Much of the bill restates quality improvment projects/processes already implemented by CMS, the Networks, and dialysis providers. The bill includes award designations and incentive payments to providers who are above average on certain quality measures. It also includes sanctions, fines, and reduced reimbursement to facilities, networks, and physicians providing below average care.

Here is the full text of the bill entitled, "ESRD Quality Improvement Act of 2002"

Awards include:

(A) DESIGNATION OF FACILITY OR PHYSICIAN AS A MEDICARE DIALYSIS PROVIDER OF ACHIEVEMENT- For each of 2005, 2006, and 2007, the Secretary shall designate Medicare Dialysis Providers of Achievement (as defined in subparagraph (B)).

(B) DEFINITION OF MEDICARE DIALYSIS PROVIDER OF ACHIEVEMENT- A Medicare Dialysis Provider of Achievement is a renal dialysis facility, or a physician, identified by the Secretary as being 2 standard deviations above the national norm for a preponderance of ESRD Clinical Performance Measures on a case severity-risk adjusted basis for 2 consecutive reporting periods (covering in the aggregate a period of at least 1 year).

(C) AUTHORITY TO MAKE BONUS PAYMENTS- The Secretary may make a payment to a Medicare Dialysis Provider of Achievement--

• (i) in a single monetary payment of not less than $1,000 and not greater than to $5,000; or

• (ii) by increasing the reimbursement rate otherwise applicable under this section to the facility or physician by 1 to 3 percent for a period of 1 year.

(C) SANCTIONS FOR ESRD NETWORKS- If the Secretary finds that an ESRD Network Administrative Organization has not made a good faith effort to carry out all of the data collection, CQI Program, QA Program, administrative and oversight activities assigned, the Secretary may--

• (i) require within a specified time frame, a plan of correction; and
  
• (ii) terminate any contracts with the ESRD Network Administrative Organization and reshape the networks by merging or otherwise redefining the geographic areas of responsibility.

(D) SANCTIONS FOR FACILITIES- If the Secretary finds that the facility or medical director has not made a good faith effort to improve its performance under this paragraph, the Secretary shall--

• `(i) subject to subparagraph (F)--
  1. assess a civil monetary penalty of not less than $500 and not more than $10,000;
     
  2. reduce reimbursement rates under this section by not less than 1 and not more than 3 percent for a period not to exceed one year, or
     
  3. in the event of life-threatening or recurrent violations, terminate or withhold certification of the facility for purposes of payment under this section; and
  
  
• (ii) notify and work collaboratively with the ESRD Network Administrative Organization involved and appropriate State survey agency to carry out (if appropriate) one or more of the following actions:
  1. Recommend that a substitute administrator or director be appointed by the appropriate State agency or officer with the authority to hire, terminate and reassign staff, obligate funds, and alter facility procedures as appropriate.
     
  2. Require corrective action within specified time frames according to a plan developed by the network, the State, or the temporary manager (if any is appointed).
     
  3. Place an on-site monitor to ensure the facility achieves and maintains acceptable levels of quality in furnishing services.
     
  4. Carry out such other actions as the Secretary determines appropriate.

(E) SANCTIONS FOR PHYSICIANS- If the Secretary finds that the attending physician has not made a good faith effort to improve performance under this paragraph, the Secretary shall initiate:

• (i) further investigation of the physician; or
  
• (ii) such other actions as the Secretary determines appropriate, after consultation with the appropriate ESRD Network Administrative Organization and State survey agency.