcomes outweighs the 
potential burden to facilities that may need to update their clinical 
depression screening and follow-up practices to receive credit for the 
measure. However, we will continue to monitor for potential unintended 
consequences.
    Comment: Several commenters expressed concern regarding the ability 
of current facility staff to effectively support patients with clinical 
depression, noting that many facilities are under-resourced. A few 
commenters recommended establishing supports (such as allowing co-
located mental health providers to bill Medicare) prior to converting 
the measure. A few commenters expressed concern regarding the 
meaningfulness of the Clinical Depression Screening and Follow-Up 
clinical measure, noting that many ESRD patients live in areas where 
there is a shortage of mental health care professionals and therefore 
would likely have difficulty accessing appropriate follow-up care 
following a positive depression screen.
    Response: We thank the commenters for their feedback. We believe 
the updated scoring methodology has the potential to foster better care 
coordination and improve patient outcomes because it awards points 
facilities if they report that they documented follow-up plans for 
eligible patients who screened positive for clinical depression. As a 
documented outline of care for a positive depression screening, a 
follow-up plan may take into account a patient's ability to access 
follow-up care. However, we acknowledge that there might be 
circumstances, such as a lack of community resources, that may be 
beyond the facility's control, and the measure does not require the 
facility to ensure that the patient completed a follow-up plan.
    Comment: A few commenters expressed concern about potential lack of 
patient privacy at facilities impacting the ability to engage 
effectively with the patient's care team to support mental health care 
needs. One commenter expressed concern that patients may feel pressured 
to participate in clinical depression screening surveys due to the 
proposed measure updates, and that a positive result on the screening 
may lead to patient stigma and impact future care.
    Response: We appreciate commenters' concern and agree that 
protecting patient privacy is imperative. We note that the updated 
Clinical Depression Screening and Follow-Up clinical measure does not 
impose additional or new requirements on facilities that would 
interfere with a patient's right to privacy, and such information would 
be part of the patient's medical record and subject to same privacy 
protections as the patient's other medical information. The measure 
does not require patients to participate in a screening, and we have no 
reason to believe that facilities would pressure their patients into 
participating. Consistent with existing measure guidance, a patient 
would be considered ``not eligible'' for purposes of the measure if the 
patient's medical records document that the patient declined to 
participate in a clinical depression screening and would, therefore, be 
excluded from the measure cohort.\211\ However, we will continue to 
monitor for potential unintended consequences.
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    \211\ https://www.cms.gov/files/document/esrd-measures-manual-v81.pdf.

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[[Page 76453]]

    Comment: One commenter expressed concerns regarding the timing of 
screening, stating that this would require screening all patients 
during the first quarter and stated that this is not clinically 
appropriate for some patients and not feasible for others due to 
fluctuating first dates of dialysis, hospitalizations, and other 
reasons. The commenter recommended including a denominator exclusion 
for ``patient stopped treatment at the facility prior to scheduled 
screening'' prior to adoption of this measure as a clinical measure.
    Response: Facilities are required to report measure data before the 
close of the clinical month of December in EQRS each year, so patient 
screening may take place at any time during the 12-month period of 
performance. We note that, to be eligible for the measure, a patient 
must be treated at a facility for at least 90 days. However, a facility 
is not precluded from screening its patients during that initial 90-day 
period, and we would encourage facilities to do so as part of their 
overall patient health assessments. Therefore, we do not think the 
suggested denominator exclusion is necessary.
    Comment: A few commenters recommended removing the Clinical 
Depression Screening and Follow-Up measure from the ESRD QIP 
altogether. A few commenters recommended moving the measure to Dialysis 
Facility Compare because it would more effectively provide 
beneficiaries with useful information about facility performance on the 
measure. A few commenters expressed the belief that the measure should 
be removed from the ESRD QIP because it is topped out.
    Response: We believe that the Clinical Depression Screening and 
Follow-Up measure remains an important part of the ESRD QIP measure set 
and that the public reporting of facility performance scores on the 
measure provides patients and caregivers with helpful information. 
Including the Clinical Depression Screening and Follow-Up measure in 
the ESRD QIP also incentivizes facilities to improve their performance 
on the measure, which we believe will ultimately result in better 
patient outcomes. Although we acknowledge that the measure, in its 
current iteration as a reporting measure with six conditions, may be 
topped out, we proposed to update the conditions needed to receive 
credit and to convert the measure to a clinical measure. Under our 
previously adopted methodology (79 FR 66174), a clinical measure is 
considered to be topped out if national measure data show (1) 
statistically indistinguishable performance levels at the 75th and 90th 
percentiles; and (2) a truncated coefficient of variation (TCV) of less 
than or equal to 0.1. To determine whether a clinical measure is topped 
out, we initially focus on the top distribution of facility performance 
on each measure and note if their 75th and 90th percentiles are 
statistically indistinguishable. Then, to ensure that we properly 
account for the entire distribution of scores, we analyze the truncated 
coefficient of variation (TCV) for the measure. As PY 2026 would be the 
first year that the Clinical Depression Screening and Follow-Up 
clinical measure would be included in the ESRD QIP, we do not have the 
clinical national measure performance data necessary to perform a 
topped-out analysis at this time.
    Final Rule Action: After considering public comments, we are 
finalizing our proposals to update the Clinical Depression Screening 
and Follow-Up measure and to convert it to a clinical measure beginning 
with PY 2026 as proposed.
5. Removal of Two Measures From the ESRD QIP Measure Set, Beginning 
With PY 2026
    In the CY 2024 ESRD PPS proposed rule, we stated that we have 
undertaken efforts to review the existing ESRD QIP measure set to 
ensure continued clinical impact and effectiveness of the measures on 
facility performance (88 FR 42499). Based on that analysis and our 
evaluation of the Program's measures, we proposed to remove the 
Ultrafiltration Rate reporting measure and the Standardized Fistula 
Rate clinical measure beginning with PY 2026.
a. Removal of the Ultrafiltration Rate Reporting Measure From the ESRD 
QIP Measure Set Beginning With PY 2026
    In the CY 2017 ESRD PPS final rule, we adopted the Ultrafiltration 
Rate reporting measure (81 FR 77912 through 77915). 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. 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. 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. When we added this measure to the ESRD QIP, we believed 
the documentation of the ultrafiltration measurements would ultimately 
contribute to the quality of the patient's ESRD treatment (81 FR 77912 
through 77915).
    In the CY 2024 ESRD PPS proposed rule, we noted that more recent 
studies have indicated that the Ultrafiltration Rate reporting measure 
may not result in the intended patient outcomes (88 FR 42499). For 
example, a patient's body size may be a confounding, possibly 
explanatory factor for the relationship between higher UFR and 
increased mortality.\212\ Additionally, although the Ultrafiltration 
Rate reporting measure captures a patient's UFR measurements reported 
monthly, the mortality risks associated with high UFR may be due to the 
frequency or number of HD sessions with high UFR.\213\ We stated our 
belief that these findings show that the documentation of a patient's 
ultrafiltration measurements through the current Ultrafiltration Rate 
reporting measure may not necessarily indicate the quality of a 
patient's ESRD treatment and tracking the ultrafiltration rate as a 
quality indicator may influence decision-making regarding dialysis 
treatment. Therefore, a facility's performance on the measure may not 
accurately reflect the quality of care provided. Accordingly, in the 
proposed rule we proposed to remove this measure from the ESRD QIP 
measure set under measure removal factor 2 (performance or improvement 
on a measure does not result in better or the intended patient 
outcomes) beginning with the PY 2026 ESRD QIP (88 FR 42499).
---------------------------------------------------------------------------

    \212\ John T. Daugirdas and Daniel Schneditz. Seminars in 
Dialysis: Hemodialysis Ultrafiltration Rate Targets Should Be Scaled 
to Body Surface Area Rather than to Body Weight. 2017.
    \213\ Jose E. Navarrete, Ajai Rajabalan, Jason Cobb, and Janice 
P. Lea. Proportion of Hemodialysis Treatments with High 
Ultrafiltration Rate and the Association with Mortality. Kidney360 
3: 1359-1366, 2022. doi: https://doi.org/10.34067/KID.0001322022.
---------------------------------------------------------------------------

    We welcomed public comment on our proposal. The comments we 
received and our responses are set forth below.
    Comment: Several commenters expressed support for our proposal to 
remove the Ultrafiltration Rate reporting measure from the ESRD QIP 
measure set. A few commenters agreed that the measure should be removed 
because UFR measurement may not necessarily reflect the quality of a 
patient's HD session. A few commenters expressed support for removing 
the measure because it would enable a more individualized approach to 
clinical

[[Page 76454]]

decision-making regarding fluid management and allow flexibility to 
provide care that is specific to a patient's individual case. A few 
commenters expressed support for removing the measure because they 
believe that the measure is topped out.
    Response: We thank commenters for their support. Although we do not 
believe that the measure is topped out, we do agree with commenters 
that the Ultrafiltration Rate reporting measure is appropriate for 
removal because the measure may not reflect quality of care provided 
and removing the measure from the ESRD QIP measure set would support a 
more individualized approach to fluid management.
    Comment: Several commenters noted the importance of fluid 
management and recommended ways to continue encouraging facilities to 
monitor patient-level UFR data. A few commenters recommended that CMS 
expand the Ultrafiltration Rate reporting measure to collect data on 
patient symptoms experienced during and between treatments as well to 
better understand the relationship between UFR and patient outcomes. 
One commenter recommended that CMS convert the Ultrafiltration Rate 
reporting measure to a clinical measure. One commenter recommended that 
the measure be modified to address the confounding factors associated 
with high UFR.
    Response: We thank commenters for their recommendations. Given the 
importance of fluid management to ESRD treatment, we encourage 
facilities to continue monitoring patient UFR data to ensure patient 
safety and improve HD care for ESRD patients. Although we are removing 
the Ultrafiltration Rate reporting measure because we do not believe 
that performance or improvement on the measure itself results in better 
patient outcomes, we may consider alternative measures which address 
confounding factors associated with high UFR in future rulemaking.
    Comment: Several commenters expressed concern regarding the 
proposed removal of the Ultrafiltration Rate reporting measure, stating 
that high UFR is associated with health complications and the measure 
incentivizes patient safety. One commenter posited that the decline in 
hospitalization events and ED visits for ESRD patients on hemodialysis 
between 2019 and 2020 could be attributed to the implementation of the 
Ultrafiltration Rate reporting measure in 2019. The commenter noted 
that most HD machines are designed to facilitate the tracking of 
patient UFR data, and that it is important for staff to review and 
analyze this patient data to address symptoms and/or medical 
complications. One commenter noted there was no clinical support for 
high UFR.
    Response: We encourage facilities to continue monitoring patient 
UFR data to ensure patient safety and improve hemodialysis (HD) care 
for ESRD patients. Although we are removing the Ultrafiltration Rate 
reporting measure because we believe that performance or improvement on 
the measure itself does not result in better patient outcomes, we 
believe that facilities will continue to monitor patient UFR data as 
part of a patient's ESRD treatment.
    Comment: A few commenters expressed concern regarding the reporting 
burden associated with the proposed changes, recommending that CMS 
weigh the potential impact on patient health outcomes against potential 
administrative burden. One commenter specifically expressed concern 
regarding the burden impact on rural facilities due to the lack of 
resources.
    Response: We do not believe that removing a measure from the ESRD 
QIP will impose additional burden on facilities.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to remove the Ultrafiltration Rate reporting 
measure from the ESRD QIP measure set beginning with PY 2026 as 
proposed.
b. Removal of the Standardized Fistula Rate Clinical Measure From the 
ESRD QIP Measure Set
    In the CY 2018 ESRD PPS final rule, we adopted the Standardized 
Fistula Rate clinical measure (82 FR 50774 through 50777). Along with 
the Long-Term Catheter Rate clinical measure, we stated that the two 
vascular access measures, when used together, consider arteriovenous 
(AV) fistula use as a positive outcome and prolonged use of a tunneled 
catheter as a negative outcome. With the growing recognition that some 
patients may exhaust their options for an AV fistula, or have 
comorbidities that may limit the success of AV fistula creation, 
pairing the measures accounts for all vascular access options. The 
Standardized Fistula Rate measure adjusts for patient factors where 
fistula placement may be either more difficult or not appropriate and 
acknowledges that in certain circumstances an AV graft may be the best 
access option by accounting for that possibility in the current measure 
specifications. In the CY 2018 ESRD PPS final rule, we stated that this 
paired incentive structure that relies on both measures reflects 
consensus best practice and supports maintenance of the gains in 
vascular access success achieved via the Fistula First/Catheter Last 
Project over the last decade (82 FR 50777).
    In the CY 2024 ESRD PPS proposed rule, we noted that since the CY 
2018 ESRD PPS final rule, there have been several changes to what many 
experts consider to be best practices with respect to vascular access 
in ESRD patients due to improvements in the care of ESRD patients 
overall, changes in patient demographics, and increasing patient 
longevity (88 FR 42500). Guidance published in 2019 by the National 
Kidney Foundation's Kidney Disease Outcome Quality Initiative (KDOQI) 
reflects updated best practices.\214\ The KDOQI's 2019 guidance notes 
that prior guidelines and initiatives have emphasized a ``fistula 
first'' approach to vascular access choice due to the AV fistula's 
associations with better short-term results compared with other 
vascular access types.\215\ However, the 2019 guidance also notes that 
more recent data have challenged these associations because of the high 
complication rates of AV fistula maturation failure requiring 
intervention. The guidance also encourages a more holistic, long-term 
approach to dialysis access that strives to preserve patient 
vasculature and avoid unnecessary procedures and complications. 
Therefore, following re-evaluation of this Fistula First approach, the 
KDOQI's 2019 guidance concludes that the Fistula First approach should 
no longer be considered a clinical best practice. Instead, the KDOQI's 
2019 guidance concludes that a patient-centered approach to 
hemodialysis vascular access that is based on a consideration of the 
patient's needs and dialysis access eligibility is preferred. Providers 
should consider what would be most appropriate for the individual 
patient, including that AV fistula may not always be most appropriate 
based on the individual patient's needs.
---------------------------------------------------------------------------

    \214\ Lok CE, Huber TS, Lee T, et al; KDOQI Vascular Access 
Guideline Work Group. KDOQI clinical practice guideline for vascular 
access: 2019 update. Am J Kidney Dis. 2020;75(4)(suppl 2):S1-S164.
    \215\ KDOQI clinical practice guidelines for vascular access. Am 
J Kidney Dis. 2006;48:S176-S247.
---------------------------------------------------------------------------

    After considering these evolving best practices and the KDOQI's 
2019 guidance, in the proposed rule we stated that we have determined 
that the Standardized Fistula Rate Clinical Measure does not provide 
patients and their healthcare providers the necessary

[[Page 76455]]

level of flexibility to choose the most suitable AV access (88 FR 
42500). We noted our belief that patients, in consultation with their 
healthcare providers, should have the flexibility to choose AV access 
(either AV fistula or AV graft) where appropriate to their specific 
patient characteristics and treatment plans. This determination should 
be based on the healthcare provider's best clinical judgment that 
considers the vessel characteristics, patient comorbidities, health 
circumstances, and patient preference. Accordingly, we proposed to 
remove the Standardized Fistula Rate clinical measure from the ESRD QIP 
measure set beginning with PY 2026 under measure removal factor 3 (a 
measure no longer aligns with current clinical guidelines or practice).
    We stated in the proposed rule that we continue to consider both AV 
fistula and AV graft as preferable forms of vascular access to a long-
term catheter, and that evidence shows that long-term catheters should 
only be used when all other AV access options have been exhausted (88 
FR 42500).\216\ We also expressed our continued belief that it is 
important to track the use of long-term catheters, minimize their use 
where possible, and incentivize best practices for vascular access. For 
those reasons, we did not propose to remove the Long-Term Catheter Rate 
clinical measure.
---------------------------------------------------------------------------

    \216\ Lok CE, Huber TS, Lee T, et al; KDOQI Vascular Access 
Guideline Work Group. KDOQI clinical practice guideline for vascular 
access: 2019 update. Am J Kidney Dis. 2020;75(4)(suppl 2):S1-S164.
---------------------------------------------------------------------------

    In the proposed rule, we also proposed to remove the reference to 
the Vascular Access Type Measure Topic and to assign the total weight 
of that topic (12 percent) solely to the Long-Term Catheter Rate 
clinical measure (88 FR 42500), as described in Table 15 of the 
proposed rule. We proposed to assign the total weight to the Long-Term 
Catheter Rate clinical measure because we believe this continues to be 
an important measure of facility performance tied to improved patient 
outcomes. We noted our belief that our proposal to assign the total 12 
percent weight to the Long-Term Catheter Rate clinical measure 
reflected our view that long-term catheter use is the least-favored 
vascular access treatment option and should be avoided where more 
clinically preferable vascular access treatment options would be 
appropriate.
    We welcomed public comment on our proposal. The comments we 
received and our responses are set forth below.
    Comment: Many commenters expressed support for the proposed removal 
of the Standardized Fistula Rate clinical measure from the ESRD QIP. 
Several of these commenters noted that removing the Standardized 
Fistula Rate clinical measure would enable clinicians to support the 
vascular access care treatment options that are most appropriate for 
their individual patients. Several commenters stated that the continued 
focus on long-term catheter rates through the Long-Term Catheter Rate 
clinical measure will sufficiently address reduction of catheters. One 
commenter stated that removing the measure will reduce costs by not 
incentivizing clinicians to perform procedures that may be unnecessary, 
painful, or have a low likelihood of success. One commenter expressed 
the belief that the measure should be removed because it is topped out.
    Response: We thank commenters for their support. Although we do not 
believe that the measure is topped out, we do agree with commenters 
that the Standardized Fistula Rate clinical measure is appropriate for 
removal because the measure no longer aligns with current clinical 
guidelines or best practices and that removing the measure will support 
a more individualized approach to vascular access care.
    Comment: Although a few commenters expressed support for the 
proposed removal, the commenters recommended that CMS continue to 
monitor AV fistula and AV graft rates.
    Response: We thank the commenters for their support, and we will 
continue to monitor trends in ESRD patient data and quality of care.
    Comment: One commenter did not support removal of the measure. The 
commenter stated that they believe there is strong evidence that AV 
fistula utilization is associated with better outcomes and is superior 
to AV grafts and tunneled catheters. This commenter recommended 
lowering the performance standard for the Standardized Fistula Rate 
clinical measure and stated that this would indirectly make the use of 
AV grafts less punitive without removing the measure while still 
allowing individualized care for each patient. This commenter expressed 
concern that removal of the measure will further incentivize the use of 
AV grafts instead of AV fistula due to higher costs associated with 
grafts because of more frequent procedures. This commenter expressed 
concern that these new incentives will cause significant reductions in 
fistula utilization with adverse consequences.
    Response: We agree with the commenter that AV fistulas are the 
preferred vascular access treatment option in cases where it is 
appropriate based on the individual patient's needs, and we continue to 
consider both AV fistula and AV graft as preferable forms of vascular 
access to a long-term catheter. Although we will continue to monitor 
trends in AV fistula and AV graft utilization, we believe that removing 
the Standardized Fistula Rate clinical measure will provide flexibility 
to determine which vascular access treatment option is most appropriate 
based on the patient's specific characteristics and treatment plans.
    Comment: A few commenters expressed concern regarding the increased 
weight of the Long-Term Catheter Rate clinical measure in the ESRD QIP. 
One commenter noted that, particularly among small or rural facilities, 
long-term catheter rates may be impacted by factors beyond a facility's 
control, such as physician availability, surgeon appointment openings, 
and operating room availability. One commenter recommended that CMS 
update the Long-Term Catheter Rate clinical measure to account for the 
increased prevalence of two-step fistula placements, which may impact 
long-term catheter rates. One commenter recommended several patient 
exclusions be added to the denominator of the Long-Term Catheter Rate 
clinical measure to account for different situations in which AV 
fistula or AV graft placement is not appropriate based on the patient's 
clinical case or individual preferences. The commenter stated that such 
exclusions would help to make the measure more patient-centered and 
meaningful, reflecting that the ``right'' vascular access is different 
for every patient.
    Response: We appreciate commenters' concern. However, we believe 
the Long-Term Catheter Rate clinical measure continues to be an 
important measure of facility performance tied to improved patient 
outcomes. The increased weight of the Long-Term Catheter Rate clinical 
measure reflects our view that long-term catheter use is the least-
favored vascular access treatment option and should be avoided where 
more clinically preferable vascular access treatment options would be 
appropriate. Although we acknowledge that long-term catheter usage may 
be appropriate in certain circumstances depending on a particular 
patient's clinical case, we believe the Long-Term Catheter Rate 
clinical measure continues to align with current clinical guidelines 
and incentivizes best practices in vascular access treatment for ESRD 
patients. However, we will also continue to monitor the impact of our 
updated policy, as well as trends in the use of two-step fistula 
placements.

[[Page 76456]]

    Comment: A few commenters expressed concern regarding the reporting 
burden associated with the proposed changes, recommending that CMS 
weigh the potential impact on patient health outcomes against potential 
administrative burden. One commenter specifically expressed concern 
with the burden impact on rural facilities due to the lack of 
resources.
    Response: We do not believe that removing a measure from the ESRD 
QIP will impose additional burden on facilities.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to remove the Standardized Fistula Rate 
clinical measure from the ESRD QIP measure set beginning with PY 2026 
as proposed.
6. Revisions To Measure Domains and To Measure Weights Used To 
Calculate the Total Performance Score (TPS) Beginning With the PY 2026 
ESRD QIP
    In the CY 2023 ESRD PPS final rule (87 FR 67251 through 67254), we 
finalized revisions to the ESRD QIP measure domains beginning with PY 
2025. Specifically, we added the Reporting Measure Domain and updated 
measure domains and measure weights across five measure domains: 
Patient & Family Engagement, Care Coordination, Clinical Care, Safety, 
and Reporting. The measure domains and weights we finalized in the CY 
2023 ESRD PPS final rule were depicted in Table 14 of the CY 2024 ESRD 
PPS proposed rule (88 FR 42501) and are depicted in this final rule in 
Table 15.
[GRAPHIC] [TIFF OMITTED] TR06NO23.027

    As discussed previously, we are finalizing our proposals that 
beginning with PY 2026, the Clinical Depression Screening and Follow-Up 
reporting measure will be converted to a clinical measure and included 
in the Care Coordination Measure Domain, the Standardized Fistula Rate 
clinical measure will be removed from the Clinical Care Measure Domain, 
the Ultrafiltration Rate reporting measure will be removed from the 
Reporting Measure Domain, and the Facility Commitment to Health Equity 
reporting measure will be added to the Reporting Measure Domain. To 
accommodate the new numbers of measures in the Care Coordination 
Measure Domain, Clinical Care Measure Domain, and Reporting Measure 
Domain, in the CY 2024 ESRD PPS proposed rule, we proposed to update 
the individual measure weights in each of these domains (88 FR 42501).
    We stated our belief that these proposed updates to the individual 
measure weights would help to ensure that a facility's individual 
measure performance has an appropriately proportionate impact on a 
facility's TPS, while also further incentivizing improvement on 
clinical measures. For example, for the Care Coordination Measure 
Domain, we proposed to update the measure weights for the SHR clinical 
measure and the SRR clinical measure to accommodate the inclusion of 
the proposed Clinical Depression Screening and Follow-Up clinical 
measure. We stated that we believe these newly proposed measure weights 
would strike an appropriate balance between the importance of facility 
performance on the SHR clinical measure and the SRR clinical measure on 
measuring patient outcomes, while also reflecting the impact of the 
proposed Clinical Depression Screening and Follow-Up clinical measure 
on patient quality of care. Additionally, we noted in the proposed rule 
that the Vascular Access Type Measure Topic is currently weighted at 12 
percent and includes both the Standardized Fistula Rate clinical 
measure and the Long-Term Catheter Rate clinical measure. We proposed 
to remove the Standardized Fistula Rate clinical measure and the 
Vascular Access Type Measure Topic, and we also proposed to weight the 
Long-Term Catheter Rate clinical measure at 12 percent. We noted our 
belief this proposal would incentivize improvement and reflect the 
impact of facility performance on the Long-Term Catheter Rate clinical 
measure (as the sole vascular access type measure) on patient outcomes. 
We also stated that we continue to believe that patient outcomes 
improve when

[[Page 76457]]

they receive the most clinically appropriate vascular access treatment 
option, and that long-term catheters should only be used when other 
vascular access treatment options are not feasible. Consistent with our 
approach in the CY 2023 ESRD PPS final rule (87 FR 67251 through 
67253), we proposed to assign individual measure weights to reflect the 
proposed updated number of measures in the Reporting Measure Domain so 
that each measure is weighted equally (88 FR 42501 through 42502). In 
light of these proposed updates to measures within the Reporting 
Measure Domain, we stated that we would weight each measure equally at 
2 percent, which is consistent with our previously finalized approach 
to weight each measure in the Reporting Measure Domain equally. We note 
that although we proposed to change the number of measures in three of 
the domains and the weights of certain individual measures in those 
domains, we did not propose to change the weights of the five domains 
themselves because we believe the updates to individual measures and 
measure weights do not significantly impact the measure domains 
themselves such that updating the weights of the measure domains would 
be required to accommodate the updated individual measure weights. In 
the CY 2024 ESRD PPS proposed rule, the previously finalized and newly 
proposed measures weights that would be included in each domain, along 
with the proposed new measure weights, for PY 2026 were depicted in 
Table 15 (88 FR 42502).
    We welcomed public comment on these proposals. The comments we 
received and our responses are set forth below.
    Comment: A few commenters expressed concern regarding the proposed 
updates to the individual measure weights within the Clinical Care 
Measure Domain. One commenter expressed concern regarding the proposed 
updates to the weight of the Long-Term Catheter Rate clinical measure, 
recommending that CMS re-weight the Long-Term Catheter Rate clinical 
measure at 9 percent and the STrR clinical measure at 10 percent within 
the Clinical Care Measure Domain. One commenter stated that because 
catheters are clinically appropriate for some patients, the measure 
weight for the Long-Term Catheter Rate clinical measure should not be 
updated and the remaining weight should be distributed among the other 
measure domains.
    Response: We appreciate commenters' concerns. However, we believe 
that the Long-Term Catheter Rate clinical measure continues to be an 
important measure of facility performance tied to improved patient 
outcomes and that the increased weight would incentivize improvement 
and reflect the impact of facility performance on the Long-Term 
Catheter Rate clinical measure (as the sole vascular access type 
measure) on patient outcomes. The increased weight of the Long-Term 
Catheter Rate clinical measure reflects our view that long-term 
catheter use is the least-favored vascular access treatment option and 
should be avoided where more clinically preferable vascular access 
treatment options would be appropriate. We will also take commenters' 
recommendations regarding specific measure weights into consideration 
for future rulemaking, but believe that the proposed weights are 
appropriate at this time to incentivize quality improvement in clinical 
measures.
    Comment: One commenter recommended that CMS increase the weight of 
the Reporting Measure Domain, noting the burden of complying with 
reporting measure requirements.
    Response: We take numerous factors into account when determining 
appropriate domain and measure weights, including clinical evidence, 
opportunity for improvement, clinical significance, and patient and 
provider burden (83 FR 56995 through 56996). We also consider (1) the 
number of measures and measure topics in a domain; (2) how much 
experience facilities have had with the measures and measure topics in 
a domain; and (3) how well the measures align with CMS's highest 
priorities for quality improvement for patients with ESRD (79 FR 
66214). We assign weights to the measure domains based on the clinical 
value and meaningfulness of the measures to patients, and the burden of 
complying with individual measure requirements. We believe that the 
Reporting Measure Domain weights are appropriate to incentivize the 
provision of high quality health care for all ESRD QIP measures.
    Final Rule Action: After considering public comments, we are 
finalizing our proposals to update the measure domains and measure 
weights for the PY 2026 ESRD QIP as proposed, and therefore, provide 
the newly finalized ESRD QIP measure domains and measure weights in 
Table 16.

