CMS Sends Congress Report Outlining Bundled Dialysis Payment System

Main Category: Medicare / Medicaid / SCHIP
Article Date: 22 Feb 2008 - 11:00 PDT

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CMS on Wednesday sent Congress a report outlining a new "fully bundled" payment system that the agency is recommending for dialysis services, CQ HealthBeat reports. Under the current system, CMS pays for some treatment separately from payments to facilities. About 40% of the rate that Medicare pays for dialysis care goes toward separately billed items, such as prescription drugs, laboratory services, supplies and blood products, according to CMS. The other 60% goes to dialysis facilities.

The Bush administration's fiscal year 2009 budget proposal calls for the new payment system to begin on Jan. 1, 2011. Acting CMS Administrator Kerry Weems said that the new system "creates incentives to furnish dialysis services efficiently." The Government Accountability Office, Medicare Payment Advisory Commission and House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) all support switching to a bundled rate.

Stark said, "I have been very concerned that Medicare's overpayments for the anti-anemia drug Epogen create a perverse incentive for dialysis centers to raise doses, which the FDA warns can put dialysis patients at increased risk of heart attack, heart failure, stroke and death." He added, "A well-designed bundled payment system will remove the incentive to over-utilize drugs and encourage more appropriate provision of care." Stark said he will "work to enact legislation this year that gets this much-needed payment reform under way."

Amgen, which manufactures Epogen, said that it is reviewing the report to "better understand the potential impact on patient access and quality of care" and that it "looks forward to discussing the implications with the renal community." The company added that quality assessment and adjustment of payments to reflect the severity of illness "are critical elements to any bundle payment system" (CQ HealthBeat, 2/20).

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