End Stage Renal Disease Prospective Payment System (ESRD PPS)

20 - End Stage Renal Disease Prospective Payment System (ESRD PPS) Per Treatment Payment Amount (Rev. 13740; Issued: 04-17-26; Effective: 07-01-26; Implementation: 07-06-26) A case mix methodology adjusts the Prospective Payment System (PPS) base rate based on a limited number of patient characteristics. Variables for which adjustments will be applied to the PPS base rate include age, body surface area (BSA), and low body mass index (BMI). These variables are determined in the ESRD PRICER to calculate the End Stage Renal Disease Prospective Payment System (ESRD PPS per treatment payment amount (including all other adjustments). The following table contains claim data required to calculate the ESRD PPS per treatment payment amount. Form CMS-1450 ASC X12 837 institutional claim Through Date 2300 | DTP segment | 434 qualifier Date of Birth 2010BA | DMG02 Condition Codes (73, 74, 87) 2300 | HI segment | BG qualifier Value Codes (A8 and A9) / Amounts 2300 | HI segment | BE qualifier Revenue Code (0821, 0831, 0841, 0851, 0880, or 0881) 2400 | SV201 For claims with dates of service on or after January 1, 2011, Medicare systems must pass the line item date of service dialysis revenue code lines when the onset of dialysis adjustment is applicable to one or more of the dialysis sessions reported on the claim. Form CMS-1450 ASC X12 837 institutional claim Line Item Date of Service for Revenue Code (0821, 0831, 0841, 0851 2400 | DTP Segment | D8 qualifier In addition to the above claim data, the following payer only codes are required on claims with dates of service on or after January 1, 2011 to calculate the ESRD PPS per treatment payment amount: Form CMS-1450 Payer Only Format Payer Only Condition Codes (MA, MB, MC, MD, ME, MF) (Identifies comorbid conditions for adjustments) X(2) Payer Only Value Code (79) (Identifies dollar amount for services applicable for the calculation for determining outlier) • X(2) V(9) Payer Only Value Code (Q8) (Identifies dollar amount for services applicable for the calculation of the transitional drug add-on payment) • X(2) V(9) Form CMS-1450 Payer Only Format Payer Only Value Code (QG) (Identifies dollar amount for services applicable for the calculation of the transitional payment for new innovative equipment and supplies) • X(2) V(9) Payer Only Value Code (QH) (Identifies dollar amount for services applicable for the calculation of the transitional payment for capital related assets for new innovative equipment • X(2) V(9) Note: The payer only codes above are assigned by the Medicare standard systems and are not submitted on the claim by the provider. The following provider data must also be passed to the ESRD PRICER to make provider- specific calculations that determine the ESRD PPS per treatment payment amount: Field Format Actual Geographic Location MSA X(4) Actual Geographic Location CBSA X(5) Special Wage Index 9(2)V9(4) Supplemental Wage Index 9(2)V9(4) Provider Type X(2) Special Payment Indicator X(1) In addition to the above provider data, the following is required to calculate the final ESRD PPS rate effective January 1, 2011: Field Format Blended Payment Indicator X(1) Low-Volume Indicator X (1) Effective January 1, 2012 the following is required to calculate the Quality Incentive Program adjustment for ESRD facilities: Field Format Quality Indicator Field X(1) Based on the claim and provider data shown above, the ESRD PRICER makes adjustments to the PPS base rate to determine the ESRD PPS per treatment payment amount. The following factors are used to adjust and make calculations to the ESRD PPS per treatment payment amount. • Provider Type • Drug add-on • Budget Neutrality Factor • Patient Age • Patient Height • Patient Weight • Patient BSA • Patient BMI • BSA factor • BMI factor • Condition Code 73 adjustment (if applicable) • Condition Code 74 adjustment (if applicable) • Condition Code 84 for AKI patients (if applicable) • Condition Code 87 adjustment (if applicable) In addition to the above adjustments, the following adjustments may be applicable to the ESRD PPS base rate for adult patient claims with dates of service on or after January 1, 2011: • Onset of Dialysis • Patient Comorbidities • Low-Volume ESRD Facility Onset of Dialysis: Providers will receive an adjustment to the ESRD PPS base rate for patients within the initial 120 calendar days from when an ESRD beneficiary began their maintenance dialysis. The provider does not report anything on the claim for this adjustment. The adjustment is determined by the start date of dialysis in the Common Working File as reported on the patient’s 2728 form. When the onset of