[Federal Register Volume 82, Number 127 (Wednesday, July 5, 2017)]
[Proposed Rules]
[Pages 31190-31233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13908]



[[Page 31189]]

Vol. 82

Wednesday,

No. 127

July 5, 2017

Part III





 Department of Health and Human Services





-----------------------------------------------------------------------





 Centers for Medicare & Medicaid Services





-----------------------------------------------------------------------





42 CFR Parts 413 and 414





 Medicare Program; End-Stage Renal Disease Prospective Payment System, 
Payment for Renal Dialysis Services Furnished to Individuals With Acute 
Kidney Injury, and End-Stage Renal Disease Quality Incentive Program; 
Proposed Rule

  Federal Register / Vol. 82 , No. 127 / Wednesday, July 5, 2017 / 
Proposed Rules  

[[Page 31190]]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 413 and 414

[CMS-1674-P]
RIN 0938-AT04


Medicare Program; End-Stage Renal Disease Prospective Payment 
System, Payment for Renal Dialysis Services Furnished to Individuals 
With Acute Kidney Injury, and End-Stage Renal Disease Quality Incentive 
Program

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule proposes to update and make revisions to the End-
Stage Renal Disease (ESRD) Prospective Payment System (PPS) for 
calendar year (CY) 2018, as well as to update the payment rate for 
renal dialysis services furnished by an ESRD facility to individuals 
with acute kidney injury (AKI). This rule also proposes to set forth 
requirements for the ESRD Quality Incentive Program (QIP), including 
for payment years (PYs) 2019 through 2021.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. August 28, 2017.

ADDRESSES: In commenting, please refer to file code CMS-1674-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1674-P, P.O. Box 8010, 
Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1674-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1810.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: [email protected], for issues 
related to the ESRD PPS and coverage and payment for renal dialysis 
services furnished to individuals with AKI.
    Delia Houseal, (410) 786-2724, for issues related to the ESRD QIP.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Electronic Access

    This Federal Register document is also available from the Federal 
Register online database through Federal Digital System (FDsys), a 
service of the U.S. Government Printing Office. This database can be 
accessed via the internet at http://www.gpo.gov/fdsys/.

Table of Contents

    To assist readers in referencing sections contained in this 
preamble, we are providing a Table of Contents. Some of the issues 
discussed in this preamble affect the payment policies, but do not 
require changes to the regulations in the Code of Federal Regulations 
(CFR).

I. Executive Summary
    A. Purpose
    1. End-Stage Renal Disease (ESRD) Prospective Payment System 
(PPS)
    2. Coverage and Payment for Renal Dialysis Services Furnished to 
Individuals With Acute Kidney Injury (AKI)
    3. End-Stage Renal Disease (ESRD) Quality Incentive Program 
(QIP)
    B. Summary of the Major Provisions
    1. ESRD PPS
    2. Payment for Renal Dialysis Services Furnished to Individuals 
With AKI
    3. ESRD QIP
    C. Summary of Cost and Benefits
    1. Impacts of the Proposed ESRD PPS
    2. Impact of the Proposed Payment for Renal Dialysis Services 
Furnished to Individuals With AKI
    3. Impacts of the Proposed ESRD QIP
II. Calendar Year (CY) 2018 End-Stage Renal Disease (ESRD) 
Prospective Payment System (PPS)
    A. Background
    1. Statutory Background
    2. System for Payment of Renal Dialysis Services
    3. Updates to the ESRD PPS
    B. Provisions of the Proposed Rule
    1. Pricing Eligible Outlier Drugs and Biologicals That Were or 
Would Have Been, Prior to January 1, 2011, Separately Billable Under 
Medicare Part B
    a. Summary of Outlier Calculation
    b. Use of ASP Methodology Under the ESRD PPS
    c. Pricing Methodologies Under Section 1847A of the Act
    d. Proposal for Pricing Eligible Outlier Drugs and Biologicals 
That Were or Would Have Been, Prior to January 1, 2011, Separately 
Billable Under Medicare Part B
    2. Proposed CY 2018 ESRD PPS Update
    a. ESRD Bundled Market Basket
    i. Proposed CY 2018 ESRD Market Basket Update, Productivity 
Adjustment, and Labor-Related Share for ESRD PPS
    ii. Proposed CY 2018 ESRDB Market Basket Update, Adjusted for 
Multifactor Productivity (MFP)

[[Page 31191]]

    b. The Proposed CY 2018 ESRD PPS Wage Indices
    i. Annual Update of the Wage Index
    ii. Application of the Wage Index Under the ESRD PPS
    c. CY 2018 Update to the Outlier Policy
    i. CY 2018 Update to the Outlier Services MAP Amounts and FDL 
Amounts
    ii. Outlier Percentage
    d. Proposed Impacts to the CY 2018 ESRD PPS Base Rate
    i. ESRD PPS Base Rate
    ii. Annual Payment Rate Update for CY 2018
III. CY 2018 Payment for Renal Dialysis Services Furnished to 
Individuals With Acute Kidney Injury (AKI)
    A. Background
    B. Annual Payment Rate Update for CY 2018
    1. CY 2018 AKI Dialysis Payment Rate
    2. Geographic Adjustment Factor
IV. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) 
for Payment Year (PY) 2021
    A. Background
    B. Accounting for Social Risk Factors in the ESRD QIP Program
    C. Proposed Change to the Performance Score Certificate 
Beginning With the Payment Year (PY) 2019 ESRD QIP
    D. Proposed Requirements Beginning With the PY 2020 ESRD QIP
    1. Proposal To Clarify the Minimum Data Policy for Scoring 
Measures Finalized for the PY 2020 ESRD QIP
    2. Proposed Changes to the Extraordinary Circumstances Exception 
(ECE) Policy
    3. Solicitation of Comments on the Inclusion of Acute Kidney 
Injury (AKI) Patients in the ESRD QIP
    4. Estimated Performance Standards, Achievement Thresholds, and 
Benchmarks for the Clinical Measures Finalized for the PY 2020 ESRD 
QIP
    5. Policy for Weighting the Clinical Measure Domain for PY 2020
    6. Proposed Payment Reductions for the PY 2020 ESRD QIP
    7. Data Validation
    E. Proposed Requirements for the PY 2021 ESRD QIP
    1. Proposed Measures for the PY 2021 ESRD QIP
    2. Proposed Replacement of the Vascular Access Type (VAT) 
Clinical Measures Beginning With the PY 2021 Program Year
    3. Proposed Revision of the Standardized Transfusion Ratio 
(STrR) Clinical Measure Beginning With the PY 2021 Program Year
    4. Proposed New Vascular Access Measures Beginning With the PY 
2021 ESRD QIP
    a. Proposed New Hemodialysis Vascular Access: Standardized 
Fistula Rate Clinical Measure (NQF #2977)
    b. Proposed New Hemodialysis Vascular Access: Long-Term Catheter 
Rate (NQF #2978) Beginning With the PY 2021 ESRD QIP
    5. Proposed Performance Period for the PY 2021 ESRD QIP
    6. Proposed Performance Standards, Achievement Thresholds, and 
Benchmarks for the PY 2021 ESRD QIP
    a. Proposed Performance Standards, Achievement Thresholds, and 
Benchmarks for the Clinical Measures in the PY 2021 ESRD QIP
    b. Performance Standards, Achievement Thresholds, and Benchmarks 
for the Clinical Measures Proposed for the PY 2021 ESRD QIP
    c. Proposed Performance Standards for the PY 2021 Reporting 
Measures
    7. Proposal for Scoring the PY 2021 ESRD QIP
    a. Scoring Facility Performance on Clinical Measures Based on 
Achievement
    b. Proposal for Scoring Facility Performance on Clinical 
Measures Based on Improvement
    c. Scoring the ICH CAHPS Clinical Measure
    d. Proposal for Scoring the Proposed Hemodialysis Vascular 
Access: Standardized Fistula Rate and Long-Term Catheter Rate 
Measures and the Vascular Access Measure Topic
    e. Proposal for Calculating Facility Performance on Reporting 
Measures
    8. Proposal for Weighting the Clinical Measure Domain, and 
Weighting the TPS
    a. Proposal for Weighting the Clinical Measure Domain for PY 
2021
    b. Proposal for Weighting the Domains Used To Calculate the TPS
    9. Example of the Proposed PY 2021 ESRD QIP Scoring Methodology
    10. Proposed Minimum Data for Scoring Measures for the PY 2021 
ESRD QIP
    11. Proposed Payment Reductions for the PY 2021 ESRD QIP
V. Advancing Health Information Exchange
VI. Collection of Information Requirements
    A. Legislative Requirement for the Solicitation of Comments
    B. Requirements in Regulation Text
    C. Additional Information Collection Requirements
    1. ESRD QIP
    a. Wage Estimates
    b. Time Required To Submit Data Based on Proposed Reporting 
Requirements
    c. Data Validation Requirements for the PY 2020 ESRD QIP
VII. Request for Information on Medicare Flexibilities and 
Efficiencies
VIII. Response to Comments
IX. Economic Analyses
    A. Regulatory Impact Analysis
    1. Introduction
    2. Statement of Need
    3. Overall Impact
    B. Detailed Economic Analysis
    1. CY 2018 End-Stage Renal Disease Prospective Payment System
    a. Effects on ESRD Facilities
    b. Effects on Other Providers
    c. Effects on the Medicare Program
    d. Effects on Medicare Beneficiaries
    e. Alternatives Considered
    2. Proposed Payment for Renal Dialysis Services Furnished to 
Individuals With AKI
    a. Effects on ESRD Facilities
    b. Effects on Other Providers
    c. Effects on the Medicare Program
    d. Effects on Medicare Beneficiaries
    e. Alternatives Considered
    3. ESRD QIP
    a. Effects of the PY 2021 ESRD QIP on ESRD Facilities
    b. Effects on Other Providers
    c. Effects on the Medicare Program
    d. Effects on Medicare Beneficiaries
    e. Alternatives Considered
    C. Accounting Statement
X. Regulatory Flexibility Act Analysis
XI. Unfunded Mandates Reform Act Analysis
XII. Federalism Analysis
XIII. Reducing Regulation and Controlling Regulatory Costs
XIV. Congressional Review Act
XV. Files Available to the Public via the Internet

Acronyms

    Because of the many terms to which we refer by acronym in this 
proposed rule, we are listing the acronyms used and their corresponding 
meanings in alphabetical order below:

Affordable Care Act the Patient Protection and Affordable Care Act
ABLE Stephen Beck, Jr., Achieving a Better Life Experience Act of 
2014
AKI Acute Kidney Injury
AMP Average Manufacturer Price
ASP Average Sales Price
ATRA American Taxpayer Relief Act of 2012
BLS Bureau of Labor Statistics
BSI Bloodstream Infection
CBSA Core Based Statistical Area
CCN CMS Certification Number
CDC Centers for Disease Control and Prevention
CEO Chief Executive Officer
CFR Code of Federal Regulations
CMS Centers for Medicare & Medicaid Services
CROWNWeb Consolidated Renal Operations in a Web-Enabled Network
CY Calendar Year
DFR Dialysis Facility Report
ECE Extraordinary Circumstances Exception
EPO Epoetin
ESA Erythropoiesis stimulating agent
ESRD End-Stage Renal Disease
ESRDB End-Stage Renal Disease Bundled
ESRD PPS End-Stage Renal Disease Prospective Payment System
ESRD QIP End-Stage Renal Disease Quality Incentive Program
FFS Fee-For-Service
FDA Food and Drug Administration
FDL Fixed-Dollar Loss
ICD International Classification of Diseases
ICH CAHPS In-Center Hemodialysis Consumer Assessment of Healthcare 
Providers and Systems
IGI IHS Global Inc.
IPPS Inpatient Prospective Payment System
IQR Interquartile Range
Kt/V A measure of dialysis adequacy where K is dialyzer clearance, t 
is dialysis time, and V is total body water volume
MAP Medicare Allowable Payment
MFP Multifactor Productivity
MIPPA Medicare Improvements for Patients and Providers Act of 2008 
(Pub. L. 110-275)
NHSN National Healthcare Safety Network
NQF National Quality Forum

[[Page 31192]]

OMB Office of Management and Budget
PAMA Protecting Access to Medicare Act of 2014
PPS Prospective Payment System
PY Payment Year
QIP Quality Incentive Program
RFA Regulatory Flexibility Act
SBA Small Business Administration
SHR Standardized Hospitalization Ratio
SRR Standardized Readmission Ratio
STrR Standardized Transfusion Ratio
TCV Truncated Coefficient of Variation
TDAPA Transitional Drug Add-on Payment Adjustment
TEP Technical Expert Panel
The Act Social Security Act
The Secretary Secretary of the Department of Health and Human 
Services
TPEA Trade Preferences Extension Act of 2015
TPS Total Performance Score
VAT Vascular Access Type
WAMP Widely Available Market Price

I. Executive Summary

A. Purpose

1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)
    On January 1, 2011, we implemented the end-stage renal disease 
(ESRD) prospective payment system (PPS), a case-mix adjusted, bundled 
prospective payment system for renal dialysis services furnished by 
ESRD facilities. This rule proposes to update and make revisions to the 
ESRD PPS for calendar year (CY) 2018. Section 1881(b)(14) of the Social 
Security Act (the Act), as added by section 153(b) of the Medicare 
Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 
110-275), and section 1881(b)(14)(F) of the Act, as added by section 
153(b) of MIPPA and amended by section 3401(h) of the Patient 
Protection and Affordable Care Act (the Affordable Care Act) (Pub. L. 
111-148), established that beginning CY 2012, and each subsequent year, 
the Secretary of the Department of Health and Human Services (the 
Secretary) shall annually increase payment amounts by an ESRD market 
basket increase factor, reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act.
2. Coverage and Payment for Renal Dialysis Services Furnished to 
Individuals With Acute Kidney Injury (AKI)
    On June 29, 2015, the President signed the Trade Preferences 
Extension Act of 2015 (TPEA) (Pub. L. 114-27). Section 808(a) of TPEA 
amended section 1861(s)(2)(F) of the Act to provide coverage for renal 
dialysis services furnished on or after January 1, 2017, by a renal 
dialysis facility or a provider of services paid under section 
1881(b)(14) of the Act to an individual with AKI. Section 808(b) of 
TPEA amended section 1834 of the Act by adding a new subsection (r) 
that provides for payment for renal dialysis services furnished by 
renal dialysis facilities or providers of services paid under section 
1881(b)(14) of the Act to individuals with AKI at the ESRD PPS base 
rate beginning January 1, 2017.
3. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP)
    This rule also proposes to set forth requirements for the end-stage 
renal disease (ESRD) quality incentive program (QIP), including for 
payment years (PYs) 2019, 2020, and 2021. The program is authorized 
under section 1881(h) of the Social Security Act (the Act). The ESRD 
QIP is the most recent step in fostering improved patient outcomes by 
establishing incentives for dialysis facilities to meet or exceed 
performance standards established by the Centers for Medicare & 
Medicaid Services (CMS).

B. Summary of the Major Provisions

1. ESRD PPS
     Update to the ESRD PPS base rate for CY 2018: The proposed 
CY 2018 ESRD PPS base rate is $233.31. This amount reflects a reduced 
market basket increase as required by section 1881(b)(14)(F)(i)(I) of 
the Act (0.7 percent), and application of the wage index budget-
neutrality adjustment factor (1.000605), equaling $233.31 ($231.55 x 
1.007 x 1.000605 = $233.31).
     Annual update to the wage index: We adjust wage indices on 
an annual basis using the most current hospital wage data and the 
latest core-based statistical area (CBSA) delineations to account for 
differing wage levels in areas in which ESRD facilities are located. 
For CY 2018, we are not proposing any changes to the application of the 
wage index floor and we propose to continue to apply the current wage 
index floor (0.4000) to areas with wage index values below the floor.
     Update to the outlier policy: Consistent with our proposal 
to annually update the outlier policy using the most current data, we 
are proposing to update the outlier services fixed-dollar loss (FDL) 
amounts for adult and pediatric patients and Medicare Allowable Payment 
(MAP) amounts for adult and pediatric patients for CY 2018 using CY 
2016 claims data. Based on the use of more current data, the FDL amount 
for pediatric beneficiaries would decrease from $68.49 to $49.55 and 
the MAP amount would decrease from $38.29 to $38.25, as compared to CY 
2017 values. For adult beneficiaries, the FDL amount would increase 
from $82.92 to $83.12 and the MAP amount would decrease from $45.00 to 
$42.70. The 1 percent target for outlier payments was not achieved in 
CY 2016. Outlier payments represented approximately 0.78 percent of 
total payments rather than 1.0 percent. We believe using CY 2016 claims 
data to update the outlier MAP and FDL amounts for CY 2018 would 
increase payments for ESRD beneficiaries requiring higher resource 
utilization in accordance with a 1 percent outlier percentage.
     Update to the pricing of drugs and biologicals under the 
outlier policy: We are proposing a change to the ESRD PPS outlier 
policy to allow the use of any pricing methodology available under 
section 1847A of the Act to determine the cost of certain eligible 
outlier service drugs and biologicals in computing outlier payments 
when average sales price (ASP) data is not available.
2. Payment for Renal Dialysis Services Furnished to Individuals With 
AKI
    We are proposing to update the AKI payment rate for CY 2018. The 
proposed CY 2018 payment rate is $233.31, which is the same base rate 
proposed under the ESRD PPS.
3. ESRD QIP
    This rule proposes to set forth requirements for the ESRD QIP, 
including for payment years (PYs) 2019, 2020 and 2021 as follows:
     Updating the Performance Score Certificate Beginning in PY 
2019: In section IV.C of this proposed rule, we set forth the updates 
we are proposing to make to the Performance Score Certificate (PSC) 
beginning in PY 2019. Specifically, in response to feedback from 
stakeholders about the length and complexity of the PSC, and in an 
effort to make the document more effective and understandable for the 
community, we propose to shorten and simplify the PSC. Specifically, we 
are proposing to shorten the PSC by removing some of the information we 
had previously finalized would be included in the document. We are 
proposing that the revised PSC would indicate the facility's TPS, as 
required under section 1881(h)(6)(c) of the Act, as well as information 
sufficient to identify the facility and information showing how the 
facility's TPS compared to the national average TPS for that specific 
payment year. We are not making any proposals to change the other 
requirements associated with this document. Facilities would still be 
required to post their PSC in a public

[[Page 31193]]

location in both English and Spanish (77 FR 67517).
     Proposed Changes to the Extraordinary Circumstances 
Exception (ECE) Policy: In section IV.D.2 of this proposed rule, we set 
forth the updates we are proposing to the Extraordinary Circumstances 
Exception (ECE) Policy for the ESRD QIP. In an effort to bring our 
policy into alignment with other quality reporting and value based 
purchasing programs, we are proposing to (1) allow facilities to submit 
a form signed by the facility's CEO or designated personnel; (2) expand 
the reasons for which an ECE can be requested by a facility or granted 
by CMS of its own accord to include an unresolved issue with a CMS data 
system, which affected the ability of the facility to submit data (an 
unresolved data system issue, in this case, would be one which did not 
allow the facility to submit data by the data submission deadline and 
one which was unable to be resolved with a work-around); and (3) 
specify that a facility does not need to be closed in order to request 
and receive consideration for an ECE, as long as the facility can 
demonstrate that its normal operations have been significantly affected 
by an extraordinary circumstance outside of its control. We are also 
clarifying that our intent is to notify a facility of our decision on a 
facility's ECE request within 90 days of the date that we receive it.
     Proposed PY 2021 Measure Set: As discussed in section 
IV.E.1 of this proposed rule, in the CY 2017 ESRD PPS final rule (81 FR 
77834 through 77969), we previously finalized 16 measures to be 
included in the PY 2020 ESRD QIP. For PY 2021, we are proposing to 
update the Standardized Transfusion Ratio (STrR) Clinical Measure to 
bring the measure into alignment with the National Quality Forum (NQF)-
endorsed specifications, and replace the two existing Vascular Access 
Type (VAT) measures with newly endorsed vascular access measures that 
address long-held concerns of the community. Specifically, we are 
proposing to replace the VAT measures with the Proposed Hemodialysis 
Vascular Access: Standardized Fistula Rate Clinical Measure and the 
Proposed Hemodialysis Vascular Access: Long-Term Catheter Rate Clinical 
Measure. There would be no increase in burden associated with the 
proposed measure changes.
     Data Validation: In section IV.D.7 of this proposed rule, 
we set forth the updates we are proposing to make to the data 
validation program in the ESRD QIP. For PY 2020, we are proposing to 
continue the pilot validation study for validation of Consolidated 
Renal Operations in a Web-Enabled Network (CROWNWeb) data. Under this 
continued validation study, we are proposing to continue using the same 
methodology used for the PY 2018 and PY 2019 ESRD QIP. Under this 
methodology, we would sample approximately 10 records per facility from 
300 facilities during CY 2018.
    For PY 2020, we are proposing to continue a National Healthcare 
Safety Network (NHSN) Bloodstream Infection (BSI) Data Validation study 
similar to the one that we finalized in the CY 2017 ESRD PPS final 
rule. Under that methodology, we would select 35 facilities to 
participate in an NHSN dialysis event validation study for two quarters 
of data reported in CY 2018. The CMS data validation contractor would 
then send these facilities requests for medical records for all 
patients with ``candidate events'' during the evaluation period, as 
well as randomly selected patient records. Each facility selected would 
be required to submit 10 records total to the CMS validation 
contractor. The CMS contractor would utilize a methodology for 
reviewing and validating the candidate events that is consistent with 
the Centers for Disease Control and Prevention's (CDC's) validation 
protocol, and analyze those records to determine whether the facility 
reported dialysis events for those patients in accordance with the NHSN 
Dialysis Event Protocol. Information from the validation study would be 
used to develop a methodology to score facilities based on the accuracy 
of their reporting of the NHSN BSI Clinical Measure.

C. Summary of Costs and Benefits

    In section IX of this proposed rule, we set forth a detailed 
analysis of the impacts that the proposed changes would have on 
affected entities and beneficiaries. The impacts include the following:
1. Impacts of the Proposed ESRD PPS
    The impact chart in section IX of this proposed rule displays the 
estimated change in payments to ESRD facilities in CY 2018 compared to 
estimated payments in CY 2017. The overall impact of the CY 2018 
changes is projected to be a 0.8 percent increase in payments. 
Hospital-based ESRD facilities have an estimated 1.0 percent increase 
in payments compared with freestanding facilities with an estimated 0.8 
percent increase.
    We estimate that the aggregate ESRD PPS expenditures would increase 
by approximately $100 million from CY 2017 to CY 2018. This reflects a 
$90 million increase from the payment rate update and a $10 million 
increase due to the updates to the outlier threshold amounts. As a 
result of the projected 0.8 percent overall payment increase, we 
estimate that there would be an increase in beneficiary co-insurance 
payments of 0.8 percent in CY 2018, which translates to approximately 
$20 million.
2. Impacts of the Proposed Payment for Renal Dialysis Services 
Furnished to Individuals With AKI
    We anticipate an estimated $2.0 million would be paid to ESRD 
facilities in CY 2018 as a result of AKI patients receiving renal 
dialysis services in the ESRD facility at the ESRD PPS base rate versus 
receiving those services in the hospital outpatient setting.
3. Impacts of the Proposed ESRD QIP
    We estimate that the overall economic impact of the ESRD QIP would 
be approximately $113 million in PY 2020 and $113 million in PY 2021. 
The $113 million figure for PY 2020 includes costs associated with the 
collection of information requirements, which we estimate would be 
approximately $91 million.\1\ For PY 2021, we estimate that ESRD 
facilities would experience an aggregate impact of approximately $120 
million as a result of the PY 2021 ESRD QIP. For PY 2021, these 
estimates have not significantly changed because we are not proposing 
to add any new measures to the program which would require an increased 
burden associated with the collection of information requirements. We 
are proposing to replace two existing measures but no new burdens are 
being proposed. Similarly, we are not proposing to increase the size of 
either of the Data Validation Studies proposed for PY 2020 so 
facilities would not experience an increase in burden with respect to 
being selected to participate in either of those two studies. 
Therefore, the overall economic impact of the ESRD QIP would be similar 
in PY 2021 to what it was in PY 2020.
---------------------------------------------------------------------------

    \1\ We note that the aggregate impact of the PY 2020 ESRD QIP 
was included in the CY 2017 ESRD PPS Final Rule (81 FR 77957). The 
previously finalized aggregate impact of $113 million reflects the 
PY 2020 estimated payment reductions and the collection of 
information requirements finalized in the PY 2020 ESRD QIP Final 
Rule.
---------------------------------------------------------------------------

    The ESRD QIP would continue to incentivize facilities to provide 
high-quality care to beneficiaries.