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7. Performance Standards for the PY 2026 ESRD QIP
    Section 1881(h)(4)(A) of 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 determined appropriate by the Secretary, 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 define the 
terms ``achievement threshold,'' ``benchmark,'' ``improvement 
threshold,'' and ``performance standard'' in our regulations at Sec.  
413.178(a)(1), (3), (7), and (12), respectively. For reporting 
measures, performance standards are the levels of data submission and 
completion of other actions specified by CMS that are used to award 
points to an ESRD facility on the measure (Sec.  413.178(a)(12)).
    In the CY 2023 ESRD PPS final rule (87 FR 67259 through 67260), we 
set the performance period for the PY 2026 ESRD QIP as CY 2024 and the 
baseline period as CY 2022. In the proposed rule, we estimated the 
performance standards for the PY 2026 clinical measures in Table 16 
using data from CY 2021, which was the most recent data available (88 
FR 42502). For certain measures previously suppressed for the PY 2023 
performance period due to significant impacts on the measure related to 
the COVID-19 public health emergency (87 FR 67225 through 67237), we 
used CY 2019 data. We are updating these performance standards for all 
measures, using CY 2022 data, in this final rule, in Table 17.
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    In addition, we summarize in Table 18 our requirements for 
successful reporting on our previously finalized reporting measures for 
the PY 2026 ESRD QIP and our proposed requirements for successful 
reporting of the Facility Commitment to Health Equity reporting 
measure. We address comments regarding our proposed reporting 
requirements for the Facility Commitment to Health Equity reporting 
measure in section IV.C.2 of this final rule.

[[Page 76460]]

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8. Eligibility Requirements for the PY 2026 ESRD QIP
    Our previously finalized minimum eligibility requirements for 
scoring the ESRD QIP measures are described in Table 18a of the CY 2024 
ESRD PPS proposed rule (88 FR 42505), and provided in Table 19a.

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BILLING CODE 4120-01-C
    In the CY 2024 ESRD PPS proposed rule, we proposed to add 
eligibility requirements for the new Facility Commitment to Health 
Equity reporting

[[Page 76462]]

measure, as well as other proposed updates to the ESRD QIP measure set 
beginning with the PY 2026 ESRD QIP, as reflected in Table 18b in the 
proposed rule (88 FR 42504 through 42506).
    We welcomed public comment on these proposals. The comments we 
received and our responses are set forth below.
    Comment: One commenter expressed continued concern regarding the 
potential to unfairly penalize small facilities due to eligibility 
requirements and encouraged CMS to engage with the community to better 
support small facilities.
    Response: We acknowledge the commenter's concern and will continue 
to monitor the impact of all ESRD QIP measures on small facilities to 
ensure they are not unfairly penalized due to eligibility requirements 
associated with a given measure.
    Final Rule Action: After considering public comments, we are 
finalizing our proposals as proposed. Since we are finalizing our 
proposal for the new measure as proposed, as well as finalizing other 
proposed updates to the ESRD QIP measure set beginning with the PY 2026 
ESRD QIP, our newly finalized minimum eligibility requirements for 
scoring the ESRD QIP measures are described in Table 19b.
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[[Page 76463]]

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BILLING CODE 4120-01-C
9. Payment Reduction Scale for the PY 2026 ESRD QIP
    Under our current policy, a facility does not receive a payment 
reduction for a payment year in connection with its performance under 
the ESRD QIP if it achieves a 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

[[Page 76464]]

national ESRD facility performance on all reporting measures.
    Under our current policy, which is codified at Sec.  413.177 of our 
regulations, we 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 mTPS 
(76 FR 634 through 635).
    In the proposed rule, we stated that for PY 2026, we estimated 
using available data that a facility must meet or exceed a mTPS of 52 
to avoid a payment reduction (88 FR 42507). We noted that the mTPS 
estimated in the proposed rule is based on data from CY 2021 and CY 
2019 instead of the PY 2026 baseline period (CY 2022) because CY 2022 
data were not yet available. We presented the estimated payment 
reduction scale in Table 19 of the CY 2024 ESRD PPS proposed rule (88 
FR 42507). We stated our intention to update the mTPS for PY 2026, as 
well as the payment reduction ranges for that payment year, in this CY 
2024 ESRD PPS final rule. We have now finalized the payment reductions 
that will apply to the PY 2026 ESRD QIP using updated CY 2022 data. The 
mTPS for PY 2026 will be 53, and the finalized payment reduction scale 
is shown in Table 20.
[GRAPHIC] [TIFF OMITTED] TR06NO23.033

D. Updates to Requirements Beginning With the PY 2027 ESRD QIP

1. PY 2027 ESRD QIP Measure Set
    Under our current policy, we generally retain all measures once 
adopted for a payment year for subsequent payment years. In the 
proposed rule, we proposed to add the Screening for Social Drivers of 
Health reporting measure and the Screen Positive Rate for Social 
Drivers of Health reporting measure to the ESRD QIP measure set 
beginning with PY 2027. As discussed in sections IV.D.2 and IV.D.3 of 
this final rule, we are finalizing these measure proposals and provide 
the finalized PY 2027 ESRD QIP measure set in Table 21.
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[[Page 76465]]

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[[Page 76466]]


BILLING CODE 4120-01-C
2. Adoption of the Screening for Social Drivers of Health Reporting 
Measure Beginning With PY 2027
    Our commitment to supporting facilities in building equity into 
their health care delivery practices is, in part, focused on empowering 
their workforce to recognize and eliminate health disparities that 
disproportionately impact their patients who have health-related social 
needs (HRSNs). HRSNs are significant risk factors associated with worse 
health outcomes as well as increased health care utilization.\217\ We 
believe that the identification of HRSNs among facility patients has 
two significant benefits. First, research has shown that certain HRSNs 
disproportionately impact populations that have historically been 
underserved by the healthcare system and screening helps identify 
individuals who may have HRSNs.\218\ Due to the association between 
chronic condition risk and HRSNs, screening for these needs could serve 
as evidence-based building blocks for supporting ESRD facilities in 
addressing persistent disparities and tracking progress towards closing 
the health equity gap in the ESRD population. Second, we believe HRSN 
screening by facilities could enable them to engage in meaningful 
collaboration with other healthcare providers and community-based 
organizations as part of a more holistic approach to addressing health 
equity gaps that negatively impact their ESRD patients, which may also 
eventually result in implementing and evaluating related innovations in 
health and social care delivery among these facilities, healthcare 
providers and community-based organizations.
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    \217\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights. June 
2021. Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion. Accessed: November 23, 2021.
    \218\ American Hospital Association. (2020). Health Equity, 
Diversity & Inclusion Measures for Hospitals and Health System 
Dashboards. December 2020. Accessed: January 18, 2022. Available at: 
https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
---------------------------------------------------------------------------

    In the FY 2023 IPPS/LTCH PPS final rule (87 FR 49191 through 
49220), we finalized the adoption of two evidence-based measures in the 
Hospital Inpatient Quality Reporting (IQR) Program, the Screening for 
Social Drivers of Health and the Screen Positive Rate for Social 
Drivers of Health measures. These two Social Drivers of Health measures 
support identification of specific risk factors for inadequate 
healthcare access and adverse health outcomes among patients. These 
measures also encourage hospitals to systematically collect HRSN data. 
We have also finalized a policy requiring that all Special Needs Plans 
(SNPs) include one or more questions on housing stability, food 
security, and access to transportation in their Health Risk Assessment 
(HRA) using questions from a list of screening instruments specified in 
sub-regulatory guidance (87 FR 27726 through 27740), as well as adopted 
the Screening for Social Drivers of Health measure in the Merit-based 
Incentive Payment System (87 FR 70054 and 70055).
    In the CY 2024 ESRD PPS proposed rule, we stated that advancing 
health equity by addressing the health disparities that underlie the 
country's health system is one of our strategic pillars and a Biden-
Harris Administration priority (88 FR 42509).\219\ We noted our belief 
that the Screening for Social Drivers of Health reporting measure 
aligns with The CMS Quality Strategy Goals for effective care 
coordination and prevention and treatment of chronic conditions.\220\ 
We stated that the Screening for Social Drivers of Health reporting 
measure would enable facilities to identify patients with HRSNs, who 
are known to experience the greatest risk of poor health outcomes. 
Improvement in risk identification has the potential to reduce 
healthcare access barriers, address the disproportionate expenditures 
attributed to populations with greatest risk, and improve the 
facility's quality of care through the facility taking steps to 
mitigate poor health outcomes by improving their care coordination 
efforts.^{221 222 223 224} These data could help facilities 
improve their care coordination efforts, including by understanding 
what HRSNs might be contributing to poor patient outcomes so that 
facilities can direct resources, as appropriate, toward referring their 
patients to resources that might be able to help them resolve their 
HRSNs.
---------------------------------------------------------------------------

    \219\ Brooks-LaSure, C. (2021). My First 100 Days and Where We 
Go From Here: A Strategic Vision for CMS. Centers for Medicare & 
Medicaid. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
    \220\ Centers for Medicare & Medicaid Services. (2021) CMS 
National Quality Strategy. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy.
    \221\ Baker, M.C., Alberti, P.M., Tsao, T.Y., Fluegge, K., 
Howland, R.E., & Haberman, M. (2021). Social Determinants Matter for 
Hospital Readmission Policy: Insights From New York City. Health 
Affairs, 40(4), 645-654. Available at: https://doi.org/10.1377/hlthaff.2020.01742.
    \222\ Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. 
(2020). Social Determinants of Health Improve Predictive Accuracy of 
Clinical Risk Models for Cardiovascular Hospitalization, Annual 
Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 
13 (6) 290-299. Available at: https://doi.org/10.1161/CIRCOUTCOMES.120.006752.
    \223\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \224\ Jaffrey, J.B., Safran, G.B., Addressing Social Risk 
Factors in Value-Based Payment: Adjusting Payment Not Performance to 
Optimize Outcomes and Fairness. Health Affairs Blog, April 19, 2021. 
Available at: https://www.healthaffairs.org/do/10.1377/forefront.20210414.379479/full/.
---------------------------------------------------------------------------

a. Background
    Health disparities manifest primarily as worse health outcomes in 
population groups where access to care is 
inequitable.^{225 226 227 228 229} Such differences persist 
across geography and healthcare settings irrespective of improvements 
in quality of care over time.^{230 231 232} Assessment of HRSNs 
is an essential mechanism for capturing the interaction between social, 
community, and environmental factors associated with health status and 
health

[[Page 76467]]

outcomes.^{233 234 235} Growing evidence demonstrates that 
specific social risk factors are directly associated with patient 
health outcomes as well as healthcare utilization, costs, and 
performance in quality reporting and payment 
programs.^{236 237}
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    \225\ Seligman, H.K., & Berkowitz, S.A. (2019). Aligning 
Programs and Policies to Support Food Security and Public Health 
Goals in the United States. Annual Review of Public Health, 40(1), 
319-337. Available at: https://pubmed.ncbi.nlm.nih.gov/30444684/.
    \226\ The Physicians Foundation. (2020). Survey of America's 
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf.
    \227\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
    \228\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity 
of Care in U.S. Hospitals. New England Journal of Medicine. 2014; 
371(24):2298-2308.
    \229\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \230\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
    \231\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \232\ Khullar, D., MD. (2020, September 8). Association Between 
Patient Social Risk and Physician Performance American academy of 
Family Physicians. Addressing Social Determinants of Health in 
Primary Care team-based approach for advancing health equity. 
Available at: https://www.aafp.org/dam/AAFP/documents/patient_care/everyone_project/team-based-approach.pdf.
    \233\ Institute of Medicine. (2014). Capturing Social and 
Behavioral Domains and Measures in Electronic Health Records: Phase 
2. Washington, DC: The National Academies Press. Available at: 
https://doi.org/10.17226/18951.
    \234\ Alley, D. E., C. N. Asomugha, P. H. Conway, and D. M. 
Sanghavi. (2016). Accountable Health Communities--Addressing Social 
Needs through Medicare and Medicaid. The New England Journal of 
Medicine 374(1):8-11. Available at: https://doi.org/10.1056/NEJMp1512532.
    \235\ CDC. CDC COVID-19 Response Health Equity Strategy: 
Accelerating Progress Towards Reducing COVID-19 Disparities and 
Achieving Health Equity. July 2020. Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/cdc-strategy.html. Accessed November 17, 2021.
    \236\ Zhang Y, Li J, Yu J, Braun RT, Casalino LP. (2021). Social 
Determinants of Health and Geographic Variation in Medicare per 
Beneficiary Spending. JAMA Network Open. 2021;4(6):e2113212. 
doi:10.1001/jamanetworkopen.2021.13212.
    \237\ Khullar, D., Schpero, W.L., Bond, A.M., Qian, Y., & 
Casalino, L.P. (2020). Association Between Patient Social Risk and 
Physician Performance Scores in the First Year of the Merit-based 
Incentive Payment System. JAMA, 324(10), 975-983. https://doi.org/10.1001/jama.2020.13129.
---------------------------------------------------------------------------

    Significant and persistent health disparities in the United States 
result in adverse health outcomes for people with 
ESRD.^{238 239} The COVID-19 pandemic has illuminated the 
detrimental interaction between HRSNs, adverse health outcomes, and 
health care utilization in the United States.^{240 241} 
Emerging evidence has shown that specific social risk factors are 
directly associated with health outcomes and health care utilization 
and costs.^{242 243 244 245} Of particular concern among people 
with ESRD are HRSNs that have an effect on treatment outcomes, 
including inadequate access to healthy foods, unstable housing, limited 
transportation, and community safety concerns.^{246 247}
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    \238\ United States Renal Data System. 2021 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, 2021. We note that, 
following publication of the CY 2024 ESRD PPS proposed rule, the 
USRDS has published its 2022 annual report, which is available at: 
https://usrds-adr.niddk.nih.gov/2022.
    \239\ Weinhandl, E.D., Wetmore, J.B., Peng, Y., Liu, J., 
Gilbertson, D.T., et al., (2021). Initial Effects of COVID-19 on 
Patient with ESKD. Journal of the American Society of Nephrology 32: 
1444-1453. doi: https://doi.org/10.1681/ASN.2021010009.
    \240\ CDC. CDC COVID-19 Response Health Equity Strategy: 
Accelerating Progress Towards Reducing COVID-19 Disparities and 
Achieving Health Equity. July 2020. Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/cdc-strategy.html. Accessed November 17, 2021.
    \241\ Weinhandl, E.D., Wetmore, J.B., Peng, Y., Liu, J., 
Gilbertson, D.T., et al., (2021). Initial Effects of COVID-19 on 
Patient with ESKD. Journal of the American Society of Nephrology 32: 
1444-1453. doi: https://doi.org/10.1681/ASN.2021010009.
    \242\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://care.diabetesjournals.org/lookup/doi/10.2337/dci20-0053.
    \243\ Dean, E.B., French, M.T., Mortensen, K. (2020). Health 
Services Research 55 (Supplement 2): 883-893. doi: 10.1111/1475-
6773.13283.
    \244\ Berkowitz, S.A., Kalkhoran, S., Edwards, S.T., Essien, 
U.R., Baggett, T.P. (2018). Unstable Housing and Diabetes-Related 
Emergency Department Visits and Hospitalization: A Nationally 
Representative Study of Safety-Net Clinic Patients. Diabetes Care 
41: 933-939. https://doi.org/10.2337/dc17-1812.
    \245\ National Academies of Sciences, Engineering, and Medicine 
2019. Dialysis Transportation: The Intersection of Transportation 
and Healthcare. Washington, DC: The National Academies Press. 
https://doi.org/10.17226/25385.
    \246\ Ibid.
    \247\ CMS (2021). Chronic Kidney Disease Disparities: 
Educational Guide for Primary Care. Available at: https://www.cms.gov/files/document/chronic-kidney-disease-disparities-educational-guide-primary-care.pdf.
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    We believe that improvement in care coordination between ESRD 
facilities, hospitals, and community-based organizations would yield 
better health outcomes for people with ESRD, and subsequently lead to 
improvements in quality performance for dialysis and other health care 
providers. We believe that the Screening for Social Drivers of Health 
reporting measure would help inform facilities of the impact of HRSNs 
in people with ESRD by assessing the proportion of adult patients who 
are screened for social drivers of health in five core domains: food 
insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety.
    In the CY 2023 ESRD PPS proposed rule, we sought public comment on 
the potential future inclusion of the Screening for Social Drivers of 
Health measure in the ESRD QIP (87 FR 38554 through 38556). For a 
summary of the comments we received, as well as our responses, we refer 
readers to the CY 2023 ESRD PPS final rule (87 FR 67265 through 67268). 
In the CY 2023 ESRD PPS final rule, we stated that we were considering 
whether to incorporate measures that assess screening for health-
related social needs into the ESRD QIP measure set (87 FR 67264).
    In the CY 2024 ESRD PPS proposed rule, we proposed to adopt the 
Screening for Social Drivers of Health reporting measure under section 
1881(h)(2)(A)(iv) of the Act, which gives the Secretary broad authority 
to specify measures for the ESRD QIP (88 FR 42510). As discussed 
previously, disparities in health equity are tied to worse patient 
outcomes in the ESRD community. While widespread interest in addressing 
HRSNs exists, action is inconsistent, specifically in ESRD facilities. 
Therefore, we believe it is appropriate to require facilities to report 
data on this measure because the intent of the proposed measure is to 
incentivize facilities to collect and utilize their data to identify 
the impact of HRSNs in their ESRD patient population, including whether 
there is a relationship between those HRSNs and the outcomes 
experienced by their patients with those HRSNs. Screening data 
collected by the facility could inform their provision of care such 
that they improve the outcomes experienced by patients with HRSNs. 
Facilities could analyze their screening data to understand whether 
there are any HRSNs that may be affecting their patients' access to 
care or contributing to poor outcomes in their patient populations and, 
in turn, develop appropriate solutions to improve access and outcomes. 
While the measure does not require facilities to take specific actions 
following an HRSN screening, we expect that any solution a facility 
might develop to address a gap it identifies would comply with all 
applicable Federal non-discrimination laws. We also noted that the 
measure is intended to promote health equity for all patients and is 
not intended to create a conflict between a CMS requirement and a 
State's civil rights laws.
    Under our Meaningful Measures Framework,\248\ the Screening for 
Social Drivers of Health reporting measure, along with the Screen 
Positive Rate for Social Drivers of Health reporting measure discussed 
in section IV.D.3 of this final rule, addresses the quality priority of 
``Work with Communities to Promote Best Practices of Healthy Living'' 
through the Meaningful Measures Area of ``Equity of Care.'' 
Additionally, consistent with Meaningful Measures 2.0, these measures 
address the ``healthcare equity'' priority area and align with our 
commitment to introduce plans to close health equity gaps and promote 
equity through quality measures, including to ``develop and implement 
measures that reflect social and economic determinants.'' \249\ 
Development and proposal of these measures also aligns with our 
strategic pillar to advance

[[Page 76468]]

health equity by addressing the health disparities that underlie our 
health system.\250\ We also believe these measures address the quality 
priority ``Promoting Effective Prevention and Treatment of Chronic 
Disease'' through the Meaningful Measures Area ``Management of Chronic 
Conditions,'' by improving a facility's ability to assess and implement 
effective care coordination for its patients. For example, data 
demonstrate that an overwhelming majority of people with ESRD travel 
outside their homes for dialysis three times per week, round trip, and 
that transportation challenges contribute to shortened treatment 
episodes and adverse health outcomes.^{251 252} Identification 
of patients with transportation difficulties could encourage facilities 
to provide information to these patients about available community-
based transportation services that could help these patients with their 
transportation needs. We also believe that the measures would encourage 
facilities to incorporate HRSN screening into their routine care, which 
would in turn improve their ability to understand the full needs of 
their patients, including those who may need additional care 
coordination but might be reluctant to otherwise seek assistance due to 
concerns about personal stigmatization.
---------------------------------------------------------------------------

    \248\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
    \249\ Centers for Medicare & Medicaid Services. Meaningful 
Measures 2.0: Moving from Measure Reduction to Modernization. 
Available at: https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization. We note that Meaningful Measures 
2.0 is still under development.
    \250\ Brooks-LaSure, C. (2021). My First 100 Days and Where We 
Go From Here: A Strategic Vision for CMS. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
    \251\ Ibid.
    \252\ United States Renal Data System. 2021 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, 2021. We note that, 
following publication of the CY 2024 ESRD PPS proposed rule, the 
USRDS has published its 2022 annual report, which is available at: 
https://usrds-adr.niddk.nih.gov/2022.
---------------------------------------------------------------------------

    Growing evidence demonstrates that specific social risk factors are 
directly associated with patient health outcomes as well as healthcare 
utilization, costs, and performance in quality reporting and payment 
programs.^{253 254} In 2017, CMS's Center for Medicare and 
Medicaid Innovation (CMMI) launched the Accountable Health Communities 
(AHC) Model to test the impact of systematically identifying and 
addressing the HRSNs of community-dwelling Medicare and Medicaid 
beneficiaries (through screening, referral, and community navigation on 
their health outcomes and related healthcare utilization and 
costs).^{255 256 257 258} The CMS Innovation Center developed 
the AHC Model based on evidence that addressing HRSNs through enhanced 
linkages between health systems and community-based organizations can 
improve health outcomes and reduce costs.\259\ HRSNs are significant 
risk factors associated with adverse health outcomes and increased 
health care utilization, including excessive emergency department (ED) 
visits and avoidable hospitalizations.^{260 261} Unmet HRSNs, 
such as food insecurity, inadequate or unstable housing, and inadequate 
transportation may increase risk for onset of chronic conditions, such 
as ESRD, and accelerate exacerbation of related adverse health 
outcomes.^{262 263 264} The AHC Model had a 5-year period of 
performance that began in May 2017 and concluded in April 2022, with 
beneficiary screening beginning in the summer of 2018 following an 
implementation period.^{265 266} Evaluation of the AHC Model 
data is still underway, and the most recent evaluation was published in 
the second AHC Model evaluation report on May 18, 2023.\267\
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    \253\ Zhang Y, Li J, Yu J, Braun RT, Casalino LP. (2021). Social 
Determinants of Health and Geographic Variation in Medicare per 
Beneficiary Spending. JAMA Network Open. 2021;4(6):e2113212. 
doi:10.1001/jamanetworkopen.2021.13212.
    \254\ Khullar, D., Schpero, W. L., Bond, A. M., Qian, Y., & 
Casalino, L. P. (2020). Association Between Patient Social Risk and 
Physician Performance Scores in the First Year of the Merit-based 
Incentive Payment System. JAMA, 324(10), 975-983. https://doi.org/10.1001/jama.2020.13129.
    \255\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights. June 
2021. Accessed: November 23, 2021. Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion.
    \256\ Alley, D. E., C. N. Asomugha, P. H. Conway, and D. M. 
Sanghavi. 2016. Accountable Health Communities--Addressing Social 
Needs through Medicare and Medicaid. The New England Journal of 
Medicine 374(1):8-11. Available at: https://doi.org/10.1056/NEJMp1512532.
    \257\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \258\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model [verbar] CMS Innovation Center. Accessed November 23, 2021. 
Available at: https://innovation.cms.gov/innovation-models/ahcm.
    \259\ RTI International. (2020). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2020/ahc-first-eval-rpt.
    \260\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \261\ Alley, D. E., C. N. Asomugha, P. H. Conway, and D. M. 
Sanghavi. 2016. Accountable Health Communities--Addressing Social 
Needs through Medicare and Medicaid. The New England Journal of 
Medicine 374(1):8-11. Available at: https://doi.org/10.1056/NEJMp1512532.
    \262\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
    \263\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://care.diabetesjournals.org/lookup/doi/10.2337/dci20-0053.
    \264\ Laraia, B.A. (2013). Food Insecurity and Chronic Disease. 
Advances in Nutrition, 4: 203-212, doi: 10.3945/an.112.003277.
    \265\ RTI International. (2020). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2020/ahc-first-eval-rpt.
    \266\ We note that the model officially concluded in April 2022 
but many awardees are continuing with no-cost extensions to continue 
utilizing unspent cooperative agreement funding and all awardees 
will conclude by April 2023.
    \267\ RTI International. (2023). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2023/ahc-second-eval-rpt.
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    While social risk factors may have a significant impact on health 
outcomes, the mechanisms by which this connection emerges are complex 
and multifaceted.^{268 269 270 271} The persistent interactions 
between individuals' HRSNs, medical providers' practices/behaviors, and 
community resources significantly impact healthcare access, quality, 
and ultimately costs, as described in the CMS Equity Plan for Improving 
Quality in Medicare.^{272 273} In

