This final rule for the 2004 physician fee schedule implements the provisions of the Medicare Prescription Drug, Improvement and Modernization Act (MPDIMA). This rule supercedes previous final rules released by CMS. CMS increases the 2004 physician conversion factor to $37.3374, reflecting a 1.5% increase required by MPDIMA. News item from AHA (American Hospital Association).

January 5, 2004 - This week, the Centers for Medicare & Medicaid Services (CMS) will release two interim final rules that implement provisions of the recently enacted Medicare Prescription Drug, Improvement and Modernization Act of 2003. The first rule implements mandated changes to the 2004 hospital outpatient prospective payment system (OPPS) that originally were issued Nov. 7 as a final rule. The other rule implements changes to the 2004 physician fee schedule, and payment for drugs and biologics. These rules, due to be published in the Federal Register on Jan. 6, take effect Jan. 1! News item from HospitalConnect™.

The news rules are expected to be available on this Provider resource page of the CMS website.

December 9, 2003 - President Bush signed the Medicare reform legislation passed by Congress last month in a ceremony near the White House on Monday morning. Summary from Kaiser Network.

November 26, 2003 - The Senate passed the Medicare Reform Bill and the bill has been forwarded to President Bush for his signature. Here are several summaries of the bill's provisions and likely effects:

• Details on Medicare Bill Provisions - summary from Kaiser Network

• Congress Sends Medicare Overhaul to Bush - story from AP/Yahoo (link is no longer available)

• Medicare Bill Headed to Bush - story from Washington Post via Yahoo (link is no longer available)

November 24, 2003 - The text of the Medicare Reform Bill released by the Conference Committee contains these provisions pertaining to dialysis and ESRD:

• No composite rate increase for 2004
  
• 1.6% composite rate increase for 2005
  
• No composite rate increase for 2006 (This month's GAO report finds evidence of quality problems at dialysis centers, while the providers say Medicare is underfunding care. See AM News report.)
  
• Current ESRD average wholesale price (AWP) drug reimbursements are maintained for 2004
  
• Pediatric exemption is restored for applicable facilities
  
• Two studies will be done on EPO and ESRD drugs by the Inspector General
  
• Starting in 2005, the Secretary of HHS is to establish a basic case-mix adjusted prospective payment system
  
• Establish a 3-year demonstration project beginning in 2006 for bundled case-mix adjusted payment system for ESRD services
  
• In 2005, HHS Secretary to provide a report on bundled prospective payment system for ESRD Services

The text of the bill (678 pages as of November 20) is available in pdf format from the House Ways and Means Committee web site. (link is no longer available)

RenalWEB has prepared a page that contains the provisions of the bill pertaining to dialysis and ESRD.

The U.S. House of Representatives passed the Medicare Reform bill early Saturday morning. The Senate is debating the bill today. Story from Reuters/Yahoo.(link is no longer available)

November 20, 2003 - House Democratic leader Nancy Pelosi said Wednesday that Democratic opposition to a Republican-backed Medicare prescription drug bill is "a party position," signaling an aggressive effort to unite the rank and file, scuttle the bill and claim credit with voters. Story from AP/Yahoo. (link is no longer available)

Republican leaders on Tuesday "expressed confidence" that the tentative agreement on the Medicare legislation being finalized by members of the Medicare conference committee will pass both chambers of Congress within a week. Summary from Kaiser Network.

November 18, 2003 - No details have emerged yet on the dialysis composite rate after the announcement this last weekend of a tentative agreement by the Medicare reform bill conference committee. Here are the latest summaries from major news services:

• "Republican Leaders Announce Tentative Deal on Medicare, Begin Assessing Support for Package" - summary from Kaiser Network

• "AARP Wages Ad Blitz to Back Medicare Plan" - story from AP/Yahoo (link is no longer available)

This press release from Senator Charles Grassley states:

"Iowa and the Rural Health Care Package

Medicare's complex funding formula penalizes states such as Iowa for practicing high-quality, cost-effective medicine. The penalty is an unfair reimbursement rate. Under the pending conference agreement on the Medicare prescription drugs legislation, rural providers will receive approximately $25 billion in additional Medicare payments over the next ten years. This includes physicians, hospitals, home health agencies, renal dialysis facilities and ambulance services."

