March 17, 2010

Dear Members of Congress:

The Centers for Medicare and Medicaid Services (CMS) is in the process of finalizing its End Stage Renal Disease (ESRD) Prospective Payment System (PPS) Rule. The rule implements provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) that require the Agency to establish a bundled payment system for dialysis services.

We respectfully ask that Congress work with us to ensure that the CMS Final Rule addresses the aspects of the Notice of Proposed Rulemaking that have been identified by the kidney community as a potential source of unintended consequences for individuals who need life-saving dialysis care. The new payment system should not compromise the quality of care for vulnerable individuals on dialysis. It is critical that the Agency fully evaluate all relevant data and thoroughly consider the comments on the draft regulation that were submitted by organizations representing dialysis consumers, including the undersigned.

CMS proposes to shift all oral drugs without injectable equivalents, including calcimimetics and phosphate binders, into the bundle. Adding these drugs in the bundle and requiring patients to pay a 20 percent coinsurance on them will have a direct adverse financial impact on beneficiaries. Under the current system, most dialysis patients receive these drugs through Medicare Part D or private insurance plans. The inclusion of oral drugs in the bundle will likely result in increased financial responsibility for beneficiaries, most profoundly for those entitled to low income subsidy under the Medicare prescription drug program and dual-eligible beneficiaries, as well as those patients who may be receiving third party assistance to fully or partially offset the cost of medications. Furthermore, CMS proposes to reimburse dialysis facilities at $14 per treatment for providing oral drugs, which is significantly less than the actual cost of the drugs, estimated to be at least $45 per treatment. The Agency must be absolutely precise in its calculation of the cost of these drugs and should not act until it is certain that all of the data have been properly evaluated and safeguards put into place. Similarly, inclusion of additional oral drugs in the bundle should be delayed until a system is in place to monitor the impact of such change, and relevant metrics are developed and approved.

The Agency also proposes to include all laboratory tests provided in connection with treatment of ESRD in the bundle. This will subject beneficiaries with ESRD to a liability for 20 percent coinsurance even though other Medicare beneficiaries do not have a coinsurance obligation for lab costs and Congress did not direct CMS to subject laboratory tests to a copayment. The final rule should not increase the financial burden of care on dialysis patients. If the rule does so, dialysis patients would become the only Medicare beneficiaries who are subject to a co-pay for laboratory services. In addition, the Final Rule should not require dialysis providers to cover the cost of lab tests simply because blood was drawn at a dialysis facility for the convenience of the patient.

We are also concerned that the specific needs of certain patients are not provided for in the Proposed Rule. For example, in the Proposed Rule, CMS recognizes that facilities spend more on separately billable drugs for African American patients which are appropriately reimbursed under the current system. However, CMS does not propose to adjust payment for race under the PPS. As a result, dialysis facilities that treat a high number of African American patients will face great financial risk, threatening the access to care for these dialysis patients without such an adjustment.

The Agency should not reduce payment to dialysis facilities beyond the reductions authorized by Congress. MIPPA sanctions a 2 percent overall payment reduction. However, CMS proposes an additional 3 percent cut during the phase-in period to the bundled payment system. The members of the organization listed below are concerned that additional cuts would compromise access to and the quality of patient care.

We ask that you contact CMS to ensure that the new ESRD PPS improves care for individuals who need dialysis services and not endanger the progress in quality of care made in recent years. The issues are complex and the Agency has limited time to act, but CMS must get the policies right. The health and wellbeing of hundreds of thousands of Medicare beneficiaries is at stake.

Warm regards,