It covers the processing of outstanding bills payable under the composite rates in effect prior to Jan. 1, 2000.

February 3, 2001 - Medicare has released a new Program Memorandum to Intermediaries, A-01-19, entitled "New Composite Payment Rates Effective April 1, 2001, through December 31, 2001, and the Application of Exceptions Under the End Stage Renal Disease Composite Rate System".

The Composite Rate is the dollar amount that Medicare has determined to be fair compensation to hospitals and dialysis clinics that are providing a standard, chronic hemodialysis treatment.

Here is the Medicare Renal Dialysis Facility Manual, which explains the services and supplies covered by the Composite Rate.

The highest rate is $144.59 per treatment. This is for major metropolitan areas with high real estate and labor costs such as New York, San Francisco, and Los Angeles.

The lowest rate is $121.70 per treatment. Most rural areas with low real estate and labor costs have this rate.

The 106th Congress finished its work on December 15. Several bills were passed in the final days of the Congressional lame-duck session including the "Medicare, Medicaid, SCHIP Benefits Improvement and Protection Act (BIPA)" and the appropriations bill for the Departments of Labor/Health and Human Services/Education (Labor/HHS). The BIPA bill included several provisions affecting dialysis facilities including a composite rate increase and a freeze on proposed changes in average wholesale prices.

Composite Rate Increase - The BIPA bill contained an increase in the composite rate for 2001. Because the bill was passed so late in the year, instead of increasing payments by 2.4% in January, the composite rate will only be increased by 1.2% from January 1, 2001 through March 31, 2001. However, for services furnished on or after April 1, 2001, the composite rate will be increased by 2.4 % and a transitional percentage allowance equal to 0.39% (totaling 2.79%), to account for the timing of the implementation of the 2.4% increase.

On January 1, 2002, the composite rate will revert to the rates in effect on December 31, 2000, plus 2.4%.

December 19, 2000 - With passage of the "Medicare, Medicaid, SCHIP Benefits Improvement and Protection Act (BIPA)" by Congress on December 15, the HCFA Program Memorandum reported here on December 14th is no longer appropriate.

HCFA issued a program memorandum (Transmittal A-00-94) on December 12, 2000 which instructs the fiscal intermediaries to increase composite rate payments by 1.2% effective January 1, 2001. This program memorandum will have to be rescinded and a new one issued to account for the higher rate in the BIPA legislation that will begin April 1, 2001.

December 14, 2000 - The Health Care Financing Administration (HCFA) has released a Program Memorandum that contains the new ESRD Composite Rates effective January 1, 2001.

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