The House Ways and Means Committee has posted a "Summary of Medicare Conference Agreement" (pdf), which covers broad areas of agreement by the conferees.

This document contains a summary of Average Wholesale Price (AWP) drug policy changes:

"Average Wholesale Price (AWP) Reform

• AWP minus 15% in 2004.
  • The Secretary would have authority to increase or decrease reimbursement based on market surveys.
• Average sales price (ASP) plus an additional percentage beginning in 2005.
  
• Competitive bidding as a physician choice beginning in 2006.
  
• Secretary has the authority to adjust reimbursement for a drug, where the ASP is found to not reflect widely available market prices.
  
• Manufacturers would be required to report ASP data. Manufacturer reporting of false ASP information would be a violation of the False Claims Act.
  
• The HHS Inspector General would be required to regularly audit manufacturer submitted ASPs and compare them with widely available market prices and Medicaid Average Manufacturer Prices (AMP).
  
• Increase practice expense reimbursements for drug administration
  • Examine existing codes for drug administration and exempt any revisions from budget neutrality requirement.
    
  • Allow for supplemental surveys on practice expenses for drug administration, and exempt any resulting changes from budget neutrality.
    
  • Require MedPAC review of payment changes as they affect payment and access to care by January 2005 for oncologists, and by January 2006 for other affected specialties."

October 30, 2003 - President Bush urged House and Senate negotiators to reach agreement this year on a $400 billion, 10-year bill to help the elderly buy prescription drugs as Democrats warned against undermining the Medicare program. Story from Bloomberg.com.

Despite general optimism among the Republicans who control Congress and prodding from President Bush to send him a bill before the end of the year, lawmakers have yet to resolve numerous controversial issues more than four months after the House and Senate passed different versions of the Medicare legislation. Story from AP/Yahoo. (link is no longer available)

October 27, 2003 - As a conference committee continues to work on reconciling the House and Senate Medicare bills, a group of senators, mostly made up of Democrats, on Thursday warned that they would block passage of a final Medicare bill if the version coming out of the committee does not meet certain conditions. Story from Kaiser Network.

Although Congress has yet to complete a Medicare reform bill that would add an outpatient prescription drug benefit, experts are already predicting that lawmakers will need to fix it if it passes. Story from American Medical News.

October 21, 2003 - Negotiators attempting to reconcile the House and Senate Medicare bills missed their self-imposed Oct. 17 deadline for agreement on a final bill, but they reported progress on a number of issues. Conferees said that although they have not made "many final decisions," they have "stepped up negotiations in the last few days" and hope to finish work on the bill by Nov. 7, according to the New York Times. Summary from Kaiser Network.

October 8, 2003 - Although negotiators charged with reconciling the House and Senate Medicare bills have addressed a number of "central" issues, including the design of a new drug benefit and drug coverage for those dually eligible for Medicare and Medicaid, they have yet to resolve some of the "most difficult" issues. Summary from Kaiser Network.

September 27, 2003 - In a meeting at the White House, President Bush urged members of the conference committee charged with reconciling the House and Senate Medicare bills to work together to reach a compromise, but he did not make specific recommendations on how to find agreement on contentious issues. Summary from Kaiser Network.

September 23, 2003 - Negotiators charged with reconciling the House and Senate Medicare bills are "so plagued by policy differences and personality clashes" that some GOP leaders are considering setting a deadline for a final bill to speed up the bargaining process. Summary from Kaiser Network.

September 18, 2003 - Senate Minority Leader Tom Daschle (Dem-SD) said on Sept. 16 that he is "becoming increasingly concerned" about whether negotiators working to reconcile the House and Senate Medicare bills will be able to reach a compromise. Summary from Kaiser Network.

September 10, 2003 - With members of the conference committee charged with reconciling the House and Senate Medicare bills scheduled to meet Sept. 9 for the first time since July, some key lawmakers and lobbyists have said the chance of passing a final compromise bill may be only 50-50. Summary from Kaiser Network.

September 5, 2003 - After a two-hour meeting Sept. 4, the 10 Republican members of the conference committee charged with reconciling the House and Senate Medicare bills said they had made progress but "still appeared to be far from agreement" on several major issues. Summary from Kaiser Network.