[[Page 31194]]

II. Calendar Year (CY) 2018 End-Stage Renal Disease (ESRD) Prospective 
Payment System (PPS)

A. Background

1. Statutory Background
    On January 1, 2011, we implemented the End-Stage Renal Disease 
(ESRD) Prospective Payment System (PPS), a case-mix adjusted bundled 
PPS for renal dialysis services furnished by ESRD facilities as 
required by section 1881(b)(14) of the Social Security Act (the Act), 
as added by section 153(b) of the Medicare Improvements for Patients 
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275). Section 
1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA and 
amended by section 3401(h) of the Patient Protection and Affordable 
Care Act (the Affordable Care Act) (Pub. L. 111-148), established that 
beginning with calendar year (CY) 2012, and each subsequent year, the 
Secretary of the Department of Health and Human Services (the 
Secretary) shall annually increase payment amounts by an ESRD market 
basket increase factor, reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act.
    Section 632 of the American Taxpayer Relief Act of 2012 (ATRA) 
(Pub. L. 112-240) included several provisions that apply to the ESRD 
PPS. Section 632(a) of ATRA added section 1881(b)(14)(I) to the Act, 
which required the Secretary, by comparing per patient utilization data 
from 2007 with such data from 2012, to reduce the single payment for 
renal dialysis services furnished on or after January 1, 2014 to 
reflect the Secretary's estimate of the change in the utilization of 
ESRD-related drugs and biologicals (excluding oral-only ESRD-related 
drugs). Consistent with this requirement, in the CY 2014 ESRD PPS final 
rule we finalized $29.93 as the total drug utilization reduction and 
finalized a policy to implement the amount over a 3- to 4-year 
transition period (78 FR 72161 through 72170).
    Section 632(b) of ATRA prohibited the Secretary from paying for 
oral-only ESRD-related drugs and biologicals under the ESRD PPS prior 
to January 1, 2016. And section 632(c) of ATRA required the Secretary, 
by no later than January 1, 2016, to analyze the case-mix payment 
adjustments under section 1881(b)(14)(D)(i) of the Act and make 
appropriate revisions to those adjustments.
    On April 1, 2014, the Protecting Access to Medicare Act of 2014 
(PAMA) (Pub. L. 113-93) was enacted. Section 217 of PAMA included 
several provisions that apply to the ESRD PPS. Specifically, sections 
217(b)(1) and (2) of PAMA amended sections 1881(b)(14)(F) and (I) of 
the Act and replaced the drug utilization adjustment that was finalized 
in the CY 2014 ESRD PPS final rule (78 FR 72161 through 72170) with 
specific provisions that dictated the market basket update for CY 2015 
(0.0 percent) and how the market basket should be reduced in CYs 2016 
through CY 2018.
    Section 217(a)(1) of PAMA amended section 632(b)(1) of ATRA to 
provide that the Secretary may not pay for oral-only ESRD-related drugs 
under the ESRD PPS prior to January 1, 2024. Section 217(a)(2) of PAMA 
further amended section 632(b)(1) of ATRA by requiring that in 
establishing payment for oral-only drugs under the ESRD PPS, the 
Secretary must use data from the most recent year available. Section 
217(c) of PAMA provided that as part of the CY 2016 ESRD PPS 
rulemaking, the Secretary shall establish a process for (1) determining 
when a product is no longer an oral-only drug; and (2) including new 
injectable and intravenous products into the ESRD PPS bundled payment.
    Finally, on December 19, 2014, the President signed the Stephen 
Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. 
L. 113-295). Section 204 of ABLE amended section 632(b)(1) of ATRA, as 
amended by section 217(a)(1) of PAMA, to provide that payment for oral-
only renal dialysis services cannot be made under the ESRD PPS bundled 
payment prior to January 1, 2025.
2. System for Payment of Renal Dialysis Services
    Under the ESRD PPS, a single, per-treatment payment is made to an 
ESRD facility for all of the renal dialysis services defined in section 
1881(b)(14)(B) of the Act and furnished to individuals for the 
treatment of ESRD in the ESRD facility or in a patient's home. We have 
codified our definitions of renal dialysis services at 42 CFR 413.171, 
which is in subpart H of 42 CFR part 413. Our other payment policies 
are also included in regulations in subpart H of 42 CFR part 413. The 
ESRD PPS base rate is adjusted for characteristics of both adult and 
pediatric patients and accounts for patient case-mix variability. The 
adult case-mix adjusters include five categories of age, body surface 
area, low body mass index, onset of dialysis, four co-morbidity 
categories, and pediatric patient-level adjusters consisting of two age 
categories and two dialysis modalities (42 CFR 413.235(a) and (b)).
    The ESRD PPS provides for three facility-level adjustments. The 
first payment adjustment accounts for ESRD facilities furnishing a low 
volume of dialysis treatments (42 CFR 413.232). The second adjustment 
reflects differences in area wage levels developed from Core Based 
Statistical Areas (CBSAs) (42 CFR 413.231). The third payment 
adjustment accounts for ESRD facilities furnishing renal dialysis 
services in a rural area (42 CFR 413.233).
    The ESRD PPS allows for a training add-on for home and self-
dialysis modalities (42 CFR 413.235(c)) and an additional payment for 
high cost outliers due to unusual variations in the type or amount of 
medically necessary care when applicable (42 CFR 413.237).
    The ESRD PPS also provides for a transitional drug add-on payment 
adjustment (TDAPA) to pay for a new injectable or intravenous product 
that is not considered included in the ESRD PPS base rate, meaning a 
product that is used to treat or manage a condition for which there is 
not an existing ESRD PPS functional category (42 CFR 413.234). The ESRD 
PPS functional categories represent distinct groupings of drugs or 
biologicals, as determined by CMS, whose end action effect is the 
treatment or management of a condition or conditions associated with 
ESRD. New injectable or intravenous products that are not included in a 
functional category in the ESRD PPS base rate are paid for using the 
TDAPA for a minimum of 2 years, until sufficient claims data for rate 
setting analysis is available. At that point, utilization would be 
reviewed and the ESRD PPS base rate modified, if appropriate, to 
account for these products. The TDAPA is based on pricing methodologies 
under section 1847A of the Act (42 CFR 413.234(c)).
3. Updates to the ESRD PPS
    Policy changes to the ESRD PPS are proposed and finalized annually 
in the Federal Register. The CY 2011 ESRD PPS final rule was published 
on August 12, 2010 in the Federal Register (75 FR 49030 through 49214). 
That rule implemented the ESRD PPS beginning on January 1, 2011 in 
accordance with section 1881(b)(14) of the Act, as added by section 
153(b) of MIPPA, over a 4-year transition period. Since the 
implementation of the ESRD PPS, we have published annual rules to make 
routine updates, policy changes, and clarifications.
    On November 4, 2016, we published in the Federal Register a final 
rule (81 FR 77384 through 77969) entitled, ``Medicare Program; End-
Stage Renal Disease Prospective Payment System,

[[Page 31195]]

Coverage and Payment for Renal Dialysis Services Furnished to 
Individuals With Acute Kidney Injury, End-Stage Renal Disease Quality 
Incentive Program, Durable Medical Equipment, Prosthetics, Orthotics 
and Supplies Competitive Bidding Program Bid Surety Bonds, State 
Licensure and Appeals Process for Breach of Contract Actions, Durable 
Medical Equipment, Prosthetics, Orthotics and Supplies Competitive 
Bidding Program and Fee Schedule Adjustments, Access to Care Issues for 
Durable Medical Equipment; and the Comprehensive End-Stage Renal 
Disease Care Model; Final Rule'' (hereinafter referred to as the CY 
2017 ESRD PPS final rule). In that rule, we updated the ESRD PPS base 
rate for CY 2017, the wage index and wage index floor, the outlier 
policy, and the home and self-dialysis training add-on payment 
adjustment. For further detailed information regarding these updates, 
see 81 FR 77384.

B. Provisions of the Proposed Rule

1. Pricing Eligible Outlier Drugs and Biologicals That Were or Would 
Have Been, Prior to January 1, 2011, Separately Billable Under Medicare 
Part B
a. Summary of Outlier Calculation
    Our regulations at 42 CFR 413.237 specify the methodology used to 
calculate outlier payments. Under the ESRD PPS outlier policy, an ESRD 
facility is eligible for an outlier payment when the facility's per 
treatment imputed MAP amount for ESRD outlier services furnished to a 
beneficiary exceeds the predicted ESRD outlier services MAP amount for 
outlier services plus the FDL amount, as specified in Sec.  413.237(b). 
In the CY 2011 ESRD PPS final rule (75 FR 49134 through 49147), we 
discuss the details of establishing the outlier policy under the ESRD 
PPS, including determining eligibility for outlier payments. We discuss 
the proposed CY 2018 updates to the outlier policy in section II.B.2.c 
of this proposed rule.
    Under 42 CFR 413.237(a)(1), ESRD outlier services include (1) 
certain items and services included in the ESRD PPS bundle that were or 
would have been separately billable under Medicare Part B prior to the 
implementation of the ESRD PPS, including ESRD-related drugs and 
biologicals, ESRD-related laboratory tests, and other ESRD-related 
medical/surgical supplies; and (2) certain renal dialysis service drugs 
included in the ESRD PPS bundle that were covered under Medicare Part D 
prior to the implementation of the ESRD PPS. For CMS to calculate 
outlier eligibility and payments, ESRD facilities must identify on the 
monthly claim which outlier services have been furnished. CMS provides 
a list of outlier services on the CMS Web site, https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Outlier_Services.html, which is subject to certain additions and 
exclusions as discussed in the CY 2012 ESRD PPS final rule (76 FR 
70246) and Chapter 8 Section 20.1 of CMS Publication 100-04 (https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c08.pdf).
    It is important for ESRD facilities to report the outlier services 
on the claim because imputed outlier service MAP amounts for a 
beneficiary are based on the actual utilization of outlier services. 
Specifically, we estimate an ESRD facility's imputed costs for ESRD 
outlier services based on available pricing data. In the CY 2011 ESRD 
PPS final rule we finalized the pricing data that we use to estimate 
imputed outlier services MAP amounts for the different categories of 
outlier services (75 FR 49141). With regard to Part B ESRD-related 
drugs and biologicals that were separately billable prior to 
implementation of the ESRD PPS, we finalized a policy to base the 
prices for these items on the most current Average Sales Price (ASP) 
data plus 6 percent. Our rationale for this decision was that ASP data 
for ESRD-related drugs and biologicals is updated quarterly and was the 
basis for payment of these drugs and biologicals prior to the 
implementation of the ESRD PPS.
b. Use of ASP Methodology Under the ESRD PPS
    Since the implementation of the ESRD PPS, we have referred to the 
use of the ASP methodology when we needed to price ESRD-related drugs 
and biologicals previously paid separately under Part B (prior to the 
ESRD PPS) for purposes of ESRD PPS policies or calculations. For 
example, as discussed above, in the CY 2011 ESRD PPS final rule, we 
finalized the use of the ASP plus 6 percent methodology for pricing 
Part B ESRD-related drugs and biologicals under the outlier policy (75 
FR 49141). In the CY 2012 ESRD PPS final rule (76 FR 20244), we stated 
that under the outlier policy, we use the ASP methodology.
    In the CY 2013 ESRD PPS final rule (77 FR 67463), we finalized that 
for CY 2013 and subsequent years we will continue to use the ASP 
methodology, including any modifications finalized in the Physician Fee 
Schedule (PFS) final rules, to compute outlier MAP amounts. (We 
referred to the PFS since this is typically the rulemaking vehicle CMS 
uses for provisions related to covered Part B drugs and biologicals, 
however, we note that other vehicles such as standalone rules, are used 
as well.) In the CY 2013 ESRD PPS final rule, we also finalized the use 
of the ASP methodology for any other policy that requires the use of 
payment amounts for drugs and biologicals that, absent the ESRD PPS, 
would be paid separately.
    In accordance with this policy, in the CY 2016 ESRD PPS proposed 
rule (80 FR 37829 through 37833), we proposed to use ASP methodology 
for purposes of two policies under the ESRD PPS drug designation 
process. Specifically, we proposed that any new injectable or 
intravenous product that fits into one of the ESRD functional 
categories would be considered included in the ESRD PPS and would count 
toward the calculation of an outlier payment. We further explained that 
in calculating the outlier payment, we price drugs using the ASP 
methodology, which is currently ASP + 6 percent (80 FR 37831). In 
addition, we proposed that for a new injectable or intravenous product 
that is used to treat or manage a condition for which there is not an 
ESRD PPS functional category, the new injectable or intravenous product 
would be eligible for the TDAPA if it meets specific criteria (80 FR 
37831 through 37832). We further proposed that we would base the TDAPA 
on the ASP methodology and pay this amount during the utilization data 
collection time period (80 FR 37832 through 37833).
    As we discussed in the CY 2016 ESRD PPS final rule (80 FR 69023 
through 69024), commenters expressed concern regarding the availability 
of ASP data when including new injectable or intravenous products into 
the ESRD PPS bundled payment, for purposes of both the outlier 
calculation and TDAPA. A commenter pointed out that under the proposal, 
new products would qualify as outlier services, and if we fail to allow 
separate payment at launch, there would be no ASP upon which to base an 
outlier payment. That commenter recommended that we consider how to 
avoid jeopardizing beneficiary access by implementing an outlier 
payment based on wholesale acquisition cost (WAC) or another readily 
available price. We agreed with the commenter, and stated that in the 
event we do not establish an ASP, WAC could be used. We explained that 
we consider WAC pricing to be a part of the pricing methodologies 
specified in section 1847A of the Act, and we would use the 
methodologies available to us under that authority in order to 
accurately determine a price for the calculation of outlier payments 
for

[[Page 31196]]

new injectable and intravenous drugs that fit into one of the existing 
ESRD PPS functional categories. However, we did not address extending 
this policy to Part B ESRD-related drugs and biologicals that are 
currently eligible for outlier consideration that may not have ASP 
data.
    Also, in the CY 2016 ESRD PPS final rule (80 FR 69024), other 
commenters expressed concern regarding the use of ASP data for purposes 
of the TDAPA. The commenters suggested that ASP would not be truly 
reflective of the actual cost of the drugs. One commenter pointed out 
that there is often a data lag between ASP and the actual cost of the 
drugs and as a result, the TDAPA may not reflect the actual cost of the 
drug. We responded that the ASP methodology is a part of the pricing 
methodologies specified in section 1847A of the Act, which may also 
include WAC pricing during the first quarter of sales as specified in 
section 1847A(c)(4) of the Act. We agreed with commenters that ASP 
pricing may not always be the most appropriate way to calculate the 
TDAPA. Therefore, we revised the regulation text at Sec.  413.234(c)(1) 
to refer to the pricing methodologies under section 1847A of the Act, 
rather than ASP pricing methodology, because these methodologies 
include ASP, as well as WAC.
c. Pricing Methodologies Under Section 1847A of the Act
    Medicare Part B follows the provisions under section 1847A of the 
Act for purposes of determining the payment amounts for drugs and 
biologicals that are described in section 1842(o)(1)(C) of the Act and 
that are furnished on or after January 1, 2005. While most Part B drugs 
(excluding those paid on a cost or prospective payment basis) are paid 
at ASP plus 6 percent, there are cases where ASP is unavailable. For 
example, when a new drug or biological is brought to market, sales data 
is not sufficiently available for the manufacturer to compute an ASP. 
In these cases, the payment amount for these drugs could be determined 
using WAC (as specified in section 1847A(c)(4) of the Act) or, when WAC 
is not available, the Medicare Administrative Contractor has discretion 
in determining the payment amount. Under section 1847A(d) of the Act, 
CMS also has the authority to substitute an Average Manufacturer Price 
(AMP) or Widely Available Market Price (WAMP)-based payment amount for 
the ASP-based payment amount when the ASP exceeds the AMP or WAMP by a 
threshold amount. As discussed in the CY 2013 PFS final rule (77 FR 
69140 through 69141), the AMP price substitution policy is not utilized 
frequently and WAMP-based price substitutions are not currently 
implemented. CMS also uses a carryover pricing policy in the very rare 
situations when a manufacturer's ASP data for a multiple source drug 
product is missing, as discussed in the CY 2011 PFS final rule (75 FR 
73461 through 73462).
d. Proposal for Pricing Eligible Outlier Drugs and Biologicals That 
Were or Would Have Been, Prior to January 1, 2011, Separately Billable 
Under Medicare Part B
    As we have described above, section 1847A of the Act provides 
methods that are used to determine payment amounts for most separately 
paid Part B drugs, that is, drugs and biologicals that are not paid on 
a cost or PPS basis (see section 1842(o)(1) of the Act). We are aware 
of several circumstances in which an ASP-based payment amount is not 
available. For example, an ASP-based payment amount is not available 
when there is no longer a Medicare program need for a drug to remain on 
the ASP fee schedule, or when drugs or biologicals are new to market 
and manufacturers have not yet reported ASP data. However, based on 
CMS' experience with determining Part B drug payment limits under 
section 1847A of the Act, we believe there are limited situations in 
which ASP data would not be available for drugs or biologicals that 
could qualify for the outlier calculation. Nevertheless, we believe 
that these drugs and biologicals, when they are determined to be an 
ESRD outlier service, should count toward the outlier calculation.
    In this proposed rule, we propose to extend the use of all pricing 
methodologies under section 1847A of the Act for purposes of the ESRD 
PPS outlier policy, specifically for current ESRD-related drugs and 
biologicals that were or would have been separately billable under Part 
B prior to the implementation of the ESRD PPS and are outlier eligible 
for CY 2018 and subsequent years. As explained above, we have already 
established a policy under the drug designation process in the CY 2016 
ESRD PPS final rule (80 FR 69023) whereby we use the pricing 
methodologies specified in section 1847A of the Act to determine the 
TDAPA for a new injectable or intravenous product that is not 
considered included in the ESRD PPS base rate (42 CFR 413.234(c)). In 
addition, we have established that we use these methodologies to 
determine a price for the calculation of outlier payments for new 
injectable and intravenous drugs that fit into one of the existing the 
functional categories (80 FR 69023).
    We believe that using the pricing methodologies under section 1847A 
of the Act is consistent with the ESRD PPS drug designation process and 
how covered drugs and biologicals are paid under Medicare Part B. We 
believe that consistency with Medicare Part B payment for drugs and 
biologicals would be beneficial to ESRD facilities because this is the 
way CMS pays for injectable drugs and biologicals on the ESRD claim 
with the AY modifier; and therefore facilities would be able to predict 
outlier payments. We are proposing to apply any pricing methodology 
available under section 1847A of the Act as appropriate when ASP 
pricing is unavailable for eligible drugs and biologicals under the 
outlier policy that were or would have been separately billable under 
Part B prior to the implementation of the ESRD PPS. In situations where 
ASP data is not available and other methodologies under section 1847A 
of the Act do not apply (including but not limited to AMP price 
substitution or carryover pricing), we believe that a WAC-based payment 
amount can be determined instead. Based on our experience with 
determining Part B drug payments under section 1847A of the Act, we 
believe that drugs and biologicals that are approved by the Food and 
Drug Administration and are being sold in the United States nearly 
always have WAC amounts published in pricing compendia. We believe this 
proposal is consistent with the intent of the ESRD PPS outlier policy, 
which is to provide a payment adjustment for high cost patients due to 
unusual variations in the type or amount of medically necessary care. 
If there are drugs and biologicals that ESRD facilities furnish for the 
treatment of ESRD that qualify as ESRD outlier services and do not have 
ASP data, we would want these items counted toward an outlier payment 
since they are a part of the cost the facility is incurring. When a 
drug or biological does not have ASP data or WAC data or cannot 
otherwise be priced under section 1847A of the Act, we propose that it 
would not count toward the outlier calculation. When the utilization of 
a drug or biological is not counted toward the outlier calculation, it 
may result in a lower outlier payment or no outlier payment to the ESRD 
facility.
    We are soliciting comment on our proposal to use any pricing 
methodology available under section 1847A of the Act for purposes of 
the ESRD PPS outlier policy. We are also

[[Page 31197]]

soliciting comment on our proposal that when pricing methodologies are 
not available under section 1847A of the Act, the drug or biological 
would not count toward the outlier calculation.
2. Proposed CY 2018 ESRD PPS Update
a. ESRD Bundled Market Basket
i. Proposed CY 2018 ESRD Market Basket Update, Productivity Adjustment, 
and Labor-Related Share for ESRD PPS
    In accordance with section 1881(b)(14)(F)(i) of the Act, as added 
by section 153(b) of MIPPA and amended by section 3401(h) of the 
Affordable Care Act, beginning in 2012, the ESRD PPS payment amounts 
are required to be annually increased by an ESRD market basket increase 
factor and reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act. The application of the productivity 
adjustment may result in the increase factor being less than 0.0 for a 
year and may result in payment rates for a year being less than the 
payment rates for the preceding year. The statute also provides that 
the market basket increase factor should reflect the changes over time 
in the prices of an appropriate mix of goods and services used to 
furnish renal dialysis services.
    Section 1881(b)(14)(F)(i)(I) of the Act, as added by section 
217(b)(2)(A) of PAMA, provides that in order to accomplish the purposes 
of subparagraph (I) with respect to 2016, 2017, and 2018, after 
determining the market basket percentage increase factor for each of 
2016, 2017, and 2018, the Secretary shall reduce such increase factor 
by 1.25 percentage points for each of 2016 and 2017 and by 1.0 
percentage point for 2018. Accordingly, for CY 2018, we will reduce the 
proposed amount of the market basket percentage increase factor by 1.0 
percent as required by section 1881(b)(14)(F)(i)(I) of the Act, and 
will further reduce it by the productivity adjustment.
    As required under section 1881(b)(14)(F)(i) of the Act, CMS 
developed an all-inclusive ESRDB input price index (75 FR 49151 through 
49162) and subsequently revised and rebased the ESRDB input price index 
in the CY 2015 ESRD PPS final rule (79 FR 66129 through 66136). 
Although ``market basket'' technically describes the mix of goods and 
services used for ESRD treatment, this term is also commonly used to 
denote the input price index (that is, cost categories, their 
respective weights, and price proxies combined) derived from a market 
basket. Accordingly, the term ``ESRDB market basket,'' as used in this 
document, refers to the ESRDB input price index.
    We propose to use the CY 2012-based ESRDB market basket as 
finalized and described in the CY 2015 ESRD PPS final rule (79 FR 66129 
through 66136) to compute the CY 2018 ESRDB market basket increase 
factor and labor-related share based on the best available data. 
Consistent with historical practice, we estimate the ESRDB market 
basket update based on IHS Global Inc.'s (IGI), forecast using the most 
recently available data. IGI is a nationally recognized economic and 
financial forecasting firm that contracts with CMS to forecast the 
components of the market baskets.
    Using this methodology and the IGI forecast for the first quarter 
of 2017 of the CY 2012-based ESRDB market basket (with historical data 
through the fourth quarter of 2016), and consistent with our historical 
practice of estimating market basket increases based on the best 
available data, the proposed CY 2018 ESRDB market basket increase 
factor is 2.2 percent. As required by section 1881(b)(14)(F)(I)(i) of 
the Act as amended by section 217(b)(2) of PAMA, we must reduce the 
amount of the market basket increase factor by 1.0 percent, resulting 
in a proposed CY 2018 ESRDB market basket percentage increase factor of 
1.2 percent.
    Under section 1881(b)(14)(F)(i) of the Act, as amended by section 
3401(h) of the Affordable Care Act, for CY 2012 and each subsequent 
year, the ESRD market basket percentage increase factor shall be 
reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act. The multifactor productivity (MFP) is 
derived by subtracting the contribution of labor and capital input 
growth from output growth. The detailed methodology for deriving the 
MFP projection was finalized in the CY 2012 ESRD PPS final rule (76 FR 
40503 through 40504). The most up-to-date MFP projection methodology is 
available on the CMS Web site at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html.
    Using IGI's first quarter 2017 forecast, the MFP adjustment for CY 
2018 (the 10-year moving average of MFP for the period ending CY 2018) 
is projected to be 0.5 percent.
    For the CY 2018 ESRD payment update, we propose to continue using a 
labor-related share of 50.673 percent for the ESRD PPS payment, which 
was finalized in the CY 2015 ESRD PPS final rule (79 FR 66136).
ii. Proposed CY 2018 ESRDB Market Basket Update, Adjusted for 
Multifactor Productivity (MFP)
    Under section 1881(b)(14)(F) of the Act, beginning in CY 2012, ESRD 
PPS payment amounts shall be annually increased by an ESRD market 
basket percentage increase factor reduced by the productivity 
adjustment. For CY 2018, section 1881(b)(14)(F)(i)(I) of the Act, as 
amended by section 217(b)(2)(A)(ii) of PAMA, requires the Secretary to 
implement a 1.0 percentage point reduction to the ESRDB market basket 
increase factor in addition to the productivity adjustment.
    As a result of these provisions, the proposed CY 2018 ESRD market 
basket increase is 0.7 percent. This market basket increase is 
calculated by starting with the proposed CY 2018 ESRDB market basket 
percentage increase factor of 2.2 percent, reducing it by the mandated 
legislative adjustment of 1.0 percent (required by section 
1881(b)(14)(F)(i)(I) of the Act), and reducing it further by the MFP 
adjustment (the 10-year moving average of MFP for the period ending CY 
2018) of 0.5 percent. As is our general practice, if more recent data 
are subsequently available (for example, a more recent estimate of the 
market basket or MFP adjustment), we will use such data to determine 
the CY 2018 market basket update and MFP adjustment in the CY 2018 ESRD 
PPS final rule.
b. The Proposed CY 2018 ESRD PPS Wage Indices
i. Annual Update of the Wage Index
    Section 1881(b)(14)(D)(iv)(II) of the Act provides that the ESRD 
PPS may include a geographic wage index payment adjustment, such as the 
index referred to in section 1881(b)(12)(D) of the Act, as the 
Secretary determines to be appropriate. In the CY 2011 ESRD PPS final 
rule (75 FR 49117), we finalized the use of the Office of Management 
and Budget's (OMB's) CBSAs-based geographic area designations to define 
urban and rural areas and their corresponding wage index values. OMB 
publishes bulletins regarding CBSA changes, including changes to CBSA 
numbers and titles. The latest bulletin, as well as subsequent 
bulletins, is available online at https://www.whitehouse.gov/omb/information-for-agencies/bulletins.
    For CY 2018, we would continue to use the same methodology as 
finalized in the CY 2011 ESRD PPS final rule (75 FR 49117) for 
determining the wage indices for ESRD facilities. Specifically, we 
would update the wage indices for