[[Page 76469]]

their 2018 survey of 8,500 physicians, The Physicians Foundation found 
almost 90 percent of physician respondents reported their patients had 
a serious health problem linked to poverty or other social 
conditions.\274\ Additionally, associations between disproportionate 
health risk, hospitalization, and adverse health outcomes have been 
highlighted and magnified by the COVID-19 pandemic.^{275 276}
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    \268\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/. Accessed 
November 23, 2021.
    \269\ Khullar, D., MD. (2020, September 8). Association Between 
Patient Social Risk and Physician Performance American academy of 
Family Physicians. (2020). Addressing Social Determinants of Health 
in Primary Care team-based approach for advancing health equity.
    \270\ Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. 
(2020). Social Determinants of Health Improve Predictive Accuracy of 
Clinical Risk Models for Cardiovascular Hospitalization, Annual 
Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 
13 (6) 290-299. Available at: https://doi.org/10.1161/CIRCOUTCOMES.120.006752.
    \271\ The Physicians Foundation. (2021). Viewpoints: Social 
Determinants of Health. Available at: https://physiciansfoundation.org/wp-content/uploads/2019/08/The-Physicians-Foundation-SDOH-Viewpoints.pdf. Accessed December 8, 2021.
    \272\ Centers for Medicare & Medicaid Services. (2021). Paving 
the Way to Equity: A Progress Report. Accessed January 18, 2022. 
Available at: https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf.
    \273\ Centers for Medicare & Medicaid Services Office of 
Minority Health. (2021). The CMS Equity Plan for Improving Quality 
in Medicare. 2015-2021. Available at: https://www.cms.gov/About-CMS/
Agency-Information/OMH/OMH_Dwnld-
CMS_EquityPlanforMedicare_090615.pdf#:~:text=The%20Centers%20for%20Me
dicare%20%26%20Medicaid%20Services%20%28CMS%29,evidence%20base%2C%20i
dentifying%20opportunities%2C%20and%20gathering%20stakeholder%20input
.
    \274\ The Physicians Foundation. (2019). Viewpoints: Social 
Determinants of Health. Available at: https://physiciansfoundation.org/wp-content/uploads/2019/08/The-Physicians-Foundation-SDOH-Viewpoints.pdf. Accessed December 8, 2021.
    \275\ CDC. (2020). CDC COVID-19 Response Health Equity Strategy: 
Accelerating Progress Towards Reducing COVID-19 Disparities and 
Achieving Health Equity. July 2020. Available at: https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/cdc-strategy.html. Accessed November 17, 2021.
    \276\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/. Accessed 
November 23, 2021.
---------------------------------------------------------------------------

    The following five core domains were selected to screen for HRSNs 
among Medicare and Medicaid beneficiaries under the AHC Model: (1) food 
insecurity; (2) housing instability; (3) transportation needs; (4) 
utility difficulties; and (5) interpersonal safety. These domains were 
chosen based upon literature review and expert consensus utilizing the 
following criteria: (1) availability of high-quality scientific 
evidence linking a given HRSN to adverse health outcomes and increased 
healthcare utilization, including hospitalizations and associated 
costs; (2) ability for a given HRSN to be screened and identified in 
the inpatient setting prior to hospital discharge, addressed by 
community-based services, and potentially improve healthcare outcomes, 
including reduced hospital re-admissions; and (3) evidence that a given 
HRSN is not systematically addressed by healthcare providers.\277\ In 
addition to established evidence of their association with health 
status, risk, and outcomes, these five domains were also selected 
because they can be assessed across the broadest spectrum of 
individuals in a variety of settings.^{278 279 280}
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    \277\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \278\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \279\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model [bond] CMS Innovation Center. Accessed November 23, 2021. 
Available at: https://innovation.cms.gov/innovation-models/ahcm.
    \280\ Kamyck, D., Senior Director of Marketing. (2019). CMS 
releases standardized screening tool for health-related social 
needs. Activate Care. Available at: https://blog.activatecare.com/news.
    \281\ Berkowitz SA, Seligman HK, Meigs JB, Basu S. Food 
insecurity, healthcare utilization, and high cost: a longitudinal 
cohort study. Am J Managed Care. 2018 Sep;24(9):399-404. PMID: 
30222918; PMCID: PMC6426124.
    \282\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \283\ Seligman, H.K., Berkowitz, S.A. (2019). Aligning Programs 
and Policies to Support Food Security and Public Health Goals in the 
United States. Annual Review of Public Health, 40(1), 319-337. 
Available at:  https://pubmed.ncbi.nlm.nih.gov/30444684/.
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    These five evidence-based HRSN domains informed our development of 
the Screening for Social Drivers of Health reporting measure, as well 
as a second measure, Screen Positive Rate for Social Drivers of Health 
reporting measure. These domains are described in Table 22.
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[[Page 76470]]


[GRAPHIC] [TIFF OMITTED] TR06NO23.036

     
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    \284\ National Academies of Sciences, Engineering, and Medicine 
2006. Executive Summary: Cost-Benefit Analysis of Providing Non-
Emergency Medical Transportation. Washington, DC: The National 
Academies Press. Available at: https://doi.org/10.17226/23285.
    \285\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \286\ Berkowitz SA, Seligman HK, Meigs JB, Basu S. Food 
insecurity, healthcare utilization, and high cost: a longitudinal 
cohort study. Am J Managed Care. 2018 Sep;24(9):399-404. PMID: 
30222918; PMCID: PMC6426124.
    \287\ Dean, E. B., French, M. T., Mortensen, K. (2020a). Food 
insecurity, health care utilization, and health care expenditures. 
Health Services Research, 55(S2), 883-893. Available at: https://doi.org/10.1111/1475-6773.13283.
    \288\ Larimer, M. E. (2009). Health Care and Public Service Use 
and Costs Before and After Provision of Housing for Chronically 
Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. 
Available at: https://doi.org/10.1001/jama.2009.414.
    \289\ Hill-Briggs, F. (2021). Social Determinants of Health and 
Diabetes: A Scientific Review. Diabetes Care. Available at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \290\ Henry M., de Sousa, T., Roddey, C., Gayen, S., Bednar, T.; 
Abt Associates. The 2020 Annual Homeless Assessment Report (AHAR) to 
Congress; Part 1: Point-in-Time Estimates of Homelessness, January 
2021. U.S. Department of Housing and Urban Development. Accessed 
November 24, 2021. Available at: https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf.
[GRAPHIC] [TIFF OMITTED] TR06NO23.037

     
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    \291\ Larimer, M. E. (2009). Health Care and Public Service Use 
and Costs Before and After Provision of Housing for Chronically 
Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. 
Available at: https://doi.org/10.1001/jama.2009.414.
    \292\ Baxter, A., Tweed, E., Katikireddi, S., Thomson, H. 
(2019). Effects of Housing First approaches on health and well-being 
of adults who are homeless or at risk of homelessness: systematic 
review and meta-analysis of randomized controlled trials. Journal of 
Epidemiology and Community Health, 73; 379-387. Available at: 
https://jech.bmj.com/content/jech/73/5/379.full.pdf.
    \293\ National Academies of Sciences, Engineering, and Medicine 
2006. Executive Summary: Cost-Benefit Analysis of Providing Non-
Emergency Medical Transportation. Washington, DC: The National 
Academies Press. Available at: https://doi.org/10.17226/23285.
    \294\ National Academies of Sciences, Engineering, and Medicine 
2006. Executive Summary: Cost-Benefit Analysis of Providing Non-
Emergency Medical Transportation. Washington, DC: The National 
Academies Press. Available at: https://doi.org/10.17226/23285.
    \295\ Hill-Briggs, F. (2021, January 1). Social Determinants of 
Health and Diabetes: A Scientific Review. Diabetes Care. Available 
at: https://pubmed.ncbi.nlm.nih.gov/33139407/.
    \296\ Billioux, A., Verlander, K., Anthony, S., Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \297\ Shier, G., Ginsburg, M., Howell, J., Volland, P., Golden, 
R. (2013). Strong Social Support Services, Such as Transportation 
And Help For Caregivers, Can Lead To Lower Health Care Use And 
Costs. Health Affairs, 32(3), 544-551. Available at: https://doi.org/10.1377/hlthaff.2012.0170.
    \298\ Baxter, A., Tweed, E., Katikireddi, S., Thomson, H. 
(2019). Effects of Housing First approaches on health and well-being 
of adults who are homeless or at risk of homelessness: systematic 
review and meta-analysis of randomized controlled trials. Journal of 
Epidemiology and Community Health, 73; 379-387. Available at: 
https://jech.bmj.com/content/jech/73/5/379.full.pdf.
    \299\ Wright, B. J., Vartanian, K. B., Li, H. F., Royal, N., 
Matson, J. K. (2016). Formerly Homeless People Had Lower Overall 
Health Care Expenditures After Moving into Supportive Housing. 
Health Affairs, 35(1), 20-27. Available at: https://doi.org/10.1377/hlthaff.2015.0393.
    \300\ Billioux, A., Verlander, K., Anthony, S., Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
    \301\ Henry M., de Sousa, T., Roddey, C., Gayen, S., Bednar, T.; 
Abt Associates. The 2020 Annual Homeless Assessment Report (AHAR) to 
Congress; Part 1: Point-in-Time Estimates of Homelessness, January 
2021. U.S. Department of Housing and Urban Development. Accessed 
November 24, 2021. Available at: https://www.huduser.gov/portal/sites/default/files/pdf/2020-AHAR-Part-1.pdf.
    \302\ Larimer, M. E. (2009). Health Care and Public Service Use 
and Costs Before and After Provision of Housing for Chronically 
Homeless Persons with Severe Alcohol Problems. JAMA, 301(13), 1349. 
Available at: https://doi.org/10.1001/jama.2009.414.

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[[Page 76471]]

    The Screening for Social Drivers of Health reporting measure 
assesses screening of the same HRSNs.
    In the proposed rule, we proposed that facilities would be able to 
choose a screening tool for purposes of this measure or otherwise 
screen their patients using a method of their choosing in order to give 
facilities the flexibility to accommodate the population they serve and 
their individual needs (88 FR 42513).^{303 304} We noted that 
the 10-item AHC Health-Related Social Needs Screening Tool that AHC 
Model participants used to identify HRSNs in the five core domains 
(described in Table 22) among community-dwelling Medicare, Medicaid, 
and dually eligible beneficiaries was tested across varied care-
delivery sites in diverse geographic locations across the 
U.S.^{305 306} Facilities may wish to consider using that tool 
because it has been found to be both reliable and valid, including high 
inter-rater reliability and concurrent and predictive validity.\307\ 
Moreover, the screening tool can be implemented in a variety of places 
where patients seek healthcare, including dialysis facilities.\308\ 
However, as stated previously, we did not propose to require facilities 
to use this tool, or any other specific tool, for purposes of the 
Screening for Social Drivers of Health reporting measure.
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    \303\ Social Interventions Research & Evaluation Network. 
(2019). Social Needs Screening Tool Comparison Table. Available at: 
https://sirenetwork.ucsf.edu/tools-resources/resources/screening-tools-comparison. Accessed January 18, 2021.
    \304\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights (June 
2021). Available at: https://innovation.cms.gov/media/document/ahcm-screeningtool-companion. Accessed January 18, 2021.
    \305\ More information on the HRSN Screening Tool is available 
at: https://innovation.cms.gov/files/worksheets/ahcm-screeningtool.pdf.
    \306\ RTI International. (2020). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2020/ahc-first-eval-rpt.
    \307\ Lewis C., Wellman R., Jones S., Walsh-Bailey C., Thompson 
E., Derus A., Paolino A., Steiner J., De Marchis E., Gottlieb L., 
and Sharp A. (2020). Comparing the Performance of Two Social Risk 
Screening Tools in a Vulnerable Subpopulation. J Family Med Prim 
Care. 2020 Sep; 9(9): 5026-5034. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7652127/.
    \308\ CMS. A Guide to Using the Accountable Health Communities 
Health-Related Social Needs Screening Tool: Promising Practices and 
Key Insights. June 2021. Accessed: November 23, 2021. Available at: 
https://innovation.cms.gov/media/document/ahcm-screeningtool-companion.
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b. Overview of Measure
    The Screening for Social Drivers of Health measure assesses the 
percentage of patients age 18 and older that a dialysis facility 
screens for food insecurity, housing instability, transportation needs, 
utility difficulties, and interpersonal safety. To report on this 
measure, facilities would provide: (1) the number of patients admitted 
to the facility who are 18 years or older during the applicable 
performance period who are screened for all of the following five 
HRSNs: Food insecurity, housing instability, transportation needs, 
utility difficulties, and interpersonal safety; and (2) the total 
number of patients at the facility who are 18 years or older during the 
applicable performance period and who are not excluded from the 
measure. In the proposed rule, we proposed to add this measure to the 
Reporting Measure Domain beginning with PY 2027 (88 FR 42514). We 
discuss measure domains and weights for PY 2027 in section IV.D.7 of 
this final rule.
    Measure specifications for this measure are currently available on 
the QualityNet website at: https://qualitynet.cms.gov/esrd/esrdqip.
(1) Cohort
    The cohort for the Screening for Social Drivers of Health reporting 
measure is all patients, aged 18 years and older, who are treated at 
the facility during the applicable performance period and not eligible 
to be excluded from the measure.
(2) Numerator
    The numerator is calculated as the number of patients who are 18 
years or older who are treated at the facility during the applicable 
performance period and are not eligible to be excluded from the 
measure, and are screened during the performance period for all of the 
following five HRSNs: Food insecurity, housing instability, 
transportation needs, utility difficulties, and interpersonal safety.
(3) Denominator
    The denominator is calculated as the number of patients at the 
dialysis facility and who are 18 years or older on the first day of the 
performance period. The following patients are excluded from the 
denominator: (1) Patients who opt-out of screening; and (2) patients 
who are unable to complete the screening and have no legal guardian or 
caregiver who is able to complete the screening on their behalf.
c. Measure Calculation
    The Screening for Social Drivers of Health measure is calculated as 
the number of patients at a dialysis facility who are 18 years or older 
who are treated at the facility during the applicable performance 
period and are not eligible to be excluded from the measure, and are 
screened by the facility for all five HRSNs (food insecurity, housing 
instability, transportation needs, utility difficulties, and 
interpersonal safety) divided by the total number of patients 18 years 
or older on the 1st day of the performance period (January 1st) at that 
dialysis facility. In the proposed rule, we proposed a 12-month period 
of performance for the measure, and facilities would be required to 
report annually (88 FR 42514). We proposed that a facility would be 
scored according to the following equation:

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    We believe that this scoring policy would encourage facilities to 
report the measure data appropriately without penalizing facilities for 
the results of such data, which may be based on circumstances beyond a 
facility's control.
d. Data Submission and Reporting
    In the proposed rule, we proposed to require facilities to report 
this measure on an annual basis beginning with PY 2027 (88 FR 42514). 
In alignment with the policy we finalized for the Hospital IQR Program, 
we would allow facilities flexibility to select their own screening 
tool or method to screen patients for

[[Page 76472]]

food insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety. Potential sources of these data 
for incorporation in a tool could include, for example, administrative 
claims data, electronic clinical data, standardized patient 
assessments, or patient-reported data and surveys. Additionally, 
multiple screening tools exist and are publicly available. Facilities 
could refer to the Social Interventions Research and Evaluation Network 
(SIREN) website, for example, for comprehensive information about the 
most widely used HRSN screening tools.^{309 310} SIREN contains 
descriptions of the content and characteristics of various tools, 
including information about intended populations, completion time, and 
number of questions. We encourage facilities to consider digital 
standardized screening tools and refer readers to the FY 2023 IPPS/LTCH 
PPS final rule (87 FR 49207), where we noted that the use of certified 
health IT can support capture of HRSN information in an interoperable 
fashion so that these data can be shared across the care continuum to 
support coordinated care.
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    \309\ Social Interventions Research & Evaluation Network. 
(2019). Social Needs Screening Tool Comparison Table. Available at: 
https://sirenetwork.ucsf.edu/tools-resources/resources/screening-tools-comparison. Accessed January 18, 2021.
    \310\ The Social Interventions Research and Evaluation Network 
(SIREN) at University of California San Francisco was launched in 
the spring of 2016 to synthesize, disseminate, and catalyze research 
on the social determinants of health and healthcare delivery.
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    We proposed that the deadline for submission would be the end of 
the EQRS December data reporting month for the applicable performance 
period, which is consistent with current reporting deadlines for other 
ESRD QIP measures (88 FR 42514). For example, the deadline for 
submission in PY 2027 would be the end of the December data reporting 
month in CY 2025.
e. Review by the Measure Applications Partnership
    We included the Screening for Social Drivers of Health reporting 
measure as a measure under consideration for the ESRD QIP on the 
publicly available 2022 MUC List, a list of measures under 
consideration for use in various Medicare programs.\311\ The CBE-
convened MAP Health Equity Advisory Group reviewed the MUC List and the 
Screening for Social Drivers of Health measure (MUC 2022-053) in detail 
and at the same time as the Screen Positive Rate for Social Drivers of 
Health measure on December 6-7, 2022 (discussed below).\312\ The Health 
Equity Advisory Group expressed support for the data collection related 
to social drivers of health, but raised concerns about public reporting 
of the data and redundancy in asking for the same information of 
patients. In addition, on December 8-9, 2022, the MAP Rural Health 
Advisory Group reviewed the 2022 MUC List and the MAP Hospital 
Workgroup did so on December 13-14, 2022.\313\ The Rural Health 
Advisory Group noted some potential reporting challenges including the 
potential masking of health disparities that are underrepresented in 
some areas and that sample size and populations served may be an issue, 
but expressed that the measure serves as a starting point to determine 
where screening is occurring. The MAP Hospital Workgroup expressed 
strong support for the measure but noted that interoperability will be 
important and cautioned about survey fatigue. The MAP Hospital 
Workgroup members conditionally supported the measure pending: (1) 
testing of the measure's reliability and validity; (2) endorsement by a 
consensus-based entity (CBE); (3) additional details on how potential 
tools map to the individual drivers, as well as best practices; (4) 
what resources may be available to assist patients; and (5) alignment 
with data standards, particularly the GRAVITY project.\314\ Thereafter, 
the MAP Coordinating Committee deliberated on January 24 and 25, 2023, 
and ultimately voted to conditionally support the Screening for Social 
Drivers of Health reporting measure for rulemaking with the same 
conditions.\315\
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    \311\ Centers for Medicare & Medicaid Services. 2022. List of 
Measures Under Consideration for December 1, 2022. We note that the 
link provided in the CY 2024 ESRD PPS proposed rule has been 
updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \312\ Centers for Medicare & Medicaid Services. 2022. 2022-2023 
MAP Preliminary Recommendations. Health Equity Advisory Group. We 
note that the link provided in the CY 2024 ESRD PPS proposed rule 
has been updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \313\ Centers for Medicare & Medicaid Services. 2022. 2022-2023 
MAP Preliminary Recommendations, Rural Health Advisory Group. We 
note that the link provided in the CY 2024 ESRD PPS proposed rule 
has been updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \314\ Centers for Medicare & Medicaid Services. (2022). 2022-
2023 MAP Final Recommendations. We note that the link provided in 
the CY 2024 ESRD PPS proposed rule has been updated, and is now 
available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports. For Information on 
the GRAVITY project, please see https://thegravityproject.net/.
    \315\ Centers for Medicare & Medicaid Services. 2023. 2022-2023 
MAP Final Recommendations. We note that the link provided in the CY 
2024 ESRD PPS proposed rule has been updated, and is now available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
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f. Consensus-Based Entity Endorsement
    Although section 1881(h)(2)(B)(i) of the Act generally requires 
that measures specified by the Secretary for the ESRD QIP be endorsed 
by the entity with a contract under section 1890(a) of the Act, section 
1881(h)(2)(B)(ii) of the Act states that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. We reviewed CBE-endorsed 
measures and were unable to identify any other CBE-endorsed measures on 
this topic, and, therefore, we believe the exception in section 
1881(h)(2)(B)(ii) of the Act applies.
g. Public Display
    In the proposed rule, we proposed to publicly display the facility-
specific results for the Screening for Social Drivers of Health measure 
on an annual basis through our Care Compare website at: https://www.medicare.gov/care-compare/. We stated that we anticipate making the 
first public report available in January 2027.
    We invited public comment on this proposal. The comments we 
received and our responses are set forth below. We address comments 
that broadly referred both the Screening for Social Drivers of Health 
measure and the Screen Positive Rate for Social Drivers of Health 
measure in this section as well.
    Comment: Several commenters expressed support for the Screening for 
Social Drivers of Health reporting measure, noting that it would help 
to provide facilities with additional information to help identify and 
address health disparities in ESRD patients. A few commenters noted 
that identifying patient social risk factors will allow care providers 
and community organizations to work together to improve care delivery.
    Response: We thank commenters for their support.

[[Page 76473]]

    Comment: Several commenters expressed support for the proposed 
Screening for Social Drivers of Health reporting measure and 
recommended additional changes to the measure specifications. A few of 
these commenters suggested that the measure screen for additional 
HRSNs, such as financial needs and caregiver burdens. One commenter, 
noting the critical role of nurses in cultivating trust and 
communication with patients as being necessary to help identify and 
address health disparities among patients while also balancing 
administrative burden, recommended that CMS take additional actions 
that would further enable nurses to comprehensively address HRSNs 
across care settings. One commenter stated that patients who are unable 
to complete screenings and do not have a legal guardian or caregiver 
able to complete the screening on their behalf are extremely vulnerable 
and recommended dialysis facilities be encouraged to support these 
patients in resource identification.
    Response: We thank commenters for their support and will take their 
recommendations under consideration for future rulemaking. We selected 
the proposed five HRSN domains based on the successful use of these 
domains in the screening that was done under the AHC Model. We note 
that while the Screening for Social Drivers of Health measure requires 
screening for the five identified HRSNs, facilities may screen for 
additional HRSNs that they believe may be impacting their patient 
population. One resource that facilities could consider is the 
Accountable Health Communities screening tool, which includes questions 
for eight supplemental domains, including financial strain. Although 
the Screening for Social Drivers of Health reporting measure excludes 
patients who are unable to complete the screening and have no legal 
guardian or caregiver who is able to complete the screening on their 
behalf, we would nonetheless encourage facilities to support these 
patients with resource identification.
    Comment: Several commenters expressed concern that the proposed 
Screening for Social Drivers of Health reporting measure and the Screen 
Positive Rate for Social Drivers of Health reporting measure would not 
effectively address poor health outcomes associated with HRSNs. A few 
of these commenters believed that the measures did not provide 
sufficient patient or provider support to help empower patients to 
improve their health outcomes. One commenter noted that the 
availability of community resources is highly variable depending on 
location and expressed concern that screening for HRSNs through 
administering questionnaires may be futile in deprived areas that lack 
access to such community organizations. One commenter expressed concern 
that the proposed measures may lead to unintended consequences and 
further perpetuate health disparities by disincentivizing facilities 
from providing care to patients with HRSNs or communities with higher 
rates of HRSNs. One commenter expressed concern that the proposed 
measures do not distinguish between a patient's social risks and a 
patient's social needs, noting that the former is determined by 
screening instrument and the latter is based on a patient's own 
priorities and preferences. The commenter recommended that CMS develop 
a measure that focuses on assessing a patient's self-identified needs 
and priorities while ensuring that resources are available to provide 
responsive follow-up care.
    Response: We thank commenters for their feedback. During the 
development of both Social Drivers of Health measures, we gave this 
topic significant consideration. The intent of the two measures is to 
incentivize facilities to screen their patients for HRSNs in five core 
domains, as well as to analyze those data to determine whether there is 
a relationship between the HRSNs and the outcomes experienced by their 
patients. Facilities could use those data to develop solutions to 
improve access to care and clinical outcomes among their patient 
population. Evaluation of the AHC Model concluded that universal 
screening may identify needs that would otherwise remain 
undetected.\316\ While broad availability of community-based resources 
that address patients' health-related social needs would be ideal, we 
believe that one of the benefits of these measures will be 
identification of opportunities to enable meaningful action, including 
prioritizing and investing in such resources where feasible. For 
example, a facility may decide to offer shuttle services for some of 
its patients if transportation is identified as a barrier to treatment. 
A facility may also be able to connect patients with local resources to 
assist with food insecurity, housing instability, or utility 
difficulties. Beginning to collect the data on patients' HRSNs remains 
imperative and a crucial step in developing resources for advancing 
health equity.
---------------------------------------------------------------------------

    \316\ RTI International. (2020). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2020/ahc-first-eval-rpt.
---------------------------------------------------------------------------

    We note that identifying and addressing HRSNs is a critical topic 
for ESRD patients and that there are high levels of health disparities 
experienced by this patient population. Although we believe that the 
two measures will not lead to unintended consequences because screening 
would be required for all eligible patients and facilities would not be 
penalized based on reported screen positive rates, CMS will monitor 
measure implementation as part of standard program and measure review 
and will consider updates to the measures if improvements are 
identified through this process.
    Comment: Several commenters expressed concern that the proposed 
Screening for Social Drivers of Health reporting measure and the Screen 
Positive Rate for Social Drivers of Health reporting measure were not 
ready for inclusion in the ESRD QIP measure set. A few commenters 
recommended an endorsement review by the CBE to ensure that such 
measures will drive improved health outcomes and advance health equity, 
given the significance of addressing social risk factors and the 
potential administrative burden associated with the inclusion of new 
measures. One commenter expressed concern with the proposed measures, 
recommending that more work be done to address potential reporting 
challenges and potential masking of health disparities before the 
measures are incorporated into the ESRD QIP. One commenter noted that 
these are the first measures aimed at HRSNs that would be used in the 
ESRD QIP, and the impact of their adoption into a payment program is 
unknown.
    Response: Although we recognize the value of measures undergoing 
review for potential CBE endorsement, given the urgency of improving 
health equity, we believe it is important to implement this measure as 
soon as possible while balancing facilities' need for sufficient time 
to implement screening and data collection processes, which is why we 
proposed to adopt this measure beginning with the PY 2027 ESRD QIP. We 
note that the most recent evaluation of the AHC model, which informed 
the development of these proposed measures, showed that it was 
effective in screening beneficiaries for HRSNs, identifying eligible 
beneficiaries, and referring those beneficiaries to HRSN-related 
navigation services.\317\ We

[[Page 76474]]

believe that the success of the AHC model shows that these measures 
will have a similar impact. Additionally, we note that, under section 
1881(h)(2)(B)(ii) of the Act, the Secretary may specify a measure that 
is not so endorsed as long as due consideration is given to measures 
that have been endorsed or adopted by a consensus organization 
identified by the Secretary. We reviewed measures endorsed by consensus 
organizations and were unable to identify any other measures on this 
topic endorsed by a consensus organization, and therefore, we believe 
the exception in section 1881(h)(2)(B)(ii) of the Act applies.
---------------------------------------------------------------------------

    \317\ RTI International. (2023). Accountable Health Communities 
(AHC) Model Evaluation. Available at: https://innovation.cms.gov/data-and-reports/2023/ahc-second-eval-rpt.
---------------------------------------------------------------------------