Senate Majority Leader Bill Frist said Thursday he was "absolutely confident" the Congress would pass Medicare drug legislation before adjourning for the year, but key GOP lawmakers quickly ran into disagreements at a private strategy session a few hours later. Story from AP/Yahoo. (link is no longer available)

Senate Finance Committee Chair Charles Grassley (R-IA) on Sept. 3 said that Republican members of the conference committee charged with reconciling the House and Senate Medicare bills will likely rework the committee's schedule. Summary from Kaiser Network.

September 4, 2003 - Republican members of the conference committee charged with reconciling the House and Senate Medicare bills (HR 1 and S 1) tentatively have scheduled a Sept. 4 meeting to discuss stalled negotiations. Negotiations were halted last week because of an "ongoing spat" between Senate Finance Committee Chair Charles Grassley (R-IA) and House Ways and Means Committee Chair Bill Thomas (R-CA). Summary from Kaiser Network.

CMS Administrator Tom Scully said on September 3rd that there's a 95% chance Congress will pass a Medicare reform bill, adding, "We are at the two-yard line." News item from Modern Healthcare (registration required).

A New York Times article points out that Congress is ignoring the successful prescription drug program implemented by the Veterans Administration and instead is relying in part on cost control mechanisms that are untested or unproven. Article via The Ledger (Florida).

September 3, 2003 - The US Senate returned to the Capitol on Tuesday from a month-long summer break with plans to resolve differences between the versions of a Medicare prescription drug bill that passed the House and Senate in June. The House returns to session on Wednesday. Story from Reuters/Yahoo. (link is no longer available)

A Medicare prescription drug benefit is likely to be one of the two "marquee domestic issues" Congress considers as it returns from its August recess. Story from Kaiser Network.

August 27, 2003 - Senate Finance Committee Chair Charles Grassley (R-IA) has withdrawn his staff from negotiations to resolve differences in the House and Senate Medicare bills (HR 1 and S 1) to protest the lack of time spent on rural health issues in the discussions. Summary from Kaiser Network.

August 2, 2003 - Seven senators have formed a bipartisan "working group" to monitor the conference committee charged with reconciling the House and Senate Medicare bills (HR 1 and S 1) to ensure that a final bill contains several compromises agreed to in the Senate. Summary from Kaiser Network.

July 29, 2003 - Although negotiators charged with reconciling the House and Senate Medicare reform bills (HR 1 and S 1) made "slim progress" last week, they still face several "polarizing issues" that could jeopardize a final compromise. Summary from Kaiser Network.

July 23, 2003 - The rival Medicare prescription drug bills that cleared the two houses of Congress last month both exceeded President Bush's spending limits, officials said Tuesday in disclosures likely to complicate efforts to reach a compromise. Story from AP/Yahoo. (link is no longer available)

July 15, 2003 - Divided along ideological as well as political lines, senior lawmakers from the House and Senate pledged their best efforts to find common ground Tuesday as they opened talks over Medicare prescription drug and modernization legislation. July 7, 2003 - The Medicare reform bill, with its provision for a dialysis composite rate increase, faces several "hurdles" as it enters conference committee negotiations. Summary from Kaiser Network.

June 27, 2003 - Medicare prescription drug legislation eased through the Senate and squeaked through the House early Friday, setting up challenging negotiations on a final compromise (which includes dialysis composite rate increases) that President Bush hopes to sign later this summer. Story from AP/Yahoo. (link is no longer available)

June 26, 2003 - President Bush held two meetings June 25 with House members to gather support for the House Medicare legislation. Bush said, "Whatever amount of energy and effort is required from the White House, we will provide it, to get a bill done this summer, one that I can sign". Summary from Kaiser Network.

Already, Senate Majority Leader Bill Frist was looking ahead to a summer of bargaining between the two houses. He said a compromise would be achievable "without much difficulty over the coming weeks," adding that both bills add prescription drug coverage to Medicare, give seniors a choice between traditional Medicare and a private alternative, and make the program voluntary. Story from AP/Yahoo. (link is no longer available)

June 21, 2003 - The House Energy and Commerce Committee on June 19 voted 29-20 to approve a Medicare reform bill. Summary from Kaiser Network.

