Taking a Closer look at the 2023 ESRD Final Rule

From the Field 

Since the beginning of the Public Health Emergency (PHE) in early 2020, the economy, labor market, and health care landscape have changed dramatically. Staffing shortages and skyrocketing labor costs are common in most industries, but these struggles seem to have been amplified in dialysis programs nationwide. The labor costs in dialysis programs have continued to increase substantially each year since the beginning of the PHE. As CMS reviewed data for the 2023 ESRD PPS, the most recent data available for review purposes are for 2020. Since 2021 and 2022 have seen continued increases in labor costs, using 2020 data to determine the base rate for 2023 does not paint an accurate picture of the current costs associated with providing a dialysis treatment.

Dialysis programs of all sizes, dialysis patients, provider advocacy associations, and professional associations in the renal industry rallied to provide CMS with clear information about the gap between the proposed ESRD PPS base rate and the current cost of a dialysis treatment due to the increase in labor and supply costs. In addition to outlining the reimbursement gap, the renal community provided CMS with potential solutions to providing additional reimbursement within the regulatory confines CMS is subject to.

In the final rule, CMS finalized an increase to the base rate that it estimates will result in a 3.1% increase in dialysis facility payments from 2022. Additionally, CMS addressed comments it received from the renal community, specifically regarding the productivity adjustment and the market basket update. CMS responded that the “2020-based ESRD Bundled (ESRDB) market basket increase adequately reflects the average change in the price of goods and services ESRD facilities purchase to provide renal dialysis services and is technically appropriate to use as the ESRD PPS payment update factor.”

Facility Level Impact File

As I’ve been working with my company’s dialysis facility clients to provide data for financial forecasting, I’ve analyzed the ESRD Facility Level Impact file associated with the ESRD PPS Final Rule and found our clients are looking at increases in their ESRD PPS base rate ranging from less than half a percent to just over four percent. While the 2023 increase in the base rate is less than the renal community had hoped for, it is still helpful to have an understanding of the increase your facility should see to help with budgeting and forecasting for the coming year.

I would encourage each facility administrator to take the time to review their facility’s estimated increase for 2023. The Facility Level Impact file can be found a CMD.gov with the file name “Addendum B – CMS-1768-F CY 2023 ESRD PPS & AKI NPRM Facility Level Impact File.” If you are unsure how to use the Facility Level Impact published by CMS, here is a brief outline that may assist you in determining the impact the final rule will have on Medicare reimbursement for your program(s).

• Look up your dialysis program using the Medicare provider number.
• The column labeled “Total Payment for Step 2 – Non-Outlier” shows the estimated 2022 payment from CMS based on 2022 payment information and 2021 treatment counts without factoring in outlier payments.
• The column labeled “Total Payment for Step 7 – Non-Outlier” shows the estimated 2023 payment from CMS based on 2023 payment information and 2021 treatment counts without factoring in outlier payments.
• Subtract the amount in the “Total Payment for Step 7 – Non-Outlier” column from the amount in the “Total Payment for Step 2 – Non-Outlier” to determine the difference between the 2022 and 2023 CMS reimbursement.
• Divide the result of the previous step by the amount in the “Total Payment for Step 2 – Non-Outlier” column to determine the percentage of the anticipated increase for the dialysis program.

When reviewing the data in the Facility Level Impact file, it is important to keep in mind that one of the factors in the increase is the facility treatment count for 2021. If your dialysis program has had a change in census, it may be beneficial to break the numbers down to a per treatment number and estimate Medicare reimbursement based on the updated treatment counts.

Sarah Tolson is the director of operations for Sceptre Management Solutions, Inc., a company specializing in billing for outpatient ESRD dialysis programs, nephrology practices, and interventional nephrology. Your questions are welcome, and she can be reached at stolson@sceptremanagement.com, 801.775.8010, or via Sceptre’s website, www.sceptremanagement.com.