[[Page 31198]]

CY 2018 to account for updated wage levels in areas in which ESRD 
facilities are located. We use the most recent pre-floor, pre-
reclassified hospital wage data collected annually under the inpatient 
prospective payment system. The ESRD PPS wage index values are 
calculated without regard to geographic reclassifications authorized 
under sections 1886(d)(8) and (d)(10) of the Act and utilize pre-floor 
hospital data that are unadjusted for occupational mix. The proposed CY 
2018 wage index values for urban areas are listed in Addendum A (Wage 
Indices for Urban Areas) and the proposed CY 2018 wage index values for 
rural areas are listed in Addendum B (Wage Indices for Rural Areas). 
Addenda A and B are located on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices.html.
    In the CY 2011 and CY 2012 ESRD PPS final rules (75 FR 49116 
through 49117 and 76 FR 70239 through 70241, respectively), we also 
discussed and finalized the methodologies we use to calculate wage 
index values for ESRD facilities that are located in urban and rural 
areas where there is no hospital data. For urban areas with no hospital 
data, we compute the average wage index value of all urban areas within 
the State and use that value as the wage index. For rural areas with no 
hospital data, we compute the wage index using the average wage index 
values from all contiguous CBSAs to represent a reasonable proxy for 
that rural area.
    We apply the wage index for Guam as established in the CY 2014 ESRD 
PPS final rule (78 FR 72172) (0.9611) to American Samoa and the 
Northern Mariana Islands. We apply the statewide urban average based on 
the average of all urban areas within the state (78 FR 72173) (0.8478) 
to Hinesville-Fort Stewart, Georgia. We note that if hospital data 
becomes available for these areas, we will use that data for the 
appropriate CBSAs instead of the proxy.
    A wage index floor value has been used instead of the calculated 
wage index values below the floor in making payment for renal dialysis 
services under the ESRD PPS. Currently, all areas with wage index 
values that fall below the floor are located in Puerto Rico. However, 
the wage index floor value is applicable for any area that may fall 
below the floor.
    In the CY 2011 ESRD PPS final rule (75 FR 49116 through 49117), we 
finalized that we would continue to reduce the wage index floor by 0.05 
for each of the remaining years of the ESRD PPS transition, that is, 
until CY 2014. In the CY 2012 ESRD PPS final rule (76 FR 70241), we 
finalized the 0.05 reduction to the wage index floor for CYs 2012 and 
2013, resulting in a wage index floor of 0.5500 and 0.5000, 
respectively. We continued to apply and to reduce the wage index floor 
by 0.05 in the CY 2013 ESRD PPS final rule (77 FR 67459 through 67461). 
Although our intention initially was to provide a wage index floor only 
through the 4-year transition to 100 percent implementation of the ESRD 
PPS (75 FR 49116 through 49117; 76 FR 70240 through 70241), in the CY 
2014 ESRD PPS final rule (78 FR 72173), we continued to apply the wage 
index floor and continued to reduce the floor by 0.05 per year for CY 
2014 and for CY 2015.
    In the CY 2016 ESRD PPS final rule (80 FR 69006 through 69008), we 
finalized the continuation of the application of the wage index floor 
of 0.4000 to areas with wage index values below the floor, rather than 
reducing the floor by 0.05. We stated in that rule that we needed more 
time to study the wage indices that are reported for Puerto Rico to 
assess the appropriateness of discontinuing the wage index floor. Also, 
in that rule a commenter provided three alternative wage indices for 
Puerto Rico for the CY 2016 ESRD PPS final rule: (1) Utilize our policy 
for areas that do not have reliable hospital data by applying the wage 
index for Guam as we did in implementing the ESRD PPS in the Northern 
Marianas and American Samoa; (2) use the U.S. Virgin Islands as a proxy 
for Puerto Rico, given the geographic proximity and its ``non-
mainland'' or ``island'' nature; or (3) reestablish the wage index 
floor in effect in 2010 when Puerto Rico became the only location with 
wage areas subject to the floor, that is, 0.65.
    In the CY 2017 proposed rule (81 FR 42817), we presented the 
findings from analyses of ESRD facility cost report and claims data 
submitted by facilities located in Puerto Rico and mainland facilities. 
We solicited public comments on the wage index for CBSAs in Puerto Rico 
as part of our continuing effort to determine an appropriate course of 
action. We did not propose to change the wage index floor for CBSAs in 
Puerto Rico, but we requested public comments in which stakeholders can 
provide useful input for consideration in future decision-making. 
Specifically, we solicited comment on the useful suggestions that were 
submitted in the CY 2016 ESRD PPS final rule (80 FR 69007). After 
considering the public comments we received regarding the wage index 
floor, we finalized the wage index floor of 0.4000 in the CY 2017 ESRD 
PPS final rule (81 FR 77858).
    In this proposed rule, for CY 2018 and subsequent years, we are 
proposing to maintain the current wage index floor of 0.4000 for CBSAs 
that have wage values that fall below the floor. The cost report 
analyses we have conducted over the past several years are inconclusive 
and have not convinced us that an increase in the wage index floor is 
warranted at this time.
    We continue to believe maintaining the current wage index floor 
value of 0.4000 is appropriate as it continues to provide additional 
payment support to the lowest wage areas and avoids the need for an 
additional budget-neutrality adjustment that would reduce the ESRD PPS 
base rate, beyond the adjustment needed to reflect updated hospital 
wage data, in order to maintain budget neutrality for wage index 
updates. We will continue to monitor and analyze ESRD facility cost 
reports and projected impacts to guide future rulemaking with regard to 
the wage index floor.
ii. Application of the Wage Index Under the ESRD PPS
    A facility's wage index is applied to the labor-related share of 
the ESRD PPS base rate. In the CY 2015 ESRD PPS final rule (79 FR 
66136), we finalized the labor-related share of 50.673 percent, which 
is based on the 2012-based ESRDB market basket. Thus, for CY 2018, the 
labor-related share to which a facility's wage index would be applied 
is 50.673 percent.
c. CY 2018 Update to the Outlier Policy
    Section 1881(b)(14)(D)(ii) of the Act requires that the ESRD PPS 
include a payment adjustment for high cost outliers due to unusual 
variations in the type or amount of medically necessary care, including 
variability in the amount of erythropoiesis stimulating agents (ESAs) 
necessary for anemia management. Some examples of the patient 
conditions that may be reflective of higher facility costs when 
furnishing dialysis care would be frailty, obesity, and comorbidities, 
such as cancer. The ESRD PPS recognizes high cost patients, and we have 
codified the outlier policy in our regulations at 42 CFR 413.237. The 
policy provides the following ESRD outlier items and services are 
included in the ESRD PPS bundle: (1) ESRD-related drugs and biologicals 
that were or would have been, prior to January 1, 2011, separately 
billable under Medicare Part B; (2) ESRD-related laboratory tests that 
were or would have been, prior to January 1, 2011, separately billable 
under Medicare Part B; (3) medical/surgical supplies, including 
syringes, used to administer ESRD-related drugs that were or would

[[Page 31199]]

have been, prior to January 1, 2011, separately billable under Medicare 
Part B; and (4) renal dialysis services drugs that were or would have 
been, prior to January 1, 2011, covered under Medicare Part D, 
including ESRD-related oral-only drugs effective January 1, 2025.
    In the CY 2011 ESRD PPS final rule (75 FR 49142), we stated that 
for purposes of determining whether an ESRD facility would be eligible 
for an outlier payment, it would be necessary for the facility to 
identify the actual ESRD outlier services furnished to the patient by 
line item (that is, date of service) on the monthly claim. Renal 
dialysis drugs, laboratory tests, and medical/surgical supplies that 
are recognized as outlier services were originally specified in 
Attachment 3 of Change Request 7064, Transmittal 2033 issued August 20, 
2010, rescinded and replaced by Transmittal 2094, dated November 17, 
2010. Transmittal 2094 identified additional drugs and laboratory tests 
that may also be eligible for ESRD outlier payment. Transmittal 2094 
was rescinded and replaced by Transmittal 2134, dated January 14, 2011, 
which was issued to correct the subject on the Transmittal page and 
made no other changes.
    Furthermore, we use administrative issuances and guidance to 
continually update the renal dialysis service items available for 
outlier payment via our quarterly update CMS Change Requests, when 
applicable. We use this separate guidance to identify renal dialysis 
service drugs that were or would have been covered under Medicare Part 
D for outlier eligibility purposes and in order to provide unit prices 
for calculating imputed outlier services. In addition, we also identify 
through our monitoring efforts items and services that are either 
incorrectly being identified as eligible outlier services or any new 
items and services that may require an update to the list of renal 
dialysis items and services that qualify as outlier services, which are 
made through administrative issuances.
    Our regulations at 42 CFR 413.237 specify the methodology used to 
calculate outlier payments. An ESRD facility is eligible for an outlier 
payment if its actual or imputed MAP amount per treatment for ESRD 
outlier services exceeds a threshold. The MAP amount represents the 
average incurred amount per treatment for services that were or would 
have been considered separately billable services prior to January 1, 
2011. The threshold is equal to the ESRD facility's predicted ESRD 
outlier services MAP amount per treatment (which is case-mix adjusted) 
plus the fixed-dollar loss (FDL) amount. In accordance with Sec.  
413.237(c) of our regulations, facilities are paid 80 percent of the 
per treatment amount by which the imputed MAP amount for outlier 
services (that is, the actual incurred amount) exceeds this threshold. 
ESRD facilities are eligible to receive outlier payments for treating 
both adult and pediatric dialysis patients.
    In the CY 2011 ESRD PPS final rule, using 2007 data, we established 
the outlier percentage at 1.0 percent of total payments (75 FR 49142 
through 49143). We also established the FDL amounts that are added to 
the predicted outlier services MAP amounts. The outlier services MAP 
amounts and FDL amounts are different for adult and pediatric patients 
due to differences in the utilization of separately billable services 
among adult and pediatric patients (75 FR 49140). As we explained in 
the CY 2011 ESRD PPS final rule (75 FR 49138 through 49139), the 
predicted outlier services MAP amounts for a patient are determined by 
multiplying the adjusted average outlier services MAP amount by the 
product of the patient-specific case-mix adjusters applicable using the 
outlier services payment multipliers developed from the regression 
analysis to compute the payment adjustments.
    For the CY 2018 outlier policy, we would use the existing 
methodology for determining outlier payments by applying outlier 
services payment multipliers that were developed for the CY 2016 ESRD 
PPS final rule (80 FR 68993-68994, 69002). We used these outlier 
services payment multipliers to calculate the predicted outlier service 
MAP amounts and projected outlier payments for CY 2018.
    For CY 2018, we propose that the outlier services MAP amounts and 
FDL amounts would be derived from claims data from CY 2016. Because we 
believe that any adjustments made to the MAP amounts under the ESRD PPS 
should be based upon the most recent data year available in order to 
best predict any future outlier payments, we propose the outlier 
thresholds for CY 2018 would be based on utilization of renal dialysis 
items and services furnished under the ESRD PPS in CY 2016. We 
recognize that the utilization of ESAs and other outlier services have 
continued to decline under the ESRD PPS, and that we have lowered the 
MAP amounts and FDL amounts every year under the ESRD PPS.
    In the CY 2017 ESRD PPS final rule (81 FR 77860), we stated that 
based on the CY 2015 claims data, outlier payments represented 
approximately 0.93 percent of total payments. For this proposed rule, 
as discussed below, CY 2016 claims data show outlier payments 
represented approximately 0.78 percent of total payments. We believe 
that trends in the utilization of the ESAs could be a reason for the 
decrease. Beginning in 2015 and continuing into 2016, there were large 
shifts in the composition of the utilization of ESA drugs. 
Specifically, utilization of Epoetin (EPO) alfa decreased and 
utilization of the longer-acting ESA drugs, darbepoetin and EPO beta, 
increased, based on estimates of average ESA utilization per session. 
As EPO alfa is measured in different units than both darbepoetin and 
EPO beta, it is difficult to compare the overall utilization of ESAs 
between 2014 and 2016 by units alone.
    In examining the claims data, we find that compositional shift away 
from use of EPO alfa to the longer acting darbepoetin and EPO beta was 
a significant factor in the decrease in total ESA costs in 2016. We 
first calculated the actual cost for ESAs administered during 2016. We 
then calculated the projected cost of ESAs that was used for the CY 
2016 ESRD PPS final rule, using total utilization from 2014 and drug 
prices from 2015 Q3 inflated to 2016 prices. The actual costs of ESAs 
administered in 2016 were roughly 20 percent lower than the value 
projected in the CY 2016 ESRD PPS final rule. We then calculated the 
projected cost of ESAs assuming that the utilization of various ESAs 
per dialysis session in 2014 and 2016 were similar and also used the 
prices and total dialysis session count from 2016. The projected costs 
from these two scenarios were similar and suggest that compositional 
change in ESA utilization was likely a significant factor in the 
decrease in the total cost of ESAs between 2014 and 2016. We continue 
to believe that the decline is leveling off and that 1.0 percent is an 
appropriate threshold for outlier payments.
i. CY 2018 Update to the Outlier Services MAP Amounts and FDL Amounts
    For CY 2018, we are not proposing any change to the methodology 
used to compute the MAP or FDL amounts. Rather, we will continue to 
update the outlier services MAP amounts and FDL amounts to reflect the 
utilization of outlier services reported on 2016 claims. For this 
proposed rule, the outlier services MAP amounts and FDL amounts were 
updated using 2016 claims data. The impact of this update is shown in 
Table 1, which compares the outlier services MAP amounts and

[[Page 31200]]

FDL amounts used for the outlier policy in CY 2017 with the updated 
proposed estimates for this rule. The estimates for the proposed CY 
2018 outlier policy, which are included in Column II of Table 1, were 
inflation adjusted to reflect projected 2018 prices for outlier 
services.

               Table 1--Outlier Policy: Impact of Using Updated Data To Define the Outlier Policy
----------------------------------------------------------------------------------------------------------------
                                                   Column I Final outlier policy    Column II Proposed outlier
                                                    for CY 2017 (based on 2015     policy for CY 2018 (based on
                                                   data, price inflated to 2017)   2016 data, price inflated to
                                                                 *                             2018)
                                                 ---------------------------------------------------------------
                                                      Age <18        Age >=18         Age <18        Age >=18
----------------------------------------------------------------------------------------------------------------
Average outlier services MAP amount per                   $38.77          $47.00          $38.20          $44.52
 treatment......................................
Adjustments.....................................  ..............  ..............  ..............  ..............
Standardization for outlier services............          1.0078          0.9770          1.0218          0.9788
MIPPA reduction.................................            0.98            0.98            0.98            0.98
Adjusted average outlier services MAP amount....          $38.29          $45.00          $38.25          $42.70
Fixed-dollar loss amount that is added to the             $68.49          $82.92          $49.55          $83.12
 predicted MAP to determine the outlier
 threshold......................................
Patient-months qualifying for outlier payment...            4.6%            6.7%            7.4%            6.3%
----------------------------------------------------------------------------------------------------------------
* Note that Column I was obtained from Column II of Table 1 from the CY 2017 ESRD PPS final rule.

    As demonstrated in Table 1, the estimated FDL amount per treatment 
that determines the CY 2018 outlier threshold amount for adults (Column 
II; $83.12) is higher than that used for the CY 2017 outlier policy 
(Column I; $82.92). The higher threshold is accompanied by a decrease 
in the adjusted average MAP for outlier services from $45.00 to $42.70. 
For pediatric patients, there is a decrease in the FDL amount from 
$68.49 to $49.55. There is a slight decrease in the adjusted average 
MAP for outlier services among pediatric patients, from $38.29 to 
$38.25.
    We estimate that the percentage of patient months qualifying for 
outlier payments in CY 2018 will be 6.3 percent for adult patients and 
7.4 percent for pediatric patients, based on the 2016 claims data. The 
pediatric outlier MAP and FDL amounts continue to be lower for 
pediatric patients than adults due to the continued lower use of 
outlier services (primarily reflecting lower use of ESAs and other 
injectable drugs).
ii. Outlier Percentage
    In the CY 2011 ESRD PPS final rule (75 FR 49081), under Sec.  
413.220(b)(4), we reduced the per treatment base rate by 1 percent to 
account for the proportion of the estimated total payments under the 
ESRD PPS that are outlier payments as described in Sec.  413.237. Based 
on the 2016 claims, outlier payments represented approximately 0.78 
percent of total payments, slightly below the 1 percent target due to 
small overall declines in the use of outlier services. Recalibration of 
the thresholds using 2016 data is expected to result in aggregate 
outlier payments close to the 1 percent target in CY 2018. We believe 
the update to the outlier MAP and FDL amounts for CY 2018 would 
increase payments for ESRD beneficiaries requiring higher resource 
utilization and move us closer to meeting our 1 percent outlier policy. 
We note that recalibration of the FDL amounts in this proposed rule 
would result in no change in payments to ESRD facilities for 
beneficiaries with renal dialysis items and services that are not 
eligible for outlier payments, but would increase payments to ESRD 
facilities for beneficiaries with renal dialysis items and services 
that are eligible for outlier payments. Therefore, beneficiary co-
insurance obligations would also increase for renal dialysis services 
eligible for outlier payments.
d. Proposed Impacts to the CY 2018 ESRD PPS Base Rate
i. ESRD PPS Base Rate
    In the CY 2011 ESRD PPS final rule (75 FR 49071 through 49083), we 
discussed the development of the ESRD PPS per treatment base rate that 
is codified in the Medicare regulations at Sec.  413.220 and Sec.  
413.230. The CY 2011 ESRD PPS final rule also provides a detailed 
discussion of the methodology used to calculate the ESRD PPS base rate 
and the computation of factors used to adjust the ESRD PPS base rate 
for projected outlier payments and budget neutrality in accordance with 
sections 1881(b)(14)(D)(ii) and 1881(b)(14)(A)(ii) of the Act, 
respectively. Specifically, the ESRD PPS base rate was developed from 
CY 2007 claims (that is, the lowest per patient utilization year as 
required by section 1881(b)(14)(A)(ii) of the Act), updated to CY 2011, 
and represented the average per treatment MAP for composite rate and 
separately billable services. In accordance with section 1881(b)(14)(D) 
of the Act and regulations at Sec.  413.230, the ESRD PPS base rate is 
adjusted for the patient specific case-mix adjustments, applicable 
facility adjustments, geographic differences in area wage levels using 
an area wage index, as well as applicable outlier payments, training 
add-on payments, or transitional drug add-on payments.
ii. Annual Payment Rate Update for CY 2018
    We are proposing an ESRD PPS base rate for CY 2018 of $233.31. This 
update reflects several factors, described in more detail as follows:
     Market Basket Increase: Section 1881(b)(14)(F)(i)(I) of 
the Act provides that, beginning in 2012, the ESRD PPS payment amounts 
are required to be annually increased by the ESRD market basket 
percentage increase factor. The latest CY 2018 projection for the ESRDB 
market basket is 2.2 percent. In CY 2018, this amount must be reduced 
by 1.0 percentage point as required by section 1881(b)(14)(F)(i)(I) of 
the Act, as amended by section 217(b)(2)(A) of PAMA, which is 
calculated as 2.2-1.0 = 1.2 percent. This amount is then reduced by the 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act, as required by section 1881(b)(14)(F)(i)(II) of the Act. The 
proposed MFP adjustment for CY 2018 is 0.5 percent, thus yielding a 
proposed update to the base rate of 0.7 percent for CY 2018 (1.2-0.5 = 
0.7 percent). Therefore, the proposed ESRD PPS base rate for CY 2018 
before application of the wage index budget-neutrality adjustment 
factor would be $233.17 ($231.55 x 1.007 = $233.17).
     Wage Index Budget-Neutrality Adjustment Factor: We compute 
a wage

[[Page 31201]]

index budget-neutrality adjustment factor that is applied to the ESRD 
PPS base rate. For CY 2018, we are not proposing any changes to the 
methodology used to calculate this factor which is described in detail 
in the CY 2014 ESRD PPS final rule (78 FR 72174). The CY 2018 proposed 
wage index budget-neutrality adjustment factor is 1.000605. This 
application would yield a CY 2018 ESRD PPS proposed base rate of 
$233.31 ($233.17 x 1.000605 = $233.31).
    In summary, we are proposing a CY 2018 ESRD PPS base rate of 
$233.31. This amount reflects a market basket increase of 0.7 percent 
and the CY 2018 wage index budget-neutrality adjustment factor of 
1.000605.

III. CY 2018 Payment for Renal Dialysis Services Furnished to 
Individuals With Acute Kidney Injury (AKI)

A. Background

    On June 29, 2015, the Trade Preferences Extension Act of 2015 
(TPEA) (Pub. L. 114-27) was enacted. In the TPEA, the Congress amended 
the Act to include coverage and provide for payment for dialysis 
furnished by an ESRD facility to an individual with acute kidney injury 
(AKI). Specifically, section 808(a) of the TPEA amended section 
1861(s)(2)(F) of the Act to provide coverage for renal dialysis 
services furnished on or after January 1, 2017, by a renal dialysis 
facility or a provider of services paid under section 1881(b)(14) of 
the Act to an individual with AKI. Section 808(b) of the TPEA amended 
section 1834 of the Act by adding a new subsection (r) to the Act. 
Subsection (r)(1) of section 1834 of the Act provides for payment, 
beginning January 1, 2017, for renal dialysis services furnished by 
renal dialysis facilities or providers of services paid under section 
1881(b)(14) of the Act to individuals with AKI at the ESRD PPS base 
rate, as adjusted by any applicable geographic adjustment applied under 
section 1881(b)(14)(D)(iv)(II) of the Act and may be adjusted by the 
Secretary (on a budget neutral basis for payments under section 1834(r) 
of the Act) by any other adjustment factor under section 1881(b)(14)(D) 
of the Act.
    In the CY 2017 ESRD PPS final rule, we finalized several coverage 
and payment policies in order to implement subsection (r) of section 
1834 of the Act and the amendments to section 1881(s)(2)(F) of the Act, 
including the payment rate for AKI dialysis (81 FR 77866 through 
77872). We interpret section 1834(r)(1) of the Act to mean the amount 
of payment for AKI dialysis services is the base rate for renal 
dialysis services determined for such year under the ESRD base rate as 
set forth in 42 CFR 413.220, updated by the ESRD bundled market basket 
percentage increase factor minus a productivity adjustment as set forth 
in Sec.  413.196(d)(1), adjusted for wages as set forth in Sec.  
413.231, and adjusted by any other amounts deemed appropriate by the 
Secretary under Sec.  413.373. We codified this policy in 42 CFR 
413.372.

B. Annual Payment Rate Update for CY 2018

1. CY 2018 AKI Dialysis Payment Rate
    The payment rate for AKI dialysis is the ESRD PPS base rate 
determined for a year under section 1881(b)(14) of the Act, which is 
the finalized ESRD PPS base rate. We note that ESRD facilities have the 
ability to bill Medicare for non-renal dialysis items and services and 
receive separate payment in addition to the payment rate for AKI 
dialysis.
    As discussed in section II.B.2.d of this proposed rule, the CY 2018 
proposed ESRD PPS base rate is $233.31, which reflects the ESRD bundled 
market basket and multifactor productivity adjustment. Accordingly, we 
are proposing a CY 2018 per treatment payment rate of $233.31 for renal 
dialysis services furnished by ESRD facilities to individuals with AKI.
2. Geographic Adjustment Factor
    Section 1834(r)(1) of the Act further provides that the amount of 
payment for AKI dialysis services shall be the base rate for renal 
dialysis services determined for a year under section 1881(b)(14) of 
the Act, as adjusted by any applicable geographic adjustment factor 
applied under section 1881(b)(14)(D)(iv)(II) of the Act. We interpret 
the reference to ``any applicable geographic adjustment factor applied 
under subparagraph (D)(iv)(II) of such section'' to mean the geographic 
adjustment factor that is actually applied to the ESRD PPS base rate 
for a particular facility. Accordingly, we apply the same wage index 
that is used under the ESRD PPS, as discussed in section II.B.2.d of 
this proposed rule. In the CY 2017 ESRD PPS final rule (81 FR 77868), 
we finalized that the AKI dialysis payment rate will be adjusted for 
wage index for a particular ESRD facility in the same way that the ESRD 
PPS base rate is adjusted for wage index for that facility. 
Specifically, we apply the wage index to the labor-related share of the 
ESRD PPS base rate that we utilize for AKI dialysis to compute the wage 
adjusted per-treatment AKI dialysis payment rate. As stated above, we 
are proposing a CY 2018 AKI dialysis payment rate of $233.31, adjusted 
by the ESRD facility's wage index.

