December 20, 2000 - The National Kidney Foundation (NKF) issued a press release explaining the extended Medicare coverage of critical immunosuppressive medications that was included in the Medicare legislation passed last week.

The American Dietetic Association issued a press release explaining the Medical Nutrition Therapy Act that was passed last week.

December 19, 2000

Washington Update by Gwen Gampel
NRAA Government Relations Consultant

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At long last, 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 includes several good provisions affecting dialysis facilities including a composite rate increase and a freeze on proposed changes in average wholesale prices.

Here is a summary:

Composite Rate Increase - The BIPA bill contains an increase in the composite rate in 2001. Because the bill is being 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%, to account for the timing of the implementation of the 2.4% increase.

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. Obviously, this program memorandum will have to be rescinded and a new one issued to account for the higher rate beginning April 1, 2001. For a copy of the program memorandum, request NRAA Report # 270.

Special Exception: According to the BIPA legislation, the Secretary of the Department of Health and Human Services (HHS) may not provide an exception on or after December 31, 2000. However, in case of a facility that did not file for an exception rate in 2000, the facility may submit an application for an exception rate by not later than July 1, 2001. Further, any exception rate in effect on December 31, 2000 shall continue in effect so long as the rate is greater than the composite rate as updated by the additional 2.4% increase in the composite rate.

HCFA in a Program Memorandum (Transmittal A-00-94) issued December 12, 2000 explained to the intermediaries that a separate Program Memorandum would be issued to announce the date on which the 180 day time period for the exception cycle would begin. In the interim, all currently approved exceptions remain in effect.

Moratorium on Reductions of Average Wholesale Prices - The BIPA includes at least a nine month moratorium on HCFA implementing reductions in the average wholesale prices used to reimburse for dialysis related drugs. The bill calls for the General Accounting Office (GAO) to study the reimbursement of drugs and biologicals under the current Medicare payment methodology. In the study the GAO is to: (i) identify the average prices at which such drugs and biologicals are acquired by physicians and other suppliers; (ii) quantify the difference between such average prices and the reimbursement amount; and (iii) determine the extent to which (if any) payment under such part is adequate to compensate physicians, providers of services (like dialysis providers), or other suppliers of such drugs and biologicals for costs incurred in the administration, handling, or storage of such drugs or biologicals. (More information available in the NRAA President's Letter).

Reforming Medicare Appeals Process — Generally, the language in the BIPA bill is similar to Rep. Thomas’ Medicare appeals bill, H.R. 2356. The initial determination and appeals process will greatly be improved under BIPA. Not only will initial determinations have to be made within 45 days of a request for payment but redeterminations must be concluded not later than 30 days after the request is made to the fiscal intermediary or carrier. The reconsideration will be handled by independent contractors chosen by the Secretary of HHS. Appeals to an Administrative Law Judge must be decided not later than 90 days from the date of the request and appeals to the Departmental Appeals Board must also be concluded in 90 days. (More information available in the NRAA President's Letter).

Annual Update Formula Study — The bill calls for a study on the development of an "ESRD Market Basket" to adjust the composite rate payment to reflect inflationary costs. The Secretary of HHS is to collect data and develop an ESRD market basket whereby HHS can estimate, before the beginning of the year, the percentage by which the costs for the year of the mix of labor and non-labor goods and services included in the composite rate will exceed the costs of such a mix in the preceding year. (More information available in the NRAA President's Letter).

Bundling Study: Additionally, the legislation calls for a study on the inclusion of additional services in the composite rate. HHS is to report on a system which includes, to the "maximum extent feasible" in the composite rate, payment for clinical diagnostic laboratory tests and drugs, including Epogen, that are routinely used in furnishing dialysis services to Medicare beneficiaries but which are currently separately billable by renal dialysis facilities. The report is due in conjunction with the report on the annual update study, July 1, 2002.

GAO Study on Access to Services: The General Accounting Office (GAO) is to study access of Medicare beneficiaries to renal dialysis services which will include whether there is a sufficient supply of facilities to furnish needed dialysis services, whether Medicare payment levels are appropriate, taking into account audited costs of facilities for all services furnished, to ensure continued access to such services, and improvements in access and quality of care that may result in the increased use of long nightly and short daily hemodialysis. The report is due to Congress by January 1, 2003.

Nutrition Therapy: The bill includes coverage for medical nutritional therapy services for beneficiaries with diabetes or renal disease (who are not receiving maintenance dialysis) provided by a registered dietician or nutrition professional beginning in January 1, 2002. Under the legislation, "medical nutritional therapy services" means nutritional diagnostic, therapy, and counseling services furnished by a registered dietitian or nutrition professional. The payment for such nutrition therapy services will be 80 percent of the lesser of the actual charge for the services or 85 percent of the amount determined under the fee schedule for the same services if furnished by a physician. HHS will also conduct a study on the expansion to other Medicare beneficiaries of the medical nutrition therapy services benefit and submit it to Congress by July 1, 2003.

Elimination of Time Limitation on Medicare Benefits for Immunosuppressive Drugs: The bill lifts the time limit on the coverage of immunosuppressive drugs which are furnished on or after the date of enactment of the bill.

Medicare+Choice (M+C): The bill would direct the Secretary of HHS to increase payments to M+C plans beginning January 1, 2002 for M+C ESRD patients to reflect the ESRD capitation demonstration project rates. Medicare is to take into account such factors as renal treatment modality, age, and the underlying cause of ESRD in computing this rate. The Secretary is to publish a proposed rule for public comment within 6 months of enactment and, in a final rule no later than July 1, 2001, a description of the appropriate adjustments.

The bill would also permit ESRD beneficiaries to enroll in another M+C plan if the plan in which they are enrolled terminates coverage.

Patient Assessment: The bill calls for the Secretary of HHS to submit a report to Congress on the development of patient assessments, including assessments of ESRD patients, to measure health and functional status by January 1, 2005.

Advisory Opinion: The Office of the Inspector General’s advisory opinion authority is extended indefinitely.

MedPAC: The bill requires that Medicare Payment Advisory Commission (MedPAC) include the vote of each commissioner on each recommendation sent to Congress.

It is expected that the President will sign the bill before the end of the year.

(Updates on many more issues available in the NRAA President's Letter).

Click here for a chronology of news stories that led to the passage of this legislation.