    Comment: Several commenters expressed concern with the potential 
burden associated with the proposed Screening for Social Drivers of 
Health reporting measure and the Screen Positive Rate for Social 
Drivers of Health reporting measure. A few commenters noted that 
facilities would need additional resources in order to implement and 
comply with proposed measure requirements. A few of these commenters 
expressed particular concern regarding staffing constraints. A few 
commenters expressed concern regarding the administrative burden 
associated with the data collection and reporting requirements and 
requested that facilities receive additional resources such as training 
and funding to support the data collection and reporting efforts 
associated with the proposed measures. One commenter expressed concern 
that the administrative burden associated with the proposed measures 
could divert facility resources from direct patient care and requested 
an assessment of the administrative burden.
    Response: While we understand that implementation of the Screening 
for Social Drivers of Health reporting measure and the Screen Positive 
Rate for Social Drivers of Health reporting measure are associated with 
some burden, as discussed in section VI.C.3 of this final rule, we 
believe the benefits outweigh the burden because screening for and 
identifying patients' HRSNs is a critical step towards a facility 
identifying and understanding how the presence of the screened HRSNs 
might be impacting patient access to ESRD care and outcomes. We intend 
to monitor the measures for any unintended or adverse outcomes 
associated with implementation.
    We note that screening can occur any time during the patient's 
treatment at the facility during the performance period prior to 
discharge and that, for example, the AHC Screening Tool addresses these 
5 HRSNs using a total of 10 questions. Therefore, we believe that 
facilities will be able to find sufficient time to screen their 
patients.
    Comment: A few commenters expressed concern with the proposed 
Screening for Social Drivers of Health reporting measure and the Screen 
Positive Rate for Social Drivers of Health reporting measure, believing 
that the goals of the two measures were already effectively covered 
through other means. One of these commenters noted that facilities are 
already required to screen their patients for HRSNs as part of ESRD 
Conditions for Coverage assessments required at 42 CFR 494.90. One of 
these commenters stated that dialysis facilities are already required 
to screen patients for multiple non-clinical conditions, noting that 
CMS previously proposed revisions to the ESRD Medical Evidence Report 
form (CMS-2728), which includes seven screening questions related to 
HRSNs that address the same five core domains as these measures. One of 
these commenters stated that the clinical measures currently included 
in the ESRD QIP are more effectively aimed at incentivizing beneficial 
patient outcomes such as preventing avoidable hospitalizations and 
reducing mortality.
    Response: We recognize that there may be overlap between the HRSN 
data screened for under the proposed measures and data that facilities 
are reporting for other purposes. However, we note that some of the 
data cited by commenters is collected on a one-time basis, whereas the 
Screening for Social Drivers of Health reporting measure and the Screen 
Positive Rate for Social Drivers of Health reporting measures require 
that the screens be conducted annually. This difference in the 
frequency of the screens will facilitate the ability of facilities to 
identify HRSNs that develop or change over time. We agree with the 
commenter that noted the beneficial impact of clinical measures in the 
ESRD QIP measure set. Given the link between social risk factors and 
adverse health outcomes, we believe that incentivizing facilities to 
screen for and identify a patient's HRSNs will similarly lead to better 
patient health outcomes.
    Comment: A few commenters recommended that the measures use a 
standardized survey to identify and collect HRSN data. One of these 
commenters noted that because the measure does not require facilities 
to use a standard screening instrument, facility performance on the 
measure is not comparable and the reported data will not be meaningful 
to the public. The commenter recommended that CMS only publicly report 
whether a facility screens for HRSNs and that CMS not publicly report 
the percentage of patients at a facility that screens positive for each 
HRSN. One commenter recommended that CMS provide guidance on the role 
of Protocol for Responding to & Assessing Patients' Assets, Risks & 
Experiences (PRAPARE) for screening in dialysis facilities. One 
commenter suggested that the measure use a standardized survey to 
identify and collect HRSN data.
    Response: We proposed that facilities would be able to choose their 
own screening tool for purposes of complying with both the Screening 
for Social Drivers of Health reporting measure and the Screen Positive 
Rate for Social Drivers of Health reporting measure because we think it 
is important to provide facilities with the flexibility to choose the 
screening tool that works best for them. We understand that the absence 
of a standardized screening tool could introduce some inconsistency in 
the information collected across facilities because different screening 
tools may vary in terms of the number of screening questions included 
or the language used in those screening questions. While we acknowledge 
the potential benefits of requiring all facilities to use the same 
screening instrument or a prescribed set of standards around the number 
or types of screening questions used, we also recognize the benefits of 
providing facilities with flexibility to customize screening and data 
collection to their patient populations. We encourage facilities to 
select screening tools that have undergone thorough testing to ensure 
they are accurate and reliable. We believe that this measure should 
promote screening practices which, among other things, help to identify 
unmet HRSNs.
    We disagree with commenter's recommendation that CMS publicly 
report only whether a facility screens for HRSNs and not the percentage 
of patients at a facility that screens positive for each HRSN. Public 
reporting provides a means of delivering important healthcare 
information to facilities, consumers, and patient advocates on the 
level of unmet HRSNs among a facility's patient population that might 
be contributing to the clinical outcomes at the facility. We believe 
that a facility's ability to identify HRSNs among its patient 
population should be considered part of the quality of care it provides 
to its patients. In addition to helping facilities identify these HRSNs 
among their patient population that could play a factor in clinical 
outcomes, it also may provide the public with

[[Page 76475]]

useful information that could be used to improve resources available to 
patients.
    Although the commenter is correct that PRAPARE may be a useful 
screening tool for engaging patients in assessing and addressing social 
drivers of health, we are not requiring that facilities use a specific 
standardized screening tool for purposes of complying with the proposed 
measures at this time. For selecting a screening tool, we suggest that 
facilities refer to evidence-based resources for comprehensive 
information about the most widely used HRSN screening tools. For 
example, the Social Interventions Research and Evaluation Network 
(SIREN) website, housed at the Center for Health and Community at the 
University of California, San Francisco, contains descriptions of the 
content and characteristics of various tools, including information 
about intended populations, completion time, and number of questions.
    Comment: One commenter expressed concern with the proposed use of a 
standardized tool to screen patients for HRSNs, noting that HRSN 
screening may be accomplished through alternative means such as 
informal but thorough patient interviewing by a practitioner or 
predictive modeling using available patient data. The commenter 
cautioned against penalizing providers for not using a standardized 
tool to screen for HRSNs, absent evidence showing the superiority of 
the proposed method.
    Response: We did not propose to require facilities to use a 
standardized screening tool. In the proposed rule, we proposed that 
facilities would be able to select a screening tool of their choosing 
for purposes of this measure to give facilities the flexibility to 
tailor their screen to the needs of their patient population.
    Comment: A few commenters requested clarification regarding whether 
Electronic Data Interchange may be used between systems and the 
screening tools already in place, including clarification that CMS 
intends to collect the data through the EQRS. One commenter recommended 
delaying adoption of the Screening for Social Drivers of Health 
reporting measure and the Screen Positive Rate for Social Drivers of 
Health reporting because dialysis facilities may need more time to 
update different EMRs.
    Response: Facilities will collect and report the measure data 
through EQRS. Because we are not requiring facilities to adopt a 
standardized screening tool, we believe that the proposed measures 
provide facilities with the flexibility to customize screening and data 
collection to their local community contexts and patient populations, 
especially in the initial stages of implementing screening protocols. 
We note that these measures are proposed for inclusion beginning with 
PY 2027, so we believe that facilities will have ample time to build 
out their interfaces and test their systems before measure data 
reporting requirements officially begin.
    Comment: A few commenters recommended that CMS align the Screening 
for Social Drivers of Health reporting measure and the Screen Positive 
Rate for Social Drivers of Health reporting measure with the 
requirements of the Comprehensive Kidney Care Contracting (CKCC) option 
of the KCC Model.
    Response: We thank commenters for the recommendations.
    Comment: One commenter recommended that facilities should receive 
full credit for reporting on these measures, cautioning against 
potentially penalizing facilities by holding them accountable for 
social disparities beyond their control.
    Response: We proposed that the Screening for Social Drivers of 
Health measure is calculated as the number of eligible patients at a 
dialysis facility who are 18 years or older who are treated at the 
facility during the applicable performance period and are screened by 
the facility for all five HRSNs divided by the total number of patients 
18 years or older on the 1st day of the performance period at that 
dialysis facility. For the Screen Positive Rate for Social Drivers of 
Health reporting measure, we proposed that the facility's measure rate 
would be calculated as the number of eligible patients for whom the 
facility reports the screening results for all five HRSNs during the 
performance period over the total number of eligible patients who the 
facility screened for all five HRSNs during that performance period. To 
calculate the facility's score on the measure, we would multiply the 
results of that fraction by ten. We note that patients who opt-out or 
are unable to complete the screening are excluded from the measure 
denominators, so that facilities are not penalized if a patient refuses 
to answer certain screening questions. Facilities will be scored on 
whether they reported the measure data, not the results of the measure 
data itself. Although we believe that it is important to encourage 
facilities to screen their patients for HSRNs and to report data for 
screen positive rates, we want to avoid potential unintended 
consequences that may result from scoring facilities on the outcomes of 
the screen positive rates themselves. That is, we will not score a 
facility based on its screen positive rates, which may reflect 
circumstances beyond a facility's control. We believe that these 
scoring policies will encourage facilities to report the measure data 
accurately without penalizing facilities for the results of such data.
    Comment: One commenter expressed strong concern that the two 
proposed measures were inappropriate for use in the ESRD QIP, noting 
the risk of exacerbating long-standing mistrust in the healthcare 
system among certain patient populations. One commenter recommended 
that resources be offered to all patients to avoid potential stigma 
associated with a patient's identified HRSNs. One commenter recommended 
that ``screening'' be clearly defined to ensure that patients are being 
actively and directly engaged in these screenings. The commenter 
expressed strong concern that incentivizing facility performance 
through data collection and financial penalties would potentially 
interfere with the autonomy of the facility's patients.
    Response: We agree that it is important for the screening for HRSNs 
to be accomplished in a way that is respectful, person-centered, and 
engenders trust. We recommend that facilities consider these factors in 
their selection of a screening tool or other methodology to use for 
purposes of implementing these measures. We note that the results of a 
patient's HRSN screening would become part of the patient's medical 
record and therefore subject to the same privacy protections as the 
rest of the patient's medical record. We note that identifying and 
addressing HRSNs is a critical topic for ESRD patients and that there 
are high levels of health disparities experienced by this patient 
population. We believe that identifying the HRSNs of ESRD patients will 
be valuable in helping facilities to identify and understand patients' 
unmet needs, which may encourage improvements in care coordination with 
outpatient and community resources, and further support development of 
patient-centered treatment plans.
    Comment: One commenter believed that HRSN screenings should remain 
voluntary, and clinics should not be penalized if a patient refuses to 
respond to a question or screening.
    Response: Patients who opt-out of a screening or are unable to 
complete a screening are excluded from the measure denominator, so a 
facility will not be penalized if a patient declines to respond to a 
question or opts out of the screening entirely. We encourage facilities 
to explain to their patients

[[Page 76476]]

what the purpose of the screening is and that they may opt out.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to adopt the Screening for Social Drivers of 
Health reporting measure as proposed.
3. Adoption of the Screen Positive Rate for Social Drivers of Health 
Reporting Measure Beginning With PY 2027
a. Background
    The impact of social risk factors on health outcomes has been well-
established in the literature.^{318 319 320 321 322} The 
Physicians Foundation reported that 73 percent of the physician 
respondents to their annual survey agreed that social risk factors such 
as housing instability and food insecurity would drive health services 
demand in 2021.\323\ Recognizing the need for a more comprehensive 
approach to closing equity gaps, we have prioritized quality measures 
that identify social drivers of health among patients served in various 
care settings and, in turn, support providers in addressing the impact 
of these drivers on disparities in patient outcomes, healthcare 
utilization, and costs.^{324 325 326} Specifically, in the 
dialysis facility setting, we aim to encourage systematic 
identification of patients' HRSNs as part of treatment planning, with 
the intention of promoting linkages with relevant community-based 
services that address those needs. We also believe that the 
identification of HRSNs can help facilities devise strategies that 
improve the quality of care provided to all of their patients and lead 
to improved health outcomes following establishment of care at the 
facility.
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    \318\ Institute of Medicine 2014. Capturing Social and 
Behavioral Domains and Measures in Electronic Health Records: Phase 
2. Washington, DC: The National Academies Press. Available at: 
https://doi.org/10.17226/18951.
    \319\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model [bond] CMS Innovation Center. Available at: https://innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 
2021.
    \320\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/. Accessed 
November 23, 2021.
    \321\ Milkie Vu et al. Predictors of Delayed Healthcare Seeking 
Among American Muslim Women, Journal of Women's Health 26(6) (2016) 
at 58; Nadimpalli SB, Cleland CM, Hutchinson MK, Islam N, Barnes LL, 
Van Devanter N. (2016) The Association between Discrimination and 
the Health of Sikh Asian Indians. Health Psychology, 35(4), 351-355. 
https://doi.org/10.1037/hea0000268.
    \322\ Office of the Assistant Secretary for Planning and 
Evaluation (ASPE). (2020). Report to Congress: Social Risk Factors 
and Performance Under Medicare's Value-Based Purchasing Program 
(Second of Two Reports). Available at: https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
    \323\ The Physicians Foundation. (2020) 2020 Survey of America's 
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf.
    \324\ Alley, D.E., C.N. Asomugha, P.H. Conway, and D.M. 
Sanghavi. 2016. Accountable Health Communities-Addressing Social 
Needs through Medicare and Medicaid. The New England Journal of 
Medicine 374(1):8-11. Available at: https://doi.org/10.1056/NEJMp1512532.
    \325\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model [bond] CMS Innovation Center. Available at: https://innovation.cms.gov/innovation-models/ahcm. Accessed November 23, 
2021.
    \326\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
---------------------------------------------------------------------------

    While the Screening for Social Drivers of Health reporting measure 
(discussed in section IV.D.2 of this final rule) enables facilities to 
identify patients with HRSNs, we stated in the CY 2024 ESRD PPS 
proposed rule (88 FR 42516) that the Screen Positive Rate for Social 
Drivers of Health measure would allow facilities to capture the 
magnitude of these needs by reporting the rate of those patients who 
screen positive for HRSNs and even potentially estimate the impact of 
individual-level HRSNs on healthcare utilization when evaluating 
quality of care.^{327 328 329} These measures complement each 
other because they would require facilities to report both the 
percentage of patients they screened (under the Screening for Social 
Drivers of Health measure) and the results of that screening (under the 
Screen Positive Rate for Social Drivers of Health measure) in order to 
potentially identify gaps and develop sustainable solutions at a 
facility level and a community level. In the proposed rule, we noted 
that our proposals to adopt these two separate, complementary measures 
align with other quality reporting programs (88 FR 42516). These two 
measures have been finalized for the Hospital IQR Program in the FY 
2023 IPPS/LTCH PPS final rule (87 FR 49191 through 49220), and since 
publication of the CY 2024 ESRD PPS proposed rule, have been finalized 
for the PPS-Exempt Cancer Hospital Quality Reporting Program in the FY 
2024 IPPS/LTCH PPS final rule (88 FR 59210 through 59222) and the 
Inpatient Psychiatric Facility Quality Reporting Program in the FY 2024 
IPF PPS final rule (88 FR 51107 through 51121).
---------------------------------------------------------------------------

    \327\ Baker, M.C., Alberti, P.M., Tsao, T.Y., Fluegge, K., 
Howland, R.E., & Haberman, M. (2021). Social Determinants Matter for 
Hospital Readmission Policy: Insights From New York City. Health 
Affairs, 40(4), 645-654. Available at: https://doi.org/10.1377/hlthaff.2020.01742.
    \328\ CMS. Accountable Health Communities Model. Accountable 
Health Communities Model [bond] CMS Innovation Center. Available at: 
https://innovation.cms.gov/innovation-models/ahcm. Accessed November 
23, 2021.
    \329\ Hammond, G., Johnston, K., Huang, K., Joynt Maddox, K. 
(2020). Social Determinants of Health Improve Predictive Accuracy of 
Clinical Risk Models for Cardiovascular Hospitalization, Annual 
Cost, and Death. Circulation: Cardiovascular Quality and Outcomes, 
13 (6) 290-299. Available at: https://doi.org/10.1161/CIRCOUTCOMES.120.006752.
---------------------------------------------------------------------------

    In the CY 2024 ESRD PPS proposed rule, we proposed to adopt this 
measure under section 1881(h)(2)(A)(iv) of the Act, which gives the 
Secretary broad authority to specify measures for the ESRD QIP (88 FR 
42516). The Screen Positive Rate for Social Drivers of Health reporting 
measure would require facilities to screen all patients who are 18 
years or older for food insecurity, housing instability, transportation 
needs, utility difficulties, and interpersonal safety and then report 
the resulting screen positive rates for each of those domains to CMS. 
These are the same five core HRSN domains under the Screening for 
Social Drivers of Health reporting measure, and facilities could use 
the same screening tool for purposes of both measures. We stated that 
reporting the screen positive rate for social drivers of health for 
each domain could inform actionable planning by facilities by helping 
to enable the development of individual patient action plans for those 
patients who screen positive (including navigation and referral). 
Following a positive HRSN screening, facilities could analyze data to 
understand, for example, whether there are any HRSNs that may be 
affecting their patients' access to care or contributing to poor 
outcomes in their patient populations and, in turn, develop appropriate 
solutions to improve access and outcomes. Thus, this measure has the 
potential to improve patient outcomes by acknowledging patients' non-
clinical needs that nevertheless greatly contribute to adverse clinical 
outcomes and providing the opportunity for additional support by 
linking providers with community-based organizations to enhance 
patient-centered treatment and discharge planning, although such reach 
out is not required.^{330 331 332} This

[[Page 76477]]

measure may also prove useful to patients by providing data 
transparency and signifying facilities' familiarity, expertise, and 
commitment regarding these issues. Finally, we believe this measure has 
the potential to facilitate data-informed collaboration with community-
based services and focused community investments, including the 
development of pathways and infrastructure to more seamlessly connect 
patients to local community resources. Thus, the measure aims to 
support facilities in leveraging available data, pursuing focused 
quality improvement activities, and promoting efficient and effective 
use of their resources. While the measure does not require facilities 
to take specific actions, we expect that any solution a facility might 
develop to address a gap it identifies would comply with all applicable 
Federal non-discrimination laws. We also note that the measure is 
intended to promote health equity for all patients and is not intended 
to create a conflict between a CMS requirement and a State's civil 
rights laws.
---------------------------------------------------------------------------

    \330\ The Physicians Foundation. (2020). Survey of America's 
Patients, Part Three. Available at: https://physiciansfoundation.org/wp-content/uploads/2020/10/2020-Physicians-Foundation-Survey-Part3.pdf.
    \331\ De Marchis, E., Knox, M., Hessler, D., Willard-Grace, R., 
Oliyawola, JN, et al. (2019). Physician Burnout and Higher Clinic 
Capacity to Address Patients' Social Needs. The Journal of the 
American Board of Family Medicine, 32 (1), 69 through 78.
    \332\ Kung, A., Cheung, T., Knox, M., Willard-Grace, R., 
Halpern, J., et.al, (2019). Capacity to Address Social Needs Affect 
Primary Care Clinician Burnout. Annals of Family Medicine. 17 (6), 
487 through 494. Available at: https://doi.org/10.1370/afm.2470.
---------------------------------------------------------------------------

b. Overview of Measure
    The Screen Positive Rate for Social Drivers of Health measure 
identifies the proportion of patients at the facility who screened 
positive for each of the following five HRSNs: Food insecurity, housing 
instability, transportation needs, utility difficulties, and 
interpersonal safety. We proposed that we would require facilities to 
report these data as five separate rates.\333\ Measure specifications 
for this measure are currently available on the QualityNet website at: 
https://qualitynet.cms.gov/esrd/esrdqip.
---------------------------------------------------------------------------

    \333\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at: https://doi.org/10.31478/201705b.
---------------------------------------------------------------------------

(1) Cohort
    The cohort for the Screen Positive Rate for Social Drivers of 
Health is patients, aged 18 years or older who are treated at the 
facility during the applicable performance period and are not eligible 
to be excluded from the measure, who were screened by the facility for 
all five HRSNs, and for whom the facility reports the results of a 
screen asking whether they have a need in one or more of the following 
five HRSNs (calculated separately): Food insecurity, housing 
instability, transportation needs, utility difficulties or 
interpersonal safety.\334\
---------------------------------------------------------------------------

    \334\ In the CY 2024 ESRD PPS proposed rule, we stated that the 
cohort consisted of eligible patients ``who were screened by the 
facility for an HRSN, and who screened positive for one or more of 
the following five HRSNs: Food insecurity, housing instability, 
transportation needs, utility difficulties or interpersonal 
safety.'' (88 FR 42517). This statement describes the numerator, 
rather than the measure cohort, and we have revised our descriptions 
of the measure cohort and the measure numerator in this final rule 
accordingly.
---------------------------------------------------------------------------

(2) Numerator
    The numerator consists of the number of patients at a dialysis 
facility who are 18 years or older who are treated at the facility 
during the applicable performance period and are not eligible to be 
excluded from the measure, who were screened for all five HRSNs, and 
who screened positive for one or more of the following five HRSNs: Food 
insecurity, housing instability, transportation needs, utility 
difficulties, or interpersonal safety.\335\
---------------------------------------------------------------------------

    \335\ In the CY 2024 ESRD PPS proposed rule, we stated that the 
numerator consisted of eligible patients ``who were screened for an 
HRSN, and for whom the facility reports the results of a screen 
asking whether they have a need in one or more of the following five 
HRSNs (calculated separately): Food insecurity, housing instability, 
transportation needs, utility difficulties or interpersonal 
safety.'' (88 FR 42517). This statement describes the measure 
cohort, rather than the measure numerator, and we have revised our 
descriptions of the measure cohort and the measure numerator in this 
final rule accordingly.
---------------------------------------------------------------------------

(3) Denominator
    The denominator consists of the number of patients at a dialysis 
facility who are 18 years or older who are treated at the facility 
during the applicable performance period and are not eligible to be 
excluded from the measure, and are screened for an HRSN (food 
insecurity, housing instability, transportation needs, utility 
difficulties and interpersonal safety). The following patients are 
excluded from the denominator: (1) Patients who opt-out of screening; 
and (2) patients who are themselves unable to complete the screening 
and have no caregiver able to do so on the patient's behalf.
c. Measure Calculation
    We proposed that the facility's measure rate for this measure would 
be calculated for a payment year as the number of eligible patients for 
whom the facility reports the screening results for all five HRSNs 
during the performance period over the total number of eligible 
patients who the facility screened for all five HRSNs during that 
performance period. To calculate the facility's score on the measure, 
we would multiply the results of that fraction by ten. The full 
equation is set forth here:

[GRAPHIC] [TIFF OMITTED] TR06NO23.039


    However, for purposes of public reporting only, we proposed to 
display the facility's screen positive rate for each HRSN separately, 
for a total of five separate rates. Although we would not score 
facilities on the results of those five separate rates, we believe that 
making such data public may help to better inform patients and their 
caregivers about a facility. We proposed a 12-month period of 
performance for the measure, and facilities would be required to report 
annually.
    We believe that these policies would encourage facilities to report 
the measure data appropriately without scoring facilities based on the 
results of such data, which may be based on circumstances beyond a 
facility's control. Although we believe that it is important to 
encourage facilities to screen their patients for HSRNs and to report 
data for screen positive rates, we want to avoid potential unintended 
consequences that may result from scoring facilities on the outcomes of 
the screen positive rates themselves. That is, we do not want to score 
a facility based on its patients' given socioeconomic factors, which 
may be based on circumstances beyond a facility's control.

