June 28, 2002 - Early today in a 221 to 208 vote, the House of Representatives adopted a Republican-backed $350 billion Medicare reform package. Story from the Washington Post.

June 27, 2002 - Although House Republican leadership aides "insist" a floor vote will occur this week on the GOP-backed $350 billion Medicare reform package, objections from some House Republicans could "imperil passage" of the bill. Story from Kaiser Network.

The Washington Post is reporting that the GOP House leadership is hoping to bring the Medicare Drug/Provider bill to the floor for a vote today.

June 24, 2002 - Here is the latest news from Washington, DC on federal funding for dialysis patient care.

The House did not follow MedPAC's recommendation, a 14-0 vote, which stated, "For calendar year 2003, the Congress should update the composite rate payment for outpatient dialysis services by 2.4 percent." (See March 2nd story below on MedPAC.)

(What follows is a small portion of the weekly e-mail newsletter of the National Renal Administrators Association (NRAA). For information on joining the NRAA and receiving complete print and electronic versions of up-to-the-minute and in-depth reports on all ESRD issues, visit the NRAA web site.)

by Gwen Gampel, NRAA Government Relations Consultant

House Ways and Means Committee Drug and Provider Bill Approved

The House Ways and Means Committee worked until 2 am Wednesday, June 19, to finish action on their Medicare bill, H.R. 4954, the "Medicare Modernization and Prescription Drug Act of 2002." The bill approved along party lines adds a drug benefit to Medicare costing about $310 billion over 10 years and increases provider payments by about $28 billion. Almost all of the money goes to hospitals, physicians and M+C plans. According to a draft preliminary CBO estimate our 1.2% composite rate increase in 2004 costs $100 million a year over the 10 year period. If it is any consolation Home Health Agencies will be $1.9 billion worse off as a result of the bill and Skilled Nursing Facilities will also be worse off. If you guessed that the hospitals and physicians got the lion's share of the funds because they; (1) have huge PACs, (2) many, many lobbyists, and (3) do a fabulous job on grassroots, you guessed right! There are some civic lessons here.

ESRD Provisions

The bill includes three ESRD provisions: (1) a 1.2% composite rate increase in 2004, (2) the reinstatement of the pediatric exception, and (3) a study on the costs of providing home dialysis therapies.

Clearly we are all very disappointed that no composite rate increase is included for 2003. We were told money was "tight" and therefore the committee could only include an increase in 2004. Having to lobby against the wholly unwarranted proposal to cut home dialysis reimbursed very much hurt our efforts as it diverted from our message for a composite rate increase. Too many Members of Congress thought the renal community would be happy if only the home dialysis cut was taken out and not enough understood that no increase is really equal to a decrease in all modality reimbursement.

The NRAA along with the Renal Coalition will be aggressively lobbying the Senate for a composite rate increase in 2003. Please use the NRAA sample letter to urge your Senators to cosponsor the Conrad/Frist bill, S. 1605, which includes a 2.6% composite rate increase. Remind your Senators that dialysis facilities are treating an ever older and sicker population, that we are facing a nursing shortage and have rising costs like other providers.

As the House bill is not expected to be taken up by the Senate the renal community may also have an opportunity for a rate increase in 2003 in a future House provider bill this year. Chairwoman Nancy Johnson, of the Health Subcommittee, will try and improve the home dialysis study language beyond home dialysis costs to include patient characteristics, outcomes, and quality of life measures, and adequacy of payment. The NRAA has suggested the National Institutes of Health (NIH) conduct the study instead of the General Accounting Office (GAO), as proposed in the bill, as they are less biased and have more scientific expertise.

Daily Dialysis Amendment

Late in the evening Rep. Jim Mc Dermott (D WA) offered and then withdrew an amendment to have Medicare reimburse for daily dialysis. He withdrew the amendment because he knew he did not have enough support in the committee to pass it. The purpose of the amendment was simply to let the committee members discuss the issue and let them know this was a priority for Reps. McDermott and Jennifer Dunn (R WA).