IV. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) for 
Payment Year (PY) 2021

A. Background

    For over 30 years, monitoring the quality of care provided to end-
stage renal disease (ESRD) patients by dialysis providers or facilities 
(hereinafter referred to collectively as ``facility'' or 
``facilities'') has been an important component of the Medicare ESRD 
payment system. The ESRD quality incentive program (QIP) is the most 
recent step in fostering improved patient outcomes by establishing 
incentives for dialysis facilities to meet or exceed performance 
standards established by the Centers for Medicare & Medicaid Services 
(CMS).
    Under the ESRD QIP, payments made to a dialysis facility by 
Medicare under section 1881(b)(14) of the Social Security Act (the Act) 
are reduced by up to 2 percent if the facility does not meet or exceed 
the total performance score with respect to performance standards 
established by the Secretary of the Department of Health and Human 
Services (the Secretary) with respect to certain specified measures.
    The calendar year (CY) 2012 ESRD PPS final rule (76 FR 70228), 
published in the Federal Register on November 10, 2011, among other 
things, set forth certain requirements for the ESRD QIP for payment 
years (PYs) 2013 and 2014.
    The CY 2013 ESRD PPS final rule (77 FR 67450), published in the 
Federal Register on November 9, 2012, set forth requirements for the 
ESRD QIP, including for payment year 2015 and beyond. In that rule, CMS 
added several new measures to the ESRD QIP's measure set and expanded 
the scope of some of the existing measures. CMS also established CY 
2013 as the performance period for the PY 2015 ESRD QIP, established 
performance standards and adopted scoring and payment methodologies 
similar to those finalized for the PY 2014 ESRD QIP.
    The CY 2014 ESRD PPS final rule (78 FR 72156), published in the 
Federal Register on December 2, 2013, set forth requirements for the 
ESRD QIP, including for PY 2016 and beyond. In that rule, CMS added 
several new measures to the ESRD QIP's measure set, established the 
performance period for the PY 2016 ESRD QIP, established performance 
standards for the PY 2016 measures, and adopted scoring and payment 
reduction methodologies that

[[Page 31202]]

were similar to those finalized for the PY 2015 ESRD QIP.
    The CY 2015 ESRD PPS final rule (79 FR 66120), published in the 
Federal Register on November 6, 2014, finalized requirements for the 
ESRD QIP, including for PYs 2017 and 2018. In that rule, CMS finalized 
the measure set for both PYs 2017 and 2018, revised the In-Center 
Hemodialysis Consumer Assessment of Healthcare Providers (ICH CAHPS) 
reporting measure, revised the Mineral Metabolism Reporting Measure, 
finalized an Extraordinary Circumstances Exemption, and finalized a new 
scoring methodology beginning with PY 2018.
    The CY 2016 ESRD PPS final rule (80 FR 68968), published in the 
Federal Register on November 6, 2015, set forth requirements for the 
ESRD QIP, including for PYs 2017 through 2019. In that rule, CMS 
finalized the PY 2019 Measure Set, reinstated the ICH CAHPS Attestation 
beginning with PY 2017, and revised the Small Facility Adjuster (SFA) 
beginning with PY 2017.
    The CY 2017 ESRD PPS final rule (81 FR 77834), published in the 
Federal Register on November 4, 2016, set forth new requirements for 
the ESRD QIP, including the inclusion of new quality measures beginning 
with PYs 2019 and 2020, and updated other policies for the program.
    The ESRD QIP is authorized by section 1881(h) of the Act, which was 
added by section 153(c) of Medicare Improvements for Patients and 
Providers Act of 2008 (MIPPA). Section 1881(h) of the Act requires the 
Secretary to establish an ESRD QIP by (1) selecting measures; (2) 
establishing the performance standards that apply to the individual 
measures; (3) specifying a performance period with respect to a year; 
(4) developing a methodology for assessing the total performance of 
each facility based on the performance standards with respect to the 
measures for a performance period; and (5) applying an appropriate 
payment reduction to facilities that do not meet or exceed the 
established Total Performance Score (TPS). This proposed rule discusses 
each of these elements and our proposals for their application to the 
ESRD QIP.

B. Accounting for Social Risk Factors in the ESRD QIP Program

    We understand that social risk factors such as income, education, 
race and ethnicity, employment, disability, community resources, and 
social support (certain factors of which are also sometimes referred to 
as socioeconomic status factors or socio-demographic status factors), 
play a major role in health. One of our core objectives is to improve 
beneficiary outcomes, including reducing health disparities, and we 
want to ensure that all beneficiaries, including those with social risk 
factors, receive high quality care. In addition, we seek to ensure that 
the quality of care furnished by facilities is assessed as fairly as 
possible under our programs while ensuring that beneficiaries have 
adequate access to excellent care.
    We have been reviewing reports prepared by the Office of the 
Assistant Secretary for Planning and Evaluation (ASPE) \2\ and the 
National Academies of Sciences, Engineering, and Medicine on the issue 
of accounting for social risk factors in CMS' value-based purchasing 
and quality reporting programs, and considering options on how to 
address the issue in these programs. On December 21, 2016, ASPE 
submitted a Report to Congress on a study it was required to conduct 
under section 2(d) of the Improving Medicare Post-Acute Care 
Transformation (IMPACT) Act of 2014. The study analyzed the effects of 
certain social risk factors in Medicare beneficiaries on quality 
measures and measures of resource use that are used in one or more of 
nine Medicare value-based purchasing programs, including the ESRD 
QIP.\3\ The report also included considerations for strategies to 
account for social risk factors in these programs. In a January 10, 
2017 report released by The National Academies of Sciences, 
Engineering, and Medicine, that body provided various potential methods 
for measuring and accounting for social risk factors, including 
stratified public reporting.\4\
---------------------------------------------------------------------------

    \2\ Office of the Assistant Secretary for Planning and 
Evaluation. 2016. Report to Congress: Social Risk Factors and 
Performance Under Medicare's Value-Based Purchasing Programs. 
Available at: https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \3\ Office of the Assistant Secretary for Planning and 
Evaluation. 2016. Report to Congress: Social Risk Factors and 
Performance Under Medicare's Value-Based Purchasing Programs. 
Available at: https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \4\ National Academies of Sciences, Engineering, and Medicine. 
2017. Accounting for social risk factors in Medicare payment. 
Washington, DC: The National Academies Press.
---------------------------------------------------------------------------

    As noted in the fiscal year (FY) 2017 Inpatient Prospective Payment 
System/Long-Term Care Hospital Prospective Payment System (IPPS/LTCH 
PPS) final rule (81 FR 56762 through 57345), the National Quality Forum 
(NQF) has undertaken a 2-year trial period in which certain new 
measures, measures undergoing maintenance review, and measures endorsed 
with the condition that they enter the trial period can be assessed to 
determine whether risk adjustment for selected social risk factors is 
appropriate for these measures. This trial entails temporarily allowing 
inclusion of social risk factors in the risk-adjustment approach for 
these measures. At the conclusion of the trial, NQF will issue 
recommendations on the future inclusion of social risk factors in risk 
adjustment for these quality measures, and we will closely review its 
findings.
    As we continue to consider the analyses and recommendations from 
these reports and await the results of the NQF trial on risk adjustment 
for quality measures, we are continuing to work with stakeholders in 
this process. As we have previously communicated, we are concerned 
about holding facilities to different standards for the outcomes of 
their patients with social risk factors because we do not want to mask 
potential disparities or minimize incentives to improve the outcomes 
for disadvantaged populations. Keeping this concern in mind, while we 
sought input on this topic previously, we continue to seek public 
comment on whether we should account for social risk factors in the 
ESRD QIP, and if so, what method or combination of methods would be 
most appropriate for accounting for social risk factors. Examples of 
methods include: (1) Adjustment of the payment adjustment methodology 
under the ESRD QIP; (2) adjustment of provider performance scores (for 
instance, stratifying facilities based on the proportion of their 
patients who are dual eligible); (3) confidential reporting of 
stratified measure rates to facilities; public reporting of stratified 
measure rates; (4) risk adjustment of a particular measure as 
appropriate based on data and evidence; and (5) redesigning payment 
incentives (for instance, rewarding improvement for facilities caring 
for patients with social risk factors or incentivizing facilities to 
achieve health equity).
    We note that in section V.I.9 of the FY 2018 IPPS proposed rule (82 
FR 19796), we discuss considerations for stratifying hospitals into 
peer groups for purposes of assessing payment adjustments under the 
Hospital Readmissions Reduction Program, as required under the 21st 
Century Cures Act of 2016 (Cures Act). We refer readers to that rule 
for a detailed discussion of these alternatives; while this discussion 
and corresponding proposal are specific to the Hospital Readmissions 
Reduction Program, they reflect the level of analysis we would 
undertake when evaluating methods and combinations of methods for 
accounting for social risk factors in

[[Page 31203]]

CMS' other value-based purchasing programs, such as the ESRD QIP. While 
we consider whether and to what extent we currently have statutory 
authority to implement one or more of the above-described methods, we 
are seeking comments on whether any of these methods should be 
considered, and if so, which of these methods or combination of methods 
would best account for social risk factors in the ESRD QIP.
    In addition, we are seeking public comment on which social risk 
factors might be most appropriate for stratifying measure scores and/or 
potential risk adjustment of a particular measure. Examples of social 
risk factors include, but are not limited to, dual eligibility/low-
income subsidy, race and ethnicity, and geographic area of residence. 
We are seeking comments on which of these factors, including current 
data sources where this information would be available, could be used 
alone or in combination, and whether other data should be collected to 
better capture the effects of social risk. We will take commenters' 
input into consideration as we continue to assess the appropriateness 
and feasibility of accounting for social risk factors in the ESRD QIP. 
We note that any such changes would be proposed through future notice-
and-comment rulemaking.
    We look forward to working with stakeholders as we consider the 
issue of accounting for social risk factors and reducing health 
disparities in the Medicare programs. Implementing any of the above 
methods would be taken into consideration in the context of how this 
and other Medicare programs operate (for example, data submission 
methods, availability of data, statistical considerations relating to 
reliability of data calculations, among others). We also welcome 
comment on operational considerations. CMS is committed to ensuring 
that its beneficiaries have access to and receive excellent care, and 
that the quality of care furnished by facilities is assessed fairly in 
the Medicare programs.

C. Proposed Change to the Performance Score Certificate Beginning With 
the Payment Year (PY) 2019 ESRD QIP

    In a final rule, which published in the Federal Register on January 
5, 2011, we finalized a policy for informing the public of facility 
performance through facility-posted certificates (76 FR 637). We 
finalized that these Performance Score Certificates (PSCs) would 
include the following information: (1) The TPS achieved by the facility 
under the ESRD QIP with respect to the payment year involved; (2) 
comparative data that shows how well the facility's TPS compares to the 
national TPS; (3) the performance result that the facility achieved on 
each individual measure with respect to the year involved; and (4) 
comparative data that shows how well the facility's individual quality 
measure performance scores compare to the national performance result 
for each quality measure (76 FR 637). As the ESRD QIP has become more 
complex over the years and as new measures have been added to the 
program, the PSC has become a lengthy document that facilities are 
required to print and post in both English and Spanish for their 
patients to view (77 FR 67517). We have received feedback from the 
community about the difficulty patients and their families have with 
interpreting and understanding the information contained on the PSC due 
to its sheer volume and complexity.
    Section 1881(h)(6)(C) of the Act only requires that the PSC 
indicate the TPS achieved by the facility with respect to a program 
year. Therefore, in an effort to make the PSC a more effective and 
understandable document for the community, we are proposing to shorten 
the PSC by removing some of the information we had previously finalized 
would be included in the document. We propose that beginning in PY 2019 
and continuing in future years, the PSC will indicate the facility's 
TPS, as required under section 1881(h)(6)(C) of the Act, as well as 
information sufficient to identify the facility (name, address, etc.). 
Additionally, we are proposing to include on the PSC information 
showing how the facility's TPS compared to the national average TPS for 
that specific payment year.
    We are not proposing any other changes to the requirements we 
previously finalized for the PSC.
    We seek comments on this proposal, and we are particularly 
interested in comments on whether the reduced amount of information on 
the PSC would both benefit facilities and enhance the public's 
understanding of the TPS.

D. Proposed Requirements Beginning With the PY 2020 ESRD QIP

1. Proposal To Clarify the Minimum Data Policy for Scoring Measures 
Finalized for the PY 2020 ESRD QIP
    Under our current policy, we begin counting the number of months in 
which a facility is open on the first day of the month after the 
facility's CCN Open Date. In the CY 2017 ESRD PPS final rule (81 FR 
77926), we inadvertently made errors in finalizing how we intended this 
policy to apply to a number of measures in the PY 2020 ESRD QIP, and we 
are proposing the intended application of this policy for PY 2020 in 
this proposed rule. We are not proposing any changes to the methodology 
we use to count the number of months for which a facility is open for 
purposes of scoring facilities on clinical and reporting measures, or 
to the minimum number of cases (qualifying patients, survey-eligible 
patients, index discharges, or patient-years at risk) that applies to 
each measure. Table 2 displays the proposed patient minimum 
requirements for each of the measures finalized for PY 2020, as well as 
the proposed CCN Open Dates after which a facility would not be 
eligible to receive a score on a reporting measure.

                                          Table 2--Proposed Minimum Data Requirements for the PY 2020 ESRD QIP
--------------------------------------------------------------------------------------------------------------------------------------------------------
               Measure                  Minimum data requirements                 CCN open date                         Small facility adjuster
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dialysis Adequacy (Clinical)........  11 qualifying patients......  N/A......................................  11-25 qualifying patients.
Vascular Access Type: Catheter        11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 (Clinical).
Vascular Access Type: Fistula         11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 (Clinical).
Hypercalcemia (Clinical)............  11 qualifying patients......  N/A......................................  11-25 qualifying patients.
NHSN Bloodstream Infection            11 qualifying patients......  Before January 1, 2018...................  11-25 qualifying patients.
 (Clinical).
NHSN Dialysis Event (Reporting).....  11 qualifying patients......  Before January 1, 2018...................  11-25 qualifying patients.
SRR (Clinical)......................  11 index discharges.........  N/A......................................  11-41 index discharges.

[[Page 31204]]

 
STrR (Clinical).....................  10 patient-years at risk....  N/A......................................  10-21 patient years at risk.
SHR (Clinical)......................  5 patient-years at risk.....  N/A......................................  5-14 patient-years at risk.
ICH CAHPS (Clinical)................  Facilities with 30 or more    Before January 1, 2018...................  N/A.
                                       survey-eligible patients
                                       during the calendar year
                                       preceding the performance
                                       period must submit survey
                                       results. Facilities will
                                       not receive a score if they
                                       do not obtain a total of at
                                       least 30 completed surveys
                                       during the performance
                                       period.
Anemia Management (Reporting).......  11 qualifying patients......  Before July 1, 2018......................  N/A.
Serum Phosphorus (Reporting)........  11 qualifying patients......  Before July 1, 2018......................  N/A.
Depression Screening and Follow-Up    11 qualifying patients......  Before July 1, 2018......................  N/A.
 (Reporting).
Pain Assessment and Follow-Up         11 qualifying patients......  Before July 1, 2018......................  N/A.
 (Reporting).
NHSN Healthcare Personnel Influenza   N/A.........................  Before January 1, 2018...................  N/A.
 Vaccination (Reporting).
Ultrafiltration Rate (Reporting)....  11 qualifying patients......  Before July 1, 2018......................  N/A.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We welcome comments on this proposal.
2. Proposed Changes to the Extraordinary Circumstances Exception (ECE) 
Policy
    Many of our quality reporting and value-based purchasing programs 
share a common process for requesting an exception from program 
reporting due to an extraordinary circumstance not within a facility's 
control. The Hospital Inpatient Quality Reporting, Hospital Outpatient 
Quality Reporting, Inpatient Psychiatric Facility Quality Reporting, 
Ambulatory Surgical Center Quality Reporting, PPS-Exempt Cancer 
Hospital Quality Reporting, the Hospital Acquired Condition Reduction 
Program, and the Hospital Readmissions Reduction Program all share 
common processes for ECE requests. In reviewing the policies for these 
programs, we recognized that there are five areas in which these 
programs have variance in comparison to the policy within the ESRD QIP 
regarding ECE requests. These are: (1) Allowing the facilities or 
hospitals to submit a form signed by the facility's or hospital's CEO 
versus CEO or designated personnel; (2) requiring the form be submitted 
within 30 days following the date that the extraordinary circumstance 
occurred versus within 90 days following the date the extraordinary 
circumstance occurred; (3) inconsistency regarding specification of a 
timeline for us to provide our response notifying the facility or 
hospital of our decision; (4) inconsistency regarding whether we would 
grant ECEs based on a facility's inability to timely and completely 
report data due to CMS data system issues; and (5) referring to this 
policy as ``extraordinary extensions/exemptions'' versus as 
``extraordinary circumstances exceptions.'' We believe that aligning 
the way the ECE policy is implemented in our program, with the way it 
is implemented in the programs listed above, can improve the overall 
administrative efficiencies for affected facilities or hospitals.
    In the CY 2015 ESRD PPS final rule (79 FR 66120 through 66265), we 
finalized that to receive consideration for an exception from the ESRD 
QIP requirements in effect during the time period that a facility is 
affected by an extraordinary circumstance, facilities would need to be 
closed and provide CMS with a CMS Disaster Extension/Exception Request 
Form within 90 calendar days of the date of the disaster or 
extraordinary circumstance (79 FR 66190). We finalized that the 
facility would need to provide the following information on the form:
     Facility CMS Certification Number (CCN).
     Facility name.
     CEO name and contact information.
     Additional contact name and contact information.
     Reason for requesting an exception.
     Dates affected.
     Date facility will start submitting data again, with 
justification for this date.
     Evidence of the impact of the extraordinary circumstances, 
including but not limited to photographs, newspaper, and other media 
articles.
    We also finalized that we would consider granting an ECE to 
facilities absent a request, if we determine that an extraordinary 
circumstance affected an entire region or locale (79 FR 66190).
    We are proposing to update these policies by: (1) Allowing the 
facility to submit a form signed by the facility's CEO or designated 
personnel; (2) expanding the reasons for which an ECE can be requested 
to include an unresolved issue with a CMS data system, which affected 
the ability of the facility to submit data (an unresolved data system 
issue would be one which did not allow the facility to submit data by 
the data submission deadline and which was unable to be resolved with a 
work-around), and (3) specifying that a facility does not need to be 
closed in order to request and receive consideration for an ECE, as 
long as the facility can demonstrate that its normal operations have 
been significantly affected by an extraordinary circumstance outside of 
its control. These proposed policies generally align with policies in 
the Hospital Inpatient Quality Reporting Program (76 FR 51651 through 
51652), (78 FR 50836 through 50837) and (81 FR 57181 through 57182), 
Hospital Outpatient Quality Reporting Program (77 FR 68489 and 81 FR 
79795), as well as ECE policies we have finalized for other quality 
reporting and value-based purchasing programs. We are proposing that 
these policies would apply beginning with the PY 2020 ESRD QIP program, 
as related to extraordinary circumstance events that occur on or after 
January 1, 2018.
    We note that there may be circumstances in which it is not feasible 
for a facility's CEO to sign the ECE request form. In these 
circumstances, we believe that facilities affected by such

[[Page 31205]]

circumstances should be able to submit an ECE request regardless of the 
CEO's availability to sign. This proposed change would allow facilities 
to designate an appropriate, non-CEO contact for this purpose. We would 
accept ECE forms which have been signed by designated personnel.
    Although we do not anticipate that unresolved issues with CMS data 
systems will happen on a regular basis, we also recognize that there 
may be times when CMS experiences issues with its data systems that 
inhibits facilities' ability to submit data. We are often able to 
resolve such issues and will allow facilities an extended period of 
time to report the data. However, in the case that the issue inhibits 
the complete reporting of data (even under an extended deadline), we 
believe it would be inequitable to take the absence of such unreported 
data into account when computing a facility's TPS for a payment year. 
Therefore, we are proposing to address these situations in one of two 
ways. In some cases, CMS may issue a blanket exemption to facilities 
that have been affected by an unresolved technical issue. In such 
cases, facilities would not be required to submit an ECE request to 
CMS, and CMS would send communications about the blanket waiver to the 
affected facilities using routine communication channels. In other 
cases, CMS may not issue a blanket exemption to facilities. In these 
cases, facilities would be required to submit an ECE request to CMS 
using the regular ECE request process, and would need to indicate how 
they were directly affected by the technical issue.
    Furthermore, we believe that it is important for facilities to 
receive timely feedback regarding the status of ECE requests. We strive 
to complete our review of each ECE request as quickly as possible. 
However, we recognize that the number of requests we receive, and the 
complexity of the information provided impacts the actual timeframe to 
make ECE determinations. To improve transparency of our process, we 
believe it is appropriate to specify that we will strive to complete 
our review of each request within 90 days of receipt.
    We seek comments on these proposals.
3. Solicitation of Comments on the Inclusion of Acute Kidney Injury 
(AKI) Patients in the ESRD QIP
    The services for which quality is measured under the ESRD QIP are 
renal dialysis services defined in section 1881(b)(14)(B) of the Act. 
Prior to January 1, 2017, these services could only be covered and 
reimbursed under Medicare if they were furnished to individuals with 
ESRD, but they are now also covered and reimbursed if they are 
furnished by renal dialysis facilities or providers of services paid 
under section 1881(b)(14) of the Act to individuals with acute kidney 
injury (AKI) (see section 1861(s)(2)(F) and 1834(r) of the Act).
    We currently do not require facilities to report AKI patient data 
for any of our measures in the ESRD QIP, including the NHSN BSI 
Clinical and Reporting Measures.\5\ However, we now have the authority 
to collect data on this patient population and believe that it is 
vitally important to monitor and measure the quality of care furnished 
to these patients.
---------------------------------------------------------------------------

    \5\ To the extent that the CDC requires facilities to report AKI 
patient data under its own, separate, statutory authority, data on 
these patients is not shared with CMS or used in the calculation of 
any ESRD QIP measures, including the NHSN Clinical and Reporting 
Measures.
---------------------------------------------------------------------------

    In the future, we intend to require facilities to report data on 
AKI patients under the ESRD QIP. We are seeking comments on whether and 
how to adapt any of our current measures to include this population, as 
well as the type of measures that might be appropriate to develop for 
future inclusion in the program that would address the unique needs of 
beneficiaries with AKI.
4. Estimated Performance Standards, Achievement Thresholds, and 
Benchmarks for the Clinical Measures Finalized for the PY 2020 ESRD QIP
    In the CY 2017 ESRD PPS final rule (81 FR 77834 through 77969), we 
finalized that for PY 2020, the performance standards, achievement 
thresholds, and benchmarks for the clinical measures would be set at 
the 50th, 15th and 90th percentile, respectively, of national 
performance in CY 2016, because this will give us enough time to 
calculate and assign numerical values to the proposed performance 
standards for the PY 2020 program prior to the beginning of the 
performance period (81 FR 77915). At this time, we do not have the 
necessary data to assign numerical values to those performance 
standards, achievement thresholds, and benchmarks because we do not yet 
have complete data from CY 2016. Nevertheless, we are able to estimate 
these numerical values based on the most recent data available. For the 
VAT, Hypercalcemia, NHSN BSI, In-Center Hemodialysis Consumer 
Assessment of Healthcare Providers and Systems (ICH CAHPS), 
Standardized Readmission Ratio (SRR), and Standardized Transfusion 
Ratio (STrR) clinical measures, this data comes from the period of 
January through December 2015. In Table 3, we have provided the 
estimated numerical values for all finalized PY 2020 ESRD QIP clinical 
measures. We will publish updated values for the clinical measures, 
using data from the first part of CY 2017, in the CY 2018 ESRD PPS 
final rule.

