Kidney Failure and the Federal Government (1991) / Chapter Skim
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Pages 189-211
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From page 189... ...
. as measured by clinical indications, functional status of patients, and patient satisfaction." Data were found to be limited, because systematic quality assessment and assurance activities have not been implemented in the ESRD program.
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From page 191... ...
The chapter focuses mainly on Medicare outpatient dialysis reimbursement, by far the largest part of ESRD costs, and emphasizes the facility component; inpatient dialysis treatment is addressed only briefly. ESRD patients, as Medicare beneficiaries, are entitled to all Medicare-covered services, not just ESRD-related services.
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From page 192... ...
The unique characteristics of organ procurement activities and the desirability of maintaining an adequate supply of kidneys, however, led HCFA to retain reimbursement for kidney acquisition on a reasonable-cost basis separate from the DRG. In 1987, the DHHS Office of Inspector General recommended including organ acquisition costs under DRG 302 (OIG, 19871.
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From page 193... ...
. The ESRD Composite Rate, on the other hand, has no patient classification system but assumes that dialysis patients are homogeneous for payment purposes and pays at a fixed per treatment rate for one service, outpatient dialysis.
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From page 194... ...
194 cat ._ cd ._ is: a' ._ cat o a so: ct _' cat v: cat PI ._ cat cat o 4_ ._ cat o ._ cut i_ o cat .~ o v ._ ~ 0 :: ~ D Cal ~ Cal ·O ._ _ ~ Cal ._ an lo, _t 0,1)
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From page 195... ...
A major provision in the law, related to outpatient dialysis facility services, called for the Secretary to establish, on a "cost-related or other economical and equitable basis," a prospective reimbursement rate for providers of dialysis services. Even though regulations were issued for various provisions of the law from 1978 onward, HCFA did not issue a Notice of Proposed Rulemaking related to outpatient dialysis facility reimbursement until 1980.
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From page 196... ...
196 Cal ._ au Cal ._ Cal ;^ Cal ._ ._ Cal o ._ Cal 50 Cal Cal Cal ._ 1 Cal o Go x Go cry of o C40 o o ~ c E ,¢ ;8 a~ o 6 an, _ ~ C: ~ o ~ ~ o o ~ .— ~ ~ ~ ~ ~ o ~ O O~ ~ C,0 ~ _ o o ~ ~ C-]
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From page 197... ...
Congress, responding to this HCFA proposal in OBRA 1986, limited the reduction to $2 per treatment and froze the new rate for two fiscal years through September 30, 1988. The base composite rates were then reduced by HCFA from $127 to $125 for hospital-based facilities and from $123 to $ 121 for independent units, effective October 1, 1986 (Table 9- 1)
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From page 198... ...
First, the cost base for the current composite rates remains the audited 1977-79 Medicare cost reports for a sample of 105 hospital-based and independent facilities. Second, as has been true for the entire history of the ESRD program, no process exists to update the rates annually for inflation or other factors that influence costs.
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From page 199... ...
The specific difference in rates, however, derives from a policy decision, not from a detailed analysis of the relative costs of treatment by type of facility. Sixth, facility-specific composite rates are determined by applying the area wage index to the labor portion of the base composite rate, an adjustment performed annually.5 Facility-specific rates are limited to a maximum of $138 per treatment, unless an exception has been obtained, and a minimum wage index of 0.9 times the labor portion of the base rate or $116 for independent units and $120 for hospital-based renal facilities.
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From page 200... ...
and HCFA determined that HIC charges were substantially higher than those of facilities providing home dialysis under Method I GAO reported in October 1989 to the Senate Finance Committee that in Florida, HIC received about $2,500 per month for dialysis supplies and equipment compared to about $1,240 received by dialysis units serving home patients under the composite rate (GAO, 19891.
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From page 201... ...
Special Provisions for Recombinant Human Erythropoietin (EPOJ EPO is the first recombinant DNA biological to be introduced into the treatment of dialysis patients. It was approved by FDA in June 1989 for use in the treatment of anemia, which affects most dialysis patients (FDA, 19894.
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From page 202... ...
Physicians were paid on a fee-for-service basis for all care provided for home dialysis patients. They could also bill Medicare on a reasonable-charge basis for other nonsupervisory outpatient care and for all inpatient care provided to hospitalized patients.
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From page 203... ...
The explicit reductions in the physician's monthly rate and the absence of adjustment for inflation, when coupled with the increasing age and complexity of the patient population, have raised concerns about the effects of physician payment on patient care. The IOM staff analyzed HCFA BMAD data for 1987 for allowed charges to physicians and nonphysicians (ambulance services, medical suppliers, independent laboratories, and others)
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From page 204... ...
The surgical category would include charges for fistula operations (for dialysis patients) , transplant procedures, as well as other nonrenal surgical procedures (for dialysis as well as transplant patients)
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From page 205... ...
In general, dialysis patients are not admitted as inpatients for renal purposes, but for the primary diagnosis leading to renal failure in the case of initial stabilization, or for the precipitating diagnosis in subsequent admissions. ESRD patients are chronically ill people who have a greater number of comorbid conditions (not unique to them)
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From page 206... ...
206 Ct o o en Ct so Cal Cal so Ct - o o Cal o ._ .s Do _1 Cal ._ En o ;^ AD Cal Cal V)
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From page 207... ...
They note a previous study by Guterman (1986) that found that ESRD patients were more likely to become length-ofstay outliers and cost outliers, and had higher average costs and charges.
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From page 208... ...
Physicians selecting the latter option had their ARM payment (and later their MCP payment) for outpatient dialysis services reduced by one-thirtieth for each day a patient was hospitalized.~5 The difference in payment between the outpatient dialysis MCP and the reasonable-charge basis for inpatient care varies with the services provided to the patient.
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From page 209... ...
HCFA found no basis for accepting the arguments that patient complexity or case mix differed in a discernible way, and chose instead to rely on exceptions requests to deal with such alleged differences. Different percentages were recognized in the composite rates for home dialysis patients: 23.5 percent for hospital-based facilities and 10.5 percent for independent units.
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From page 210... ...
13. One manual listed these basic coding principles for admitting ESRD patients under the DRG system: (1)
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From page 211... ...
1988. Kidney acquisition costs: A management advisory report.
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