March 2, 2002 - The Medicare Payment Advisory Commission (MedPAC) yesterday sent its annual report on Medicare payment recommendations to Congress. The report follows up on actions MedPAC took in January, when it decided to recommend a 2.4% increase in the composite rate for 2003.

Here is the chapter of the MedPAC report dealing with outpatient dialysis services (pdf format). The chapter begins with this summary:

Current aggregate Medicare payments for outpatient dialysis services appear to be adequate. MedPAC's best estimate for 2002 is that payments for composite rate services and separately billable medications together exceed providers' costs by about 3 percentage points; however, neither payment for composite rate services nor payments for medications outside the payment bundle accurately reflect efficient providers' costs. Although composite rate payments did not cover the costs of providing dialysis services, payments for separately billable medications significantly exceeded providers' costs.

December 18, 2001 - There are now 101 co-sponsors in the House of Representatives for the Medicare Dialysis Benefit Improvement Act of 2001 (HR 2220).

The Senate version, S. 1605, now has two co-sponsors.

November 21, 2001 - There are now 97 co-sponsors in the House of Representatives for the Medicare Dialysis Benefit Improvement Act of 2001 (HR 2220). "The Medicare Dialysis Benefit Improvement Act", would: (1) increase the composite rate by 2.6% for 2002; (2) pay a full composite rate payment for a fourth routine treatment for pediatric patients, those patients over 80 kgs and cardiac patients with fluid overload; and (3) restore the exception process.

Here is the Summary and Status Record of Bill HR 2220 from thomas.loc.gov.

Here is RenalWEB's Dialysis Legislation Page.

November 5, 2001 - Senator Kent Conrad (D-ND) and Senator Bill Frist (R-TN) have introduced S. 1605, the companion bill to H.R. 2220 introduced by Reps. Camp (R-MI) and Thurman (D-FL).

There are now 90 co-sponsors in the House of Representatives for the Medicare Dialysis Benefit Improvement Act of 2001 (HR 2220).

August 13, 2001 - Below is a press release from the Renal Leadership Council applauding the results of a study by Abt Associates which details why dialysis facilities should receive at least a 2.6% increase in Medicare reimbursement.

Medicare Should Increase Reimbursement to Dialysis Facilities

Contact: Gwen Gampel
(202) 544-6264

"At a minimum Medicare reimbursement for dialysis treatments should be increased by 2.9% in 2002 to cover inflationary costs," according to Abt Associates which conducted a detailed analysis of dialysis provider costs and Medicare revenue for 1999 and 2000. The study entitled, "Updating the 2002 composite Rate for Dialysis Treatments", concluded that, "without an adjustment to the composite rate, patient access to care in areas with above average proportions of Medicare patients will be threatened."

Medicare currently provides "composite rate" reimbursement to some 3,600 free-standing and hospital-based dialysis facilities providing renal replacement therapy to approximately 300,000 Medicare beneficiaries with End-Stage Renal Disease (ESRD) throughout the U.S. Without kidney transplantation or dialysis treatments, to clean the blood of toxins, ESRD is invariably fatal.

Kent Thiry, CEO of DaVita, and Chairman of the Renal Leadership Council said, "Dialysis providers welcome the results of the study as it clearly demonstrates that dialysis facilities require an inflation increase for 2002 from Medicare." Thiry went on to say that, "The Renal Leadership Council was extremely frustrated by this year's Medicare Payment Advisory Commission's flawed assessment that Medicare reimbursement for dialysis treatments should remain unchanged". However, he said, "He understood that MedPAC decided to conduct a broader analysis than they usually do and staff simply did not have enough time or have access to some key data to do as thorough an analysis as Abt Associates."

Thiry said, "Like other health care services, dialysis facilities are facing labor shortages, rising wages, fuel costs and product costs. Facilities must receive adequate reimbursement to continue providing Medicare beneficiaries the quality of care they deserve."

"Dialysis provider reimbursement is the only Medicare reimbursement that does not include an annual update formula," Thiry said. "As a result, Thiry continued, "while hospitals are slated to receive a 2.75% increase and other providers will receive on average 2.5% increases in their Medicare reimbursement in 2002, dialysis providers will receive no increase without Congressional action this year."