dialysis adjustment is provided, the claim is not entitled to a comorbidity adjustment or a training add-on adjustment. Patient Comorbidities: The ESRD PPS will provide adjustments for each category of chronic and acute comorbidity conditions, 3 categories of chronic conditions and 3 categories of acute conditions. In the event that more than one of the comorbidity categories is present on the claim, the claim will be adjusted for the highest paying comorbidity category. Chronic Comorbidities When chronic comorbidity codes are reported on the claim an adjustment may be made for as long as the chronic condition remains applicable to the patient care provided and is reported on the claim. Acute Comorbidities Acute comorbidity category adjustments will be eligible for a payment for the first month reported and then for the next three consecutive months, regardless of whether or not the diagnosis code is on the claim after the first month. This adjustment applies for no more than four consecutive months for any reported acute comorbidity category. Acute comorbidity conditions reported for more than four consecutive months will not receive additional payment. In the event that the comorbidity condition was resolved and later reoccurred, the provider may submit a condition code to indicate the diagnosis is a reoccurrence. The adjustment will be applicable for an additional four months. For a list of specific acute and chronic comorbid conditions eligible for adjustment, refer to the following website: https://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/ESRDpayment/Patient-Level-Adjustments This list may be updated as often as quarterly in January, April, July and October of each year. Low-Volume ESRD Facilities: ESRD facilities will receive an adjustment to their ESRD PPS base rate when the facility furnished less than 4,000 treatments in each of the three cost report years preceding the payment year and has not open, closed, or received a new provider number due to a change in ownership during the 3 years preceding the payment year. The ESRD facility must notify their A/B MAC (A) if they believe they are eligible for the low-volume adjustment. The A/B MAC (A) must validate the eligibility and update the provider specific file according to the ESRD facility’s low-volume payment tier. Pediatric patient claims are not eligible for the low-volume adjustment. A/B MACs (A) are instructed to validate the facility’s eligibility for the low volume adjustment. If an A/B MAC (A) determines that an ESRD facility has received the low volume adjustment in error, the A/B MAC (A) is required to adjust all of the ESRD facility’s affected claims to remove the adjustment within 6 months of finding the error. In addition to the above adjustments, the following adjustments may be applicable to the ESRD PPS base rate for adult and pediatric patient claims with dates of service on or after January 1, 2011: Training Adjustment: The ESRD PPS provides a training add-on of $33.44 adjusted by the ESRD PPS wage index that accounts for an hour of nursing time for training treatments. The add-on applies to both PD and HD training treatments. ESRD PPS Outlier Payments: The ESRD Prospective Payment System (PPS) includes a payment adjustment for high cost outliers when there are unusual variations in the type or amount of medically necessary care. Outlier consideration is provided for the following: • ESRD-related drugs and biologicals that were or would have been prior to January 1, 2011, either included under the case-mix adjusted composite payment system or separately billable under Medicare Part B; • ESRD-related laboratory tests that were or would have been, prior to January 1, 2011 separately billable under Part B; • Medical/surgical supplies, including syringes, used to administer ESRD-related drugs that were or would have been prior to January 1, 2011, separately billable under Medicare Part B; and • Renal dialysis service drugs that were or would have been, prior to January 1, 2011 covered under Medicare Part D. • For new injectable renal dialysis drugs and biologicals that are eligible outlier services, ESRD facilities should report J3591 with the National Drug Code (NDC) in the 11-digit format 5-4-2. The MAC will set the payment rate based on pricing methodologies under 1847A of the Act using the guidance in the Medicare Claims Processing Manual, Chapter 17 - Drugs and Biologicals, Section 20.1.3 - Exceptions to Average Sales Price (ASP) Payment Methodology. Statute requires the delay of the implementation of the oral-only renal dialysis service policy until January 1, 2025. Services not included in the PPS that remain separately payable are