February 2, 2011

Dear Members of Congress:

At the end of last year, we wrote to you highlighting our concerns regarding the Centers for Medicare and Medicaid Services’ (CMS) decision to continue to use estimates, rather than  using actual data, in establishing the “transition adjustment” to the new Medicare End Stage Renal Disease (ESRD) payment system.  Our organizations, which represent individuals with kidney disease and kidney failure, remain grateful that CMS has heeded patients’ concerns on several points related to implementation of the new payment system.  However, we remain troubled that the transition adjustment has not been revised.  Failure to revise it based on actual data could result in a loss of approximately $250 million from Medicare funding for dialysis patient care.  We are disappointed that the previous Congress did not take the opportunity to direct CMS to base this adjustment, without having to go through rulemaking, on the actual number of facilities that have chosen to opt into the new payment system.  We strongly urge you to act quickly this year so that CMS can implement the appropriate adjustment amount by April 1, 2011, making it retroactive to January 1, 2011. Failure to do so could negatively affect access to and quality of care for this vulnerable patient population.

Congress established the transition adjustment to ensure budget neutrality for Medicare’s new ERSD Prospective Payment System (PPS), while allowing dialysis facilities the option to transition into the new payment system during a four-year period. CMS has acknowledged that the adjustment was not intended to achieve savings beyond what was already provided in the legislation. While we appreciate that the Agency is willing to fix this during the next rulemaking cycle, we are concerned waiting until 2012 could create a hardship for many dialysis facilities that depend upon timely and accurate Medicare payments to provide high-quality care. 

As we noted in our earlier letter, CMS estimated that only 43 percent of facilities would opt in to the new payment system, requiring a 3.1 percent reduction in Medicare payments during the transition years in order to achieve budget neutrality. However, all dialysis centers were required to notify CMS by November 1 whether they would actually choose to fully implement the PPS.  As it turns out, CMS substantially underestimated the number of centers that would opt to fully implement the new PPS.  A study by The Moran Company finds more than 90 percent of all facilities intend to be paid fully under the new PPS.  Using the actual number of centers opting in, rather than the CMS estimate, will ensure that Congressional intent is achieved and that dialysis care is not unnecessarily placed at risk. 

Not correcting the transition adjustment now will undermine the important improvements to the Medicare ESRD program that Congress has made, including providing an annual payment update and implementing the first true pay-for-performance program under Medicare.  If the proposed 3.1 percent adjustment is implemented, overall dialysis payment cuts will be far in excess of the 2 percent Congress mandated in the Medicare Improvements for Patients and Providers Act (MIPPA). If dialysis services are underfunded, patient care will be directly and negatively affected.

To protect dialysis patients’ access to quality care, Congress should instruct CMS immediately to correct the adjuster and base it on actual provider behavior so that payments made in 2011 are consistent with Congressional intent. It is very important that the Agency make the adjustment to the payment system as quickly as possible and at least by April 1, 2011.

Thank you for your attention to this important matter that could impact the lives and health of individuals on dialysis nationwide.


Sincerely,
                  

LaVarne Burton                   
President and CEO                           
American Kidney Fund                       
6110 Executive Blvd., Suite 1010                        
Rockville, MD 20852                                                                    

John Davis
CEO 
National Kidney Foundation           
East 33rd Street                               
New York, NY 10016                   

Tonya L. Saffer
Interim Executive Director
Dialysis Patient Citizens
900 7th Street, NW, Suite 670
Washington, DC  20001

Lori Hartwell
President and Founder
Renal Support Network
1311 N. Maryland Ave. 30
Glendale, CA  91207