[[Page 76478]]

d. Data Collection, Submission and Reporting
    In the CY 2024 ESRD PPS proposed rule, we proposed to require 
facilities to submit data necessary to calculate the numerator and the 
denominator for this measure once annually within the ESRD Quality 
Reporting System (EQRS), beginning with PY 2027 (88 FR 42517). We 
proposed that facilities would be required to submit data on this 
measure using the same process we have finalized for the submission of 
data on other measures in the ESRD QIP within EQRS.
e. Review by the Measure Applications Partnership
    We included the Screen Positive Rate for Social Drivers of Health 
reporting measure for consideration in the ESRD QIP on the publicly 
available 2022 MUC List, a list of measures under consideration for use 
in various Medicare programs.\336\ The CBE-convened MAP Health Equity 
Advisory Group reviewed the Screen Positive Rate for Social Drivers of 
Health measure (MUC 2022-050) in detail and at the same time as the 
Screening for Social Drivers of Health measure on December 6-7, 
2022.\337\ The Health Equity Advisory Group expressed support for the 
collection of data related to social health drivers, but raised 
concerns regarding public reporting and the repetition of asking 
patients the same questions. In addition, on December 8-9, 2022, the 
MAP Rural Health Advisory Group reviewed the 2022 MUC List and was also 
reviewed by the MAP Hospital Workgroup on December 13-14, 2022.\338\ 
The Rural Health Advisory Group noted potential reporting challenges 
including the potential masking of health disparities that are 
underrepresented in some areas and that sample size and populations 
served may be an issue, but also expressed support that the measure 
seeks to advance the drivers of health and serves as a starting point 
to determine where screening is occurring. The MAP Hospital Workgroup 
recommended conditional support for the measure for rulemaking pending 
endorsement by a CBE to address reliability and validity concerns, 
attentiveness to how results are shared and contextualized for public 
reporting, and encouragement for CMS to examine any differences in 
reported rates by reporting process (to assess whether they are the 
same or different across dialysis facilities).\339\ Thereafter, the MAP 
Coordinating Committee deliberated on January 24-25, 2023, and 
ultimately voted to conditionally support the Screen Positive Rate for 
Social Drivers of Health measure for rulemaking with the same 
conditions.\340\
---------------------------------------------------------------------------

    \336\ [thinsp]Centers for Medicare Medicaid Services. 2022. List 
of Measures Under Consideration for December 1, 2022. We note that 
the link provided in the CY 2024 ESRD PPS proposed rule has been 
updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \337\ Centers for Medicare Medicaid Services. 2022. 2022-2023 
MAP Preliminary Recommendations, Health Equity Advisory Group. We 
note that the link provided in the CY 2024 ESRD PPS proposed rule 
has been updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \338\ Centers for Medicare Medicaid Services. 2022. MAP 
Preliminary Recommendations, Rural Health Advisory Group. We note 
that the link provided in the CY 2024 ESRD PPS proposed rule has 
been updated, and is now available at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \339\ Centers for Medicare Medicaid Services. 2023. 2022-2023 
MAP Final Recommendations. We note that the link provided in the CY 
2024 ESRD PPS proposed rule has been updated, and is now available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
    \340\ Centers for Medicare Medicaid Services. 2023. 2022-2023 
MAP Final Recommendations. We note that the link provided in the CY 
2024 ESRD PPS proposed rule has been updated, and is now available 
at: https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/lists-and-reports.
---------------------------------------------------------------------------

f. Consensus-Based Entity Endorsement
    Although section 1881(h)(2)(B)(i) of the Act generally requires 
that measures specified by the Secretary for the ESRD QIP be endorsed 
by the entity with a contract under section 1890(a) of the Act, section 
1881(h)(2)(B)(ii) of the Act states that in the case of a specified 
area or medical topic determined appropriate by the Secretary for which 
a feasible and practical measure has not been endorsed by the entity 
with a contract under section 1890(a) of the Act, the Secretary may 
specify a measure that is not so endorsed as long as due consideration 
is given to measures that have been endorsed or adopted by a consensus 
organization identified by the Secretary. We reviewed CBE-endorsed 
measures and were unable to identify any other CBE-endorsed measures on 
this topic, and, therefore, we believe the exception in section 
1881(h)(2)(B)(ii) of the Act applies.
g. Public Display
    In the proposed rule, we proposed to publicly display the ESRD QIP 
score and facility-specific rates for the Screen Positive Rate for 
Social Drivers of Health measure on an annual basis beginning in PY 
2027 through our Care Compare website at: https://www.medicare.gov/care-compare/.
    We invited public comment on this proposal. The comments we 
received and our responses are set forth below. We note that we have 
addressed comments that broadly referred both the Screening for Social 
Drivers of Health measure and the Screen Positive Rate for Social 
Drivers of Health measure in section IV.D.2 of this final rule.
    Comment: Several commenters expressed support for the proposed 
Screen Positive Rate for Social Drivers of Health reporting measure. A 
few of these commenters noted that the proposed measure would provide 
facilities with important information regarding a patient's potential 
HRSNs that often impact patient outcomes. A few commenters expressed 
support because the measure will help identify patient social risk 
factors, allowing care providers and community organizations to work 
together to improve care delivery. One commenter expressed support and 
noted that the transportation challenges and utility insecurity may be 
particularly important for dialysis patients.
    Response: We thank the commenters for their support. We agree that 
HRSNs are critical factors that impact patient outcomes, and increased 
knowledge about patients' HRSNs will help facilities ensure that all of 
their patients receive the highest quality ESRD care. Further, we agree 
that collecting these data will incentivize facilities to better 
recognize whether any of the HRSNs in the screening tool are impacting 
their patients and take steps to improve access and outcomes.
    Comment: One commenter expressed support for the proposal to 
include the Screen Positive Rate for Social Drivers of Health measure 
as a reporting measure so that facilities are not scored based on the 
results of the data which reflect factors beyond the facility's 
control.
    Response: We thank the commenter for its support.
    Comment: Several commenters recommended additional changes to the 
measure specifications to encourage follow up after a positive 
screening. A few commenters recommended that CMS require the 
development of action plans to address HRSNs or otherwise add 
requirements for facilities to follow up with patients on identified 
HRSNs where appropriate. A few commenters recommended that CMS update 
the measure to require referral and delivery of identified needed 
services. If services are not available, one commenter suggested that 
facilities should be responsible for reporting this to relevant 
Federal, State, or local agencies authorities. One commenter

[[Page 76479]]

recommended that CMS consider potential uses for the data captured by 
this measure and propose these uses in future rulemaking.
    Response: We thank the commenters for their recommendations, and 
may consider them in future rulemaking. We believe this measure has the 
potential to improve patient outcomes by acknowledging patients' HSRN 
needs that can contribute to adverse clinical outcomes.
    Comment: A few commenters expressed concern that the Screen 
Positive Rate for Social Drivers of Health reporting measure would 
disincentivize caring for socially vulnerable patients because 
facilities serving patient populations with high rates of HRSNs would 
be unfairly penalized for poor performance on the proposed measure. One 
commenter expressed concern that the proposed Screen Positive Rate for 
Social Drivers of Health reporting measure will disadvantage facilities 
by penalizing them based on the existence of patients with HRSNs, 
rather than the quality of care provided, and recommended that CMS 
instead offer supplemental payments to facilities that commit to use 
these supplemental payments to address HRSNs relevant to their patient 
population.
    Response: We believe that identifying the HRSNs of ESRD patients 
will be valuable in helping facilities to identify and understand 
patients' unmet needs, which may encourage improvements in care 
coordination with outpatient and community resources, and further 
support development of patient-centered treatment plans. We note that 
identifying and addressing HRSNs is a critical topic for ESRD patients 
and that there are high levels of health disparities experienced by 
this patient population. Although we believe that the proposed measure 
will not lead to unintended consequences because facilities would not 
be penalized based on reported screen positive rates, CMS will monitor 
measure implementation and data reporting as part of standard program 
and measure review and will consider updates to the measure if 
improvements are identified through this process. Although we 
appreciate the commenter's suggestion that CMS offer supplemental 
payments to facilities to address HRSNs relevant to their patient 
population, we do not have authority under the ESRD QIP statute to 
offer the supplemental payments suggested by the commenter.
    Comment: A few commenters expressed concern with the proposed 
Screen Positive Rate for Social Drivers of Health reporting measure, 
stating that data collected for this measure ultimately would not 
provide consumers with meaningful information relevant to a facility's 
quality of care. One commenter noted that publicly reported information 
would be subject to misinterpretation due to existing biases and 
preconceptions. A few commenters did not support public reporting 
because the measure reflects characteristics of the facility's patient 
population, not the facility's performance or quality of care.
    Response: We appreciate the commenters' concerns. The measure 
provides a means of delivering important healthcare information to 
facilities, consumers, and patient advocates on the level of unmet 
HRSNs among a facility's patient population that might be contributing 
to the clinical outcomes experienced at the facility. We believe that a 
facility's ability to identify these HRSNs among its patient population 
should be considered part of the quality of care it provides to its 
patients. In addition to helping facilities identify these HRSNs among 
their patient population that could play a factor in clinical outcomes, 
it also may provide the public with useful information that could be 
used to improve resources available to patients. We intend to conduct 
outreach and education with providers and patients to share information 
about the two Social Drivers of Health measures in conjunction with 
public reporting.
    Comment: A few commenters expressed concern regarding the potential 
burden associated with the proposed measure. Noting the potential 
burden to facilities, one commenter recommended that facilities receive 
adequate support and training to facilitate the data collection efforts 
associated with such measure prior to the measure's implementation. One 
commenter expressed concern that the measure adds reporting burden to 
report data that CMS is already collecting. One commenter expressed 
concern that the proposed Screen Positive Rate for Social Drivers of 
Health reporting measure would not benefit small facilities that 
already have individualized care plans for each of their patients, and 
that the additional burden from the proposed measure outweighs any 
potential benefit to patients.
    Response: While we understand implementation of HRSN screening 
processes and reporting of the Screen Positive Rate for Social Drivers 
of Health reporting measure is associated with some burden, as 
discussed in section VI.C.3 of this final rule, we believe the benefits 
outweigh the burden because identifying patients' HRSNs is a critical 
step towards a facility identifying and understanding how the presence 
of the screened HRSNs might be impacting patient access to ESRD care 
and outcomes. We appreciate that facilities may already be collecting 
relevant data and potentially incorporating it into individualized 
patient care plans. However, we believe that the proposed Screen 
Positive Rate for Social Drivers of Health reporting measure is an 
important step towards health equity by supporting facilities in 
leveraging available data, pursuing focused quality improvement 
activities, and promoting efficient and effective use of their 
resources.
    Comment: One commenter expressed concern with the proposed Screen 
Positive Rate for Social Drivers of Health reporting measure, 
recommending that CMS further explore potential reliability and 
validity concerns associated with the measure before it is included in 
the ESRD QIP.
    Response: We appreciate the commenter's concern. We note that the 
most recent evaluation of the AHC model, which informed the development 
of these proposed measures, showed that it was effective in screening 
beneficiaries for HRSNs, identifying eligible beneficiaries, and 
referring those beneficiaries to HRSN-related navigation services. 
Although facilities in the ESRD QIP can use a screening tool of their 
choice, we note that multiple screening tools exist and are publicly 
available. Facilities could refer to the SIREN website, for example, 
for comprehensive information about the most widely used HRSN screening 
tools, including validity assessments where available.\341\ We note 
that CMS also performs validity assessments as part of its annual EQRS 
data validation. Additionally, CMS will monitor measure implementation 
and data reporting as part of standard program and measure review and 
will consider updates to the measure if improvements are identified 
through this process.
---------------------------------------------------------------------------

    \341\ Social Interventions Research & Evaluation Network. 
(2019). Social Needs Screening Tool Comparison Table. Available at: 
https://sirenetwork.ucsf.edu/tools-resources/resources/screening-tools-comparison. Accessed October 24, 2023.
---------------------------------------------------------------------------

    Comment: One commenter requested that CMS provide additional 
information regarding how the data will be used. Commenter also 
questioned the intervals for collecting the data.
    Response: We believe that the data may be used by facilities to 
inform actionable planning by helping to enable the development of 
individual patient action plans for those patients who screen positive 
(including

[[Page 76480]]

navigation and referral). By helping to identify patients' non-clinical 
needs that nevertheless greatly contribute to adverse clinical 
outcomes, the data may be used to link providers with community-based 
organizations to enhance patient-centered treatment and discharge 
planning, although such reach out is not required. We also note that 
there are multiple interested parties who will be able to use data 
regarding facilities' patient populations, including patients and their 
caregivers, patient advocacy organizations, local community services 
organizations, and Federal, State, and local policy makers. We also 
believe that the measure will facilitate systematic gathering of such 
data in a manner that provides information to facilities on the level 
of unmet need among their patients that many facilities do not compile 
currently. Although facilities are reporting the data to CMS for 
purposes of the measures at this time, CMS at this time does not plan 
to use the data for any purposes beyond the public reporting being 
finalized in this final rule.
    Comment: One commenter stated that the equation provided does not 
match the description of the numerator. The commenter also recommended 
establishing a baseline period for implementation and data validation 
prior to public reporting.
    Response: In the CY 2024 ESRD PPS proposed rule, we stated that the 
numerator consisted of eligible patients ``who were screened for an 
HRSN, and for whom the facility reports the results of a screen asking 
whether they have a need in one or more of the following five HRSNs 
(calculated separately): Food insecurity, housing instability, 
transportation needs, utility difficulties or interpersonal safety.'' 
(88 FR 42517). However, this statement actually describes the measure 
cohort, rather than the measure numerator. The measure numerator was 
correctly described in the equation that we proposed to use for scoring 
facilities on the measure. Therefore, in this final rule we have 
updated the description of the numerator to match the equation. The 
numerator now reads, ``The numerator consists of the number of patients 
at a dialysis facility who are 18 years or older who are treated at the 
facility during the applicable performance period and are not eligible 
to be excluded from the measure, who were screened for all five HRSNs, 
and who screened positive for one or more of the following five HRSNs: 
Food insecurity, housing instability, transportation needs, utility 
difficulties, or interpersonal safety.'' Regarding the commenter's 
suggestion to establish a baseline period for implementation and data 
validation, we note that we are finalizing an updated definition of 
mTPS in IV.B.1 of this final rule which applies to new reporting 
measures for which there is an insufficient quantity of data available 
prior to the first performance period. Under our finalized policy, if 
there is an insufficient quantity of data available prior to the first 
performance period of a new reporting measure, we will set a proxy 
median of zero for the reporting measure until we have sufficient data, 
which will account for the possibility that new reporting measures may 
have different reporting requirements. We believe this policy will 
allow the timely inclusion of new reporting measures in the ESRD QIP 
measure set while also encouraging facilities to report the new or 
additional data that may be specified by that reporting measure so that 
they are able to receive credit for reporting. We also believe that by 
delaying the implementation of these measures until PY 2027 will give 
facilities ample time to ensure the validity of their data. CMS also 
performs validity assessments as part of its annual EQRS data 
validation.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to adopt the Screen Positive Rate for Social 
Drivers of Health reporting measure.
4. Performance Period for the PY 2027 ESRD QIP
    We continue to believe that our current policy of 12-month 
performance and baseline periods provide us sufficiently reliable 
quality measure data for the ESRD QIP. Under this policy, we will adopt 
CY 2025 as the performance period and CY 2023 as the baseline period 
for the PY 2027 ESRD QIP.
    We did not propose any changes to this policy. We addressed 
comments and finalized our proposals to apply this performance period 
to the Screening for Social Drivers of Health reporting measure and the 
Screen Positive Rate for Social Drivers of Health reporting measure in 
sections IV.D.2 and IV.D.3 of this final rule.
5. Performance Standards for the PY 2027 ESRD QIP
    Section 1881(h)(4)(A) of 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 determined appropriate by the Secretary, 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 define the 
terms ``achievement threshold,'' ``benchmark,'' ``improvement 
threshold,'' and ``performance standard'' in our regulations at Sec.  
413.178(a)(1), (3), (7), and (12), respectively. For reporting 
measures, performance standards are the levels of data submission and 
completion of other actions specified by CMS that are used to award 
points to an ESRD facility on the measure (Sec.  413.178(a)(12)).
a. Performance Standards for Clinical Measures in the PY 2027 ESRD QIP
    In the CY 2024 ESRD PPS proposed rule, we erroneously stated that 
at that time, we did 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 did not 
have CY 2022 data, and stated our intention to publish these numerical 
values, using CY 2022 data, in the CY 2024 ESRD PPS final rule (88 FR 
42518). We intended to refer to CY 2023 data in the proposed rule, 
rather than CY 2022 data. Because we do not have CY 2023 data at this 
time, we are clarifying in this final rule that we will publish these 
numerical values, using CY 2023 data, in the CY 2025 ESRD PPS final 
rule.
b. Performance Standards for the Newly Finalized Reporting Measures 
Beginning With the PY 2027 ESRD QIP
    In this final rule, we are finalizing our proposals to add the 
Screening for Social Drivers of Health reporting measure and the Screen 
Positive Rate for Social Drivers of Health reporting measure beginning 
with the PY 2027 ESRD QIP, which we discuss in IV.D.2 and IV.D.3 of 
this final rule. We are finalizing a 12-month period of performance for 
both the Screening for Social Drivers of Health reporting measure and 
the Screen Positive Rate for Social Drivers of Health reporting 
measure, and facilities will be required to report annually for both 
measures beginning with the PY 2027 ESRD QIP.
6. Scoring the PY 2027 ESRD QIP
a. Scoring Facility Performance on Clinical Measures
    In the CY 2014 ESRD PPS final rule, we finalized policies for 
scoring

[[Page 76481]]

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). In the CY 2023 ESRD PPS final rule, we updated our 
scoring methodology beginning with PY 2025 (87 FR 67251 through 67254).
b. Scoring Facility Performance on Reporting Measures
    Our policy for scoring performance on reporting measures is 
codified at Sec.  413.178(e). In section IV.D.2 of this final rule, we 
are finalizing our proposal to adopt the Screening for Social Drivers 
of Health reporting measure beginning with PY 2027. We are also 
finalizing our proposal to adopt the Screen Positive Rate for Social 
Drivers of Health reporting measure, as discussed in section IV.D.3 of 
this final rule. As discussed above, we are finalizing in this final 
rule that a facility will be scored based on the equations described in 
sections IV.D.2.c and IV.D.3.c of this final rule. We are adopting a 
12-month period of performance for the measures, and facilities will be 
required to report annually. We believe that these scoring policies 
will encourage facilities to report the measure data appropriately 
without penalizing facilities for the results of such data, which may 
be impacted by circumstances beyond a facility's control.
7. Revisions To Measure Domains and To Measure Weights Used To 
Calculate the Total Performance Score (TPS) Beginning With the PY 2027 
ESRD QIP
    In the CY 2024 ESRD PPS proposed rule, beginning with PY 2027, we 
proposed to add the Screening for Social Drivers of Health reporting 
measure and the Screen Positive for Social Drivers of Health reporting 
measure to the Reporting Measure Domain (88 FR 42519). To accommodate 
the new number of measures in the Reporting Measure Domain, we proposed 
to update the individual measure weights in this domain. We stated our 
belief that these proposed updates would help to ensure that a 
facility's individual measure performance has an appropriately 
proportionate impact on a facility's TPS, while also continuing to 
further incentivize improvement on clinical measures through those 
individual measure weights. Consistent with our approach in the CY 2023 
ESRD PPS final rule, we proposed to assign individual measure weights 
to reflect the proposed updated number of measures in the Reporting 
Measure Domain so that each measure is weighted equally (87 FR 67251 
through 67253). Since we proposed to add two new measures to the 
Reporting Measure Domain beginning with PY 2027, we stated that we 
would weight each measure within that domain equally at approximately 
1.43 percent, which is consistent with our previously finalized 
approach to weight each measure in the Reporting Measure Domain 
equally. We noted that although we proposed to change the number of 
measures in the Reporting Measure Domain and weights of certain 
individual measures in that domain, we did not propose to change the 
weights of the five domains themselves, because we believe the proposed 
updates to individual measures and measure weights did not 
significantly impact the measure domains themselves such that updating 
the weights of the measure domains would be required to accommodate the 
updated individual measure weights. The previously finalized and newly 
proposed measures that would be included in each domain, along with the 
proposed new measure weights, beginning with PY 2027, were depicted in 
Table 22 of the proposed rule (88 FR 42520).
    We welcomed public comment on these proposals. The comments we 
received and our responses are set forth below.
    Comment: One commenter recommended that the ESRD QIP measure set be 
streamlined to focus more weight on clinically meaningful measures.
    Response: We agree with the commenter that the weights should 
reflect clinical value and meaningfulness to patients, which we took 
into account in developing our measure domains and individual measure 
weights. We believe that the measure domains and weights will provide 
facilities with meaningful incentives to improve their performance on 
measures that are impactful in terms of both clinical value and 
importance to patients. We note that we have developed the ESRD QIP 
measure set specifically to ensure that facilities focus on the most 
relevant clinical topics that will lead to improved quality of care and 
better outcomes for patients.
    Comment: One commenter expressed concern that with the large number 
of program measures, the reporting measures' weight is 
disproportionately small compared to the effort to operationalize 
associated processes, and recommended collaboration with the kidney 
care community to identify appropriate measures and weights.
    Response: We note that the weight of a given measure domain takes 
into account a number of factors, including clinical evidence, 
opportunity for improvement, clinical significance, and patient and 
provider burden (83 FR 56995 through 56996). We also consider (1) the 
number of measures and measure topics in a domain; (2) how much 
experience facilities have had with the measures and measure topics in 
a domain; and (3) how well the measures align with CMS's highest 
priorities for quality improvement for patients with ESRD (79 FR 
66214). We assign weights to the measure domains based on the clinical 
value and meaningfulness of the measures to patients, and the burden of 
complying with individual measure requirements. Having taken all of 
these factors into consideration, we believe that the Reporting Measure 
Domain weights are appropriate to support high quality health care on 
all ESRD QIP measures.
    Final Rule Action: After considering public comments, we are 
finalizing our proposals as proposed. As we discussed previously, we 
are finalizing our proposals to update the measure domains and measure 
weights beginning with the PY 2027 ESRD QIP as proposed, and therefore 
provide the updated ESRD QIP measure domains and measure weights in 
Table 23.

BILLING CODE 4120-01-P

[[Page 76482]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.040

BILLING CODE 4120-01-C

V. End-Stage Renal Disease Treatment Choices (ETC) Model

A. Background

    Section 1115A of the Act authorizes the Innovation Center to test 
innovative payment and service delivery models expected to reduce 
Medicare, Medicaid, and Children's Health Insurance Program (CHIP) 
expenditures while preserving or enhancing the quality of care 
furnished to the beneficiaries of these programs. The purpose of the 
ETC Model is to test the effectiveness of adjusting certain Medicare 
payments to ESRD facilities and Managing Clinicians to encourage 
greater utilization of home dialysis and kidney transplantation, 
support Beneficiary modality choice, reduce Medicare expenditures, and 
preserve or enhance the quality of care. As described in the Specialty 
Care Models final rule (85 FR 61114), beneficiaries with ESRD are among 
the most medically fragile and high-cost populations served by the 
Medicare program. ESRD Beneficiaries require dialysis or kidney 
transplantation to survive, and the majority of ESRD Beneficiaries 
receiving dialysis receive hemodialysis in an ESRD facility. However, 
as described in the Specialty Care Models final rule, alternative renal 
replacement modalities to in-center hemodialysis, including home 
dialysis and kidney transplantation, are associated with improved 
clinical outcomes, better quality of life, and lower costs than in-
center hemodialysis (85 FR 61264).
    The ETC Model is a mandatory payment model. ESRD facilities and 
Managing Clinicians are selected as ETC Participants based on their 
location in Selected Geographic Areas--a set of 30 percent of Hospital 
Referral Regions (HRRs) that have been randomly selected to be included 
in the ETC Model, as well as HRRs with at least 20 percent of ZIP 
codes\TM\ located in Maryland.\342\ CMS excludes all U.S.

[[Page 76483]]

Territories from the Selected Geographic Areas.
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    \342\ ZIP code\TM\ is a trademark of the United States Postal 
Service.
---------------------------------------------------------------------------

    Under the ETC Model, ETC Participants are subject to two payment 
adjustments. The first is the Home Dialysis Payment Adjustment (HDPA), 
which is an upward adjustment on certain payments made to participating 
ESRD facilities under the ESRD Prospective Payment System (PPS) on home 
dialysis claims, and an upward adjustment to the Monthly Capitation 
Payment (MCP) paid to participating Managing Clinicians on home 
dialysis-related claims. The HDPA applies to claims with claim service 
dates beginning January 1, 2021 and ending December 31, 2023.
    The second payment adjustment under the ETC Model is the 
Performance Payment Adjustment (PPA). For the PPA, we assess ETC 
Participants' home dialysis rates and transplant rates during a 
Measurement Year (MY), which includes 12 months of performance data. 
Each MY has a corresponding PPA Period--a 6-month period that begins 6 
months after the conclusion of the MY. We adjust certain payments for 
ETC Participants during the PPA Period based on the ETC Participant's 
home dialysis rate and transplant rate, calculated as the sum of the 
transplant waitlist rate and the living donor transplant rate, during 
the corresponding MY.
    Based on an ETC Participant's achievement in relation to benchmarks 
based on the home dialysis rate and transplant rate observed in 
Comparison Geographic Areas during the Benchmark Year, and the ETC 
Participant's improvement in relation to their own home dialysis rate 
and transplant rate during the Benchmark Year, we would make an upward 
or downward adjustment to certain payments to the ETC Participant. The 
magnitude of the positive and negative PPAs for ETC Participants 
increases over the course of the Model. These PPAs apply to claims with 
claim service dates beginning July 1, 2022 and ending June 30, 2027.
    In the CY 2022 ESRD PPS final rule, we finalized a number of 
changes to the ETC Model. We made adjustments to the calculation of the 
home dialysis rate (86 FR 61951 through 61955) and the transplant rate 
(86 FR 61955 through 61959) and updated the methodology for attributing 
Pre-emptive Living Donor Transplant (LDT) Beneficiaries (86 FR 61950 
through 61951). We modified the achievement benchmarking and scoring 
methodology (86 FR 61959 through 61968), as well as the improvement 
benchmarking and scoring methodology (86 FR 61968 through 61971). We 
specified the method and requirements for sharing performance data with 
ETC Participants (86 FR 61971 through 61984). We also made a number of 
updates and clarifications to the kidney disease patient education 
services waivers and made certain related flexibilities available to 
ETC Participants (86 FR 61984 through 61994). In the CY 2023 ESRD PPS 
final rule (87 FR 67136) we finalized further changes to the ETC Model. 
We updated the PPA achievement scoring methodology beginning in the 
fifth Measurement Year (MY) of the ETC Model, which began on January 1, 
2023 (87 FR 67277 through 67278). We also clarified requirements for 
qualified staff to furnish and bill kidney disease patient education 
services under the ETC Model's Medicare program waivers (87 FR 67278 
through 67280), and finalized our intent to publish participant-level 
model performance information to the public (87 FR 67280).

B. Summary of the Proposed Provisions, Public Comments, and Responses 
to Comments on the ETC Model

    The CY 2024 ESRD PPS proposed rule appeared in the June 30, 2023, 
version of the Federal Register, with a comment period that ended on 
August 25, 2023. In that proposed rule, we proposed to modify the ETC 
Model, effective January 1, 2024, to acknowledge the availability of 
administrative review of targeted review requests. We received five 
timely public comments on our proposal, including comments from 
dialysis organizations and national provider and quality improvement 
organizations. We also received comments related to issues that we did 
not discuss in the CY 2024 ESRD PPS proposed rule. These include, for 
example, general expressions of support for the ETC Model, concerns 
regarding CMS's methodology for ETC Participant selection and 
aggregation group construction, a recommendation that CMS develop a 
tool to measure the experience of Beneficiaries using home modalities, 
and recommendations regarding the format in which CMS posts ETC Model 
results. While we generally are not addressing those comments in this 
final rule, we thank commenters for their input and may consider their 
recommendations in future rulemaking. In this final rule, we provide a 
summary the proposed provision, a summary of the public comments 
received and our responses to them, and the policies we are finalizing 
for the ETC Model. These policies take effect January 1, 2024.
    In the Specialty Care Models final rule (85 FR 61114), we 
established our policies for targeted reviews of the calculation of an 
ETC Participant's Modality Performance Score (MPS). As described in 
Sec.  512.390(c), targeted reviews are limited to the calculation of 
the MPS and may not pertain to the methodologies used to calculate the 
MPS, home dialysis rate, transplant rates, achievement and improvement 
benchmarks, or the PPA amounts. ETC Participants have 90 days following 
the availability of the MPS to submit a targeted review request. CMS 
responds to each targeted review request that is received within the 
90-day time period. CMS may solicit additional information from the ETC 
Participant in support of the request after which a determination is 
made as to whether there was an error in the calculation of the ETC 
Participant's MPS that results in an incorrect PPA being applied during 
the PPA period. In such a scenario, CMS notifies the ETC Participant 
and resolves any resulting discrepancy in payment that arises from the 
application of an incorrect PPA.
    In the CY 2024 ESRD PPS proposed rule, we proposed revisions to our 
regulations at Sec.  512.390 to clarify the ability of the CMS 
Administrator to review targeted review determinations. In particular, 
we proposed to add Sec.  512.390(d) to specify that the CMS 
Administrator may review targeted review requests when administrative 
review is requested by ETC Participants within 15-calendar days of a 
targeted review request determination made by CMS.
    We proposed that within 45 days of the date of the ETC 
Participant's request for administrative review, the CMS Administrator 
may act as follows: (i) decline to review the targeted review request 
determination made by CMS, (ii) render a final decision based on the 
CMS Administrator's review of the targeted review request 
determination, or (iii) choose to take no action on the request for 
administrative review. We proposed that targeted review request 
determinations made by the CMS Administrator are considered final if 
the CMS Administrator declines an ETC Participant's request for 
administrative review or if the CMS Administrator does not take any 
action on the ETC Participant's request for administrative review by 
the end of the 45-day period described.
    We also proposed a conforming change to delete the existing 
provision in Sec.  512.390(c)(5), which states that decisions based on 
targeted review are final, and there is no further review or appeal.
    These changes were proposed to ensure that accountability for the 
decisions of CMS is vested in a

[[Page 76484]]

principal officer and to bring the targeted review process to a more 
similar posture as other CMS appeals entities that provide for CMS 
Administrator review. These revisions were also proposed to ensure that 
ETC Participants are aware that administrative review is available to 
ETC Participants who wish to seek additional review of the results of a 
targeted review request.
    We solicited comment on this proposal.
    Comment: We received five in scope comments timely submitted. All 
five comments were supportive of our proposed administrative review 
policy. One provider organization wrote that the proposed policy would 
increase awareness of the availability of administrative review among 
ETC Participants. A dialysis organization wrote that the proposed 
policy would increase transparency and accountability for targeted 
review determinations made by CMS. A kidney care coalition also noted 
the proposed policy would support awareness, transparency, and 
accountability.
    Response: We thank the commenters for their support of our proposed 
administrative review policy.
    Final Rule Action: We are finalizing our proposed modifications to 
the ETC Model regulations at Sec.  512.390 to clarify the ability of 
the CMS Administrator to review targeted review determinations. We are 
adding Sec.  512.390(d) to specify that the CMS Administrator may 
review targeted review requests when administrative review is requested 
by ETC Participants within 15-calendar days of a targeted review 
request determination made by CMS.