not considered outlier services. When the ESRD PRICER returns an outlier payment, the standard systems shall display the total applicable outlier payment on the claim with value code 17. Information related to the outlier services eligible for adjustment can be found at the following website: http://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/ESRDpayment/Outlier_Services.html This list may be updated as often as quarterly in January, April, July and October of each year. For claims submitted with dates of service on or after January 1, 2012, all drugs reported on the ESRD claim under revenue codes 0634, 0635 and 0636 with a rate available on the ASP file will be considered in the Medicare allowed payment (MAP) amount for outlier consideration with the exception of any drugs reported with the AY modifier and drugs included in the original composite rate payment system. Transitional Drug Add-On Payment Adjustment (TDAPA) Effective January 1, 2016 under the ESRD PPS drug designation process, CMS provides payment using a Transitional Drug Add-on Payment Adjustment (TDAPA) for new renal dialysis new injectable or intravenous drugs and biologicals that qualify under 42 CFR 413.234(c)(1). CMS will pay for the drug or biological using a transitional drug add-on payment adjustment, if the new injectable or intravenous drug or biological is used to treat or manage a condition for which there is not an existing ESRD PPS functional category. CMS bases the TDAPA on payment methodologies under section 1847A of the Social Security Act which are discussed in Pub. 100-04, Chapter 17, Section 20. The MAC will set the payment rate based on pricing methodologies under 1847A of the Act using the guidance in the Medicare Claims Processing Manual, Chapter 17 - Drugs and Biologicals, Section 20.1.3 - Exceptions to Average Sales Price (ASP) Payment Methodology. This payment is applicable for a period of 2 years. While the TDAPA applies to a new injectable or intravenous drug or biological, the drug or biological is not considered an outlier service, is not separately payable with the AY modifier and does not apply to acute kidney injury claims (AKI). Drugs eligible for the TDAPA must be billed with revenue code 0636 and, for dates of service before July 1, 2026, modifier AX must be appended to the HCPCS. • The TDAPA claim lines are shown as covered line items but no payment will be included on the line item. The TDAPA is included in the prospective payment amount on the dialysis revenue code lines. • Q8 payer only value code captures the total allowable payment for the TDAPA. The ESRD pricer divides the Q8 amount by the total number of dialysis treatments and the per treatment amount is added to PPS rate and included in each dialysis line payment. Additional information on the TDAPA is available on the CMS website located at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/ESRDpayment/ESRD-Transitional-Drug Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) Beginning January 1, 2020, the ESRD PPS provides the Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) for new and innovative renal dialysis equipment and supplies that qualify under § 413.236. The TPNIES payment is based on 65 percent of the Medicare Administrative Contractor (MAC) determined price. The MACs, on behalf of CMS, establish prices for new and innovative renal dialysis equipment and supplies that meet the TPNIES eligibility criteria using verifiable information from the following sources of information, if available: • the invoice amount, facility charges for the item, discounts, allowances, and rebates; • the price established for the item by other MACs and the sources of information used to establish that price; • payment amounts determined by other payers and the information used to establish those payment amounts; • charges and payment amounts required for other equipment and supplies that may be comparable or otherwise relevant. The TPNIES is paid for 2 calendar years, beginning on January 1 and ending on December 31. While the TPNIES applies to a new and innovative equipment or supply, the equipment or supply is not considered an outlier service. Items eligible for the TPNIES must be billed with revenue code 027X and, for dates of service before July 1, 2026, modifier AX must be appended to the HCPCS. Until TPNIES items receive a HCPCS the TPNIES supplies are reported with HCPCS A4913 for miscellaneous dialysis supply not otherwise specified and for TPNIES equipment HCPCS E1699 is reported for miscellaneous dialysis equipment not otherwise specified. • The TPNIES claim lines are shown as covered line items but no payment will be included on the line item. The TPNIES is included in the prospective payment amount on the dialysis revenue code lines. • QG payer only value code captures the total allowable price for the TPNIES. The ESRD pricer calculates the 65 percent of the MAC determined price and divides the amount by the total number of dialysis treatments and the per treatment amount is added to PPS rate and included in each dialysis line payment. Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) for Capital Related Assets (CRA) Beginning January 1, 2021, the TPNIES policy was expanded to include CRA that are home dialysis machines when used in the home for a single patient. For CRA for TPNIES only, CMS includes an offset adjustment to offset the costs already paid for dialysis machines in the ESRD PPS bundle. Effective January 1, 2022, CMS annually updates the offset adjustment amount by the ESRD bundled market basket percentage increase factor minus the productivity adjustment factor. The payment for CRA for TPNIES is based on 65 percent of the MAC determined price (see below), reduced by the offset adjustment amount described in the prior sentences. The MACs, on behalf of CMS, establish prices for new and innovative renal dialysis equipment and supplies, including certain CRA that are home dialysis machines, that meet the TPNIES eligibility criteria using verifiable information from the following sources of information, if available: • the invoice amount, facility charges for the item, discounts, allowances, and rebates; • the price established for the item by other MACs and the sources of information used to establish that price; • payment amounts determined by other payers and the information used to establish those payment amounts; • charges and payment amounts required for other equipment and supplies that may be comparable or otherwise relevant. The TPNIES for CRA is paid for 2 calendar years, beginning on January 1 of the approval year and ending on December 31 the following year. Following payment of the TPNIES for CRA, the ESRD PPS base rate will not be modified and the new CRA that is a home dialysis machine will not be an eligible outlier service as provided in § 413.237. Beginning January 1, 2021 and continuing through dates of service before July 1, 2026, ESRD facilities report the AX modifier (item furnished in conjunction with dialysis services) with the HCPCS code for the CRA that is eligible to receive TPNIES payment for CRA. The TPNIES for CRA pricing instructions apply when a HCPCS code on the TPNIES CRA list is reported and one of the following revenue codes: •0823, Hemodialysis Home Equipment • 0833, Peritoneal Home Equipment • 0843, Continuous Ambulatory Peritoneal Dialysis (CAPD) Home Equipment • 0853, Continuous Cycling Peritoneal Dialysis (CCPD) Home Equipment • 0889, Other Miscellaneous Dialysis (to be used for ultrafiltration home equipment). For CRAs that are home dialysis machines used in the home for a single patient, the MACs shall divide the annual allowance by the expected number of treatments to calculate the annual allowance and the per treatment amount. The expected number of treatments is always 156 per year. MACs shall assign an amount to value code QH (Total TPNIES CRA amount) which totals the CRA for TPNIES per treatment amount multiplied by the number of treatments on that claim. The number of dialysis treatments for the month used in the CRA for TPNIES calculation, is limited to the 13 to 14 allowable monthly treatments that are deemed medically necessary. Dialysis treatments exceeding 13 to 14 per month (3 treatments per week) that are determined reasonable and necessary by the Medicare contractors are payable; however, treatments that exceed 13 to 14 per month shall not be considered for separate pricing for CRA for TPNIES. ESRD facilities should not bill separate line items for CRA for TPNIES in excess of 13 to 14 treatments per month. Regardless of the number of treatments given per month, the adjusted CRA for TPNIES per treatment amount will equal the adjusted CRA for TPNIES per treatment amount that is calculated for 13 treatments per month. MACs shall not allow CRA for TPNIES in excess of 156 treatments per calendar year. Pricer puts a payment at the dialysis line so that it is a per treatment payment. Therefore, Pricer calculates the adjusted per treatment amount that is added to each dialysis line by: 1) dividing QH by the total number of administered dialysis treatments, 2) subtracting the applicable offset amount, and 3) multiplying by 65 percent. CRA for TPNIES is not applicable to the per treatment payment amount that is paid to ESRD facilities for furnishing dialysis to individuals with Acute Kidney Injury (AKI).