After the Senate and House pass their respective Medicare reform legislation, a conference committee will resolve the differences in the ESRD provisions between the two bills, S1 and HR2473.

June 18, 2003 - The Medicare reform bill, with its provision for a dialysis composite rate increase, is now making its way through two committees of the U.S. House of Representatives.

Yesterday, by a bipartisan vote of 25 - 15, lawmakers on the Ways and Means Committee approved H.R. 2473, the Medicare Prescription Drug and Modernization Act of 2003, as amended, after a full committee markup lasting over eight hours. Press release from the Ways & Means Committee.

The House Committee on Energy and Commerce will meet in OPEN MARKUP SESSION at 10:00 a.m. on Wednesday June 18, 2003 in 2123 Rayburn House Office Building, to continue its consideration of H.R. 2473, the "Medicare Prescription Drug and Modernization Act of 2003" (pdf).

Section 623 of the bill addresses dialysis issues:

SEC. 623. RENAL DIALYSIS SERVICES.

(a) DEMONSTRATION OF ALTERNATIVE DELIVERY MODELS.—

(1) USE OF ADVISORY BOARD.—In carrying out the demonstration project relating to improving care for people with end-stage renal disease through alternative delivery models (as published in the Federal Register of June 4, 2003), the Secretary shall establish an advisory board comprised of representatives described in paragraph (2) to provide advice and recommendations with respect to the establishment and operation of such demonstration project.

(2) REPRESENTATIVES.—Representatives referred to in paragraph (1) include representatives of the following:

(A) Patient organizations.
(B) Clinicians.
(C) The medicare payment advisory commission established under section 1805 of the Social Security Act (42 U.S.C. 1395b–6).
(D) The National Kidney Foundation.
(E) The National Institute of Diabetes and Digestive and Kidney Diseases of National Institutes of Health.
(F) End-stage renal disease networks.
(G) Medicare contractors to monitor quality of care.
(I) providers of services and renal dialysis facilities furnishing end-stage renal disease services.
(J) Economists.
(K) Researchers.

(b) RESTORING COMPOSITE RATE EXCEPTIONS FOR PEDIATRIC FACILITIES.—

(1) IN GENERAL.—Section 422(a)(2) of BIPA is amended—

(A) in subparagraph (A), by striking ‘‘and (C)’’ and inserting ‘‘, (C), and (D)’’;
(B) in subparagraph (B), by striking ‘‘In the case’’ and inserting ‘‘Subject to subparagraph (D), in the case’’; and
(C) by adding at the end the following new subparagraph:
‘‘(D) INAPPLICABILITY TO PEDIATRIC FACILITIES. — Subparagraphs (A) and (B) shall not apply, as of October 1, 2002, to pediatric facilities that do not have an exception rate described in subparagraph (C) in effect on such date. For purposes of this subparagraph, the term ‘pediatric facility’ means a renal facility at least 50 percent of whose patients are individuals under 18 years of age.’’.

(2) CONFORMING AMENDMENT.—The fourth sentence of section 1881(b)(7) (42 U.S.C. 1395rr(b)(7)), as amended by subsection (b), is further amended by striking ‘‘Until’’ and inserting ‘‘Subject to section 422(a)(2) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, and until’’.

(c) INCREASE IN RENAL DIALYSIS COMPOSITE RATE FOR SERVICES FURNISHED IN 2004.—Notwithstanding any other provision of law, with respect to payment under part B of title XVIII of the Social Security Act for renal dialysis services furnished in 2004, the composite payment rate otherwise established under section 1881(b)(7) of such Act (42 U.S.C. 1395rr(b)(7)) shall be increased by 1.6 percent.

June 16, 2003 - The Senate Finance Committee last week approved a Medicare reform/prescription drug bill that includes higher reimbursements to hospitals, doctors and dialysis centers. The bill appears headed for a full Senate vote as soon as this week. Story from Bloomberg.com.

S.1 - Prescription Drug and Medicare Improvement Act of 2003 (Reported in Senate)

SEC. 423. INCREASE IN RENAL DIALYSIS COMPOSITE RATE.