VI. Collection of Information Requirements

    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 
OMB for review and approval. To fairly evaluate whether an information 
collection should be approved by OMB, section 3506(c)(2)(A) of the 
Paperwork Reduction Act of 1995 requires that we solicit comment on the 
following issues.
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs).

A. ICRs Regarding the JW and JZ Reporting Requirements; Reporting 
Policy for Discarded Amounts of Renal Dialysis Drugs and Biological 
Products Paid for Under the ESRD PPS, Section II.B.1.h (OMB Control 
Number 0938-0997)

    As discussed in section II.B.1.h of this final rule, we are 
finalizing a requirement that beginning January 1, 2025, ESRD 
facilities must report information on claims about the total number of 
billing units of any discarded amount of a renal dialysis drug or 
biological product from a single-dose container or single-use package 
that is paid for under the ESRD PPS, using the JW modifier (or any 
successor modifier that includes the same data). Additionally, we are 
finalizing a requirement that ESRD facilities report the JZ modifier 
for all such drugs and biological products with no discarded amounts 
beginning no later than January 1, 2025. Based on our analysis of ESRD 
PPS claims as well as the billing guidance in sections 8 and 17 of the 
Medicare Claims Processing Manual, we have determined that the JW 
modifier requirement reflects current practices for ESRD facilities and 
would not significantly increase burden for ESRD facilities. 
Additionally, the JZ modifier requirement is not expected to increase 
burden on ESRD facilities because under the guidance provided regarding 
use of the JW modifier, the ESRD facility should already have processes 
in place in order to determine, in the case of certain drugs and 
biological products, whether or not there are any discarded units from 
a single use container or package, record discarded amounts in the 
patient medical record, and specify administered and discarded amounts 
on the claim form. Additionally, as discussed in section II.B.1.h of 
this final rule, any separately payable drugs or biological products 
that ESRD facilities bill for using the AY modifier would already be 
subject to the JW and JZ modifier policies under Medicare Part B. 
Although we recognize that ESRD facilities may need additional time to 
train staff and update their systems in order to apply existing 
processes to a broader scope of renal dialysis drugs and biological 
products, we continue to anticipate that most ESRD facilities should 
already be set up to report the JW and JZ modifiers without incurring 
additional burden.

B. ICRs Regarding the Proposal to Require Time on Machine Data as a 
Recordkeeping and Cost Reporting Requirement for Outpatient Maintenance 
Dialysis; Section II.B.1.j (OMB Control Numbers 0938-0997)

    We are finalizing a requirement that ESRD facilities submit data 
and information on ESRD PPS claims regarding the number of minutes 
between the start and end of hemodialysis treatment, without accounting 
for any interruptions, received by a beneficiary in center in an ESRD 
facility effective January 1, 2025. We have developed monetary 
estimates of the amount of ESRD facility staff time required to 
calculate and report on claims the minutes of time on machine for each 
in-center hemodialysis treatment to estimate the cost associated with 
the finalized requirement to report time on machine data. We have 
included those estimates in the Regulatory Impact Analysis in section 
VII.D.2.a of this final rule. We acknowledge the burden associated with 
this requirement, but we note that the burden associated with the CMS-
1450 institutional claim form already accounts for the variability in 
the number and type of codes submitted for each claim.

C. Additional Information Collection Requirements

1. ESRD QIP--Wage Estimates (OMB Control Numbers 0938-1289 and 0938-
1340)
    To derive wages estimates, we used data from the U.S. Bureau of 
Labor Statistics' May 2021 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 the ESRD Quality Reporting System (EQRS) 
(formerly, CROWNWeb) and the CDC's NHSN, as well as compiling and 
submitting patient records for the purpose of data validation studies. 
In the proposed rule, we stated that the most recently available median 
hourly wage of a Medical Records Specialist is $22.43 per hour (88 FR 
42522).\343\ In this final rule, we are updating the median hourly wage 
to $22.69 per hour, which reflects

[[Page 76485]]

the most recently available data.\344\ We also calculate fringe benefit 
and overhead at 100 percent. 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. 
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, there is no practical alternative, and we believe 
that these are reasonable estimation methods. Therefore, using these 
assumptions, in the proposed rule we estimated an hourly labor cost of 
$44.86 as the basis of the wage estimates for all collections of 
information calculations in the ESRD QIP (88 FR 42522). In this final 
rule, we are updating our previously estimated hourly labor cost to 
$45.38 as the basis of the wage estimates for all collections of 
information calculations in the ESRD QIP.
---------------------------------------------------------------------------

    \343\ https://www.bls.gov/oes/2021/may/oes292072.htm. Accessed 
on January 3, 2023.
    \344\ https://www.bls.gov/oes/current/oes292072.htm. Accessed on 
July 18, 2023.
---------------------------------------------------------------------------

    We used this updated wage estimate, along with updated facility and 
patient counts, to update our estimate for the total information 
collection burden in the ESRD QIP for PY 2026 that we discussed in the 
CY 2024 ESRD PPS proposed rule (88 FR 42522 through 42523) and to 
estimate the total information collection burden in the ESRD QIP for PY 
2027. We provide the re-estimated information collection burden 
associated with the PY 2026 ESRD QIP and the newly estimated 
information collection burden associated with the PY 2027 ESRD QIP in 
section VII.C.3 of this final rule.
2. Estimated Burden Associated With The Data Validation Requirements 
for PY 2026 and PY 2027 (OMB Control Numbers 0938-1289 and 0938-1340)
    In the CY 2020 ESRD PPS final rule, we finalized a policy to adopt 
the EQRS (formerly, CROWNWeb) data validation methodology that we 
previously adopted for the PY 2016 ESRD QIP as the methodology we would 
use to validate EQRS 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 
burden estimates using a newly available wage estimate of a Medical 
Records Specialist. In the CY 2020 ESRD PPS final rule, we estimated 
that it would take each facility approximately 2.5 hours to comply with 
this requirement (84 FR 60787). If 300 facilities are requested to 
submit records, we estimated that the total combined annual burden for 
these facilities would be 750 hours (300 facilities x 2.5 hours). Since 
we anticipate that Medical Records Specialists or similar 
administrative staff would submit these data, we estimate that the 
aggregate cost of the EQRS data validation each year would be 
approximately $34,035 (750 hours x $45.38), or an annual total of 
approximately $113.45 ($34,035/300 facilities) per facility in the 
sample. The burden cost increase associated with these requirements 
will be submitted to OMB in the revised information collection request 
(OMB control number 0938-1289; Expiration date: November 30, 2025).
    In the CY 2021 ESRD PPS final rule, we finalized our policy to 
reduce the number of records that a facility selected to participate in 
the NHSN data validation must submit to a CMS contractor, beginning 
with PY 2023 (85 FR 71471 through 71472). 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 this policy for NHSN validation, we estimated that 
it would take each facility approximately 5 hours to comply with this 
requirement. If 300 facilities are requested to submit records each 
year, we estimated 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 Specialists or similar 
staff would submit these data, using the newly available wage estimate 
of a Medical Records Specialist, we estimate that the aggregate cost of 
the NHSN data validation each year would be approximately $68,070 
(1,500 hours x $45.38), or a total of approximately $226.90 ($68,070/
300 facilities) per facility in the sample. While the burden hours 
estimate would not change, the burden cost updates associated with 
these requirements will be submitted to OMB in the revised information 
collection request (OMB control number 0938-1340; Expiration date: 
November 30, 2025).
3. Estimated EQRS Reporting Requirements for PY 2026 and PY 2027 (OMB 
Control Number 0938-1289)
    To estimate the burden associated with the EQRS reporting 
requirements (previously known as 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 EQRS 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 EQRS, and the 
number of facilities submitting data to EQRS. In the CY 2023 ESRD PPS 
final rule, we estimated that the burden associated with EQRS reporting 
requirements for the PY 2026 ESRD QIP was approximately $220 million 
for approximately 4,908,291 total burden hours (87 FR 67282).
    We are finalizing several changes to the ESRD QIP measure set in 
this final rule that will affect the burden associated with EQRS 
reporting requirements for PY 2026 or PY 2027. Beginning with PY 2026, 
we are removing two measures from the ESRD QIP measure set and adding 
one measure to the ESRD QIP measure set. We note that, although the 
finalized measure we are adding to the ESRD QIP measure set beginning 
with PY 2026 is modified from the version of the measure that was 
proposed, the estimated burden associated with the measure will not 
change because the modification will not impose additional EQRS 
reporting requirements on facilities. For PY 2027 and for subsequent 
years, we are adding two measures to the ESRD QIP measure set. We have 
re-calculated the burden estimate for PY 2026 to reflect the impact of 
these finalized policies, using updated estimates of the total number 
of ESRD facilities, the total number of patients nationally, and wages 
for Medical Records Specialists or similar staff, as well as a refined 
estimate of the number of hours needed to complete data entry for EQRS 
reporting. In the CY 2024 ESRD PPS proposed rule, we estimated that the 
amount of time required to submit measure data to EQRS would be 2.5 
minutes per element and did not use a rounded estimate of the time 
needed to complete data entry for EQRS reporting (88 FR 42523). We are 
further updating these estimates in this final rule. There are 126 data 
elements for 507,837 patients across 7,833 facilities, for a total of 
63,987,462

[[Page 76486]]

elements (126 data elements x 507,837 patients). At 2.5 minutes per 
element, this would yield approximately 340.3 hours per facility. 
Therefore, the PY 2026 burden would be 2,666,144 hours (340.3 hours x 
7,833 facilities). Using the wage estimate of a Medical Records 
Specialist, we estimate that the PY 2026 total burden cost is 
approximately $120.9 million (2,666,144 hours x $45.38).
    There would also be an incremental burden change from PY 2026 to PY 
2027 because we are adding two new measures beginning with PY 2027. For 
PY 2027, there are 136 data elements proposed for 507,837 patients 
across 7,833 facilities. At 2.5 minutes per element, this would yield 
approximately 367.3 hours per facility. Therefore, the PY 2027 burden 
would be 2,877,743 hours (367.3 hours x 7,833 facilities). Using the 
wage estimate of a Medical Records Specialist, we estimate that the PY 
2027 total burden cost would be approximately $130.5 million (2,877,743 
hours x $45.38).
    We received two comments on the ESRD QIP collection of information 
discussions. The comments we received and our response is set forth 
below.
    Comment: One commenter stated that because CMS is estimating an 
increase in facility burden for both PY 2026 and PY 2027, CMS should 
limit data collection and reporting under the ESRD QIP to those 
measures that are absolutely necessary to ensure that facilities can 
spend the maximum time, effort and resources on caring for patients. A 
second commenter expressed concern that $131 million dollars of 
increased burden is not sustainable.
    Response: We note that we have developed the ESRD QIP measure set 
specifically to ensure that facilities focus on the most relevant 
clinical topics that will lead to improved quality of care and better 
outcomes for patients. We appreciate the commenter's concern regarding 
the estimated burden for PY 2027, but note that the net increase in 
burden from PY 2026 (approximately $120.9 million) to PY 2027 
(approximately $130.5 million) is estimated to be less than $10 
million. By contrast, the estimated burden for PY 2026 is approximately 
$100 million less than the estimated burden for PY 2025, which is 
approximately $220 million (87 FR 67282).
    If you comment on these information collection, that is, reporting, 
recordkeeping or third-party disclosure requirements, submit your 
comments to the Office of Information and Regulatory Affairs, Office of 
Management and Budget, Attention: CMS Desk Officer, CMS-1782-F
    Fax: (202) 395-6974; or
    Email: [email protected].

VII. Regulatory Impact Analysis

A. Statement of Need

1. ESRD 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 Act, as added by 
section 153(b) of 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 Affordable Care Act (Pub. L. 111-148), established that 
beginning CY 2012, and each subsequent year, the Secretary shall 
annually increase payment amounts by an ESRD market basket percentage 
increase, reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act. This final rule implements updates 
and policy changes to the CY 2024 ESRD wage index values, the final 
combined wage index and TPEAPA budget-neutrality adjustment factor, the 
outlier payment threshold amounts, and the TPNIES offset amount. 
Failure to publish this final rule would result in ESRD facilities not 
receiving appropriate payments in CY 2024 for renal dialysis services 
furnished to ESRD beneficiaries.
    This rule also has several policy changes to improve payment 
stability and adequacy under the ESRD PPS. These include a new 
transitional add-on payment adjustment for pediatric patients and a new 
add-on payment adjustment for certain new renal dialysis drugs and 
biological products in existing ESRD PPS functional categories after 
the end of the TDAPA period. We are also finalizing updates to the 
administrative process for the LVPA, requiring ESRD facilities to 
report on claims billing units of any discarded amounts of certain 
drugs and biological products, and requiring ESRD facilities to report 
``time on machine'' data on ESRD PPS claims for all in-center 
hemodialysis treatments. We believe that each of these changes will 
improve payment stability and adequacy under the ESRD PPS.
2. AKI
    This final rule finalizes updates to the payment rate for renal 
dialysis services furnished by ESRD facilities to individuals with AKI. 
As discussed in section III.B of this final rule, we are also applying 
to all AKI dialysis payments the updates to the ESRD PPS base rate and 
wage index. Failure to publish this final rule would result in ESRD 
facilities not receiving appropriate payments in CY 2024 for renal 
dialysis services furnished to patients with AKI in accordance with 
section 1834(r) of the Act.
3. ESRD QIP
    Section 1881(h)(1) of the Act requires CMS to reduce the payments 
otherwise made to a facility under the ESRD PPS by up to two percent if 
the facility does not satisfy the requirements of the ESRD QIP for that 
year. This final rule finalizes updates for the ESRD QIP, including 
removing the Ultrafiltration Rate reporting measure from the ESRD QIP 
measure set beginning with PY 2026, removing the Standardized Fistula 
Rate clinical measure from the ESRD QIP measure set beginning with PY 
2026, updating the COVID-19 Vaccination Coverage Among HCP beginning 
with PY 2026, converting the Clinical Depression Screening and Follow-
Up reporting measure to a clinical measure beginning with PY 2026, and 
adding the Facility Commitment to Health Equity reporting measure to 
the ESRD QIP measure set beginning with PY 2026. This final rule also 
finalizes the adoption of the Screening for Social Drivers of Health 
reporting measure and the Screen Positive Rate for Social Drivers of 
Health reporting measure to the ESRD QIP measure set beginning with PY 
2027.
4. ETC Model
    We believe it is necessary to make certain changes to the ETC Model 
to acknowledge the availability of administrative review of targeted 
review requests. The policy we are finalizing in this rule is necessary 
to provide transparency to ETC Participants regarding the avenue 
available to them should they wish to seek additional review of the 
results of a targeted review request determination.

B. Overall Impact

    We have examined the impacts of this final rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), Executive Order 14094 entitled ``Modernizing 
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act 
(RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive

[[Page 76487]]

Order 13132 on Federalism (August 4, 1999), and the Congressional 
Review Act (5 U.S.C. 804(2))
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 14094 entitled ``Modernizing Regulatory Review'' (hereinafter, 
the Modernizing E.O.) amends section 3(f)(1) of Executive Order 12866 
(Regulatory Planning and Review). The amended 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 $200 million or more in any 1 year (adjusted every 3 years 
for changes in gross domestic product), or adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, territorial, or Tribal governments or communities; (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 legal or 
policy issues for which centralized review would meaningfully further 
the President's priorities or the principles set forth in this 
Executive order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with significant regulatory action/s and/or with significant effects as 
per section 3(f)(1) of Executive Order 12866 ($200 million or more in 
any 1 year). Based on our estimates of the combined impact of the ESRD 
PPS, ESRD QIP, and ETC provisions in this final rule, OMB has 
determined this rulemaking is significant per section 3(f)(1) economic 
effect as measured by the $200 million or more in any 1 year threshold, 
and hence is also a major rule under Subtitle E of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (also known as the 
Congressional Review Act). Accordingly, we have prepared a Regulatory 
Impact Analysis that to the best of our ability presents the costs and 
benefits of the rulemaking. Therefore, OMB has reviewed this final 
rule, and the Department has provided the following assessment of its 
impact.
C. Impact Analysis
1. ESRD PPS
    We estimate that the revisions to the ESRD PPS will result in an 
increase of approximately $190 million in Medicare payments to ESRD 
facilities in CY 2024, which includes the amount associated with 
updates to the outlier thresholds, payment rate update, updates to the 
wage index, the budget-neutral transitional pediatric ESRD add-on 
payment adjustment, the beginning of the post-TDAPA add-on payment 
adjustment, and continuation of the approved TDAPA as identified in 
Table 11. We note that approximately $10 million in projected CY 2024 
expenditures for Jesduvroq (daprodustat) are not included in the 
detailed economic analysis in Table 24 due to the fact that we do not 
yet have the required claims data for Jesduvroq, and therefore we 
cannot estimate impacts at the facility level.
2. AKI
    We estimate that the updates to the AKI payment rate will result in 
an increase of approximately $1 million in Medicare payments to ESRD 
facilities in CY 2024.
3. ESRD QIP
    We estimate that the updates to the ESRD QIP will result in $16 
million in estimated payment reductions across all facilities for PY 
2026.
4. ETC Model
    We estimate that the changes to the ETC Model will not impact the 
Model's projected direct savings from payment adjustments alone. As 
described in the CY 2023 ESRD PPS final rule, we estimate that the 
Model would generate $28 million in direct savings related to payment 
adjustments over 6.5 years (87 FR 67297 through 67299).
5. Summary of Impacts
    We estimate that the combined impact of the policies finalized in 
this rule on payments for CY 2024 is $190 million based on the 
estimates of the updates to the ESRD PPS and the AKI payment rates, as 
well as $10 million in projected new TDAPA spending in CY 2024. We 
estimate an additional $12 million in costs associated with the final 
policy to require ESRD facilities to report time on machine data. We 
estimate the impacts of the ESRD QIP for PY 2026 to be $120.9 million 
in information collection burden and $16 million in estimated payment 
reductions across all facilities. Additionally, we estimate the impacts 
of the ESRD QIP for PY 2027 to be $130.5 million in information 
collection burden and $13.8 million in estimated payment reductions 
across all facilities. Finally, we estimate that the changes to the ETC 
model in this final rule will not impact the Model's projected direct 
savings from payment adjustments alone.

D. Detailed Economic Analysis

    In this section, we discuss the anticipated benefits, costs, and 
transfers associated with the changes in this final rule. Additionally, 
we estimate the total regulatory review costs associated with reading 
and interpreting this final rule.
1. Benefits
    Under the CY 2024 ESRD PPS and AKI payment, ESRD facilities will 
continue to receive payment for renal dialysis services furnished to 
Medicare beneficiaries under a case-mix adjusted PPS. We continue to 
expect that making prospective Medicare payments to ESRD facilities 
will enhance the efficiency of the Medicare program. Additionally, we 
expect that updating the Medicare ESRD PPS base rate and rate for AKI 
treatments furnished at ESRD facilities by 2.1 percent based on the CY 
2024 ESRDB market basket percentage increase reduced by the CY 2024 
productivity adjustment will improve or maintain beneficiary access to 
high quality care by ensuring that payment rates reflect the best 
available data on the resources involved in delivering renal dialysis 
services. We estimate that overall payments under the ESRD PPS will 
increase by 2.1 percent.
2. Costs
a. ESRD PPS and AKI
    As discussed in section II.B.1.j of this final rule, we are 
finalizing a requirement for ESRD facilities to submit data and 
information on ESRD PPS claims for renal dialysis services regarding 
the number of minutes of hemodialysis treatment received by a 
beneficiary in center in an ESRD facility. This patient-level reporting 
on resource use will be used to apportion composite rate costs for use 
in the case-mix adjustment under the ESRD PPS. We estimate that there 
will be an increase in costs for ESRD facilities associated with this 
final reporting requirement; however, as we previously noted in the CY 
2020 ESRD PPS proposed rule (84 FR 38396 through 38400), we are aware 
that many ESRD facilities' EHR systems automatically collect this 
information for every dialysis treatment, minimizing the additional 
burden of reporting this metric on claims. However, commenters 
identified that there are additional burdens associated with 
transmitting

[[Page 76488]]

that information from the medical records to the billing system, as 
many ESRD facilities do not have such processes in place. Therefore, we 
are updating our burden estimate to include the burden associated with 
this step in the process.
    For those ESRD facilities that use EHRs, we estimate that there 
will be only very minimal additional staff time required to record such 
time on machine data on the patient's medical records for renal 
dialysis services. For those ESRD facilities that do not use EHRs, we 
estimate that additional staff time will be required to take note of 
the time at which hemodialysis began and the time at which hemodialysis 
ended and subtract the start time from the end time to determine the 
total number of minutes of hemodialysis. Conservatively, we estimate 
this will require no more than 1 minute per treatment.
    For all ESRD facilities, we estimate that additional staff time 
will be required to compile time on machine data for each patient each 
month and enter it into the billing system to be submitted. 
Conservatively, we estimate that this will require no more than 5 
minutes per patient month.
    To calculate the annual additional ESRD facility staff time that 
will be associated with recording time on machine data on ESRD PPS 
claims for renal dialysis services, we multiply the estimated time per 
treatment by the number of dialysis treatments. Based on the most 
recent available CY 2022 ESRD PPS claims for this final rule, we 
estimate there were approximately 30.6 million treatments. However, as 
discussed in section II.B.1.j, we proposed to limit this reporting 
requirement to in-center claims. We estimated that approximately 14.8 
percent of claims are for home dialysis, and therefore we reduce our 
estimate of the total number of treatments by 14.8 percent. 
Additionally, we believe it is reasonable to assume that LDOs will 
utilize existing systems and processes to document treatment duration 
in the EHR and send that information to the claim. Based on the latest 
available data as shown in Table 24, approximately 78.4 percent of 
treatments were furnished by LDOs. Therefore, we estimate that the 
additional costs associated with this time on machine reporting 
requirement will be associated with approximately 5.6 million in-
center, non-LDO dialysis treatments per year.
    Additionally, ESRD facilities already report time on machine data 
monthly in the EQRS for a single dialysis session. This means that for 
a patient who receives 156 dialysis treatments per year, the duration 
of twelve of those sessions would already be reported in the EQRS. We 
do not believe there will be any additional staff time required to 
report time on machine data on ESRD PPS claims for the treatments 
already reported in EQRS. Therefore, we estimate that the additional 
staff time that will be needed for reporting time on machine will be 
for 144 out of 156 treatments per year for the typical patient. For our 
cost estimate, we multiplied our estimate of 5.6 million in-center 
dialysis treatments by a factor of (144/156), which equals 
approximately 5.2 million treatments per year.
    To calculate the annual additional ESRD facility staff time that 
will be associated with calculating and reporting time on machine data 
on ESRD PPS claims for renal dialysis services, we multiply the 
estimated time per patient month by the number of dialysis patient 
months. Based on the most recent available ESRD PPS claims data for 
this final rule (from CY 2022), we estimate there were approximately 
2.2 million patient months for patients receiving in-center 
hemodialysis. Therefore, we estimate that the additional costs 
associated with compiling and reporting the data for this time on 
machine reporting requirement will be associated with approximately 2.2 
million in-center dialysis patient months per year.
    To derive wages estimates, we used data from the U.S. Bureau of 
Labor Statistics' May 2022 National Occupational Employment and Wage 
Estimates. We believe it is reasonable to assume that Medical Records 
and Health Information Technicians, who are responsible for organizing 
and managing health information data, are the individuals reporting 
time on machine data. As discussed in the CY 2016 ESRD PPS final rule 
(80 FR 69069), this is consistent with our assumptions about the types 
of employees tasked with submitting measure data to CROWNWeb (now EQRS) 
and NHSN, as well as compiling and submitting patient records for the 
purpose of data validation studies. The most recently available mean 
hourly wage of a Medical Records and Health Information Technician is 
$24.42 per hour.\345\ We also calculate fringe benefit and overhead at 
100 percent. 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 note 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, there is no practical alternative, and we believe 
that these are reasonable estimation methods. Therefore, using these 
assumptions, we estimate an hourly labor cost of $48.84 as the basis of 
the wage estimates for the estimate of cost associated with the 
proposed requirement to report time on machine data on ESRD PPS claims 
for renal dialysis services.
---------------------------------------------------------------------------

    \345\ https://www.bls.gov/oes/current/oes292099.htm.
---------------------------------------------------------------------------

    Based on the figures discussed in the preceding paragraphs, we 
estimate that total additional staff time each year for ESRD facilities 
associated with the requirement to record time on machine data is equal 
to 5.2 million x 1 minute = 5.2 million minutes = 86,667 hours. 
Additionally, we estimate that the total additional staff time each 
year for ESRD facilities associated with the calculation and reporting 
of the time on machine data is equal to 2.2 million x 5 minutes = 11 
million minutes = 183,333 hours. We estimate the total annual cost 
associated with this requirement is equal to (86,667 hours + 183,333 
hours) x $47.34 = $12,781,800 per year.
    We recognize that some non-LDO ESRD facilities may also choose to 
adopt an automated process, rather than a manual process. Therefore, 
the estimate of $12,781,800 represents the upper limit of our burden 
estimate. For ESRD facilities that choose to utilize existing systems 
and processes to document treatment duration in the EHR and send that 
data to the claim, we estimate the burden associated with our 
requirement to report time on machine data will be minimal.
b. ESRD QIP
    For PY 2026 and PY 2027, we have updated the estimated costs 
associated with the information collection requirements under the ESRD 
QIP with updated estimates of the total number of ESRD facilities, the 
total number of patients nationally, wages for Medical Records 
Specialists or similar staff, and a refined estimate of the number of 
hours needed to complete data entry for EQRS reporting. We have made no 
changes to our methodology for calculating the annual burden associated 
with the information collection requirements for EQRS data validation 
(previously known as the CROWNWeb validation study) or NHSN data 
validation. We have updated our methodology for calculating the annual 
burden associated with the information