Abt Associates' findings contradict the Medicare Payment Advisory Commission's (MedPAC) analyses and recommendation. Specifically, while MedPAC considered all of the Medicare revenue from the composite rate and separately billable drugs, the Abt report found the commission did not take into consideration the most recent increases in labor, capital, drug acquisition, and overhead costs of providing dialysis treatments and ancillary drugs. This combined with the fact that the commission omitted from their analysis legitimate costs related to bad debt and medical directors fees led them to the wrong conclusion about dialysis providers' margins.

Abt concluded that:

• Even restricting the analysis to allowable Medicare costs, in 2000, the cost of providing composite rate services exceeded the average Medicare composite rate payment by almost $8.00 a treatment, a 7% shortfall. (The average composite rate payment per treatment is $128.)

• Contrary to MedPAC's findings, the profits made on separately billable items were not large enough to cover the increasing losses incurred on composite rate services.

• While the number of patients treated by the largest dialysis companies has increased in recent years, this type of consolidation actually indicates falling profit margins, not increased profits as MedPAC assumes.

• Productivity changes are unlikely to affect provider costs in 2002, contrary to MedPAC's unsubstantiated projection of further productivity gains.

The Abt Associates study is based on the most current, actual data from the six largest providers of dialysis services and several smaller providers which together deliver nearly 70% of all the dialysis care for Medicare ESRD beneficiaries in this country. The study was commissioned by some of the leading renal community organizations including the Renal Leadership Council, which includes 4 of the largest dialysis providers, Fresenius Medical Care, the National Kidney Foundation, the National Renal Administrators Association and the merican Nephrology Nurses' Association.

(End of press release.)

July 11, 2001 - Seven Major Dialysis-Related Organizations Send Letter to Congress:

The National Renal Administrators Association (NRAA) was joined by the American Kidney Fund, American Society of Nephrology, American Society of Pediatric Nephrology, American Nephrology Nurses' Association, National Kidney Foundation, Renal Physicians Association in sending a letter to the members of the House Ways and Means Committee, Energy and Commerce Committee, the Rural Caucus and the Black Caucus asking them to cosponsor the NRAA backed dialysis legislation, H.R. 2220, the "Medicare Dialysis Benefit Improvement Act." Please see the NRAA Website for sample letters to send to your Representative.

The Medicare Dialysis Benefit Improvement Act, H.R. 2220, would:

• increase the composite rate by 2.6% for 2002;

• pay a full composite rate payment for a fourth routine treatment for pediatric patients, those patients over 80 kgs and cardiac patients with fluid overload; and

• restore the exception process.

June 21, 2001 - On June 19, 2001, Representatives Dave Camp (R-MI), Karen Thurman (D-FL) (link is no longer available) and eight others introduced the "Medicare Dialysis Benefit Improvement Act of 2001". This bill includes a 2.6% increase in the composite rate for 2002, reimbursement for a fourth weekly hemodialysis treatment for certain patients, and restoration of exceptions to the composite rate.

The other eight original sponsors are members of key House committees that oversee this type of legislation. They include: J.D. Hayworth (R-AZ) and Charles Rangel (D-NY) on the House Ways and Means Committee, John Lewis (D-GA), Phil English (R-PA), Jim McDermott (D-WA), Jerry Kleczka (D-WI) all four on the Ways and Means Health Subcommittee, Chip Pickering (R-MS) and Ralph Hall (D-TX) both on the Energy and Commerce Health Subcommittee.

Here is the text of the HR 2220 from the thomas.gov web site.

Here is the Summary and Status Record of Bill HR 2220 from thomas.loc.gov.

In January of this year, the Medicare Payment Advisory Commission (MedPAC) agreed to recommend no increase in the composite rate payments in 2002 and accepted the December 2000 proposed ESRD-related recommendations basically unamended. Click here for a summary of lobbying efforts have been undertaken to overcome MedPAC's recommendation.

It will be interesting to see if this bill progresses separately or whether it is combined with the "Kidney Patient Daily Dialysis Quality Act of 2001", which was introduced last month: