Kidney Care Council Statement on the End Stage Renal Disease Prospective Payment System Final Rule

November 22, 2013

Cuts to Dialysis Medicare Reimbursement Put Care of Vulnerable Patients at Risk

The Kidney Care Council (KCC) is concerned about the negative impact of the multiyear reduction in payment released today by the Centers for Medicare & Medicaid Services (CMS) in the Medicare end-stage renal disease (ESRD) prospective payment system (PPS) Final Rule.

“Dialysis providers are committed to providing the best quality care to all of our patients,” said KCC Chairman Tom Weinberg. “Today’s Medicare ruling substantially reduces funding needed for patient care and interferes with the ability of our physicians, nurses, and clinical teams to do the very best for every patient.”

The Final Rule transitions the 12 percent cut over a period of three or four years, with a 3.3 percent reduction in 2014. The size of the cut itself, $29.93 per treatment, remains unchanged from the Proposed Rule and contradicts the unified voice of patients, clinicians, providers, facilities, and Members of Congress to correct the total amount of the reduction set forth in the Proposed Rule.

“Phasing-in a cut of this magnitude only delays the harm,” said Weinberg. “These cuts mean that Medicare reimbursements over the next three to four years will not keep pace with the ever-increasing costs of delivering life-saving dialysis treatments. For providers, that means tough choices for staffing, services, facility hours, clinical interventions that improve patient outcomes and quality of life, and ultimately whether an entire facility can be kept open to service a community. For Medicare beneficiaries, it means reduced access to care.”

Today’s Medicare cuts are aimed at an industry with modest Medicare margins, as is historically well documented by the Medicare Payment Advisory Commission. KCC continues to be concerned for the most vulnerable facilities and their patients. Facilities in greatest jeopardy will be those with the greatest number of Medicare and Medicaid patients, which are frequently in rural areas and the inner city.

“The Medicare math doesn’t add up,” said KCC Executive Director Cherilyn Cepriano. “CMS’ own data from 2012 shows that gross Medicare margins were only 3.9 percent for dialysis facilities and that Medicare payments in 44 percent of all facilities fell below the cost of providing care. So a 12 percent cut – even if it is spread over multiple years – is clearly unsustainable. Today’s Rule will drive an even greater percentage of facilities even further into the red or even out of business – which is alarming given that Medicare beneficiaries comprise 85 percent of all dialysis patients.”

KCC will work with Congress to support the continued provision of quality care in dialysis facilities across America. “We have appreciated the bipartisan leadership in the House and Senate on these issues in support of their constituents living with kidney failure and had hoped that urging from the public and Members of Congress would lead CMS to take a better path,” said Cepriano. “Faced with this Final Rule that sets dialysis reimbursement at an unsustainable level, we will work with Congress on proposals that would strengthen the ESRD PPS, improve the stability of the economic model for dialysis facilities, and continue to make strides in improvements in patient care.”

KCC is a nonprofit national health care association based outside of Washington, D.C. and comprised of twelve of the leading kidney dialysis provider companies in the United States. Collectively, the KCC members provide End Stage Renal Disease (ESRD) services to more than 85 percent of the dialysis patients in the United States. The membership includes large, small, nonprofit and for-profit provider companies.