[[Page 31206]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.000

    In previous rulemaking, we have finalized that if final numerical 
values for the performance standard, achievement threshold, and/or 
benchmark are worse than they were for that measure in the previous 
year of the ESRD QIP, then we would substitute the previous year's 
performance standard, achievement threshold, and/or benchmark for that 
measure. We finalized this policy because we believe that the ESRD QIP 
should not have lower performance standards than in previous years. In 
the CY 2017 ESRD PPS final rule, we finalized an update to that policy 
because in certain cases, it may be appropriate to re-baseline the NHSN 
BSI Clinical Measure, such that expected infection rates are calculated 
on the basis of a more recent year's data (81 FR 77886). In such cases, 
numerical values assigned to performance standards may appear to 
decline, even though they represent higher standards for infection 
prevention. For PY 2020 and future payment years, we propose to 
continue use of this policy for the reasons explained above. Therefore, 
for PY 2020, with the exception of the NHSN BSI Clinical Measure, we 
will substitute the PY 2019 performance standard, achievement 
threshold, and/or benchmark for any measure that has a final numerical 
value for a performance standard, achievement threshold, and/or 
benchmark that is worse than it was for that measure in the PY 2019 
ESRD QIP. Based upon the estimated values shown above, we do not 
anticipate needing to substitute the performance standards from PY 2019 
for any measures included in the PY 2020 ESRD QIP.
    Although we are not proposing any changes to this policy, we are 
seeking comments on whether we should continue to use this policy in 
the future.
5. Policy for Weighting the Clinical Measure Domain for PY 2020
    In the CY 2017 ESRD PPS final rule, we finalized our policy for 
weighting the Clinical Measure Domain for PY 2020. With the addition of 
the Safety Measure Domain to the ESRD QIP Program, we finalized that 
the Clinical Measure Domain would comprise 75 percent of the TPS, the 
Safety Measure Domain would comprise 15 percent of the TPS and the 
Reporting Measure Domain would comprise 10 percent of the TPS. Table 4 
shows the weights finalized for PY 2020 for the Clinical Measure 
Domain.

[[Page 31207]]



                  Table 4--Finalized Clinical Measure Domain Weighting for the PY 2020 ESRD QIP
----------------------------------------------------------------------------------------------------------------
                                    Measure weight in the
   Measures/measure topics by       clinical domain score        Measure weight as percent of TPS (updated)
            subdomain                     (percent)
----------------------------------------------------------------------------------------------------------------
Patient and Family Engagement/    40......................
 Care Coordination Subdomain.
    ICH CAHPS measure...........  25......................  18.75.
    SRR Measure.................  15......................  11.25.
Clinical Care Subdomain.........  60......................
    STrR measure................  11......................  8.25.
    Dialysis Adequacy measure...  18......................  13.5.
    VAT measure topic...........  18......................  13.5.
    Hypercalcemia measure.......  2.......................  1.5.
    SHR measure.................  11......................  8.25.
                                 -------------------------------------------------------------------------------
        Total...................  100% (of Clinical         75% (of TPS).
                                   Measure Domain).
----------------------------------------------------------------------------------------------------------------
Note: The percentages listed in this Table represent the measure weight as a percent of the Clinical Domain
  Score for PY 2020.

    We are not proposing any changes to these weights finalized in the 
CY 2017 ESRD PPS final rule at 81 FR 77918.
6. Proposed Payment Reductions for the PY 2020 ESRD QIP
    Section 1881(h)(3)(A)(ii) of the Act requires the Secretary to 
ensure that the application of the ESRD QIP scoring methodology results 
in an appropriate distribution of payment reductions across facilities, 
such that facilities achieving the lowest TPS receive the largest 
payment reductions. In the CY 2017 ESRD PPS final rule, we finalized 
our proposal for calculating the minimum TPS for PY 2020 and future 
payment years (81 FR 77927). Under our current policy, a facility will 
not receive a payment reduction if it achieves a minimum TPS that is 
equal to or greater than the total of the points it would have received 
if: (1) It performs at the performance standard for each clinical 
measure; and (2) it receives the number of points for each reporting 
measure that corresponds to the 50th percentile of facility performance 
on each of the PY 2018 reporting measures (81 FR 77927).
    We were unable to calculate a minimum TPS for PY 2020 in the CY 
2017 ESRD PPS final rule because we were not yet able to calculate the 
performance standards for each of the clinical measures. We therefore 
stated that we would publish the minimum TPS for the PY 2020 ESRD QIP 
in the CY 2018 ESRD PPS final rule (81 FR 77927).
    Based on the estimated performance standards listed above, we 
estimate that a facility must meet or exceed a minimum TPS of 61 for PY 
2020. For all of the clinical measures, these data come from CY 2015. 
We are proposing that a facility failing to meet the minimum TPS, which 
we will finalize in the CY 2018 ESRD PPS final rule, will receive a 
payment reduction based on the estimated TPS ranges indicated in Table 
5.

Table 5--Estimated Payment Reduction Scale for PY 2020 Based on the Most
                         Recently Available Data
------------------------------------------------------------------------
                                                               Reduction
                   Total performance score                        (%)
------------------------------------------------------------------------
100-61......................................................           0
60-51.......................................................         0.5
50-41.......................................................         1.0
40-31.......................................................         1.5
30-21.......................................................         2.0
------------------------------------------------------------------------

7. Data Validation
    One of the critical elements of the ESRD QIP's success is ensuring 
that the data submitted to calculate measure scores and TPSs are 
accurate. We began a pilot data validation program in CY 2013 for the 
ESRD QIP, and procured the services of a data validation contractor 
that was tasked with validating a national sample of facilities' 
records as reported to CROWNWeb. For validation of CY 2014 data, our 
priority was to develop a methodology for validating data submitted to 
CROWNWeb under the pilot data validation program. That methodology was 
fully developed and adopted through the rulemaking process. For the PY 
2016 ESRD QIP (78 FR 72223 through 72224), we finalized a requirement 
to sample approximately 10 records from 300 randomly selected 
facilities; these facilities had 60 days to comply once they received 
requests for records. We continued this pilot for the PY 2017, PY 2018 
and PY 2019 ESRD QIP, and propose to continue doing so for the PY 2020 
ESRD QIP. Using the data collected thus far, we are exploring options 
for refining the methodology used in order to improve the effectiveness 
and reliability of the data collected. For future payment years, we 
will consider whether this validation effort should continue in pilot 
status or as a permanent feature of the ESRD QIP program. Under the 
continued validation study, we will sample the same number of records 
(approximately 10 per facility) from the same number of facilities, 
which totaled 300 facilities during CY 2018. If a facility is randomly 
selected to participate in the pilot validation study but does not 
provide us with the requisite medical records within 60 calendar days 
of receiving a request, then we propose to deduct 10 points from the 
facility's TPS.
    In the CY 2015 ESRD PPS final rule (79 FR 66120 through 66265), we 
also finalized that there would be a feasibility study for validating 
data reported to CDC's NHSN Dialysis Event Module for the NHSN BSI 
Clinical Measure (OMB #0938-NEW). Healthcare-acquired infections are 
relatively rare, and we finalized that the feasibility study would 
target records with a higher probability of including a dialysis event, 
because this would enrich the validation sample while reducing the 
burden on facilities. This methodology resembles the methodology we use 
in the Hospital Inpatient Quality Reporting Program to validate the 
central line-associated BSI measure, the catheter-associated urinary 
tract infection measure, and the surgical site infection measure (77 FR 
53539 through 53553).
    For the PY 2020 ESRD QIP, we propose to continue conducting the 
same NHSN dialysis event validation study, that we finalized in the CY 
2017 ESRD PPS final rule for PY 2019 (81 FR 77894). For PY 2020, we 
would continue to select 35 facilities to participate in an NHSN 
dialysis event validation study by submitting 10 patient records 
covering two quarters of data reported in CY 2018. However, for PY 
2020, the sampling method used to select the 35 facilities would be 
adjusted

[[Page 31208]]

such that a more representative sample of facility data can be 
analyzed, including data from high performing facilities as well as 
facilities identified as being at risk of underreporting. A CMS 
contractor would send these facilities requests for medical records for 
all patients with ``candidate events'' during the evaluation period; 
that is, patients who had any positive blood cultures; received any 
intravenous antimicrobials; had any pus, redness, or increased swelling 
at a vascular access site; and/or were admitted to a hospital during 
the evaluation period. Facilities would have 60 calendar days to 
respond to the request for medical records based on candidate events 
either electronically or on paper. If the contractor determines that 
additional medical records are needed to reach the 10-record threshold 
from a facility to validate whether the facility accurately reported 
the dialysis events, then the contractor would send a request for 
additional, randomly selected patient records from the facility. The 
facility would have 60 calendar days from the date of the letter to 
respond to the request. With input from CDC, the CMS contractor would 
utilize a methodology for reviewing and validating records from 
selected patients, in order to determine whether the facility reported 
dialysis events for those patients in accordance with the NHSN Dialysis 
Event Protocol. If a facility is selected to participate in the 
validation study but does not provide CMS with the requisite lists of 
information or medical records within 60 calendar days of receiving a 
request, then we propose to deduct 10 points from the facility's TPS. 
Information from the validation study may be used in future years of 
the program to inform our consideration of future policies that would 
incorporate NHSN data accuracy into the scoring process. In future 
years of the program we may also look to improve the NHSN dialysis 
event validation study by validating records from a greater number of 
facilities or by validating a larger sample of records from each 
facility participating in the study.

E. Proposed Requirements for the PY 2021 ESRD QIP

1. Proposed Measures for the PY 2021 ESRD QIP
    We previously finalized 16 measures in the CY 2017 ESRD PPS final 
rule for the PY 2020 ESRD QIP. In accordance with our policy to 
continue using measures unless we propose to remove or replace them, 
(77 FR 67477), we will continue to use all but 2 of these measures in 
the PY 2021 ESRD QIP. These measures are summarized in Table 6 below. 
We are proposing to replace the two VAT Clinical Measures with the 
proposed Hemodialysis Vascular Access: Standardized Fistula Rate 
Clinical Measure and the proposed Hemodialysis Vascular Access: Long-
Term Catheter Rate Clinical Measure beginning with PY 2021.

                          Table 6--PY 2020 ESRD QIP Measures Being Continued in PY 2021
----------------------------------------------------------------------------------------------------------------
                        NQF No.                                       Measure title and description
----------------------------------------------------------------------------------------------------------------
0258..................................................  ICH CAHPS Survey Administration, a clinical measure.
                                                         Measure assesses patients' self-reported experience of
                                                         care through percentage of patient responses to
                                                         multiple testing tools.
2496..................................................  SRR, a clinical measure. Ratio of the number of observed
                                                         unplanned 30-day hospital readmissions to the number of
                                                         expected unplanned 30-day readmissions.
2979..................................................  STrR, a clinical measure. Risk-adjusted standardized
                                                         transfusion ratio for all adult Medicare dialysis
                                                         patients. Number of observed eligible red blood cell
                                                         transfusion events occurring in patients dialyzing at a
                                                         facility to the number of eligible transfusions that
                                                         would be expected.
N/A...................................................  Kt/V Dialysis Adequacy Comprehensive, a clinical
                                                         measure. Percentage of all patient months for patients
                                                         whose delivered dose of dialysis (either hemodialysis
                                                         or peritoneal dialysis) met the specified threshold
                                                         during the reporting period.
1454..................................................  Hypercalcemia, a clinical measure. Proportion of patient-
                                                         months with 3-month rolling average of total
                                                         uncorrected serum or plasma calcium greater than 10.2
                                                         mg/dL.
1463 *................................................  SHR, a clinical measure. Risk-adjusted SHR of the number
                                                         of observed hospitalizations to the number of expected
                                                         hospitalizations.
0255..................................................  Serum Phosphorus, a reporting measure. Percentage of all
                                                         adult (>=18 years of age) peritoneal dialysis and
                                                         hemodialysis patients included in the sample for
                                                         analysis with serum or plasma phosphorus measured at
                                                         least once within month.
N/A...................................................  Anemia Management Reporting, a reporting measure. Number
                                                         of months for which facility reports erythropoiesis-
                                                         stimulating agent (ESA) dosage (as applicable) and
                                                         hemoglobin/hematocrit for each Medicare patient, at
                                                         least once per month.
Based on NQF #0420....................................  Pain Assessment and Follow-Up, a reporting measure.
                                                         Facility reports in CROWNWeb one of six conditions for
                                                         each qualifying patient once before August 1 of the
                                                         performance period and once before February 1 of the
                                                         year following the performance period.
Based on NQF #0418....................................  Clinical Depression Screening and Follow-Up, a reporting
                                                         measure. Facility reports in CROWNWeb one of six
                                                         conditions for each qualifying patient once before
                                                         February 1 of the year following the performance
                                                         period.
Based on NQF #0431....................................  NHSN Healthcare Personnel Influenza Vaccination, a
                                                         reporting measure. Facility submits Healthcare
                                                         Personnel Influenza Vaccination Summary Report to CDC's
                                                         NHSN system, according to the specifications of the
                                                         Healthcare Personnel Safety Component Protocol, by May
                                                         15 of the performance period.
N/A...................................................  Ultrafiltration Rate, a reporting measure. Number of
                                                         months for which a facility reports elements required
                                                         for ultrafiltration rates for each qualifying patient.
Based on NQF #1460....................................  NHSN BSI in Hemodialysis Patients, a clinical measure.
                                                         The Standardized Infection Ratio (SIR) of BSIs will be
                                                         calculated among patients receiving hemodialysis at
                                                         outpatient hemodialysis centers.
N/A...................................................  NHSN Dialysis Event Reporting Measure. Number of months
                                                         for which facility reports NHSN Dialysis Event data to
                                                         CDC.
----------------------------------------------------------------------------------------------------------------
* We note that the complete lists of ICD-10 codes associated with the Standardized Readmission Ratio Clinical
  Measure and the Standardized Hospitalization Ratio Clinical Measure included in the ESRD QIP for PY 2020 are
  included in the Measure Technical Reports, available here: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html.


[[Page 31209]]

2. Proposed Replacement of the Vascular Access Type (VAT) Clinical 
Measures Beginning With the PY 2021 Program Year
    We consider a quality measure for removal or replacement if: (1) 
Measure performance among the majority of ESRD facilities is so high 
and unvarying that meaningful distinctions in improvements or 
performance can no longer be made (in other words, the measure is 
topped-out); (2) performance or improvement on a measure does not 
result in better or the intended patient outcomes; (3) a measure no 
longer aligns with current clinical guidelines or practice; (4) a more 
broadly applicable (across settings, populations, or conditions) 
measure for the topic becomes available; (5) a measure that is more 
proximal in time to desired patient outcomes for the particular topic 
becomes available; (6) a measure that is more strongly associated with 
desired patient outcomes for the particular topic becomes available; or 
(7) collection or public reporting of a measure leads to negative or 
unintended consequences (77 FR 67475). In the CY 2015 ESRD PPS final 
rule, we adopted statistical criteria for determining whether a 
clinical measure is topped out, and adopted a policy under which we 
could retain an otherwise topped-out measure if we determined that its 
continued inclusion in the ESRD QIP measure set would address the 
unique needs of a specific subset of the ESRD population (79 FR 66174).
    Subsequent to the publication of the CY 2017 ESRD PPS final rule, 
we evaluated the finalized PY 2020 ESRD QIP measures that would be 
continued in PY 2021 against all of these criteria. We determined that 
none of these measures met criterion (1), (2), (3), (4), (5) or (7). As 
part of this evaluation for criterion one, we performed a statistical 
analysis of the PY 2020 measures we plan to continue using for PY 2021 
and future payment years to determine whether any measures were 
``topped out.'' The full results of this analysis can be found at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html and a summary of 
our topped-out analysis results appears in Table 7.
    As Table 7 illustrates, the distributions of the PY 2020 clinical 
measures were assessed in order to determine if any measures were 
``topped out.'' In order for a measure to be considered topped out, two 
conditions had to be met. First, a measure was considered topped out if 
the 75th percentile, or 25th percentile for measures where lower 
percentiles indicate better performance, was statistically 
indistinguishable from the 90th (or 10th) percentile, and second, the 
truncated coefficient of variation (TCV) was less than or equal to 10 
percent, or 0.10. We note that the percentiles were considered 
statistically indistinguishable if the 75th/25th percentile was within 
two standard errors of the 90th/10th percentile. Additionally, for each 
measure the TCV was calculated by first removing the lower and upper 
5th percentiles, then dividing the standard deviation by the mean of 
this truncated distribution (SDtruncated/
Meantruncated). The TCV was then converted to a decimal by 
dividing the TCV by 100.
    Measures evaluated included the combined Kt/V (that is, a measure 
of dialysis adequacy where K is dialyzer clearance, t is dialysis time, 
and V is total body water volume measure), Fistula, Catheter, 
Hypercalcemia, NHSN Standardized Infection Ratio (SIR), SRR, STrR, SHR, 
and the six individual CAHPS clinical measures. Medicare claims data 
from 2015 were used in Fistula and Catheter calculations. CROWNWeb data 
from 2015 was used for Hypercalcemia, the combination of 2015 CROWNWeb 
data and 2015 Medicare claims data were used for Kt/V measure, and the 
SRR, STrR, and SHR measures were based on both combination of 2014 
CROWNWeb data and 2014 Medicare claims data. The NHSN BSI Clinical 
Measure was calculated using the CY 2015 NHSN data from the CDC, and 
the six components of the ICH-CAHPS measure were calculated using the 
CY 2015 ICH-CAHPS data.
    Table 7 presents the percentiles, standard error, and TCV for each 
measure. In this analysis, all facilities with the minimum eligible 
patient requirement per measure were included. The results indicate 
none of the PY 2020 clinical measures met both ``topped out'' 
conditions.
BILLING CODE 4120-01-P

[[Page 31210]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.001

BILLING CODE 4120-01-C
As the information in Table 7 indicates, none of these clinical 
measures are currently topped-out in the ESRD QIP. Accordingly, we are 
not proposing to remove any of these measures from the ESRD QIP for PY 
2021 because they are topped out.
    Over the past few years, we have received numerous public comments 
regarding the two VAT measures included in the ESRD QIP's measure set. 
Specifically, commenters have recommended that CMS adjust the weights 
of the VAT measures to place more emphasis on reducing catheters to 
encourage the use of fistulas and grafts (81 FR 77904). Another 
commenter specifically supported CMS' submission of new VAT Measures to 
the NQF Renal Standing Committee to address the small number of 
patients for whom a catheter may be the most appropriate vascular 
access type when life expectancy is limited (81 FR 77905). We also note 
that the VAT measures currently used in the ESRD QIP measure set are 
calculated using claims data. This limits the applicability of the 
measures to Medicare Fee-For-Service (FFS) patients, while excluding 
all others.
    Although there is no evidence to suggest that the current VAT 
measures are leading to negative or unintended consequences, we are 
proposing to

[[Page 31211]]

remove both from the ESRD QIP measure set beginning with the PY 2021 
program based on criterion (6) listed earlier, because measures that 
are more strongly associated with desired patient outcomes for the 
particular topic are now available. As discussed more fully below, we 
are proposing to replace the VAT measures with the Proposed 
Hemodialysis Vascular Access: Standardized Fistula Rate Clinical 
Measure (NQF #2977) and the Proposed Hemodialysis Vascular Access: 
Long-Term Catheter Rate Clinical Measure (NQF #2978). These proposed 
measures will address the methodological concerns the community has 
shared regarding the existing measures. Additionally, they have both 
been endorsed by the NQF and are supported by the Measures Application 
Partnership. Both of the proposed measures are being considered for 
reporting on Dialysis Facility Compare and in the Dialysis Facility 
Compare Star Ratings for 2018 and both measures can be calculated using 
data that facilities are already required to report in CROWNWeb in 
order to meet 42 CFR 494.180(h) of the 2008 updated Conditions for 
Coverage for ESRD Dialysis Facilities. Because CROWNWeb collects data 
on all patients, we believe that the adoption of these measures will 
enable us to more accurately assess the quality of care furnished by 
facilities.
    We seek comments on our proposal to remove the current VAT measures 
from the ESRD QIP measure set beginning with the PY 2021 program year.
3. Proposed Revision of the Standardized Transfusion Ratio (STrR) 
Clinical Measure Beginning With the PY 2021 Program Year
    We believe that changes during the past several years to the way 
ESRD services are reimbursed under Medicare, as well as changes to how 
ESRD care is measured under the ESRD QIP and through other quality 
reporting initiatives, may have impacted how anemia is clinically 
managed. Some of these changes include the identification of safety 
concerns associated with aggressive erythropoiesis-stimulating agent 
(ESA) use, the expansion of the ESRD PPS bundled payment methodology to 
include ESAs, and the continued growth and expansion of the ESRD QIP. 
There are concerns that these changes could result in the 
underutilization of ESAs, with lower achieved hemoglobin values that 
may increase the frequency of red blood cell transfusion in the US 
chronic dialysis population.
    Excessive rates of blood transfusion may be an indicator for 
underutilization of clinical treatments to increase endogenous red 
blood cell production (for example, ESA, iron). Dialysis patients who 
are eligible for kidney transplant and have received transfusions are 
at increased risk of becoming sensitized to the donor pool thereby 
making transplant more difficult to accomplish. Blood transfusions 
carry a small risk of transmitting blood borne infections and/or the 
development of a transfusion reaction, and using infusion centers or 
hospitals to transfuse patients is expensive, inconvenient, and could 
compromise future vascular access.\6\
---------------------------------------------------------------------------

    \6\ FDA Drug Safety Communication: Modified dosing 
recommendations to improve the safe use of Erythropoiesis-
Stimulating Agents (ESAs) in chronic kidney disease. http://www.fda.gov/Drugs/DrugSafety/ucm259639.htm.
    Kidney Disease: Improving Global Outcome (KDIGO) Anemia Work 
Group. KDIGO Clinical Practice Guideline for Anemia in Chronic 
Kidney Disease. Kidney inter., Suppl. 2012; 2: 279-335. http://www.kdigo.org/clinical_practice_guidelines/pdf/KDIGO-Anemia%20GL.pdf.
    Obrador and Macdougall. Effect of Red Cell Transfusions on 
Future Kidney Transplantation. Clin J Am Soc Nephrol 8: 852-860, 
2013.
    Ibrahim, et al. Blood transfusions in kidney transplant 
candidates are common and associated with adverse outcomes. Clin 
Transplant 2011: 25: 653-659.
---------------------------------------------------------------------------

    Monitoring the risk-adjusted transfusion rate at the dialysis 
facility level, relative to national standards, allows for detection of 
treatment patterns in dialysis-related anemia management. This is of 
particular importance due to recommendations by the Food and Drug 
Administration regarding more conservative ESA dosing.\7\ As providers 
use less ESAs in an effort to minimize the risks associated with 
aggressive anemia treatment, it becomes more important to monitor for 
an overreliance on transfusions. Beginning with PY 2017, we adopted the 
STrR to address gaps in the quality of anemia management. We also 
submitted that measure to the NQF for consensus endorsement, but the 
Renal Standing Committee did not recommend it for endorsement, in part 
due to concerns that variability in hospital coding practices with 
respect to the use of 038 and 039 revenue codes might unduly bias the 
measure rates. Upon reviewing the committee's feedback, we revised the 
STrR measure to address these concerns. Following this revision, we 
resubmitted the STrR (NQF #2979) to NQF for consensus endorsement, and 
the NQF endorsed it in 2016. The change we are proposing to the STrR 
beginning with the PY 2021 ESRD QIP will align the measure 
specifications we use for the ESRD QIP with the measure specifications 
that the NQF endorsed in 2016 (NQF #2979).
---------------------------------------------------------------------------

    \7\ https://www.fda.gov/Drugs/DrugSafety/ucm259639.htm.
---------------------------------------------------------------------------

Summary of Change
    The proposed updated specifications to the STrR measure contain a 
more restricted definition of transfusion events than is used in the 
current STrR measure. Specifically, the revised definition excludes 
inpatient transfusion events for claims that include only 038 or 039 
revenue codes without an accompanying ICD-9 or ICD-10 Procedure Code or 
Value Code. As a result of requiring that all inpatient transfusion 
events include an appropriate ICD-9 or ICD-10 Procedure Code or Value 
Code, the measure will identify transfusion events more specifically 
and with less bias related to regional coding variation. As a result, 
it will assess a smaller number of events as well as a smaller range of 
total events.
2016 Measures Application Partnership Review
    We determined that the proposed revision to the STrR (NQF #2979) 
constituted a substantive change to the measure, and we submitted that 
revision to the Measures Application Partnership for consideration as 
part of the pre-rulemaking process. The Measures Application 
Partnership recommended that this measure be refined and resubmitted 
due to concerns that measuring transfusions in dialysis facilities may 
not be feasible.\8\ The Measures Application Partnership also expressed 
concern that the decision to administer a blood transfusion may be 
outside of the dialysis facility's control because in general, 
clinicians in hospitals make the decisions about blood transfusions. 
The Measures Application Partnership also expressed concern that 
variability in blood transfusion coding practices could inadvertently 
affect a dialysis facility's performance on this measure.
---------------------------------------------------------------------------

    \8\ http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=84452.
---------------------------------------------------------------------------

    Although we acknowledge that the Measures Application Partnership 
recommended that we refine and resubmit the updated version of the STrR 
measure, we note that the Measures Application Partnership's 
recommendation is at odds with the earlier conclusion of the NQF to 
endorse this change. On the issue of whether it is feasible to measure 
transfusions in dialysis facilities, the NQF concluded that these 
events can be identified using the same Medicare claims code algorithm 
that we use to identify transfusion events in other outpatient 
settings. The STrR measure identifies

