On June 24, 2016, CMS issued a proposed rule that would update payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to beneficiaries on or after January 1, 2017.  The proposed rule also proposes changes related to the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Competitive Bidding Program.  The proposed rule is scheduled to be published in the Federal Register on June 20, 2016 and comments on the proposed rule are due August 23, 2016.  A summary of the proposed updates can be found in the fact sheet published by CMS, available by clicking here. 

In the proposed rule, CMS proposes an increase to the 2017 ESRD PPS base rate, which CMS projects will increase the total payments to all ESRD facilities by 0.5 percent compared with 2016.  For hospital-based ESRD facilities, CMS projects an increase in total payments of 0.7 percent, while for freestanding facilities the projected increase in total payments will be 0.5 percent. 

CMS also proposes changes to the ESRD Quality Incentive Program (QIP), including for payment years 2018, 2019, and 2020, under which payment incentives are made to dialysis facilities to improve the quality of care that they provide.  Under the ESRD QIP, facilities that do not achieve a minimum Total Performance Score with respect to quality measures receive a reduction in their payment rates under the ESRD PPS.

CMS also addresses in the proposed rule issues related to the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Competitive Bidding Program (CBP).  CMS proposes requiring bidding entities to obtain and provide proof of a bid surety bond for each competitive bidding area in which the entity submits its bid(s), in accordance with Section 1847(a)(1)(G) of the Social Security Act.  CMS also proposes revisions to the existing state licensure requirement and proposes to expand suppliers’ appeal rights in the event of a breach of contract action by CMS.

Finally, CMS would change the methodologies for adjusting DMEPOS fee schedule amounts using information from the DMEPOS Competitive Bidding Programs for certain groups of items with similar items.  CMS also proposes changes to the methodology for establishing bid limits for items under the DMEPOS Competitive Bidding Program.