End-stage renal disease (ESRD) prospective payment system (PPS)

Section 153(b) of the Medicare Improvements for Patients and Providers Act (MIPPA) requires the implementation of a bundled ESRD PPS effective for Medicare outpatient maintenance dialysis services furnished on or after January 1, 2011. This payment system combines payments for the composite rate and separately billable renal dialysis items and services into a single base rate. This rate is updated annually by CMS and published in the Federal Register for a January 1 effective date. In addition, adjustments are made to the base rate for the following:

• Patient-level adjustments for case-mix;
• Facility-level adjustments;
• A training add-on (if applicable);
• An outlier adjustment and; 
• A budget neutrality adjustment during the transition period through 2013.

ESRD facilities that did not make an election to be paid 100 percent under the ESRD PPS on or before November 1, 2010, receive a blend of payments during a four year transition period. This blended payment is composed of the prior basic case-mix adjusted composite rate portion and the ESRD PPS.

For more information about ESRD services for outpatient maintenance dialysis, visit the CMS websites: ESRD payment and End Stage Renal Disease center.