[[Page 31212]]

transfusion events during at-risk periods for patients cared for in a 
dialysis facility.
    With respect to the MAP's concern that the decision to administer a 
blood transfusion might be outside of the dialysis facility's control, 
we note that the issue of whether anemia management practices in a 
dialysis facility can be linked to transfusion risk was specifically 
considered by the NQF during the endorsement process.
    The NQF Renal Standing Committee concluded that this transfusion 
avoidance measure would incentivize facilities to properly manage 
anemia, with the result of lowering the patient's transfusion risk. The 
NQF Renal Standing Committee also found that although the decision to 
transfuse might ultimately be made by a hospital, the need to do so is 
dictated not only by clinical circumstances observed by the hospital, 
but also by the way the patient's anemia was managed by the facility.
    Although the Measures Application Partnership was concerned that 
variability in blood transfusion coding practices could inadvertently 
affect a dialysis facility's performance on this measure, we note that 
the definition of transfusion events used in the revised STrR measure 
is consistent with the definition used in numerous scientific 
publications, including several peer reviewed publications.\9\ Under 
this definition, transfusion events are included in the measure only if 
they are coded with specific transfusion procedure or value codes. We 
believe this coding requirement reduces the potential for inadvertently 
capturing non-transfusion events in the measure. In addition, the 
exclusion of revenue code only transfusion events from the measure 
decreases the potential that the measure results would be influenced by 
differences in hospital coding practices.
---------------------------------------------------------------------------

    \9\ Hirth, Turenne, Wilk et al. Blood transfusion practices in 
dialysis patients in a dynamic regulatory environment. Am J Kidney 
Dis. 2014 Oct;64(4):616-21. Doi: 10.1053/j.ajkd.2014.01.011. Epub 
2014 Feb 19.
    Gilbertson, Monda, Bradbury & Collins. RBC Transfusions Among 
Hemodialysis Patients (1999-2010): Influence of Hemoglobin 
Concentrations Below 10 g/dL. Am J Kidney Dis. 2013; Volume 62, 
Issue 5, 919-928.
    Collins et al. Effect of Facility-Level Hemoglobin Concentration 
on Dialysis Patient Risk of Transfusion. Am J Kidney Dis. 2014; 
63(6):997-1006.
    Cappell et al. Red blood cell (RBC) transfusion rates among US 
chronic dialysis patients during changes to Medicare end-stage renal 
disease (ESRD) reimbursement systems and erythropoiesis stimulating 
agent (ESA) labels. BMC Nephrology 2014, 15:116.
    Ibrahim, et al. Blood transfusions in kidney transplant 
candidates are common and associated with adverse outcomes. Clin 
Transplant 2011: 25: 653-659.
    Molony, et al. Effects of epoetin alfa titration practices, 
implemented after changes to product labeling, on hemoglobin levels, 
transfusion use, and hospitalization rates. Am J Kidney Dis 2016: 
epub before print (published online March 12, 2016).
---------------------------------------------------------------------------

    We agree with the NQF Standing Committee's assessment that the STrR 
(NQF #2979) is an appropriate measure of quality for dialysis 
facilities. We further believe that the measure is appropriate for the 
ESRD QIP because the measure (1) demonstrates variation in performance 
among facilities, (2) is an outcome of care that is modifiable by 
dialysis providers through effective management of anemia in patients, 
and (3) is a valid and reliable indicator of quality at the facility 
level. Proper management of anemia is an important quality of care 
issue for dialysis patients, and a topic for which the ESRD QIP must 
include measures (see section 1881(h)(2)(A)(i)).
    For these reasons, we believe the revision to the STrR measure 
should be reflected in the ESRD QIP, and beginning with the PY 2021 
program year, we propose to use the updated version of the STrR (NQF 
#2979). Full measure specifications and testing data are available at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html.
    We note that the complete list of ICD-10 codes that would be 
included in the measure is included in the Technical Report for the 
measure, provided at the link listed above.
    We seek comments on this proposal.
4. Proposed New Vascular Access Measures Beginning With the PY 2021 
ESRD QIP
    As discussed in sections IV.E.4, IV.E.4.a, and IV.E.4.b of this 
proposed rule, for PY 2021, we propose to remove the two VAT measures 
from the ESRD QIP and to replace them with two Vascular Access measures 
that were recently endorsed by the NQF. We are proposing to score these 
measures the same way that we score the current VAT measures, and to 
include them within the Vascular Access Measure Topic.
Background
    Beginning with the PY 2015 ESRD QIP, we adopted the Minimizing 
Catheter Use as Chronic Dialysis Access (NQF #0256) and Maximizing 
Placement of Arterial Venous (AV) fistula (NQF #0257), paired measures 
of the rate of catheter and fistula placement for chronic dialysis 
access, respectively, for the ESRD QIP (77 FR 67479). These measures 
were developed in accordance with the National Kidney Foundation Kidney 
Disease Outcomes Quality Initiative Guidelines that state the 
following: (1) AV fistulas have the lowest rate of thrombosis and 
require the fewest interventions, (2) cost of AV fistula use and 
maintenance is the lowest, (3) fistulas have the lowest rates of 
infection, and (4) fistulas are associated with the highest survival 
and lowest hospitalization rates. A number of epidemiologic studies 
consistently demonstrate the reduced morbidity and mortality associated 
with greater use of AV fistulas for vascular access in maintenance 
hemodialysis.
    Based upon data we collected during the CMS Fistula First/Catheter 
Last Initiative,\10\ a gradual trend towards lower catheter use has 
been observed among prevalent maintenance hemodialysis patients in the 
United States, declining from approximately 28 percent in 2006 to 
approximately 18 percent by August 2015. Furthermore, the percentage of 
maintenance HD patients using a catheter for at least 3 months has 
declined during this time period from nearly 12 percent to 10.8 
percent. Continued monitoring of chronic catheter use is needed to 
sustain this trend.
---------------------------------------------------------------------------

    \10\ Fistula First Catheter Last Dashboard August 2015 http://fistulafirst.esrdncc.org/ffcl/for-ffcl-professionals/archive/.
---------------------------------------------------------------------------

    Since the Maximizing Placement of AV fistula (NQF #0257) was first 
implemented, we have received public comments expressing concerns that 
in certain cases, such as patients with a low life expectancy, 
placement of a fistula may not be appropriate. A growing number of 
studies report that creating AV fistulas in some patients is less 
likely to be successful in the presence of certain comorbidities. In 
addition, certain patient groups may have less incremental benefit from 
an AV fistula relative to an AV graft.
    Since the implementation of Minimizing Catheter Use as Chronic 
Dialysis Access (NQF #0256), we have received comments from 
stakeholders raising concerns about its inability to account for 
patients with a limited life expectancy, for whom a fistula, with its 
extended maturation period, may not represent an improved quality of 
life. By incorporating additional exclusion criteria to account for 
such patients, this measure avoids setting a quality standard that may 
penalize facilities for providing appropriate vascular access.
    In 2015, we convened a Technical Expert Panel (TEP) to review the 
existing vascular access measures to consider how best to address these 
concerns. A copy of the summary TEP report is available at https://
www.cms.gov/Medicare/Quality-

[[Page 31213]]

Initiatives-Patient-Assessment-Instruments/ESRDQIP/
061_TechnicalSpecifications.html. The TEP made the following 
recommendations:
     The fistula measure should be risk-adjusted for factors 
that are associated with decreased likelihood of AV fistula success, 
including:
    ++ Diabetes.
    ++ Heart diseases.
    ++ Peripheral vascular disease.
    ++ Cerebrovascular disease.
    ++ Chronic obstructive pulmonary disease.
    ++ Anemia (unrelated to ESRD/Chronic Kidney Disease).
    ++ Non-Vascular Access-Related Infections.
    ++ Drug Dependence.
     The measures should include all eligible hemodialysis 
patients, not just Medicare beneficiaries.
     The measures should include patients in the first 90 days 
of dialysis because this is a critical time for access planning/
placement.
     The measures should include in the numerator only patients 
with an AV fistula using 2 needles (or an approved single needle 
device).
     The measures should exclude conditions associated with a 
limited life expectancy where an AV fistula may not be the appropriate 
choice for access (for example, hospice, metastatic cancer, end stage 
liver disease, and coma/brain injury).
    We responded to the TEP's recommendations by developing two new VAT 
measures intended to be jointly reported to assess the placement of 
vascular access among ESRD dialysis patients. These two vascular access 
quality measures, when used together, consider AV fistula use as a 
positive outcome and prolonged use of a tunneled catheter as a negative 
outcome. With the growing recognition that some patients have exhausted 
options for an AV fistula or have comorbidities that may limit the 
success of AV fistula creation, joint reporting of the measures 
accounts for all three vascular access options. This paired incentive 
structure that relies on both measures (standardized fistula rate and 
long-term catheter rate) reflects consensus-based best practice, and 
supports maintenance of the gains in vascular access success achieved 
via the Fistula First/Catheter Last Project over the last decade.
a. Proposed New Hemodialysis Vascular Access: Standardized Fistula Rate 
Clinical Measure (NQF #2977)
Summary of Changes
    This proposed measure replaces NQF #0257, Maximizing Placement of 
AV fistula, and it incorporates changes that reflect input from the 
2015 Vascular Access TEP:
     Risk Adjustment for the following conditions that affect 
the success of fistula placement:
    ++ Diabetes.
    ++ Heart diseases.
    ++ Peripheral vascular disease.
    ++ Cerebrovascular disease.
    ++ Chronic obstructive pulmonary disease.
    ++ Anemia (unrelated to ESRD/Chronic Kidney Disease).
    ++ Non-Vascular Access-Related Infections.
    ++ Drug Dependence.
     Inclusion of all eligible hemodialysis patients, not just 
Medicare beneficiaries.
     Inclusion of patients in the first 90 days of dialysis 
because this is a critical time for access planning/placement.
     Inclusion in the numerator of only patients with an AV 
fistula using 2 needles (or an approved single needle device).
     Exclusion of conditions associated with a limited life 
expectancy where an AV fistula may not be the appropriate choice for 
access (for example, hospice, metastatic cancer, end-stage liver 
disease, and coma/brain injury).
Data Sources
    CROWNWeb, Medicare claims and the CMS Medical Evidence form 2728 
(OMB No. 0938-0046) are used as the data sources for establishing the 
denominator. CROWNWeb is the data source for establishing the 
numerator. Medicare claims and the CMS Medical Evidence form 2728 are 
data sources for the risk adjustment factors. Medicare claims and 
CROWNWeb are used for the exclusion criteria. Using CROWNWeb as the 
primary data source allows us to expand the Standardized Fistula Rate 
to include all ESRD dialysis patients, rather than only Medicare FFS 
patients, providing a more complete quality assessment for dialysis 
facilities. This was a key consideration by the TEP that recommended 
the development of this measure.
Outcome
    The outcome of the Standardized Fistula Rate is the use of an AV 
fistula as the sole means of vascular access as of the last 
hemodialysis treatment session of the month.
Cohort
    The cohort includes adult ESRD dialysis patients who are determined 
to be maintenance hemodialysis patients (in-center or home) for the 
entire reporting month at the same facility.
Inclusion and Exclusion Criteria
    The Standardized Fistula Rate excludes pediatric patients (<18 
years old), patients on peritoneal dialysis, and patient-months where 
the patient was not on hemodialysis (in-center or home) at the same 
facility for the entire reporting month. The measure additionally 
excludes patients with a catheter who have a limited life expectancy.
Risk Adjustment
    The Standardized Fistula Rate is a directly standardized 
percentage, with each facility's percentage of fistula use adjusted by 
a series of risk factors, including patient demographic and clinical 
characteristics based on a logistic regression model. The demographic 
and clinical characteristics were chosen in order to adjust for factors 
outside the control of a facility that are associated with a decreased 
likelihood of AV fistula success.
    We submitted the measure to NQF, where the Renal Standing Committee 
recommended it for consensus endorsement, and the NQF endorsed the 
measure in December 2016. The Standardized Fistula Rate (NQF #2977) was 
submitted to the Measure Applications Partnership in 2016, which 
supported the measure for implementation in the ESRD QIP.
    We propose implementing Hemodialysis Vascular Access: Standardized 
Fistula Rate (NQF #2977) beginning with the PY 2021 program year. 
Detailed measure specifications and testing data are available at 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html. We seek comments 
on this proposal.
b. Proposed New Hemodialysis Vascular Access: Long-Term Catheter Rate 
(NQF #2978) Beginning With the PY 2021 ESRD QIP
Summary of Changes
    This proposed measure replaces NQF #0256, Minimizing Use of 
Catheters as Chronic Dialysis Access, and it incorporates the following 
changes that reflect input from the 2015 Vascular Access TEP:
     Inclusion of all eligible hemodialysis patients, not just 
Medicare beneficiaries, since the measure is now specified to be 
calculated from CROWNWeb.
     Patients using a catheter continuously for 3 months or 
longer, even if combined with an AV fistula (or graft), are now counted 
in the numerator. The current measure does

[[Page 31214]]

not count patients in the numerator if they have a catheter combined 
with an AV fistula or graft.
     Patients with missing VAT are counted in both the 
denominator and the numerator. That is, ``missing'' access type is 
considered a ``failure'' and therefore counts against the facility.
     Exclusion criteria have been added to the measure for 
conditions associated with a limited life expectancy where a catheter 
may be an appropriate choice for access. These are the same exclusions 
applied to the Standardized Fistula Rate measure (for example, hospice, 
metastatic cancer, end stage liver disease, and coma/brain injury).
Data Sources
    CROWNWeb, Medicare Claims and the CMS Medical Evidence form 2728 
are used as the data sources for establishing the denominator. CROWNWeb 
is the data source for establishing the numerator. Medicare claims and 
CROWNWeb are used for the exclusion criteria. Medicare claims and the 
CMS Medical Evidence Form 2728 are used for risk adjustment. Using 
CROWNWeb as the primary data source allows us to expand the Long-Term 
Catheter Rate to include all ESRD dialysis patients, rather than only 
Medicare FFS patients, providing a more complete quality assessment for 
dialysis facilities. This was a key consideration by the TEP that 
recommended the development of this measure.
Outcome
    The outcome of the Long-Term Catheter Rate is the use of a catheter 
continuously for 3 months or longer as of the last hemodialysis 
treatment session of the month.
Cohort
    The cohort includes adult ESRD dialysis patients who are determined 
to be maintenance hemodialysis patients (in-center or home) for the 
entire reporting month at the same facility.
Inclusion and Exclusion Criteria
    The Long-Term Catheter Rate excludes pediatric patients (<18 years 
old), patients on peritoneal dialysis, and patient-months not on 
hemodialysis (in-center or home) for the entire reporting month at the 
same facility. The measure additionally excludes patients with a 
catheter who have a limited life expectancy.
    We submitted the Long-Term Catheter Rate (NQF #2978) to NQF, where 
the Renal Standing Committee recommended it for consensus endorsement, 
and the NQF endorsed the measure in December 2016. The measure was 
submitted to the Measure Application Partnership in 2016, which 
supported it for implementation in the ESRD QIP.
    We propose to introduce the Long-Term Catheter Rate (NQF #2978) 
into the ESRD QIP beginning with the PY 2021 program year. Full measure 
specifications and testing data are available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html.
    We seek comments on this proposal.
5. Proposed Performance Period for the PY 2021 ESRD QIP
    We are proposing to establish CY 2019 as the performance period for 
the PY 2021 ESRD QIP for all but the NHSN Healthcare Personnel 
Influenza Vaccination reporting measure because it is consistent with 
the performance periods we have historically used for these measures 
and accounts for seasonal variations that might affect a facility's 
measure score.
    We are proposing that the performance period for the NHSN 
Healthcare Personnel Influenza Vaccination reporting measure will be 
from October 1, 2018 through March 31, 2019, because this period spans 
the length of the 2018-2019 influenza season.
    We seek comments on these proposals.
6. Proposed Performance Standards, Achievement Thresholds, and 
Benchmarks for the PY 2021 ESRD QIP
    Section 1881(h)(4)(A) of the Act provides that ``the Secretary 
shall establish performance standards with respect to measures selected 
. . . for a performance period with respect to a year.'' Section 
1881(h)(4)(B) of the Act further provides that the ``performance 
standards . . . shall include levels of achievement and improvement, as 
determined appropriate by the Secretary.'' We use the performance 
standards to establish the minimum score a facility must achieve to 
avoid a Medicare payment reduction.
a. Proposed Performance Standards, Achievement Thresholds, and 
Benchmarks for the Clinical Measures in the PY 2021 ESRD QIP
    For the same reasons stated in the CY 2013 ESRD PPS final rule (77 
FR 67500 through 76502), we are proposing for PY 2021 to set the 
performance standards, achievement thresholds, and benchmarks for the 
clinical measures at the 50th, 15th, and 90th percentile, respectively, 
of national performance in CY 2017, because this will give us enough 
time to calculate and assign numerical values to the proposed 
performance standards for the PY 2021 program prior to the beginning of 
the performance period. We continue to believe these standards will 
provide an incentive for facilities to continuously improve their 
performance, while not reducing incentives to facilities that score at 
or above the national performance rate for the clinical measures.
    We seek comments on our proposal to continue this policy for PY 
2021.
b. Performance Standards, Achievement Thresholds, and Benchmarks for 
the Clinical Measures Proposed for the PY 2021 ESRD QIP
    At this time, we do not have the necessary data to assign numerical 
values to the proposed performance standards for the clinical measures, 
because we do not yet have data from CY 2017 or the first portion of CY 
2018. We will publish values for the clinical measures, using data from 
CY 2017 and the first portion of CY 2018 in the CY 2019 ESRD PPS final 
rule.
c. Proposed Performance Standards for the PY 2021 Reporting Measures
    In the CY 2014 ESRD PPS final rule, we finalized performance 
standards for the Anemia Management and Mineral Metabolism reporting 
measures (78 FR 72213). In the CY 2016 ESRD PPS final rule, we 
finalized performance standards for the Screening for Clinical 
Depression and Follow-Up, Pain Assessment and Follow-Up, and NHSN 
Healthcare Provider Influenza Vaccination reporting measures (79 FR 
66209). In the CY 2017 ESRD PPS final rule, we finalized performance 
standards for the Ultrafiltration Rate Reporting Measure (81 FR 77916), 
the Serum Phosphorus Reporting measure (81 FR 77916), and the NHSN 
Dialysis Event Reporting measure (81 FR 77916).
    We are proposing to continue use of these performance standards for 
the Reporting Measures included in the PY 2021 ESRD QIP.
7. Proposal for Scoring the PY 2021 ESRD QIP
a. Scoring Facility Performance on Clinical Measures Based on 
Achievement
    In the CY 2014 ESRD PPS final rule, we finalized a policy for 
scoring performance on clinical measures based on achievement (78 FR 
72215). Under this methodology, facilities receive points along an 
achievement range based on their performance during the performance 
period for each measure,

[[Page 31215]]

which we define as a scale between the achievement threshold and the 
benchmark. In determining a facility's achievement score for each 
clinical measure under the PY 2021 ESRD QIP, we propose to continue 
using this methodology for all clinical measures.
    We also propose to use this same methodology for scoring the two 
new Vascular Access measures proposed in sections IV.E.4.a and 
IV.E.4.b.
    Aside from the proposed addition of the two Vascular Access 
measures, we are not proposing any changes to this policy. We propose 
to continue use of this policy for the PY 2021 ESRD QIP.
b. Proposal for Scoring Facility Performance on Clinical Measures Based 
on Improvement
    In the CY 2014 ESRD PPS final rule, we finalized a policy for 
scoring performance on clinical measures based on improvement (78 FR 
72215 through 72216). In determining a facility's improvement score for 
each measure under the PY 2021 ESRD QIP, we propose to continue using 
this methodology for all clinical measures. Under this methodology, 
facilities receive points along an improvement range, defined as a 
scale running between the improvement threshold and the benchmark. We 
propose to define the improvement threshold as the facility's 
performance on the measure during CY 2018. The facility's improvement 
score would be calculated by comparing its performance on the measure 
during CY 2019 (the proposed performance period) to the improvement 
threshold and benchmark.
    We also propose to use this same methodology for scoring the two 
new Vascular Access measures proposed in sections IV.E.4.a and IV.E.b.
    Aside from the proposed addition of the two new Vascular Access 
measures, we are not proposing any changes to this policy. We propose 
to continue use of this policy for the PY 2021 ESRD QIP.
c. Scoring the ICH CAHPS Clinical Measure
    In the CY 2015 ESRD PPS final rule, we finalized a policy for 
scoring performance on the ICH CAHPS clinical measure based on both 
achievement and improvement (79 FR 66209 through 66210). We are 
proposing to use this scoring methodology for the PY 2021 ESRD QIP. 
Under this methodology, facilities will receive an achievement score 
and an improvement score for each of the three composite measures and 
three global ratings in the ICH CAHPS survey instrument. A facility's 
ICH CAHPS score will be based on the higher of the facility's 
achievement or improvement score for each of the composite measures and 
global ratings, and the resulting scores on each of the composite 
measures and global ratings will be averaged together to yield an 
overall score on the ICH CAHPS clinical measure. For PY 2021, the 
facility's achievement score would be calculated by comparing where its 
performance, on each of the three composite measures and three global 
ratings during CY 2019, falls relative to the achievement threshold and 
benchmark for that measure and rating based on CY 2017 data. The 
facility's improvement score would be calculated by comparing its 
performance on each of the three composite measures and three global 
ratings during CY 2019 to its performance rates on these items during 
CY 2018.
    We seek comments on this proposal.
d. Proposal for Scoring the Proposed Hemodialysis Vascular Access: 
Standardized Fistula Rate and Long-Term Catheter Rate Measures and the 
Vascular Access Measure Topic
    In the CY 2013 ESRD PPS final rule we established a methodology for 
deriving the overall scores for measure topics (77 FR 67507). We are 
proposing to use the same methodology described in the CY 2013 ESRD PPS 
to calculate the VAT Measure Topic Score.
    We seek comments on this proposal.
e. Proposal for Calculating Facility Performance on Reporting Measures
    In the CY 2013 ESRD PPS final rule, we finalized policies for 
scoring performance on the Anemia Management and Mineral Metabolism 
reporting measures in the ESRD QIP (77 FR 67506). In the CY 2015 ESRD 
PPS final rule, we finalized policies for scoring performance on the 
Clinical Depression Screening and Follow-Up, Pain Assessment and 
Follow-Up, and NHSN Healthcare Provider Influenza Vaccination reporting 
measures (79 FR 66210 through 66211). In the CY 2017 ESRD PPS final 
rule, we finalized policies for scoring performance on the 
Ultrafiltration Rate, Serum Phosphorus, and NHSN Dialysis Event 
reporting measures (81 FR 77917).
    We propose to continue use of these policies for the PY 2021 ESRD 
QIP.
8. Proposal for Weighting the Clinical Measure Domain, and Weighting 
the TPS
a. Proposal for Weighting the Clinical Measure Domain for PY 2021
    In the CY 2017 ESRD PPS final rule, we discussed our policy 
priorities for quality improvement for patients with ESRD (81 FR 
77887). These priorities have not changed since that time. Accordingly, 
in an effort to remain consistent in the weighting of measures included 
in the program, we propose to weight the following measures in the 
following subdomains of the clinical measure domain (see Table 8):

   Table 8--Proposed Measure Domain Weighting for the PY 2021 ESRD QIP
------------------------------------------------------------------------
                                          Measure weight
                                            within the    Measure weight
  Measures/measure topics by subdomain        domain      as  percent of
                                           (proposed for   TPS (proposed
                                           PY 2021)  (%)   for PY 2021)
------------------------------------------------------------------------
                         Clinical Measure Domain
------------------------------------------------------------------------
Patient and Family Engagement/Care                    40              30
 Coordination Subdomain.................
    ICH CAHPS Measure...................              25           18.75
    SRR Measure.........................              15           11.25
Clinical Care Subdomain.................              60              45
    STrR measure........................              11            8.25
    Kt/V Dialysis Adequacy Comprehensive              18            13.5
     Measure............................
    Vascular Access Type Measure Topic..              18            13.5
    Hypercalcemia measure...............               2             1.5
    SHR Measure.........................              11            8.25
                                         -------------------------------

[[Page 31216]]

 
    Total: Clinical Measure Domain......         100% of    75% of Total
                                                Clinical     Performance
                                          Measure Domain          Score.
------------------------------------------------------------------------
                        Reporting Measure Domain
------------------------------------------------------------------------
Serum Phosphorus reporting measure......              20               2
Anemia Management reporting measure.....              20               2
Pain Assessment and Follow-Up reporting               20               2
 measure................................
Clinical Depression Screening and Follow-             20               2
 Up reporting measure...................
NHSN HCP Influenza Vaccination reporting              20               2
 measure................................
                                         -------------------------------
    Total: Reporting Measure Domain.....         100% of    10% of Total
                                               Reporting     Performance
                                          Measure Domain          Score.
------------------------------------------------------------------------
                          Safety Measure Domain
------------------------------------------------------------------------
NHSN BSI Clinical Measure...............              60               9
NHSN Dialysis Event Reporting Measure...              40               6
                                         -------------------------------
    Total: Safety Measure Domain........  100% of Safety    15% of Total
                                          Measure Domain     Performance
                                                                  Score.
------------------------------------------------------------------------

    Specifically, for PY 2021 we are proposing to maintain the weight 
of the Safety Measure Domain at 15 percent of a facility's TPS without 
raising it further, in light of validation concerns discussed in the CY 
2017 ESRD PPS final rule (81 FR 77887). Specifically, we identified two 
distinct types of accidental or intentional under-reporting. First, 
there is a belief that many facilities do not consistently report 
monthly dialysis event data for the full 12-month performance period. 
Second, even with respect to the facilities that do report monthly 
dialysis event data, there is a concern that many of those facilities 
do not consistently report all of the dialysis events that they should 
be reporting (81 FR 77879). Additionally, as discussed above, although 
we are not proposing to change the total number of measures in the ESRD 
QIP's measure set for PY 2021, we are proposing to replace the existing 
Vascular Access measures with the proposed Standardized Fistula and 
Catheter Clinical measures. We believe these measures hold the same 
importance and value as the measures they are replacing and are 
therefore not proposing any changes to the weights finalized for PY 
2020 in the CY 2017 ESRD PPS final rule. We may, in future years of the 
program, consider increasing the weight of the NHSN BSI Clinical 
Measure and/or the NHSN BSI Measure Topic once we see that facilities 
are completely and accurately reporting to NHSN and once we have 
analyzed the data from the recently increased NHSN Data Validation 
Study.
    We seek comments on these proposals.
b. Proposal for Weighting the Domains Used To Calculate the TPS
    We continue to believe that while the reporting measures are 
valuable, the clinical measures assess facility performance on actual 
patient care processes and outcomes and therefore justify a higher 
combined weight (78 FR 72217). In the CY 2017 ESRD PPS final rule, we 
finalized that the weight of the Safety Measure Domain would be 15 
percent of a facility's TPS, the weight of the Clinical Measure Domain 
would be 75 percent of a facility's TPS and the weight of the Reporting 
Measure Domain would be 10 percent of a facility's TPS. We are not 
proposing any changes to this and are proposing to apply it to the PY 
2021 program year.
    In the CY 2017 ESRD PPS final rule, we finalized that, to be 
eligible to receive a TPS, a facility must be eligible to be scored on 
at least one measure in the Clinical Measure Domain and at least one 
measure in the Reporting Measure Domain. We are not proposing any 
changes to this policy for the PY 2021 ESRD QIP.
    We seek comments on the continued use of these policies.
9. Example of the Proposed PY 2021 ESRD QIP Scoring Methodology
    In this section, we provide an example to illustrate the proposed 
scoring methodology for PY 2021. Figures 1 through 4 illustrate how to 
calculate the Clinical Measure Domain score, the Reporting Measure 
Domain score, the Safety Measure Domain score, and the TPS. Figure 5 
illustrates the full proposed scoring methodology for PY 2021. Note 
that for this example, Facility A, a hypothetical facility, has 
performed very well.
    Figure 1 illustrates the methodology used to calculate the Clinical 
Measure Domain score for Facility A.

