CMS to Cut ESRD Bundled Reimbursement up to $880 Million

The Centers for Medicare and Medicaid Services (CMS) will cut the reimbursement rate for end-stage renal disease (ESRD) bundled payments beginning in 2014.

The rebased rate is to reflect the reduced usage of ESRD drugs, specifically Epogen and two other anemia-treating drugs manufactured by Amgen, according to a Washington Post report.

For the past several years the bundled payment system for dialysis treatments has been relatively lucrative for healthcare providers, in part because Medicare’s reimbursement rate was based on the level of usage of anemia drugs of more than five years ago.

Shortly after CMS established the bundled-payment rates for dialysis treatment, the FDA began issuing warnings about potential side-effects of the Amgen pharmaceuticals. Healthcare providers cut back the usage of these drugs on their patients, but according to the Government Accountability Office, Medicare did not reduce the bundled-payment rate commensurately.

Late last year the GAO recommended a dialysis payment rate cut, but CMS could not oblige without approval by Congress. As part of the “fiscal cliff” legislation, Congress included a provision to allow CMS to “make reductions,” the Post reported.

The reduced reimbursement rate will cost providers as much as $880 million per year, according to the Post. The current reimbursement rates can be downloaded here (PDF, registration required):  (You must be logged in to download this file. Don't have an account? Register for free and you'll be returned to this page.)