Notwithstanding any other provision of law, with respect to payment under part B of title XVIII of the Social Security Act for renal dialysis services furnished in 2005 and 2006, the composite rate for such services shall be increased by 1.6 percent under section 1881(b)(12) of such Act (42 U.S.C. 1395rr(b)(7)), as added by section 433(b)(5).

SECTION 433(b)(5)

(5) INCREASE IN COMPOSITE RATE FOR END STAGE RENAL DISEASE FACILITIES- Section 1881(b) (42 U.S.C. 1395rr(b) is amended--

(A) in paragraph (7), by adding at the end the following new sentence: `In the case of dialysis services furnished in 2004 or a subsequent year, the composite rate for such services shall be determined under paragraph (12).'; and

(B) by adding at the end the following new paragraph:

`(12)(A) In the case of dialysis services furnished during 2004, the composite rate for such services shall be the composite rate that would otherwise apply under paragraph (7) for the year increased by an amount to ensure (as estimated by the Secretary) that--

`(i) the sum of the total amount of--

`(I) the composite rate payments for such services for the year, as increased under this paragraph; and

`(II) the payments for drugs and biologicals (other than erythropoetin) furnished in connection with the furnishing of renal dialysis services and separately billed by renal dialysis facilities under paragraphs (4) and (5) of section 1842(o) for the year; is equal to

`(ii) the sum of the total amount of the composite rate payments under paragraph (7) for the year and the payments for the separately billed drugs and biologicals described in clause (i)(II) that would have been made if the amendments made by section 433 of the Prescription Drug and Medicare Improvement Act of 2003 had not been enacted.

`(B) Subject to subparagraph (E), in the case of dialysis services furnished in 2005, the composite rate for such services shall be an amount equal to the composite rate established under subparagraph (A), increased by 0.05 percent and further increased pursuant to section 423 of the Prescription Drug and Medicare Improvement Act of 2003.

`(C) Subject to subparagraph (E), in the case of dialysis services furnished in 2006, the composite rate for such services shall be an amount equal to the composite rate established under subparagraph (B), increased by 0.05 percent.

`(D) Subject to subparagraph (E), in the case of dialysis services furnished in 2007 or a subsequent year, the composite rate for such services shall be an amount equal to the composite rate established under this paragraph for the previous year (determined as if such section 423 had not been enacted), increased by 0.05 percent.

`(E) If the Secretary implements a reduction in the payment amount under paragraph (4)(C) or (5) for a drug or biological described in subparagraph (A)(i)(II) for a year after 2004, the Secretary shall, as estimated by the Secretary--

`(i) increase the composite rate for dialysis services furnished in such year in the same manner that the composite rate for such services for 2004 was increased under subparagraph (A); and

`(ii) increase the percentage increase under subparagraph (C) or (D) (as applicable) for years after the year described in clause (i) to ensure that such increased percentage would result in expenditures equal to the sum of the total composite rate payments for such services for such years and the total payments for drugs and biologicals described in subparagraph (A)(i)(II) is equal to the sum of the total amount of the composite rate payments under this paragraph for such years and the payments for the drugs and biologicals described in subparagraph (A)(i)(II) that would have been made if the reduction in payment amount described in subparagraph had not been made.

`(F) There shall be no administrative or judicial review under section 1869, section 1878, or otherwise, of determinations of payment amounts, methods, or adjustments under this paragraph.'.

Background information on H.R. 1784 is available from the National Renal Administrators Association (NRAA) web site. (link is no longer available)

May 27, 2003 - The Senate version of the "Medicare Renal Dialysis Payment Fairness Act of 2003" was introduced on May 21st. S-1098 has the exact same language and title as HR-1784.

Here is a press release from Senator Kent Conrad of North Dakota.

April 24, 2003 - Federal legislation has been proposed for an annual update in the Medicare composite rate for dialysis treatments. The composite rate is the dollar amount that Medicare has determined to be fair compensation to hospitals and dialysis clinics for supplies, labor, standard medications, and clinic overhead costs for a standard, chronic hemodialysis treatment. Dialysis provider reimbursement is the only Medicare reimbursement that does not include an annual update formula.

H.R. 1784, the "Medicare Renal Dialysis Payment Fairness Act of 2003" applies to composite rate payments beginning January 1, 2004.

There are currently 11 co-sponsors of the bill.