[[Page 31217]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.002

    Figure 2 illustrates the general methodology for calculating the 
Reporting Measure Domain score for Facility A.

[[Page 31218]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.003

    Figure 3 illustrates the methodology used for calculating the 
Safety Measure Domain score for Facility A.

[[Page 31219]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.004

    Figure 4 illustrates the methodology used to calculate the TPS for 
Facility A.

[[Page 31220]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.005

    Figure 5 illustrates the full scoring methodology for PY 2021.

[[Page 31221]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.006

10. Proposed Minimum Data for Scoring Measures for the PY 2021 ESRD QIP
    Our policy is to score facilities on clinical and reporting 
measures for which they have a minimum number of qualifying patients 
during the performance period. With the exception of the Standardized 
Readmission Ratio, Standardized Hospitalization Ratio, Standardized 
Transfusion Ratio, NHSN Healthcare Personnel Influenza Vaccination, and 
ICH CAHPS clinical measures, a facility must treat at least 11 
qualifying cases during the performance period in order to be scored on 
a clinical or reporting measure. A facility must have at least 11 index 
discharges to be eligible to receive a score on the SRR clinical 
measure, 10 patient-years at risk to be eligible to receive a score on 
the STrR clinical measure, and 5 patient-years at risk to be eligible 
to receive a score on the SHR clinical measure. The NHSN Healthcare 
Personnel Influenza Vaccination measure does not assess patient level 
data and therefore does not have a minimum qualifying patient count. In 
order to receive a score on the ICH CAHPS clinical measure, a facility 
must have treated at least 30 survey-eligible patients during the 
eligibility period and receive 30 completed surveys during the 
performance period. We propose to continue use of these minimum data 
policies for the measures that we have proposed to continue including 
in the PY 2021 ESRD QIP measure set. Additionally, we propose to use 
these same minimum data policies for the proposed Vascular Access 
Measures discussed above.
    Under our current policy, we begin counting the number of months 
for which a facility is open on the first day of the month after the 
facility's CMS Certification Number (CCN) Open Date. In section IV.D.1 
of the preamble, we proposed clarifications to our CCN Open Date Policy 
and to the patient minimum requirements for each of the measures 
finalized for the PY 2020 ESRD QIP. For the PY 2021 ESRD QIP, only 
facilities with a CCN Open Date before July 1, 2019 would be eligible 
to be scored on the Anemia Management, Serum Phosphorous, 
Ultrafiltration Rate, Pain Assessment and Follow-Up, Clinical 
Depression Screening and Follow-Up reporting measures, and only 
facilities with a CCN Open Date before January 1, 2019 would be 
eligible to be scored on the NHSN BSI Clinical and Reporting Measures, 
the ICH CAHPS Clinical Measure, and the NHSN Healthcare Personnel 
Influenza Vaccination reporting measure. We propose to continue 
applying these CCN open date policies to the measures proposed for PY 
2021.
    Table 9 displays the proposed patient minimum requirements for each 
of the measures, as well as the proposed CCN Open Dates after which a 
facility would not be eligible to receive a score on a reporting 
measure. We note that the 11 qualifying patient minimum used for the 
majority of the measures shown in the table below is a long-standing 
policy in the ERSD QIP.

                                          Table 9--Proposed Minimum Data Requirements for the PY 2021 ESRD QIP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              Minimum data
                Measure                       requirements                       CCN open date                          Small facility adjuster
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dialysis Adequacy (Clinical)..........  11 qualifying patients..  N/A.......................................  11-25 qualifying patients.

[[Page 31222]]

 
Hemodialysis Vascular Access:           11 qualifying patients..  N/A.......................................  11-25 qualifying patients.
 Standardized Fistula Rate (Clinical).
Hemodialysis Vascular Access:           11 qualifying patients..  N/A.......................................  11-25 qualifying patients.
 Standardized Catheter Rate (Clinical).
Hypercalcemia (Clinical)..............  11 qualifying patients..  N/A.......................................  11-25 qualifying patients.
NHSN BSI (Clinical)...................  * 11 qualifying patients  Before January 1, 2019....................  11-25 qualifying patients.
NHSN Dialysis Event (Reporting).......  * 11 qualifying patients  Before January 1, 2019....................  N/A.
SRR (Clinical)........................  11 index discharges.....  N/A.......................................  11-41 index discharges.
STrR (Clinical).......................  10 patient-years at risk  N/A.......................................  10-21 patient-years at risk.
SHR (Clinical)........................  5 patient-years at risk.  N/A.......................................  5-14 patient-years at risk.
ICH CAHPS (Clinical)..................  Facilities with 30 or     Before January 1, 2019....................  N/A.
                                         more survey-eligible
                                         patients during the CY
                                         preceding the
                                         performance period must
                                         submit survey results.
                                         Facilities will not
                                         receive a score if they
                                         do not obtain a total
                                         of at least 30
                                         completed surveys
                                         during the performance
                                         period.
Anemia Management (Reporting).........  11 qualifying patients..  Before July 1, 2019.......................  N/A.
Serum Phosphorus (Reporting)..........  11 qualifying patients..  Before July 1, 2019.......................  N/A.
Depression Screening and Follow-Up      11 qualifying patients..  Before July 1, 2019.......................  N/A.
 (Reporting).
Pain Assessment and Follow-Up           11 qualifying patients..  Before July 1, 2019.......................  N/A.
 (Reporting).
NHSN Healthcare Personnel Influenza     N/A.....................  Before January 1, 2019....................  N/A.
 Vaccination (Reporting).
Ultrafiltration Rate (Reporting)......  11 qualifying patients..  Before July 1, 2019.......................  N/A.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For the NHSN BSI Clinical Measure and the NHSN Dialysis Event Reporting Measure, qualifying patients include only in-center hemodialysis patients.
  Inpatient hemodialysis patients and home hemodialysis or peritoneal dialysis patients are excluded from this measure.

11. Proposed Payment Reductions for the PY 2021 ESRD QIP
    Section 1881(h)(3)(A)(ii) of the Act requires the Secretary to 
ensure that the application of the scoring methodology results in an 
appropriate distribution of payment reductions across facilities, such 
that facilities achieving the lowest TPSs receive the largest payment 
reductions. We propose that, for the PY 2021 ESRD QIP, a facility will 
not receive a payment reduction if it achieves a minimum TPS that is 
equal to or greater than the total of the points it would have received 
if:
     It performed at the performance standard for each clinical 
measure.
     It received the number of points for each reporting 
measure that corresponds to the 50th percentile of facility performance 
on each of the PY 2019 reporting measures. We note this proposed policy 
for PY 2021 is identical to the policy finalized for PY 2020.
    We recognize that we are not proposing a policy regarding the 
inclusion of measures for which we are not able to establish a 
numerical value for the performance standard through the rulemaking 
process before the beginning of the performance period in the PY 2020 
minimum TPS. We have not proposed such a policy because no measures in 
the proposed PY 2021 measure set meet this criterion. However, should 
we choose to adopt a clinical measure in future rulemaking without the 
baseline data required to calculate a performance standard before the 
beginning of the performance period, we will propose a criterion 
accounting for that measure in the minimum TPS for the applicable 
payment year at that time.
    The PY 2019 program is the most recent year for which we will have 
calculated final measure scores before the beginning of the proposed 
performance period for PY 2021 (that is, CY 2019). Because we have not 
yet calculated final measure scores, we are unable to determine the 
50th percentile of facility performance on the PY 2019 reporting 
measures. We will publish that value once we have calculated final 
measure scores for the PY 2019 program.
    Section 1881(h)(3)(A)(ii) of the Act requires that facilities 
achieving the lowest TPSs receive the largest payment reductions. In 
the CY 2014 ESRD PPS final rule (78 FR 72223 through 72224), we 
finalized a payment reduction scale for PY 2016 and future payment 
years: For every 10 points a facility falls below the minimum TPS, the 
facility would receive an additional 0.5 percent reduction on its ESRD 
PPS payments for PY 2016 and future payment years, with a maximum 
reduction of 2.0 percent. We are not proposing any changes to this 
policy for the PY 2021 ESRD QIP.
    Because we are not yet able to calculate the performance standards 
for each of the clinical measures, we are also not able to calculate a 
proposed minimum TPS at this time. We will propose a minimum TPS, based 
on data from CY 2017 and the first part of CY 2018, in the CY 2019 ESRD 
PPS proposed rule.
    We are not proposing any changes to these policies.

V. Advancing Health Information Exchange

    HHS has a number of initiatives designed to improve health and 
health care quality through the adoption of health information 
technology (health IT) and nationwide health information exchange. 
Health IT facilitates the secure, efficient, and effective sharing and 
use of health-related information when and where it is needed, and is 
an important tool for settings across the continuum of care, including 
ESRD facilities. Health IT plays an important role in developing care 
plans to manage dialysis related care and co-morbid conditions for 
patients with ESRD, as well as enabling electronic coordination and 
communication among multidisciplinary teams. Such tools can promote 
quality improvement, improve

[[Page 31223]]

efficiencies and reduce unnecessary costs.
    HHS continues to make important strides promoting the availability 
of technology tools to support providers, including those in ESRD 
settings. For instance, the Office of the National Coordinator for 
Health Information Technology (ONC) released a document entitled 
``Connecting Health and Care for the Nation: A Shared Nationwide 
Interoperability Roadmap Version 1.0 (Roadmap) (available at https://www.healthit.gov/sites/default/files/hie-interoperability/nationwide-interoperability-roadmap-final-version-1.0.pdf), which describes 
barriers to interoperability across the current health IT landscape, 
the desired future state that the industry believes will be necessary 
to enable a learning health system, and a suggested path for moving 
from the current state to the desired future state. In the near term, 
the Roadmap focuses on actions that will enable a majority of 
individuals and providers across the care continuum to send, receive, 
find and use a common set of electronic clinical information at the 
nationwide level by the end of 2017. Moreover, the vision described in 
the Roadmap significantly expands the types of electronic health 
information, information sources, and information users well beyond 
clinical information derived from electronic health records.
    In addition, ONC has released the 2017 Interoperability Standards 
Advisory (available at https://www.healthit.gov/standards-advisory), a 
coordinated catalog of standards and implementation specifications to 
enable priority health information exchange functions. Providers, 
payers, and vendors are encouraged to take these health IT standards 
into account as they implement interoperable health information 
exchange across the continuum of care.
    We encourage stakeholders to utilize health information exchange 
and certified health IT to effectively and efficiently help providers 
improve internal care delivery practices, support management of care 
across the continuum, enable the reporting of electronically specified 
clinical quality measures, and improve efficiencies and reduce 
unnecessary costs. As adoption of certified health IT increases and 
interoperability standards continue to mature, HHS will seek to 
reinforce standards through relevant policies and programs.

VI. Collection of Information Requirements

A. Legislative Requirement for Solicitation of Comments

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection requirement 
should be approved by OMB, section 3506(c)(2)(A) of the Paperwork 
Reduction Act of 1995 requires that we solicit comment on the following 
issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.

B. Requirements in Regulation Text

    We are not proposing any changes to the regulatory text for the 
ESRD PPS or for AKI dialysis payment in CY 2018.

C. Additional Information Collection Requirements

    This proposed rule does not impose any new information collection 
requirements in the regulation text, as specified above. However, there 
are changes in some currently approved information collections. The 
following is a discussion of these information collections.
1. ESRD QIP
a. Wage Estimates
    To derive wage estimates, we used data from the U.S. Bureau of 
Labor Statistics' May 2016 National Occupational Employment and Wage 
Estimates. In the CY 2016 ESRD PPS final rule (80 FR 69069), we stated 
that it was reasonable to assume that Medical Records and Health 
Information Technicians, who are responsible for organizing and 
managing health information data,\11\ are the individuals tasked with 
submitting measure data to CROWNWeb and NHSN for purposes of the Data 
Validation Studies rather than a Registered Nurse, whose duties are 
centered on providing and coordinating care for patients.\12\ The mean 
hourly wage of a Medical Records and Health Information Technician is 
$19.93 per hour. Fringe benefit is calculated at 100 percent. 
Therefore, using these assumptions, we estimate an hourly labor cost of 
$39.86 as the basis of the wage estimates for all collection of 
information calculations in the ESRD QIP. We have adjusted these 
employee hourly wage estimates by a factor of 100 percent to reflect 
current HHS department-wide guidance on estimating the cost of fringe 
benefits and overhead. These are necessarily rough adjustments, both 
because fringe benefits and overhead costs vary significantly from 
employer to employer and because methods of estimating these costs vary 
widely from study to study. Nonetheless, there is no practical 
alternative and we believe that these are reasonable estimation 
methods.
---------------------------------------------------------------------------

    \11\ https://www.bls.gov/oes/current/oes292071.htm.
    \12\ https://www.bls.gov/oes/current/oes291141.htm.
---------------------------------------------------------------------------

b. Time Required To Submit Data Based on Proposed Reporting 
Requirements
    In the CY 2016 ESRD PPS final rule (80 FR 69070), we estimated that 
the time required to submit measure data using CROWNWeb is 2.5 minutes 
per data element submitted, which takes into account the small 
percentage of data that is manually reported, as well as the human 
interventions required to modify batch submission files such that they 
meet CROWNWeb's internal data validation requirements.
c. Data Validation Requirements for the PY 2020 ESRD QIP
    Section IV.D.7 of this proposed rule outlines our data validation 
proposals for PY 2020. Specifically, for the CROWNWeb validation, we 
propose to continue randomly sampling records from 300 facilities as 
part of our continuing pilot data-validation program. Each sampled 
facility would be required to produce approximately 10 records, and the 
sampled facilities will be reimbursed by our validation contractor for 
the costs associated with copying and mailing the requested records. 
The burden associated with these validation requirements is the time 
and effort necessary to submit the requested records to a CMS 
contractor. We estimate that it will take each facility approximately 
2.5 hours to comply with this requirement. If 300 facilities are asked 
to submit records, we estimate that the total combined annual burden 
for these facilities will be 750 hours (300 facilities x 2.5 hours). 
Since we anticipate that Medical Records and Health Information 
Technicians or

[[Page 31224]]

similar administrative staff would submit this data, we estimate that 
the aggregate cost of the CROWNWeb data validation would be 
approximately $29,895 (750 hours x $39.86/hour), or a total of 
approximately $93 ($29,895/300 facilities) per facility in the sample. 
The burden associated with these requirements is captured in an 
information collection request (OMB control number 0938-1289).
    Under the proposed continued data validation study for validating 
data reported to the NHSN Dialysis Event Module, we are proposing to 
continue using the methodology finalized in the CY 2017 ESRD PPS final 
rule, however we have proposed a modification to our sampling 
methodology (81 FR 77956). A CMS contractor would send these facilities 
requests for medical records for all patients with ``candidate events'' 
during the evaluation period. Overall, we estimate that, on average, 
quarterly lists would include two positive blood cultures per facility, 
but we recognize these estimates may vary considerably from facility to 
facility. We estimate that it would take each facility approximately 60 
minutes to comply with this requirement (30 minutes from each of the 
two quarters in the evaluation period). If 35 facilities are asked to 
submit records, we estimate that the total combined annual burden for 
these facilities would be 35 hours (35 facilities x 1 hour). Since we 
anticipate that Medical Records and Health Information Technicians or 
similar administrative staff would submit this data, we estimate that 
the aggregate cost of the NHSN data validation would be $1,395.10 (35 
hours x $39.86/hour), or a total of $39.86 ($1,395.10/35 facilities) 
per facility in the sample. The burden associated with these 
requirements is captured in an information collection request (OMB 
control number 0938-NEW).
    To determine the burden associated with new collection of 
information requirements, we look at each of these elements together: 
The total number of patients nationally, the number of elements per 
patient-year required for each measure, the amount of time required for 
data entry, and the estimated wage plus benefits of the individuals 
within facilities who are most likely to be entering data into 
CROWNWeb. Therefore, based on this methodology, in the CY 2017 ESRD PPS 
final rule, we anticipated the burden associated with the new 
collection of information requirements was approximately $91 million 
for the PY 2020 ESRD QIP (81 FR 77957).\13\ We are not changing our 
data collection methodology for PY 2021; however, we are proposing to 
replace two existing measures for PY 2021. We believe replacing the two 
existing measures would have a de minimis effect on the overall burden 
associated with collection of information requirements in PY 2021. 
Accordingly, the PY 2021 burden estimate remains the same at $91 
million. The net incremental burden from PY 2020 to PY 2021 is $0.
---------------------------------------------------------------------------

    \13\ We note that the aggregate impact of the PY 2020 ESRD QIP 
was included in the CY 2017 ESRD PPS final rule (81 FR 77834 through 
77969). The previously finalized aggregate impact of $113 million 
reflects the PY 2020 estimated payment reductions and the collection 
of information requirements for the Ultrafiltration Rate Reporting 
Measure, finalized in the CY 2017 ESRD PPS final rule (81 FR 77915).
---------------------------------------------------------------------------

VII. Request for Information on Medicare Flexibilities and Efficiencies

    CMS is committed to transforming the health care delivery system--
and the Medicare program--by putting an additional focus on patient-
centered care and working with providers, physicians, and patients to 
improve outcomes. We seek to reduce burdens for hospitals, physicians, 
and patients, improve the quality of care, decrease costs, and ensure 
that patients and their providers and physicians are making the best 
health care choices possible. These are the reasons we are including 
this Request for Information in this proposed rule.
    As we work to maintain flexibility and efficiency throughout the 
Medicare program, we would like to start a national conversation about 
improvements that can be made to the health care delivery system that 
reduce unnecessary burdens for clinicians, other providers, and 
patients and their families. We aim to increase quality of care, lower 
costs, improve program integrity, and make the health care system more 
effective, simple and accessible.
    We would like to take this opportunity to invite the public to 
submit their ideas for regulatory, subregulatory, policy, practice, and 
procedural changes to better accomplish these goals. Ideas could 
include payment system redesign, elimination or streamlining of 
reporting, monitoring and documentation requirements, aligning Medicare 
requirements and processes with those from Medicaid and other payers, 
operational flexibility, feedback mechanisms and data sharing that 
would enhance patient care, support of the physician-patient 
relationship in care delivery, and facilitation of individual 
preferences. Responses to this Request for Information could also 
include recommendations regarding when and how CMS issues regulations 
and policies and how CMS can simplify rules and policies for 
beneficiaries, clinicians, physicians, providers, and suppliers. Where 
practicable, data and specific examples would be helpful. If the 
proposals involve novel legal questions, analysis regarding CMS' 
authority is welcome for CMS' consideration. We are particularly 
interested in ideas for incentivizing organizations and the full range 
of relevant professionals and paraprofessionals to provide screening, 
assessment and evidence-based treatment for individuals with opioid use 
disorder and other substance use disorders, including reimbursement 
methodologies, care coordination, systems and services integration, use 
of paraprofessionals including community paramedics and other 
strategies. We are requesting commenters to provide clear and concise 
proposals that include data and specific examples that could be 
implemented within the law.
    We note that this is a Request for Information only. Respondents 
are encouraged to provide complete but concise responses. This Request 
for Information is issued solely for information and planning purposes; 
it does not constitute a Request for Proposal (RFP), applications, 
proposal abstracts, or quotations. This Request for Information does 
not commit the United States Government to contract for any supplies or 
services or make a grant award.
    Further, CMS is not seeking proposals through this Request for 
Information and will not accept unsolicited proposals. Responders are 
advised that the United States Government will not pay for any 
information or administrative costs incurred in response to this 
Request for Information; all costs associated with responding to this 
Request for Information will be solely at the interested party's 
expense. We note that not responding to this Request for Information 
does not preclude participation in any future procurement, if 
conducted. It is the responsibility of the potential responders to 
monitor this Request for Information announcement for additional 
information pertaining to this request. In addition, we note that CMS 
will not respond to questions about the policy issues raised in this 
Request for Information. CMS will not respond to comment submissions in 
response to this Request for Information in the CY 2018 ESRD PPS final 
rule. Rather, CMS

[[Page 31225]]

will actively consider all input as we develop future regulatory 
proposals or future subregulatory policy guidance. CMS may or may not 
choose to contact individual responders. Such communications would be 
for the sole purpose of clarifying statements in the responders' 
written responses. Contractor support personnel may be used to review 
responses to this Request for Information. Responses to this notice are 
not offers and cannot be accepted by the Government to form a binding 
contract or issue a grant. Information obtained as a result of this 
Request for Information may be used by the Government for program 
planning on a nonattribution basis. Respondents should not include any 
information that might be considered proprietary or confidential. This 
Request for Information should not be construed as a commitment or 
authorization to incur cost for which reimbursement would be required 
or sought. All submissions become United States Government property and 
will not be returned. CMS may publicly post the public comments 
received, or a summary of those public comments.