[[Page 76489]]

collection requirements for EQRS reporting based on our measure updates 
for PY 2026, PY 2027, and subsequent years.
    We also updated the payment reduction estimates based on our 
policies that we have finalized in this final rule, using more recent 
data for the measures in the ESRD QIP measure set. We estimate that as 
a result of our previously finalized policies and the policies we have 
finalized in this final rule for PY 2026, there would be approximately 
$120.9 million in information collection burden and an additional $16 
million in estimated payment reductions across all facilities, for a 
total estimated impact of $136.9 million.
    For PY 2027, we estimate that as a result of our previously 
finalized policies and the policies we have finalized in this final 
rule for PY 2027, there would be approximately $130.5 million in 
information collection burden and $13.8 million in estimated payment 
reductions across all facilities, for a total estimated impact of 
$144.3 million.
3. Transfers
    We estimate that the updates to the ESRD PPS and AKI payment rate 
will result in a total increase of approximately $190 million in 
Medicare payments to ESRD facilities in CY 2024, which includes the 
amount associated with updates to the outlier thresholds, and updates 
to the wage index. This estimate includes an increase of approximately 
$1 million in Medicare payments to ESRD facilities in CY 2024 due to 
the updates to the AKI payment rate, of which approximately 20 percent 
is increased beneficiary coinsurance payments. We estimate 
approximately $150 million in transfers from the Federal Government to 
ESRD facilities due to increased Medicare program payments and 
approximately $40 million in transfers from beneficiaries to ESRD 
facilities due to increased beneficiary coinsurance payments because of 
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 ESRD PPS 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 ESRD PPS final rule, we assume that the 
total number of unique commenters on this year's ESRD PPS proposed 
rule, 256, will be the number of reviewers of this ESRD PPS final rule. 
We acknowledge that this assumption may understate or overstate the 
costs of reviewing this final rule. It is possible that not all 
commenters reviewed this year's proposed rule in detail, and it is also 
possible that some reviewers chose not to comment on the ESRD PPS 
proposed rule. For these reasons we thought that the number of 
commenters would be a fair estimate of the number of reviewers of this 
final rule. We invited comments on the approach in estimating the 
number of entities which will review this final rule but did not 
receive any comments on this topic. 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 solicited comments on this assumption and none were 
received.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this final rule is $123.06 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 will take approximately 300 
minutes (5.00 hours) for the staff to review half of this final rule, 
which has a total of approximately 150,000 words. For each entity that 
reviews the rule, the estimated cost is $615.30 (5.00 hours x $123.06). 
Therefore, we estimate that the total cost of reviewing this regulation 
is $157,516.80 ($615.30 x 256).
5. Impact Statement and Table
a. CY 2024 End-Stage Renal Disease Prospective Payment System
(1) Effects on ESRD Facilities
    To understand the impact of the changes affecting Medicare payments 
to different categories of ESRD facilities, it is necessary to compare 
estimated payments in CY 2023 to estimated payments in CY 2024. To 
estimate the impact among various types of ESRD facilities, it is 
imperative that the estimates of Medicare payments in CY 2023 and CY 
2024 contain similar inputs. Therefore, we simulated Medicare payments 
only for those ESRD facilities for which we can calculate both current 
Medicare payments and new Medicare payments.
    For this final rule, we used CY 2022 data from the Medicare Part A 
and Part B Common Working Files as of August 4, 2023, as a basis for 
Medicare dialysis treatments and payments under the ESRD PPS. We 
updated the 2022 claims to 2023 and 2024 using various updates. The 
updates to the ESRD PPS base rate are described in section II.B.1.d of 
this final rule. Table 24 shows the impact of the estimated CY 2024 
ESRD PPS payments compared to estimated Medicare payments to ESRD 
facilities in CY 2023.
BILLING CODE 4120-01-P


[[Page 76490]]


[GRAPHIC] [TIFF OMITTED] TR06NO23.041


[[Page 76491]]


[GRAPHIC] [TIFF OMITTED] TR06NO23.042


BILLING CODE 4120-01-C
    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.1.c of 
this final rule is shown in column C. For CY 2024, the impact on all 
ESRD facilities because of the final changes to the outlier payment 
policy would be an increase in estimated Medicare payments of less than 
0.1 percent.
    Column D shows the effect of the TPEAPA as described in section 
II.B.1.g of this final rule. This adjustment will be implemented in a 
budget neutral manner, so the total impact of this change would be 0.0 
percent. However, there will be distributional impacts of this final 
change, primarily a 25.3 percent increase to payments to Pediatric ESRD 
facilities (with more than 50 percent of patients under age 18). This 
policy change also corresponds to a 0.8 percent increase to hospital-
based ESRD facilities. Because the budget neutrality factor for this 
policy is so small, the impact analysis found no significant decrease 
to any ESRD facility as the total decrease in payments for ESRD 
facilities that predominantly serve adults will still be less than 0.05 
percent.
    Column E shows the effect of year-over-year payment changes related 
to the post-TDAPA add-on payment adjustment as described in section 
II.B.1.i of this final rule and current TDAPA payments. The post-TDAPA 
add-on payment adjustment will not be budget neutral; however, we 
estimate the difference between total payments in CY 2023 during which 
time payment is made using the TDAPA under the ESRD PPS and estimated 
total payments in CY 2024 under the final post-TDAPA add-on payment 
adjustment would be less than 0.1 percent. Therefore, the total impact 
of this change as compared to current TDAPA payments is 0.0 percent.
    Column F reflects the effect of the update to the ESRD PPS wage 
index as described in section II.B.1.b of this final rule. This update 
will be budget neutral, so the total impact of this policy change is 
0.0 percent. However, there will be distributional impacts of this 
change. The largest increase would be to mid-Atlantic ESRD facilities 
that would receive 0.8 percent higher payments because of the final 
updated ESRD PPS wage index. The largest decrease will be to ESRD 
facilities with more than 20 percent and less than 50 percent pediatric 
patients, who will receive 1.1 percent lower payments because of the 
updated ESRD PPS wage index.
    Column G reflects the overall impact, that is, the effects of the 
final outlier

[[Page 76492]]

policy changes, the TPEAPA, the post-TDAPA payment adjustment, the 
updated wage index, and the payment rate update as described in section 
II.B.1.d of this final rule. The ESRD PPS payment rate update for CY 
2024 is 2.1 percent, which reflects the ESRDB market basket percentage 
increase for CY 2024 of 2.4 percent and the productivity adjustment of 
0.3 percent. We expect that overall ESRD facilities will experience a 
2.1 percent increase in estimated Medicare payments in CY 2024. The 
categories of types of ESRD facilities in the impact table show impacts 
ranging from a 1.4 percent increase to a 28.4 percent increase in their 
CY 2024 estimated Medicare payments.
(2) 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 2024, we estimate that 
the ESRD PPS will have zero impact on these other providers.
(3) Effects on the Medicare Program
    We estimate that Medicare spending (total Medicare program 
payments) for ESRD facilities in CY 2024 will be approximately $6.7 
billion. This estimate considers a projected decrease in fee-for-
service Medicare ESRD beneficiary enrollment of 4.3 percent in CY 2024.
(4) 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 
2.1 percent overall increase in the CY 2024 ESRD PPS payment amounts, 
we estimate that there will be an increase in beneficiary coinsurance 
payments of 2.1 percent in CY 2024, which translates to approximately 
$40 million.
(5) Alternatives Considered
(i) Transitional Pediatric ESRD Add-On Payment Adjustment
    As discussed in section II.B.1.g.(4) of this final rule, we 
proposed and are finalizing to implement a transitional add-on payment 
adjustment of 30 percent for Pediatric ESRD Patients, which we call the 
TPEAPA. We also considered, but did not propose, an alternative payment 
structure which would phase in the adjustment over 3 years starting at 
10 percent for the first year and 20 percent for the second year.
(ii) Add-On Payment Adjustment for Certain Renal Dialysis Drugs and 
Biological Products After the TDAPA Period Ends
    As discussed in section II.B.1.i.(3) of this final rule, we 
proposed and are finalizing an add-on payment adjustment for new renal 
dialysis drugs and biological products in existing ESRD PPS functional 
categories after the end of the TDAPA period. We also considered, but 
did not propose, an alternative methodology for calculating this 
payment adjustment which would incorporate a reconciliation of all the 
formerly separately billable drugs against the calculated post-TDAPA 
payment adjustment. Additionally, we considered but did not propose 
alternative approaches to applying and calculating this add-on payment 
adjustment for specific patient populations.
(iii) Reporting Time on Machine Data on ESRD PPS Claims for Renal 
Dialysis Services
    As discussed in section II.B.1.j.(3) of this final rule, we 
proposed and are finalizing to require ESRD facilities to submit data 
and information on ESRD PPS claims for renal dialysis services 
regarding the number of minutes of hemodialysis treatment received by a 
beneficiary in center in an ESRD facility. This patient-level reporting 
on resource use would be used to apportion composite rate costs for use 
in the case-mix adjustment. We also considered, but did not propose, to 
use dialysis duration data from EQRS to apportion composite rate costs 
for this purpose. We discuss why we did not propose this alternative in 
further detail in section II.B.1.j.(3) of this final rule.
(iv) Allowing ESRD Facilities Impacted by a Disaster or Other Emergency 
To Apply for an Exception From the Treatment Volume Threshold 
Requirement for the LVPA
    As discussed in section II.B.1.f.(3)(a)(ii), we are finalizing our 
proposal to allow ESRD facilities to receive exceptions for some of the 
requirements for the LVPA if they are impacted by a disaster or other 
emergency. One of these exceptions is for ESRD facilities that exceed 
the 4000-treatment volume threshold due to treating patients who were 
displaced from an ESRD facility that closed or experienced an 
operational disruption due to a disaster or other emergency. To receive 
this exception, we proposed that the ESRD facility must submit a 
request for the exception, in writing, to CMS by the annual attestation 
deadline of November 1st. We are finalizing that the deadline for 
requesting this exception be either the annual attestation deadline or 
30 days after the end of the cost-reporting year for which the ESRD 
facility is attesting, whichever is later. We also considered, but did 
not finalize, having a deadline of December 31st for the attestation 
for ESRD facilities impacted by a disaster or other emergency and, 
therefore, a deadline of December 31st for requesting the exception. We 
discuss why we are not finalizing this alternative in further detail in 
section II.B.1.f.(3)(a)(ii) of this final rule.
b. Continuation of Approved Transitional Drug Add-On Payment 
Adjustments (TDAPA) for New Renal Dialysis Drugs or Biological Products 
for CY 2024
(1) Korsuva[supreg] (difelikefalin)
    One renal dialysis drug for which the TDAPA was paid in CY 2022 and 
CY 2023 will continue to be eligible for the TDAPA in CY 2024. CMS 
Transmittal 11295,\346\ implemented the 2-year TDAPA period specified 
in Sec.  413.234(c)(1) for Korsuva[supreg] (difelikefalin). The TDAPA 
payment period began on April 1, 2022, and will continue through March 
31, 2024. As set forth in Sec.  413.234(c), TDAPA payment is based on 
100 percent of average sales price (ASP). If ASP is not available, then 
the TDAPA is based on 100 percent of wholesale acquisition cost (WAC) 
and, when WAC is not available, the payment is based on the drug 
manufacturer's invoice.
---------------------------------------------------------------------------

    \346\ CMS Transmittal 11295 rescinded and replaced CMS 
Transmittal 11278, dated February 24, 2022 and is available at: 
https://www.cms.gov/files/document/r11295CP.pdf.
---------------------------------------------------------------------------

    We based the CY 2024 impacts on the most current 72x claims data; 
from May 2022, when utilization first appeared on the claims, through 
July 2023. During that timeframe, the average monthly TDAPA payment 
amount for Korsuva[supreg] was $1,000,000. In applying that average to 
the 3 remaining months of the TDAPA payment period in CY 2024, we 
estimate $3,000,000 in spending ($1,000,000 * 3 = $3,000,000) of which, 
approximately $600,000 ($3,000,000 * 0.20 = $600,000) would be 
attributed to beneficiary coinsurance amounts.
(2) Jesduvroq (daprodustat)
    On July 27, 2023, CMS Transmittal 12157 \347\ implemented the 2-
year TDAPA period specified in Sec.  413.234(c)(1) for Jesduvroq 
(daprodustat). The TDAPA payment

[[Page 76493]]

period began on October 1, 2023, and will continue through September 
30, 2025. As stated previously, TDAPA payment is based on 100 percent 
of ASP. If ASP is not available, then the TDAPA is based on 100 percent 
of WAC and, when WAC is not available, the payment is based on the drug 
manufacturer's invoice.
---------------------------------------------------------------------------

    \347\ CMS Transmittal 12157, dated July 27, 2023 is available 
at: https://www.cms.gov/files/document/r12157cp.pdf.
---------------------------------------------------------------------------

    We based our impact analysis on the most current pricing and 
manufacturer provided volume estimates at the time of this final rule. 
Estimates are based on the most current, reasonable assumptions but are 
subject to change based on any changes to the product's label, 
indication, recommended dosage, safety profile or changes to applicable 
law, regulations and/or the standard of care.
    Jesduvroq is currently priced at $3.91 per 1 milligram unit.\348\ 
Several factors effect dosing, as described in Jesduvroq's Prescribing 
Information.\349\ However, total volume is estimated at 2,623,860 units 
in CY 2024. Multiplying the 2,623,860 units by the current pricing of 
$3.91 would result in approximately $10.3 million in CY 2024 spending 
(2,623,860 * $3.91 = $10,259,293), of which, approximately $2.1 million 
($10,259,293 * 0.20 = $2,051,859) would be attributed to beneficiary 
coinsurance amounts.
---------------------------------------------------------------------------

    \348\ CMS ESRD PPS Transitional Drug Add-on Payment Adjustment 
web page. Payment Amounts for New Renal Dialysis Drugs and 
Biological Products Currently Eligible for the TDAPA. Available at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Downloads/Drugs-and-Biologicals-Eligible-for-TDAPA.pdf. 
Accessed on September 29, 2023.
    \349\ Jesduvroq Prescribing Information Available at: https://gskpro.com/content/dam/global/hcpportal/en_US/Prescribing_Information/Jesduvroq/pdf/JESDUVROQ-PI-MG.PDF. Accessed 
on September 29, 2023.
---------------------------------------------------------------------------

c. Payment for Renal Dialysis Services Furnished to Individuals With 
AKI
(1) Effects on ESRD Facilities
    To understand the impact of the changes affecting Medicare payments 
to different categories of ESRD facilities for renal dialysis services 
furnished to individuals with AKI, it is necessary to compare estimated 
Medicare payments in CY 2023 to estimated Medicare payments in CY 2024. 
To estimate the impact among various types of ESRD facilities for renal 
dialysis services furnished to individuals with AKI, it is imperative 
that the Medicare payment estimates in CY 2023 and CY 2024 contain 
similar inputs. Therefore, we simulated Medicare payments only for 
those ESRD facilities for which we can calculate both current Medicare 
payments and new Medicare payments.
    For this final rule, we used CY 2022 data from the Medicare Part A 
and Part B Common Working Files as of August 4, 2023, as a basis for 
Medicare for renal dialysis services furnished to individuals with AKI. 
We updated the 2022 claims to 2023 and 2024 using various updates. The 
updates to the AKI payment amount are described in section III.B of 
this final rule. Table 25 shows the impact of the estimated CY 2024 
Medicare payments for renal dialysis services furnished to individuals 
with AKI compared to estimated Medicare payments for renal dialysis 
services furnished to individuals with AKI in CY 2023.
BILLING CODE 4120-01-P

[[Page 76494]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.043


[[Page 76495]]


[GRAPHIC] [TIFF OMITTED] TR06NO23.044

BILLING CODE 4120-01-C
    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 CY 2024 wage indices.
    Column D shows the overall impact, that is, the effects of the 
combined wage index and TPEAPA budget-neutrality adjustment factor, 
wage index updates, and the payment rate update of 2.1 percent, which 
reflects the ESRDB market basket percentage increase for CY 2024 of 2.4 
percent and the productivity adjustment of 0.3 percentage point. We 
expect that overall ESRD facilities will experience a 2.0 percent 
increase in estimated Medicare payments in CY 2024. The categories of 
types of ESRD facilities in the impact table show impacts ranging from 
an increase of 0.5 percent to 2.7 percent in their CY 2024 estimated 
Medicare payments.
(2) Effects on Other Providers
    Under section 1834(r) of the Act, as added by section 808(b) of 
TPEA, we proposed to update 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 patient and his or her physician make the 
decision about where the renal dialysis services are furnished. 
Therefore, this change would have zero impact on other Medicare 
providers.
(3) Effects on the Medicare Program
    We estimate approximately $70 million will be paid to ESRD 
facilities in CY 2024 because of patients with AKI receiving renal 
dialysis services in an 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.
(4) Effects on Medicare Beneficiaries
    Currently, beneficiaries have a 20 percent coinsurance obligation 
when they receive AKI dialysis in the hospital outpatient setting. When 
these services are furnished in an ESRD facility, the patients will 
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 expect beneficiaries to 
pay less coinsurance when AKI dialysis is furnished by ESRD facilities.
(5) 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 
adjustments is 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 
will assist us in developing knowledgeable, data-driven proposals.
d. ESRD QIP
(1) Effects of the PY 2026 ESRD QIP on ESRD Facilities
    The ESRD QIP is intended to prevent reductions in the quality of 
ESRD dialysis facility services provided to beneficiaries. The general 
methodology that we use to calculate 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 2026 ESRD QIP will apply to the ESRD PPS 
payments made to the facility for services furnished in CY 2026, as 
codified in our regulations at Sec.  413.177.
    For the PY 2026 ESRD QIP, we estimate that, of the 7,833 facilities 
(including those not receiving a TPS) enrolled in Medicare, 
approximately 30.56 percent or 2,394 of the facilities that have 
sufficient data to calculate a TPS would receive a payment reduction 
for PY 2026. Among an estimated 2,394 facilities that would receive a 
payment reduction, approximately 64 percent or 1,544 facilities would 
receive the smallest payment reduction of 0.5 percent. We are updating 
the estimated impact of the PY 2026 ESRD QIP that we provided in the CY 
2023 ESRD PPS final rule (87 FR 67293 through 67296). Based on our 
final policies, the updated total estimated payment reductions for all 
the 2,394 facilities expected to

[[Page 76496]]

receive a payment reduction in PY 2026 would be approximately 
$15,990,524. Facilities that do not receive a TPS do not receive a 
payment reduction.
    Table 26 shows the updated overall estimated distribution of 
payment reductions resulting from the PY 2026 ESRD QIP.
[GRAPHIC] [TIFF OMITTED] TR06NO23.045

    To estimate whether a facility would receive a payment reduction 
for PY 2026, we scored each facility on achievement and improvement on 
several clinical measures we have previously finalized and for which 
there were available data from EQRS and Medicare claims. Payment 
reduction estimates were calculated using the most recent data 
available (specified in Table 27) in accordance with the policies 
finalized in this final rule. Measures used for the simulation are 
shown in Table 27.
[GRAPHIC] [TIFF OMITTED] TR06NO23.046

    For all measures except the SHR clinical measure, the SRR clinical 
measure, and the STrR measure, measures with less than 11 patients for 
a facility were not included in that facility's TPS. For the SHR 
clinical measure and the SRR clinical measure, facilities were required 
to have at least 5 patient-years at risk and 11 index discharges, 
respectively, to be included in the facility's TPS. For the STrR 
clinical measure, facilities were required to have at least 10 patient-
years at risk to be included in the facility's TPS. Each facility's TPS 
was compared to an estimated mTPS and an estimated payment reduction 
table consistent with the final policies outlined in section IV.C of 
this final rule. Facility reporting measure scores were estimated using 
available data from CY 2022. 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 2026 for each 
facility resulting from this final rule, we multiplied the total 
Medicare payments to the facility during the 1-year period between 
January 2022 and December 2022 by the facility's estimated payment 
reduction percentage expected under the ESRD QIP, yielding a total 
payment reduction amount for each facility.
    Table 28 shows the estimated impact of the finalized ESRD QIP 
payment reductions to all ESRD facilities for PY 2026. 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

[[Page 76497]]

performance period used for these calculations differs from the 
performance period we are using for the PY 2026 ESRD QIP, the actual 
impact of the PY 2026 ESRD QIP may vary significantly from the values 
provided here.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR06NO23.047

BILLING CODE 4120-01-C
(3) Effects of the PY 2027 ESRD QIP on ESRD Facilities
    For the PY 2027 ESRD QIP, we are updating the estimated effect that 
we presented in the CY 2024 ESRD PPS proposed rule (88 FR 42534 through 
42536). In this final rule, we estimate that, of the 7,833 facilities 
(including those not receiving a TPS) enrolled in Medicare, 
approximately 28.88 percent or 2,262 of the facilities that have 
sufficient data to calculate a TPS would receive a payment reduction 
for PY 2027. Among an estimated 2,262 facilities that would receive a 
payment reduction, approximately 70 percent or 1,584 facilities would 
receive the smallest payment reduction of 0.5 percent. The total 
payment reductions for all the 2,262 facilities expected to receive a 
payment reduction is approximately $13,847,479. Facilities that do not 
receive a TPS do not receive a payment reduction.
    Table 29 shows the overall estimated distribution of payment 
reductions resulting from the PY 2027 ESRD QIP.

[[Page 76498]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.048

    To estimate whether a facility would receive a payment reduction in 
PY 2027, we scored each facility on achievement and improvement on 
several clinical measures we have previously finalized and for which 
there were available data from EQRS and Medicare claims. Payment 
reduction estimates were calculated using the most recent data 
available (specified in Table 30) in accordance with the policies 
finalized in this final rule. Measures used for the simulation are 
shown in Table 30.
[GRAPHIC] [TIFF OMITTED] TR06NO23.049

    For all measures except the SHR clinical measure, the SRR clinical 
measure, and the STrR measure, measures with less than 11 patients for 
a facility were not included in that facility's TPS. For the SHR and 
SRR measures, facilities were required to have at least 5 patient-years 
at risk and 11 index discharges, respectively, to be included in the 
facility's TPS. For the STrR clinical measure, facilities were required 
to have at least 10 patient-years at risk 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 
previously finalized policies and the policies we have finalized in 
this final rule outlined in section IV.D of this final rule. Facility 
reporting measure scores were estimated using available data from CY 
2022. 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 2027 for each 
facility resulting from this final rule, we multiplied the total 
Medicare payments to the facility during the 1-year period between 
January 2022 and December 2022 by the facility's estimated payment 
reduction percentage expected under the ESRD QIP, yielding a total 
payment reduction amount for each facility.
    Table 31 shows the estimated impact of the finalized ESRD QIP 
payment reductions to all ESRD facilities for PY 2027. 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 using for the PY 2027 ESRD QIP, the actual 
impact of the PY 2027 ESRD QIP may vary significantly from the values 
provided here.
BILLING CODE 4120-01-P

[[Page 76499]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.050

(4) Effects on Other Providers
    The ESRD QIP is applicable to ESRD 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 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.
(5) Effects on the Medicare Program
    For PY 2027, we estimate that the ESRD QIP would contribute 
approximately $13,847,478.73 in Medicare savings. For comparison, Table 
32 shows the payment reductions that we estimate will be applied by the 
ESRD QIP from PY 2018 through PY 2027.

