Now that the Medicare legislation has become law, the center of activity has moved from Congress to the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). The broad language of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) gives the HHS secretary discretion over many of its provisions, including the design and implementation of the bundled payment system of reimbursement for the treatment of end-stage renal disease (ESRD). MIPPA, which became law on July 15, 2008, creates a bundled payment that covers items and services included in the composite rate as of December 31, 2010; erythropoiesis-stimulating agents and their oral equivalents; and laboratory tests. Under the law, the secretary of the HHS has the discretion to include in the “bundle” other drugs, biologics, and their oral equivalents as well as other items and services furnished to individuals for the specific treatment of ESRD. The case-mix adjusters specified in the law are patient weight, body mass index, comorbidities, length of time on dialysis, age, race and ethnicity. However, the law gives the HHS secretary discretion to include additional adjustments, such as those relating to geographic factors and for pediatric and rural facilities. There is also an adjustment for high-cost outliers to be decided by the secretary. MIPPA requires that low-volume, high-cost facilities receive a minimum add-on adjustment of 10 percent during the 4-year phase-in of the bundle. The secretary has discretion in determining the facilities that qualify for the add-on and the amount, if any, over 10 percent. The unit of payment under the bundle is also left to the discretion of the secretary, who may set it on a per-treatment, weekly or monthly basis. Developing the ESRD regulations will be a multiyear process; even though CMS may be starting the process now, the ultimate decisions will be made under a new administration. MIPPA requires CMS to initiate a pay-for-performance program. According to the law, the bundled payment rate will be reduced by up to 2 percent for facilities that do not achieve or make progress toward specified quality measures starting January 1, 2012. Anemia management, patient satisfaction, iron management, bone mineral metabolism, and vascular access are specified in the law as quality measures. The secretary will establish the specific benchmarks used in measuring quality, the design of the overall system, the implementation process, and the details of the public notice requirements. The secretary will also develop the criteria for participation and selection in the five-year chronic kidney disease demonstration project required by MIPPA and the content of the chronic kidney disease education sessions and material that will now be reimbursed by Medicare. MIPPA includes specific language that precludes judicial or administrative review of any of the secretary's decisions. In essence, the secretary and the administration have broad unilateral authority in developing the specific policies for implementing the statutory ESRD requirements. Although the law gives the secretary broad authority in the design of the reimbursement, quality and demonstration programs, CMS will play a crucial role in their development. The implementation decisions will be made through the regulatory process, which begins with CMS. The path for the development of regulations is that the initial decisions are made by CMS, reviewed by the secretary of the HHS, forwarded to the Office of Management and Budget (OMB) for analysis and concurrence, and published as proposed regulations with a public comment period. The comments are reviewed, and changes can be made in the proposed regulations, which must then be reviewed again by the secretary of the HHS and the OMB before being published as final regulations. Once the final regulations are published, there is normally a 60- to 90-day period before implementation. Developing the ESRD regulations will be a multiyear process. Even though CMS may be starting the process now, the ultimate decisions will be made under a new administration. This means that a new secretary of the HHS, administrator of CMS, and director of the OMB, along with other top officials, will have a direct impact on the regulations. The regulatory process is where the action will be focused for the next year.
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