VIII. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

IX. Economic Analyses

A. Regulatory Impact Analysis

1. Introduction
    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as economically significant); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). This rule is economically significant within the meaning of 
section 3(f)(1) of the Executive Order, since it meets the $100 million 
threshold. Additionally, OMB has determined that the actions are 
significant within the meaning of section 3(f)(4) of the Executive 
Order. Therefore, OMB has reviewed these proposed regulations, and the 
Departments have provided the following assessment of their impact. We 
solicit comments on the regulatory impact analysis provided.
2. Statement of Need
    This rule proposes a number of routine updates and one policy 
change to the ESRD PPS in CY 2018. The proposed routine updates include 
the CY 2018 wage index values, the wage index budget-neutrality 
adjustment factor, and outlier payment threshold amounts. The proposed 
policy change involves an update to the outlier pricing policy. Failure 
to publish this proposed rule would result in ESRD facilities not 
receiving appropriate payments in CY 2018 for renal dialysis services 
furnished to ESRD patients.
    This rule proposes routine updates to the payment for renal 
dialysis services furnished by ESRD facilities to individuals with AKI. 
Failure to publish this proposed rule would result in ESRD facilities 
not receiving appropriate payments in CY 2018 for renal dialysis 
services furnished to patients with AKI in accordance with section 
1834(r) of the Act.
    This rule proposes to implement requirements for the ESRD QIP, 
including a proposal to adopt a measure set for the PY 2021 program, as 
directed by section 1881(h) of the Act. Failure to propose requirements 
for the PY 2021 ESRD QIP would prevent continuation of the ESRD QIP 
beyond PY 2020. In addition, proposing requirements for the PY 2021 
ESRD QIP provides facilities with more time to review and fully 
understand new measures before their implementation in the ESRD QIP.
3. Overall Impact
    We estimate that the proposed revisions to the ESRD PPS will result 
in an increase of approximately $100 million in payments to ESRD 
facilities in CY 2018, which includes the amount associated with 
updates to the outlier thresholds, outlier policy, and updates to the 
wage index. We are estimating approximately $2 million that would now 
be paid to ESRD facilities for dialysis treatments provided to AKI 
beneficiaries.
    For PY 2021, we estimate that the proposed revisions to the ESRD 
QIP will result in a savings of $29 million, which includes a zero 
incremental burden due to collection of information requirements and 
$29 million in estimated payment reductions across all facilities.
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on last year's proposed rule will be the number of reviewers 
of this proposed rule. We acknowledge that this assumption may 
understate or overstate the costs of reviewing this rule. It is 
possible that not all commenters reviewed last year's rule in detail, 
and it is also possible that some reviewers chose not to comment on the 
proposed rule. For these reasons we thought that the number of past 
commenters would be a fair estimate of the number of reviewers of this 
rule. We welcome any comments on the approach in estimating the number 
of entities which will review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that

[[Page 31226]]

each reviewer reads approximately 50 percent of the rule. We seek 
comments on this assumption.
    Using the wage information from the BLS (https://www.bls.gov/oes/2015/may/naics4_621100.htm) for medical and health service managers 
(Code 11-9111), we estimate that the cost of reviewing this rule is 
$105.00 per hour, including overhead and fringe benefits. Assuming an 
average reading speed, we estimate that it would take approximately 
1.25 hours for the staff to review half of this proposed rule. For each 
ESRD facility that reviews the rule, the estimated cost is $131.25 
(1.25 hours x $105.00). Therefore, we estimate that the total cost of 
reviewing this regulation is $19,162.50 ($131.25 x 146 reviewers).

B. Detailed Economic Analysis

1. CY 2018 End-Stage Renal Disease Prospective Payment System
a. Effects on ESRD Facilities
    To understand the impact of the changes affecting payments to 
different categories of ESRD facilities, it is necessary to compare 
estimated payments in CY 2017 to estimated payments in CY 2018. To 
estimate the impact among various types of ESRD facilities, it is 
imperative that the estimates of payments in CY 2017 and CY 2018 
contain similar inputs. Therefore, we simulated payments only for those 
ESRD facilities for which we are able to calculate both current 
payments and new payments.
    For this proposed rule, we used CY 2016 data from the Part A and B 
Common Working Files, as of February 17, 2017, as a basis for Medicare 
dialysis treatments and payments under the ESRD PPS. We updated the 
2016 claims to 2017 and 2018 using various updates. The updates to the 
ESRD PPS base rate are described in section II.B.2.d of this proposed 
rule. Table 10 shows the impact of the estimated CY 2018 ESRD payments 
compared to estimated payments to ESRD facilities in CY 2017.

BILLING CODE 4120-01-P

[[Page 31227]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.007

BILLING CODE 4120-01-C
    Column A of the impact table indicates the number of ESRD 
facilities for each impact category and column B indicates the number 
of dialysis treatments (in millions). The overall effect of the 
proposed changes to the outlier payment policy described in section 
II.B.2.c of this proposed rule is shown in column C. For CY 2018, the 
impact on all ESRD facilities as a result of the changes to the outlier 
payment policy would be a 0.1 percent increase in estimated payments. 
Nearly all ESRD facilities are anticipated to experience a positive 
effect in their estimated CY 2018 payments as a result of the proposed 
outlier policy changes.
    Column D shows the effect of the proposed CY 2018 wage indices and 
the wage index floor of 0.4000. The

[[Page 31228]]

categories of types of facilities in the impact table show changes in 
estimated payments ranging from a 0.8 percent decrease to a 0.3 percent 
increase due to these proposed updates in the wage indices.
    Column E shows the effect of the proposed CY 2018 ESRD PPS payment 
rate update. The proposed ESRD PPS payment rate update is 0.7 percent, 
which reflects the proposed ESRDB market basket percentage increase 
factor for CY 2018 of 2.2 percent, the 1.0 percent reduction as 
required by the section 1881(b)(14)(F)(i)(I) of the Act, and the MFP 
adjustment of 0.5 percent.
    Column F reflects the overall impact, that is, the effects of the 
proposed outlier policy changes, the proposed wage index floor, and 
payment rate update. We expect that overall ESRD facilities would 
experience a 0.8 percent increase in estimated payments in CY 2018. The 
categories of types of facilities in the impact table show impacts 
ranging from a decrease of 0.1 percent to an increase of 1.2 percent in 
their CY 2018 estimated payments.
b. Effects on Other Providers
    Under the ESRD PPS, Medicare pays ESRD facilities a single bundled 
payment for renal dialysis services, which may have been separately 
paid to other providers (for example, laboratories, durable medical 
equipment suppliers, and pharmacies) by Medicare prior to the 
implementation of the ESRD PPS. Therefore, in CY 2018, we estimate that 
the proposed ESRD PPS would have zero impact on these other providers.
c. Effects on the Medicare Program
    We estimate that Medicare spending (total Medicare program 
payments) for ESRD facilities in CY 2018 would be approximately $10.0 
billion. This estimate takes into account a projected increase in fee-
for-service Medicare dialysis beneficiary enrollment of 1.8 percent in 
CY 2018.
d. Effects on Medicare Beneficiaries
    Under the ESRD PPS, beneficiaries are responsible for paying 20 
percent of the ESRD PPS payment amount. As a result of the projected 
0.8 percent overall increase in the proposed CY 2018 ESRD PPS payment 
amounts, we estimate that there will be an increase in beneficiary co-
insurance payments of 0.8 percent in CY 2018, which translates to 
approximately $20 million. The $20 million is based on 20 percent of CY 
2018 estimated total payment increase of $100 million.
e. Alternatives Considered
    In section II.B.2.b of this proposed rule, we propose maintaining 
the wage index floor at 0.4000. We considered increasing the wage index 
floor to 0.5000 as well as increasing the wage index floor to 0.6000 
and determined that maintaining the wage index floor at 0.4000 provided 
the appropriate adjustment related to the cost of furnishing dialysis 
in areas with a wage index less than 0.4000.
2. Proposed Payment for Renal Dialysis Services Furnished to 
Individuals With AKI
a. Effects on ESRD Facilities
    We analyzed CY 2016 hospital outpatient claims to identify the 
number of treatments furnished historically for AKI patients. We 
identified 8,900 outpatient treatments with AKI that also had dialysis 
treatments that were furnished in CY 2016. We then inflated the 8,900 
treatments to 2018 values using estimated population growth for fee-for 
service non-ESRD beneficiaries. This results in an estimated 9,170 
treatments that would now be paid to ESRD facilities for furnishing 
dialysis to beneficiaries with AKI. Using the proposed CY 2018 ESRD 
base rate of $233.31 and an average wage index multiplier, we are 
estimating approximately $2 million that would now be paid to ESRD 
facilities for dialysis treatments provided to AKI beneficiaries.
    Ordinarily, we would provide a table showing the impact of this 
provision on various categories of ESRD facilities. Because we have no 
way to project how many patients with AKI requiring dialysis will 
choose to have dialysis treatments at an ESRD facility, we are unable 
to provide a table at this time.
b. Effects on Other Providers
    Under section 1834(r) of the Act, as added by section 808(b) of 
TPEA, we are proposing to update the payment rate for renal dialysis 
services furnished by ESRD facilities to beneficiaries with AKI. The 
only two Medicare providers authorized to provide these outpatient 
renal dialysis services are hospital outpatient departments and ESRD 
facilities. The decision about where the renal dialysis services are 
furnished is made by the patient and his or her physician. Therefore, 
this proposal will have zero impact on other Medicare providers.
c. Effects on the Medicare Program
    We estimate approximately $2 million would be paid to ESRD 
facilities in CY 2018 as a result of AKI patients receiving renal 
dialysis services in the ESRD facility at the lower ESRD PPS base rate 
versus receiving those services only in the hospital outpatient 
setting.
d. Effects on Medicare Beneficiaries
    Currently, beneficiaries have a 20 percent co-insurance obligation 
when they receive AKI dialysis in the hospital outpatient setting. When 
these services are furnished in an ESRD facility, the patients would 
continue to be responsible for a 20 percent co-insurance. Because the 
AKI dialysis payment rate paid to ESRD facilities is lower than the 
outpatient prospective payment system's payment amount, we would expect 
beneficiaries to pay less co-insurance when AKI dialysis is furnished 
by ESRD facilities.
e. Alternatives Considered
    As we discussed in the CY 2017 ESRD PPS proposed rule (81 FR 
42870), we considered adjusting the AKI payment rate by including the 
ESRD PPS case-mix adjustments, and other adjustments at section 
1881(b)(14)(D) of the Act, as well as not paying separately for AKI 
specific drugs and laboratory tests. We ultimately determined that 
treatment for AKI is substantially different from treatment for ESRD 
and the case-mix adjustments applied to ESRD patients may not be 
applicable to AKI patients and as such, including those policies and 
adjustment would be inappropriate. We will monitor utilization and 
trends of items and services furnished to individuals with AKI for 
purposes of refining the payment rate in the future. This monitoring 
will assist us in developing knowledgeable, data-driven proposals.
3. ESRD QIP
a. Effects of the PY 2021 ESRD QIP on ESRD Facilities
    The ESRD QIP provisions are intended to prevent possible reductions 
in the quality of ESRD dialysis facility services provided to 
beneficiaries as a result of payment changes under the ESRD PPS. The 
methodology that we are proposing to use to determine a facility's TPS 
for the PY 2021 ESRD QIP is described in section IV.E.8 of this 
proposed rule. Any reductions in ESRD PPS payments as a result of a 
facility's performance under the PY 2021 ESRD QIP would apply to ESRD 
PPS payments made to the facility in CY 2021.
    For the PY 2021 ESRD QIP, we estimate that, of the 6,453 dialysis 
facilities (including those not receiving a TPS) enrolled in Medicare, 
approximately 40 percent or 2,551 of the facilities would receive a 
payment

[[Page 31229]]

reduction in PY 2021. The total payment reduction for all of the 2,551 
facilities expected to receive a reduction is approximately $29 million 
($29,017,218). Facilities that do not receive a TPS are not eligible 
for a payment reduction.
    Table 11 shows the overall estimated distribution of payment 
reductions resulting from the PY 2021 ESRD QIP.

 Table 11--Estimated Distribution of PY 2021 ESRD QIP Payment Reductions
------------------------------------------------------------------------
                                             Number of      Percent of
          Payment reduction (%)             facilities      facilities
------------------------------------------------------------------------
0.0.....................................           3,469            57.6
0.5.....................................           1,507            25.0
1.0.....................................             754            12.5
1.5.....................................             228             3.8
2.0.....................................              62             1.0
------------------------------------------------------------------------
Note: This table excludes 433 facilities that we estimate will not
  receive a payment reduction because they will not report enough data
  to receive a TPS.

    To estimate whether or not a facility would receive a payment 
reduction in PY 2021, we scored each facility on achievement and 
improvement on several measures we have previously finalized and for 
which there were available data from CROWNWeb and Medicare claims. 
Measures used for the simulation are shown in Table 12.

                       Table 12--Data Used To Estimate PY 2021 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
                                               Period of time used to
                                               calculate achievement
                 Measure                      thresholds, performance                Performance period
                                             standards, benchmarks, and
                                               improvement thresholds
----------------------------------------------------------------------------------------------------------------
VAT:
    Standardized Fistula Ratio..........  Jan 2014-Dec 2014..............  Jan 2015-Dec 2015.
    % Catheter..........................  Jan 2014-Dec 2014..............  Jan 2015-Dec 2015.
Kt/V Dialysis Adequacy Comprehensive....  Jan 2014-Dec 2014..............  Jan 2015-Dec 2015.
Hypercalcemia...........................  Jan 2014-Dec 2014..............  Jan 2015-Dec 2015.
STrR....................................  Jan 2014-Dec 2014..............  Jan 2014-Dec 2014.
ICH CAHPS Survey........................  Jan 2015-Dec 2015..............  Jan 2015-Dec 2015.
SRR.....................................  Jan 2014-Dec 2014..............  Jan 2015-Dec 2015.
NHSN BSI................................  Jan 2014-Dec 2014..............  Jan 2015-Dec 2015.
SHR.....................................  Jan 2014-Dec 2014..............  Jan 2015-Dec 2015.
----------------------------------------------------------------------------------------------------------------

    For all measures except STrR and SHR, clinical measure topic areas 
with less than 11 cases for a facility were not included in that 
facility's TPS. For SHR and STrR, facilities were required to have at 
least 5 and 10 patient-years at risk, respectively, in order to be 
included in the facility's TPS. Each facility's TPS was compared to an 
estimated minimum TPS and an estimated payment reduction table that 
were consistent with the proposals outlined in section IV.E.8 of this 
proposed rule. Facility reporting measure scores were estimated using 
available data from CY 2014 and 2015. Facilities were required to have 
a score on at least one clinical and one reporting measure to receive a 
TPS.
    To estimate the total payment reductions in PY 2021 for each 
facility resulting from this proposed rule, we multiplied the total 
Medicare payments to the facility during the 1-year period between 
January 2015 and December 2015 by the facility's estimated payment 
reduction percentage expected under the ESRD QIP, yielding a total 
payment reduction amount for each facility: Total ESRD payment in 
January 2015 through December 2015 times the estimated payment 
reduction percentage.
    Table 13 shows the estimated impact of the finalized ESRD QIP 
payment reductions to all ESRD facilities for PY 2021. The table 
details the distribution of ESRD facilities by facility size (both 
among facilities considered to be small entities and by number of 
treatments per facility), geography (both urban/rural and by region), 
and by facility type (hospital based/freestanding facilities). Given 
that the time periods used for these calculations will differ from 
those we propose to use for the PY 2021 ESRD QIP, the actual impact of 
the PY 2021 ESRD QIP may vary significantly from the values provided 
here.
BILLING CODE 4120-01-P

[[Page 31230]]

[GRAPHIC] [TIFF OMITTED] TP05JY17.008


[[Page 31231]]


[GRAPHIC] [TIFF OMITTED] TP05JY17.009

BILLING CODE 4120-01-C
b. Effects on Other Providers
    The ESRD QIP is applicable to outpatient dialysis facilities. 
Therefore, this proposal will have zero impact on other Medicare 
providers. We are aware that several of our measures do impact other 
providers. For example, with the introduction of the Standardized 
Readmission Ratio Clinical measure in PY 2017 and the Standardized 
Hospitalization Ratio Clinical Measure in PY 2020, we anticipate that 
hospitals may experience financial savings as dialysis facilities work 
to reduce the number of unplanned readmissions and hospitalizations. We 
are actively exploring various methods to assess the impact these 
measures have on hospitals and other outpatient facilities.
c. Effects on the Medicare Program
    For PY 2021, we estimate that ESRD QIP will contribute 
approximately $29 million ($29,017,218) in Medicare savings. For 
comparison, Table 14 shows the payment reductions achieved by the ESRD 
QIP program for PYs 2016 through 2021.

       Table 14--Payment Reductions Payment Year 2016 Through 2021
------------------------------------------------------------------------
                                        Estimated payment reductions
           Payment year                          (citation)
------------------------------------------------------------------------
PY 2021...........................  $29,017,218.
PY 2020...........................  $31,581,441 (81 FR 77960).
PY 2019...........................  $15,470,309 (80 FR 69074).
PY 2018...........................  $11,576,214 (79 FR 66257).
PY 2017...........................  $11,954,631 (79 FR 66255).
PY 2016...........................  $15,137,161 (78 FR 72247).
------------------------------------------------------------------------

d. Effects on Medicare Beneficiaries
    The ESRD QIP is applicable to outpatient dialysis facilities. Since 
the program's inception, there is evidence of improved performance on 
ESRD QIP measures. As we stated in the CY 2017 ESRD PPS final rule, one 
objective measure we can examine to demonstrate the improved quality of 
care over time is the improvement of performance standards (81 FR 
77873). As the ESRD QIP has refined its measure set and as facilities 
have gained experience with the measures included in the program, 
performance standards have generally continued to rise. We view this as 
evidence that facility performance (and therefore the quality of care 
provided to Medicare beneficiaries) is objectively improving. To date 
we have been unable to examine the impact of the ESRD QIP on Medicare 
beneficiaries including the financial impact of the program or the 
impact on the health outcomes of beneficiaries. However, in future 
years we are interested in examining these impacts through the addition 
of new measures to the program and through the analysis of available 
data from our existing measures.
e. Alternatives Considered
    In an effort to reduce administrative and financial burden on 
dialysis facilities, we considered the burden associated with each of 
the measures included in the ESRD QIP to determine whether any of the 
measures could feasibly be removed from the program at this time. The 
Ultrafiltration Rate Reporting measure, finalized for inclusion in the 
program beginning with PY 2020, adds a significant burden to facilities 
because of the number of data elements required to be entered for each 
patient treated by the facility. We carefully considered whether this 
measure could be removed from the program in an effort to reduce burden 
for facilities, but as we noted in the CY 2017 ESRD PPS final rule, 
this measure is extremely valuable from a clinical perspective. Studies 
suggest that higher ultrafiltration rates are associated with higher 
mortality and higher odds of an ``unstable'' dialysis session, and that 
rapid rates of fluid removal at dialysis can precipitate events such as 
intradialytic hypotension, subclinical, yet significantly decreased 
organ perfusion, and in some cases myocardial damage and heart failure 
(81 FR 77912). Therefore we continue to believe that, despite the high 
burden associated with this measure, it is clinically valuable and 
important to continue including this measure in the ESRD QIP's measure 
set and that the clinical benefits outweigh the burden associated with 
the measure.

C. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars_a004_a-4), in Table 15 below, we have 
prepared an accounting statement showing the classification of the 
transfers and costs associated with the various provisions of this 
proposed rule.

[[Page 31232]]



  Table 15--Accounting Statement: Classification of Estimated Transfers
                            and Costs/Savings
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
                            ESRD PPS and AKI
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $80 million.
From Whom to Whom......................  Federal government to ESRD
                                          providers.
Increased Beneficiary Co-insurance       $20 million.
 Payments.
From Whom to Whom......................  Beneficiaries to ESRD
                                          providers.
------------------------------------------------------------------------
                          ESRD QIP for PY 2021
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $-29 million.
From Whom to Whom......................  Federal government to ESRD
                                          providers (payment
                                          reductions).
------------------------------------------------------------------------
                Category                              Costs
------------------------------------------------------------------------
Annualized Monetized ESRD Provider       $0.
 Costs.
------------------------------------------------------------------------

    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

X. Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354) 
(RFA) requires agencies to analyze options for regulatory relief of 
small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Approximately 13 percent of ESRD dialysis 
facilities are considered small entities according to the Small 
Business Administration's (SBA) size standards, which classifies small 
businesses as those dialysis facilities having total revenues of less 
than $38.5 million in any 1 year. Individuals and States are not 
included in the definitions of a small entity. For more information on 
SBA's size standards, see the Small Business Administration's Web site 
at http://www.sba.gov/content/small-business-size-standards (Kidney 
Dialysis Centers are listed as 621492 with a size standard of $38.5 
million).
    We do not believe ESRD facilities are operated by small government 
entities such as counties or towns with populations of 50,000 or less, 
and therefore, they are not enumerated or included in this estimated 
RFA analysis. Individuals and States are not included in the definition 
of a small entity.
    For purposes of the RFA, we estimate that approximately 13 percent 
of ESRD facilities are small entities as that term is used in the RFA 
(which includes small businesses, nonprofit organizations, and small 
governmental jurisdictions). This amount is based on the number of ESRD 
facilities shown in the ownership category in Table 10. Using the 
definitions in this ownership category, we consider the 502 facilities 
that are independent and the 368 facilities that are shown as hospital-
based to be small entities. The ESRD facilities that are owned and 
operated by Large Dialysis Organizations (LDOs) and regional chains 
would have total revenues of more than $38.5 million in any year when 
the total revenues for all locations are combined for each business 
(individual LDO or regional chain), and are not, therefore, included as 
small entities.
    For the ESRD PPS updates proposed in this rule, a hospital-based 
ESRD facility (as defined by type of ownership, not by type of dialysis 
facility) is estimated to receive a 1.1 percent increase in payments 
for CY 2018. An independent facility (as defined by ownership type) is 
also estimated to receive a 0.8 percent increase in payments for CY 
2018.
    For AKI dialysis, we are unable to estimate whether patients will 
go to ESRD facilities, however, we have estimated there is a potential 
for $2.0 million in payment for AKI dialysis treatments that could 
potentially be furnished in ESRD facilities.
    We estimate that of the 2,551 ESRD facilities expected to receive a 
payment reduction in the PY 2021 ESRD QIP, 325 are ESRD small entity 
facilities. We present these findings in Table 11 (``Estimated 
Distribution of PY 2021 ESRD QIP Payment Reductions'') and Table 13 
(``Impact of Proposed QIP Payment Reductions to ESRD Facilities for PY 
2021'') above. We estimate that the payment reductions will average 
approximately $11,375 per facility across the 2,551 facilities 
receiving a payment reduction, and $13,885 for each small entity 
facility. Using our estimates of facility performance, we also 
estimated the impact of payment reductions on ESRD small entity 
facilities by comparing the total estimated payment reductions for 922 
small entity facilities with the aggregate ESRD payments to all small 
entity facilities. We estimate that there are a total of 922 small 
entity facilities, and that the aggregate ESRD PPS payments to these 
facilities would decrease 0.45 percent in PY 2021.
    Therefore, the Secretary has determined that this proposed rule 
would not have a significant economic impact on a substantial number of 
small entities. The economic impact assessment is based on estimated 
Medicare payments (revenues) and HHS's practice in interpreting the RFA 
is to consider effects economically ``significant'' only if greater 
than 5 percent of providers reach a threshold of 3 to 5 percent or more 
of total revenue or total costs. We solicit comment on the RFA analysis 
provided.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. Any 
such regulatory impact analysis must conform to the provisions of 
section 603 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a metropolitan statistical area and has fewer than 100 beds. We do not 
believe this proposed rule will have a significant impact on operations 
of a substantial number of small rural hospitals because most dialysis 
facilities are freestanding. While there are 132 rural hospital-based 
dialysis facilities, we do not know how many of them are based at 
hospitals with fewer than 100 beds. However, overall, the 132 rural 
hospital-based dialysis facilities will experience an estimated 0.7 
percent decrease in payments. As a result, this proposed rule is not 
estimated to have a

[[Page 31233]]

significant impact on small rural hospitals.
    Therefore, the Secretary has determined that this proposed rule 
would not have a significant impact on the operations of a substantial 
number of small rural hospitals.

XI. Unfunded Mandates Reform Act Analysis

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2017, that 
is approximately $148 million. This proposed rule does not include any 
mandates that would impose spending costs on State, local, or Tribal 
governments in the aggregate, or by the private sector, of $141 
million. Moreover, HHS interprets UMRA as applying only to unfunded 
mandates. We do not interpret Medicare payment rules as being unfunded 
mandates, but simply as conditions for the receipt of payments from the 
federal government for providing services that meet federal standards. 
This interpretation applies whether the facilities or providers are 
private, State, local, or Tribal.

XII. Federalism Analysis

    Executive Order 13132 on Federalism (August 4, 1999) establishes 
certain requirements that an agency must meet when it promulgates a 
proposed rule (and subsequent final rule) that imposes substantial 
direct requirement costs on State and local governments, preempts State 
law, or otherwise has Federalism implications. We have reviewed this 
proposed rule under the threshold criteria of Executive Order 13132, 
Federalism, and have determined that it will not have substantial 
direct effects on the rights, roles, and responsibilities of States, 
local or Tribal governments.

XIII. Reducing Regulation and Controlling Regulatory Costs

    Executive Order 13771, entitled Reducing Regulation and Controlling 
Regulatory Costs (82 FR 9339), was issued on January 30, 2017. This 
proposed rule is not expected to be subject to the requirements of E.O. 
13771 because, if finalized as proposed, it is expected to result in no 
more than de minimis costs.

XIV. Congressional Review Act

    This proposed rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress 
and the Comptroller General for review.

XV. Files Available to the Public via the Internet

    The Addenda for the annual ESRD PPS proposed and final rulemakings 
will no longer appear in the Federal Register. Instead, the Addenda 
will be available only through the Internet and is posted on the CMS 
Web site at http://www.cms.gov/ESRDPayment/PAY/list.asp In addition to 
the Addenda, limited data set (LDS) files are available for purchase at 
http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/EndStageRenalDiseaseSystemFile.html. Readers who 
experience any problems accessing the Addenda or LDS files, should 
contact [email protected].

    Dated: June 27, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.


    Approved: June 27, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-13908 Filed 6-29-17; 4:15 pm]
BILLING CODE 4120-01-P