[[Page 76500]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.051

BILLING CODE 4120-01-C
(6) Effects on Medicare Beneficiaries
---------------------------------------------------------------------------

    \350\ In the CY 2022 ESRD PPS final rule, we adopted a special 
scoring methodology and payment policy for PY 2022 due to 
significant impacts related to the COVID-19 public health emergency 
(86 FR 61918 through 61919). Under this policy, we did not apply any 
payment reductions to ESRD facilities for PY 2022.
---------------------------------------------------------------------------

    The ESRD QIP is applicable to ESRD facilities. Since the Program's 
inception, there is evidence of 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.
(7) Alternatives Considered
    In section IV.C.5 of this final rule, we are finalizing the 
removals of the Ultrafiltration Rate reporting measure and the 
Standardized Fistula Rate clinical measure, beginning with PY 2026. We 
considered not removing these measures. However, we concluded that 
removing these two measures was appropriate under our previously 
finalized measure removal factors. This approach will help to ensure 
that a facility's performance is assessed based on measures that 
continue to be meaningful parts of the ESRD QIP measure set.
e. ETC Model
(1) Overview
    The ETC Model is a mandatory payment model designed to test payment 
adjustments to certain dialysis and dialysis-related payments, as 
discussed in the Specialty Care Models final rule (85 FR 61114), the CY 
2022 ESRD PPS final rule (86 FR 61874), and the CY 2023 ESRD PPS final 
rule (87 FR 67136) for ESRD facilities and for Managing Clinicians for 
claims with dates of service from January 1, 2021, to June 30, 2027. 
The requirements for the ETC Model are set forth in 42 CFR part 512, 
subpart C. We proposed to revise our regulations at Sec.  512.390 to 
acknowledge the ability of the CMS Administrator to review the results 
of ETC Participants' targeted review requests. For the results of the 
detailed economic analysis of the ETC Model and a description of the 
methodology used to perform the analysis, see the Specialty Care Models 
final rule (85 FR 61114).
(2) Data and Methods
    A stochastic simulation was created to estimate the financial 
impacts of the ETC Model relative to baseline expenditures, where 
baseline expenditures were defined as data from CYs 2018 and 2019 
without the changes applied. The simulation relied upon statistical 
assumptions derived from retrospectively constructed ESRD facilities' 
and Managing Clinicians' Medicare dialysis claims, transplant claims, 
and transplant waitlist data reported during 2018 and 2019, the most 
recent years of complete data available before the start of the ETC 
Model. Both datasets and the risk-adjustment methodologies for the ETC 
Model were developed by the CMS Office of the Actuary (OACT).
    Table 33 summarizes the estimated impact of the ETC Model when the 
achievement benchmarks for each year are set using the average of the 
home dialysis rates for year t-1 and year t-2 for the HRRs randomly 
selected for participation in the ETC Model. We estimate that the 
Medicare program would save a net total of $43 million from the PPA and 
HDPA between January 1, 2021, and June 30, 2027 less $15 million in 
increased training and education expenditures. Therefore, the net 
impact to Medicare spending is estimated to be $28 million in savings. 
This is consistent with the net impact to Medicare spending estimated 
for the CY 2022 ESRD PPS final rule, in which the net impact to 
Medicare spending was also estimated to be $28 million in savings (86 
FR 62014 through 62016). Making administrative review available to ETC 
Participants who wish to seek additional review of a targeted review 
determination is not expected to change this estimate.
(3) Medicare Estimate--Primary Specification, Assume Rolling Benchmark
BILLING CODE 4120-01-P

[[Page 76501]]

[GRAPHIC] [TIFF OMITTED] TR06NO23.052

    In Table 33, negative spending reflects a reduction in Medicare 
spending, while positive spending reflects an increase. The results for 
this table were generated from an average of 400 simulations under the 
assumption that benchmarks are rolled forward with a 1.5-year lag. For 
a detailed description of the key assumptions underlying the impact 
estimate, see the Specialty Care Models final rule (85 FR 61353) and 
the CY 2022 ESRD PPS final rule (86 FR 60214 through 60216).
(4) Effects on the Home Dialysis Rate, the Transplant Rate, and Kidney 
Transplantation
    The changes in this final rule will not impact the findings 
reported for the effects of the ETC Model on the home dialysis rate or 
the transplant rate described in the Specialty Care Models final rule 
(85 FR 61355) and the CY 2022 ESRD PPS final rule (86 FR 62017).
(5) Effects on Kidney Disease Patient Education Services and HD 
Training Add-Ons
    The changes in this final rule will not impact the findings 
reported for the effects of the ETC Model on kidney disease patient 
education services and HD training add-ons described in the Specialty 
Care Models final rule (85 FR 61355) and the CY 2023 ESRD PPS final 
rule (87 FR 67136).
(6) Effects on Medicare Beneficiaries
    Providing the option for ETC Participants to seek administrative 
review of targeted review determinations will not impact the findings 
reported for the effects of ETC Model on Medicare beneficiaries in lieu 
of the ETC Model's likelihood of incentivizing ESRD facilities and 
Managing Clinicians to improve access to home dialysis and 
transplantation for Medicare beneficiaries. Further details on the 
impact of the ETC Model on ESRD Beneficiaries may be found in the 
Specialty Care Models final rule (85 FR 61357), the CY 2022 ESRD PPS 
final rule (86 FR 61874), or the CY 2023 ESRD PPS final rule (87 FR 
67136).
(7) Alternatives Considered
    In this final rule, we are finalizing the proposal to revise our 
regulations at Sec.  512.390 to acknowledge the availability of 
administrative review of targeted review requests. We considered 
retaining our current process, in which targeted review determinations 
are final with no further review or appeal; however, we believe that 
providing for administrative review of targeted review determinations 
is important to provide ETC Participants with transparency regarding 
the avenue that is available should they wish to seek review of their 
targeted review determination, to vest accountability for the decisions 
of CMS in a principal officer, and to bring the

[[Page 76502]]

ETC Model into alignment with other CMS programs.
E. Accounting Statement
    As required by OMB Circular A-4 (available at Https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in 
Table 34 showing the classification of the impact associated with the 
provisions of this final rule.
[GRAPHIC] [TIFF OMITTED] TR06NO23.053

BILLING CODE 4120-01-C
F. Regulatory Flexibility Act Analysis (RFA)
    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
options for regulatory relief of small entities if a rule has a 
significant impact on a substantial number of small entities. For 
purposes of the RFA, small entities include small businesses, nonprofit 
organizations, and small governmental jurisdictions. 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. Therefore, the number of small entities estimated in this RFA 
analysis includes the number of ESRD facilities that are either 
considered small businesses or nonprofit organizations.
    According to the Small Business Administration's (SBA) size 
standards, an ESRD facility is classified as a small business if it has 
total revenues of less than $41.5 million in any 1 year. For the 
purposes of this analysis, we exclude the ESRD facilities that are 
owned and operated by LDOs and regional chains, which would have total 
revenues of more than $8.1 billion in any year when the total revenues 
for all locations are combined for each business (LDO or regional 
chain), and are not, therefore, considered small businesses. Because we 
lack data on individual ESRD facilities' receipts, we cannot determine 
the number of small proprietary ESRD facilities or the proportion of 
ESRD facilities' revenue derived from Medicare payments. Therefore, we 
assume that all ESRD facilities that are not owned by LDOs or regional 
chains are considered small businesses. Accordingly, we consider the 
462 facilities that are independent and 357 facilities that are 
hospital-based, as shown in the ownership category in Table 24, to be 
small businesses. These facilities represent approximately 10 percent 
of all ESRD facilities in our data set.
    Additionally, we identified in our analytic file that there are 796 
facilities that are considered nonprofit organizations, which is 
approximately 10 percent of all ESRD facilities in our data set. In 
total, accounting for the 370 nonprofit ESRD facilities that are also 
considered small businesses, there are 1,245 ESRD facilities that are 
either small businesses or nonprofit organizations, which is 
approximately 16 percent of all ESRD facilities in our data set.
    For the ESRD PPS updates in this final rule, a hospital-based ESRD 
facility (as defined by type of ownership, not by type of ESRD 
facility) is estimated to receive a 3.4 percent increase in Medicare 
payments for CY 2024. An

[[Page 76503]]

independent facility (as defined by ownership type) is likewise 
estimated to receive a 2.7 percent increase in Medicare payments for CY 
2024. As shown in Table 24, we estimate that the overall revenue impact 
of this final rule on all ESRD facilities is a positive increase to 
Medicare payments by approximately 2.1 percent.
    For AKI dialysis, we are unable to estimate whether patients will 
go to ESRD facilities, however, we have estimated there is a potential 
for $70 million in payment for AKI dialysis treatments that could 
potentially be furnished in ESRD facilities.
    For the ESRD QIP, we estimate that of the 2,394 ESRD facilities 
expected to receive a payment reduction as a result of their 
performance on the PY 2026 ESRD QIP, 406 are ESRD small entity 
facilities. We present these findings in Table 25 (``Estimated 
Distribution of PY 2026 ESRD QIP Payment Reductions'') and Table 27 
(``Estimated Impact of ESRD QIP Payment Reductions to ESRD Facilities 
for PY 2026'').
    Regarding the ETC Model, in the Specialty Care Models final rule, 
we described our assumption, for the purposes of the regulatory impact 
analysis, that the great majority of Managing Clinicians are small 
entities by nature of meeting the SBA definition of a small business, 
but that the greater majority of ESRD facilities are not, as they are 
owned, either partially or entirely, by organizations that do not meet 
the SBA definition of a small entity. We described the low volume 
threshold exclusions and aggregation policies used in the ETC Model and 
our assessment that, in conjunction with the fact that the ETC Model 
affects Medicare payment only for select services furnished to Medicare 
FFS beneficiaries; the ETC Model will not have a significant impact on 
spending for a substantial number of small entities. For the purposes 
of this final rule, we have determined that the policy to clarify the 
ability of the CMS Administrator to review targeted review 
determinations will not change the assessment that the ETC Model will 
not have a significant impact on spending for a substantial number of 
small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. 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 121 rural hospital-based 
ESRD facilities, we do not know how many of them are based at hospitals 
with fewer than 100 beds. However, overall, the 121 rural hospital-
based ESRD facilities will experience an estimated 2.2 percent increase 
in payments. Therefore, the Secretary has certified that this final 
rule would not have a significant impact on the operations of a 
substantial number of small rural hospitals. Clarifying the ability of 
the CMS Administrator to review ETC Model targeted review 
determinations is not expected to change the Secretary's assessment.

G. Unfunded Mandates Reform Act Analysis (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 2023, that 
threshold is approximately $177 million. This final rule will not 
impose a mandate that will result in the expenditure by State, local, 
and Tribal governments, in the aggregate, or by the private sector, of 
more than $177 million in any 1 year. 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.

H. 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 State, local, or Tribal governments.

I. Congressional Review Act

    This final regulation 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.

VIII. Files Available to the Public

    The Addenda for the annual ESRD PPS proposed and final rule will no 
longer appear in the Federal Register. Instead, the Addenda will be 
available only through the internet and will be posted on CMS's website 
under the regulation number, CMS-1782-F, at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices. In addition to the 
Addenda, limited data set files (LDS) are available for purchase at 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/EndStageRenalDiseaseSystemFile. Readers who 
experience any problems accessing the Addenda or LDS files, should 
contact CMS by sending an email to CMS at the following mailbox: 
[email protected]. Chiquita Brooks-LaSure, Administrator of the 
Centers for Medicare & Medicaid Services, approved this document on 
October 24, 2023.

List of Subjects

42 CFR Part 413

    Diseases, Health facilities, Medicare, Puerto Rico, Reporting and 
recordkeeping requirements.

42 CFR Part 512

    Administrative practice and procedure, Health care, Health 
facilities, Health insurance, Medicare, Penalties, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

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), 1395m, 1395x(v), 1395x(kkk), 1395hh, 1395rr, 1395tt, 
and 1395ww.


[[Page 76504]]



0
2. Section 413.178 is amended by revising paragraphs (a)(8) and (c) to 
read as follows:


Sec.  413.178  ESRD quality incentive program.

    (a) * * *
    (8) Minimum total performance score (mTPS) means, with respect to a 
payment year except payment year 2023, the total performance score that 
an ESRD facility would receive if it performed at the 50th percentile 
of national ESRD facility performance on all clinical measures during 
the baseline period, and it performed at the median of national ESRD 
facility performance on all reporting measures using data from the most 
recently available year before the performance period.
* * * * *
    (c) ESRD QIP measure selection, retention, and removal--(1) ESRD 
QIP measure selection. CMS specifies measures for the ESRD QIP for a 
payment year and groups the measures into domains. The measures for a 
payment year include:
    (i) Measures on anemia management that reflect the labeling 
approved by the Food and Drug Administration for such management;
    (ii) Measures on dialysis adequacy;
    (iii) To the extent feasible, a measure (or measures) of patient 
satisfaction;
    (iv) To the extent feasible, measures on iron management, bone 
mineral metabolism, and vascular access (including for maximizing the 
placement of arterial venous fistula);
    (v) Beginning with the 2016 payment year, measures specific to the 
conditions treated with oral-only drugs and that are, to the extent 
feasible, outcomes-based; and
    (vi) Other measures that CMS specifies.
    (2) Use of endorsed measures--(i) General rule. Measures specified 
by CMS under paragraph (c)(1) of this section will be endorsed by the 
entity with a contract under section 1890(a) of the Social Security 
Act, unless the exception in paragraph (c)(2)(ii) of this section 
applies.
    (ii) Exception. CMS may specify a measure under paragraph (c)(1) of 
this section that does not meet the requirement in paragraph (c)(2)(i) 
of this section if:
    (A) CMS has determined that a specified area or medical topic is 
appropriate for inclusion in the ESRD QIP;
    (B) CMS has not identified a feasible and practical measure with 
respect to that specified area or medical topic that has been endorsed 
by the entity with a contract under section 1890(a) of the Social 
Security Act; and
    (C) CMS has given due consideration to measures that have been 
endorsed or adopted by a consensus organization.
    (3) Updating of measure specifications. CMS uses rulemaking to make 
substantive updates to the specifications of measures used in the ESRD 
QIP. CMS announces technical measure specification updates through the 
QualityNet website (https://qualitynet.cms.gov) and listserv 
announcements.
    (4) Measure retention. All measures specified for the ESRD QIP 
measure set remain in the measure set unless CMS, through rulemaking, 
removes or replaces them.
    (5) Measure removal factors--(i) General rule. CMS may remove or 
replace a measure based on one or more of the following factors:
    (A) Factor 1. Measure performance among the majority of ESRD 
facilities is so high and unvarying that meaningful distinctions in 
improvements or performance can no longer be made.
    (B) Factor 2. Performance or improvement on a measure does not 
result in better or the intended patient outcomes.
    (C) Factor 3. A measure no longer aligns with current clinical 
guidelines or practice.
    (D) Factor 4. A more broadly applicable (across settings, 
populations, or conditions) measure for the topic or a measure that is 
more proximal in time to desired patient outcomes for the particular 
topic becomes available.
    (E) Factor 5. A measure that is more strongly associated with 
desired patient outcomes for the particular topic becomes available.
    (F) Factor 6. Collection or public reporting of a measure leads to 
negative or unintended consequences.
    (G) Factor 7. It is not feasible to implement the measure 
specifications.
    (H) Factor 8. The costs associated with a measure outweigh the 
benefit of its continued use in the program.
    (ii) Exception. CMS may retain a measure that meets one or more of 
the measure removal factors described in paragraph (c)(5)(i) of this 
section for reasons including, but not limited to, that the measure 
addresses a gap in quality that is so significant that removing the 
measure would lower the quality of care furnished by facilities, or 
that the measure is statutorily required.
    (iii) Patient safety exception. Upon a determination by CMS that 
the continued requirement for facilities to submit data on a measure 
raises specific patient safety concerns, CMS may elect to immediately 
remove the measure from the ESRD QIP measure set. CMS will, upon 
removal of the measure--
    (A) Provide notice to facilities and the public at the time CMS 
removes the measure, along with a statement of the specific patient 
safety concerns that would be raised if facilities continued to submit 
data on the measure; and
    (B) Provide notice of the removal in the Federal Register.
* * * * *

0
3. Section 413.198 is amended by revising paragraphs (a) and 
(b)(3)(iii) and adding paragraphs (b)(5) and (6) to read as follows:


Sec.  413.198  Recordkeeping and cost reporting requirements for 
outpatient maintenance dialysis.

    (a) Purpose and scope. This section implements sections 
1881(b)(2)(B)(i) and 1881(b)(14) of the Act by specifying recordkeeping 
and cost reporting requirements for ESRD facilities under part 494 of 
this chapter. The records and reports will enable CMS to determine the 
costs incurred in furnishing outpatient maintenance dialysis as defined 
in Sec.  413.170(a).
* * * * *
    (b) * * *
    (3) * * *
    (iii) Flow from the provision of luxury items or services (items or 
services substantially in excess of or more expensive than those 
generally considered necessary for the provision of needed health 
services); or
* * * * *
    (5) Each ESRD facility must submit data and information of the 
types and in the formats established by CMS for the purpose of 
estimating patient-level and facility-level variation in resource use 
involved in furnishing renal dialysis services. Beginning January 1, 
2025, the data and information must include, but is not limited to the 
following:
    (i) Information reported on ESRD prospective payment system (PPS) 
claims for renal dialysis services regarding the number of minutes 
between the start and end of hemodialysis treatment, without accounting 
for any interruptions, received by a beneficiary in center in an ESRD 
facility;
    (ii) Information reported on ESRD PPS claims about the total number 
of billing units (or the expected number of billing units, for renal 
dialysis drugs and biological products provided to beneficiaries for 
use while receiving home dialysis services as defined in Sec.  413.217 
of this chapter or oral forms of renal dialysis drugs and biological 
products), of any discarded amount of a renal dialysis drug or 
biological product from a single-dose container or single-use package 
that is paid for under the

[[Page 76505]]

ESRD PPS, using the JW modifier (or any successor modifier that 
includes the same data); and
    (iii) Information reported on ESRD PPS claims about any renal 
dialysis drug or biological product from a single-dose container or 
single-use package that is paid for under the ESRD PPS for which there 
is no discarded amount (or no discarded amount expected, for renal 
dialysis drugs and biological products provided to beneficiaries for 
use while receiving home dialysis services as defined in Sec.  413.217 
of this chapter or oral forms of renal dialysis drugs and biological 
products), using the JZ modifier (or any successor modifier that 
includes the same data).
    (6) Beginning January 1, 2025, each ESRD facility must document in 
the beneficiary's medical record any discarded amounts of a renal 
dialysis drug or biological product from a single-dose container or 
single-use package that is paid for under the ESRD PPS.

0
4. Section 413.230 is amended by revising paragraphs (d) and (e) and 
adding paragraph (f) to read as follows:


Sec.  413.230  Determining the per treatment payment amount.

* * * * *
    (d) Any transitional drug add-on payment adjustment under Sec.  
413.234(c);
    (e) Any transitional add-on payment adjustment for new and 
innovative equipment and supplies under Sec.  413.236(d); and
    (f) Any add-on payment adjustment for new renal dialysis drugs or 
biological products in existing ESRD PPS functional categories after 
the payment period for the transitional drug add-on payment adjustment 
has ended, as described in Sec.  413.234(c)(3) and (g).

0
5. Section 413.232 is amended by revising paragraphs (b)(1) and (2) and 
(g) introductory text and adding paragraphs (g)(5) and (6) to read as 
follows:


Sec.  413.232  Low-volume adjustment.

* * * * *
    (b) * * *
    (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 
paragraphs (g)(4) and (5) of this section) preceding the payment year; 
and
    (2) Has not opened, closed, or received a new provider number due 
to a change in ownership (except where the change in ownership results 
in a change in facility type) 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, except as specified in 
paragraph (g)(6) of this section.
* * * * *
    (g) To receive the low-volume adjustment, an ESRD facility must 
include in its 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 paragraphs (g)(4) and (5) of this 
section, for the 3 cost reporting years preceding the payment year to 
verify the number of treatments, except that:
* * * * *
    (5) For payment year 2024 and subsequent payment years, an ESRD 
facility may attest in the attestation specified in paragraph (e) of 
this section that it would have met the requirements of paragraph 
(b)(1) of this section, except that for one or more of the most recent 
3 cost reporting years the facility furnished 4,000 or more treatments 
because of temporary patient-shifting as a result of the closure or 
operational disruption of another ESRD facility due to a disaster or 
other emergency. For the purposes of the exception in this paragraph 
(g)(5), temporary patient-shifting is defined as providing renal 
dialysis services to one or more displaced patient(s) at any time 
through the end of the CY following the 12-month period beginning when 
an ESRD facility first begins providing renal dialysis services to one 
or more displaced patients. 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 cost reporting year due to 
temporary patient-shifting as a result of the closure or operational 
disruption of an ESRD facility resulting from a disaster or other 
emergency;
    (ii) The facility must request an exception under this paragraph 
(g)(5) from CMS, in the form and manner specified by CMS, no later than 
the attestation deadline specified in paragraph (e) of this section or 
30 days after the end of the cost reporting year, whichever is later, 
for each cost reporting year that the facility furnishes treatments 
equal to or in excess of 4,000 due to temporary patient-shifting as a 
result of the closure or operational disruption of an ESRD facility 
resulting from a disaster or other emergency;
    (iii) Within 30 days of CMS's receipt of the facility's request, 
CMS will review the request and either approve the request based on a 
determination that the ESRD facility furnished treatments equal to or 
in excess of 4,000 in the cost reporting year due to temporary patient-
shifting as a result of the closure or operational disruption of an 
ESRD facility resulting from a disaster or other emergency, or deny the 
request, and will notify the facility and the MAC of its decision;
    (iv) If CMS approves the request, the ESRD facility is paid the 
low-volume adjustment on claims for Medicare beneficiaries, on the 
basis of the exception in this paragraph (g)(5), during the payment 
year in which the temporary patient-shifting occurred, so long as all 
other requirements for the low-volume adjustment are met. For any 
future payment year, the ESRD facility would not be prevented from 
receiving the low-volume adjustment if the ESRD facility meets or 
exceeds the 4,000 treatment threshold in a cost reporting year due to 
temporary patient-shifting as a result of the disaster or other 
emergency that resulted in another ESRD facility's closure or 
operational disruption, so long as all other requirements for the low-
volume adjustment are met; and
    (v) The facility must maintain documentation of the number of 
displaced patients treated and information about the ESRD facility or 
facilities that closed or experienced operational disruptions due to a 
disaster or other emergency and previously treated those patients, and 
must provide such supporting documentation to CMS and the MAC upon 
request.
    (6) In the case of an ESRD facility that closes due to a disaster 
or other emergency and later reopens, the ESRD facility may attest in 
the attestation specified in paragraph (e) of this section that CMS has 
granted an exception to the requirements specified in paragraph (b)(2) 
of this section because it closed due to a disaster or other emergency. 
For any facility that so attests--
    (i) The ESRD facility would need to request such an exception from 
CMS, in the form and manner specified by CMS, within 60 days of the 
facility's closure, and the ESRD facility must inform the MAC of this 
request in writing;
    (ii) With 30 days of CMS's receipt of the facility's request, CMS 
will review the request and either approve the request based on a 
determination that the ESRD facility closed due to a disaster or other 
emergency, or deny the request, and will inform both the facility and 
the MAC of its decision; and
    (iii) If CMS approves the request, the exception under this 
paragraph (g)(6) will be applicable for a period

[[Page 76506]]

consisting of the remainder of the cost reporting year (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) 
in which the closure occurred and the following full 2 cost reporting 
years. After this period the ESRD facility would follow the general 
attestation process for the low-volume adjustment specified in 
paragraph (e) of this section and this paragraph (g).
    (iv) The ESRD facility that attests under this paragraph (g)(6) to 
have closed due to a disaster or other emergency would need to notify 
CMS and the MAC, in the form and manner specified by CMS, within 30 
days reopening and providing renal dialysis services. Within 30 days of 
CMS's receipt of the facility's notification, CMS will confirm receipt 
to the facility and the MAC of the facility's notification and the ESRD 
facility will be able to receive the low-volume adjustment as of the 
date of reopening, so long as all other requirements for the low-volume 
adjustment are met.
    (v) The ESRD facility must maintain documentation regarding its 
closure, and must provide such supporting documentation to CMS and/or 
the MAC upon request.
* * * * *

0
6. Section 413.234 is amended by:
0
a. Adding paragraph (b)(1)(iii);
0
b. Revising paragraph (c)(1)(i); and
0
c. Adding paragraphs (c)(1)(ii), (c)(3), and (g).
    The additions and revision read as follows:


Sec.  413.234  Drug designation process.

* * * * *
    (b) * * *
    (1) * * *
    (iii) The new renal dialysis drug or biological product is paid for 
using the add-on payment adjustment described in paragraphs (c)(3) and 
(g) of this section, referred to as the post- transitional drug add-on 
payment adjustment (TDAPA) add-on payment adjustment.
* * * * *
    (c) * * *
    (1) * * *
    (i) Following payment of the transitional drug add-on payment 
adjustment, the new renal dialysis drug or biological product is paid 
the post-TDAPA add-on payment adjustment as set forth in paragraphs 
(c)(3) and (g) of this section.
    (ii) Following payment of the transitional drug add-on payment 
adjustment the ESRD PPS base rate will not be modified.
* * * * *
    (3) For any new renal dialysis drug or biological product that is 
eligible for payment using the transitional drug add-on payment 
adjustment described in paragraphs (b)(1)(iii) and (c)(1) of this 
section, CMS applies a post-TDAPA add-on payment adjustment to all ESRD 
PPS claims that is calculated using the methodology set forth in 
paragraph (g) of this section. CMS will apply the post-TDAPA add-on 
payment adjustment beginning 8 calendar quarters after the first 
calendar quarter in which the transitional drug add-on payment 
adjustment is paid for the applicable product, and ending 12 calendar 
quarters after the end of the last calendar quarter in which the 
transitional drug add-on payment adjustment is paid for the applicable 
product. If CMS stops receiving the latest full calendar quarter of ASP 
data for the applicable renal dialysis drug or biological product 
during the applicable time period specified in paragraph (c)(1) of this 
section or during the 3-year period following such applicable time 
period, CMS will not pay any post-TDAPA add-on payment adjustment for 
such product in any future year.
* * * * *
    (g) Post-TDAPA add-on payment adjustment methodology. CMS uses the 
following methodology to calculate the post-TDAPA add-on payment 
adjustment described in paragraph (c)(3) of this section:
    (1) CMS bases the calculation on the most recent 12-month period of 
utilization for the new renal dialysis drug or biological product and 
the most recent available full calendar quarter of ASP data. If the 
most recent full calendar quarter of ASP data reflects zero or negative 
sales, then the calculation is based on 100 percent of WAC and, when 
WAC is not available, the payment is based on the drug manufacturer's 
invoice.
    (2) CMS calculates the post-TDAPA add-on payment adjustment 
annually as the expenditure for the new renal dialysis drug or 
biological product divided by the total number of ESRD PPS treatments 
during the same period.
    (3) CMS applies a reduction factor to the post-TDAPA add-on payment 
adjustment for case mix standardization to reflect estimated increases 
resulting from the application of the patient-level adjustments as 
described in paragraph (g)(5) of this section. This reduction factor is 
calculated based on the patient-level adjustments (as described in 
Sec.  413.235) applicable to the most recent 12-month period of 
utilization of ESRD PPS claims.
    (4) The amount of the post-TDAPA add-on payment adjustment is equal 
to 65 percent of the amount calculated in paragraph (g)(2) of this 
section, multiplied by the reduction factor specified in paragraph 
(g)(3) of this section, and multiplied by the latest available forecast 
of annual growth in the ESRD bundled market basket composite price 
proxy for pharmaceuticals.
    (5) The post-TDAPA add-on payment adjustment that is applied to an 
ESRD PPS claim is adjsuted by any applicable patient-level case-mix 
adjustments under Sec.  413.235.

0
7. Section 413.235 is amended by revising paragraph (b) to read as 
follows:


Sec.  413.235  Patient-level adjustments.

* * * * *
    (b) CMS adjusts the per treatment base rate for Pediatric ESRD 
Patients in accordance with section 1881(b)(14)(D)(iv)(I) of the Act as 
follows:
    (1) To account for patient age and treatment modality; and
    (2) Beginning January 1, 2024, to provide a per-treatment 
transitional add-on payment adjustment of 30 percent of the per 
treatment payment amount under Sec.  413.230 for renal dialysis 
services furnished to Pediatric ESRD Patients during calendar years 
2024, 2025, and 2026.
* * * * *

0
8. Section 413.236 is amended by revising paragraph (b)(2) to read as 
follows:


Sec.  413.236  Transitional add-on payment adjustment for new and 
innovative equipment and supplies.

* * * * *
    (b) * * *
    (2) Is new, meaning a complete application has been submitted to 
CMS under paragraph (c) of this section within 3 years of the date of 
the Food and Drug Administration (FDA) marketing authorization;
* * * * *

PART 512--RADIATION ONCOLOGY MODEL AND END STAGE RENAL DISEASE 
TREATMENT CHOICES MODEL

0
9. The authority citation for part 512 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1315a, and 1395hh.


0
10. Section 512.390 is amended by removing paragraph (c)(5) and adding 
paragraph (d).
    The addition reads as follows:


Sec.  512.390  Notification, data sharing, and targeted review.

* * * * *

[[Page 76507]]

    (d) Review of targeted review decisions. The Administrator may 
review a targeted review request when administrative review is 
requested by an ETC Participant within 15-calendar days of a targeted 
review request determination made by CMS.
    (1) Administrative review. Within 45 days of the date of the ETC 
Participant's request for administrative review, the CMS Administrator 
may act as follows:
    (i) Decline to review a targeted review request determination made 
by CMS;
    (ii) Render a final decision based on the CMS Administrator's 
review of the targeted review request determination; or
    (iii) Choose to take no action on the request for administrative 
review.
    (2) Administrative review determinations. The targeted review 
determination made by the CMS Administrator is final if the CMS 
Administrator declines an ETC Participant's request for administrative 
review or if the CMS Administrator does not take any action on the ETC 
Participant's request for administrative review by the end of the 45-
day period described in paragraph (d)(1) of this section. CMS-1782-F

    Dated: October 25, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-23915 Filed 10-27-23; 4:15 pm]
 BILLING CODE 4120-01-P

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