End-Stage Renal Disease Risk Model Updates for 2023

by  Aimee L. Wilcox, CPMA, CCS-P, CST, MA, MT

On June 21, 2022, Centers for Medicare and Medicaid Services (CMS) issued a proposed rule change to update payment rates and other policies affecting the Prospective Payment System (PPS) for End-Stage Renal Disease (ESRD) services beginning in 2023. CMS plans to make changes to the following: 

Efforts are currently being made to support innovation for new drugs that truly are new and innovative, and not the same medications that were simply repackaged or a variation of drugs currently available to treat ESRD patients; and ensuring ESRD patients have access to technologies that have the potential to improve health outcomes and quality of life.

As part of this effort, CMS has proposed a change to the definition of an “oral-only drug,” which will be effective as of January 1, 2025. According to § 413.234(a), the new definition will be changed to read: 

“A drug or biological product with no injectable equivalent or other form of administration other than an oral form.”

Where pharmaceutical companies have previously made simple changes to the current oral drugs to qualify for additional payments or programs, this change is intended to reduce prescription costs while at the same time, driving research for new oral-only drugs that may increase survival rates and improve quality of life. Other changes to the ESRD Risk Model include: 

  1. Use of the 2019 data in place of the scheduled 2020 data. The 2020 data was placed on pause due to, “Circumstances caused by the Public Health Emergency (PHE) for the coronavirus disease 2019 (COVID-19) pandemic have significantly affected the validity and reliability of the measures and resulting performance scores.” Currently, while 2021 is the performance period being used, 2020 would have been the baseline period for the 2023 ESRD QIP. 
  2. Inclusion of a potential add-on payment adjustment for any new, renal dialysis drugs and biological products (413.234(a). This is the underlying reason for changing the definition of "an oral-only drug."
  3. Consideration of health equity as it pertains to issues that may be incorporated into the ESRD Risk Model, such as focusing on the pediatric dialysis payments and how social determinants of health (SDOH) may impact the care of these beneficiaries.
  4. Clarification of the ESRD Prospective Payment System (PPS) functional category descriptions.
  5. Changing the ESRD PPS methodology for calculating the outlier threshold specific to adult ESRD patients.
  6. Rebasing and also revising, the ESRD Bundled Market Basket into the 2020 base year, with an update to the labor-related share.
  7. Application of a permanent 5% cap on decreases in the ESRD PPS wage index, as well as providing an increase in the wage index floor.

For additional information related to the specific changes and how each may individually impact the ESRD program, please refer to the full CMS Newsroom Fact Sheet available HERE.


Disclaimer: The above article is the opinion of the author(s) and should not be interpreted by providers/payers as official guidance. For any questions about the content of this article, please contact the author(s).

About the Author: Aimee L. Wilcox is a medical coding, billing, and auditing consultant, author, and educator with more than 30 years of clinical and administrative experience in healthcare, coding, billing, and auditing. Medicine, including coding and billing, is a constantly changing field full of challenges and learning and she loves both. Aimee believes there are talented medical professionals who, with proper training and excellent information, can continue to practice the art of healing while feeling secure in their billing and reimbursement for such care.

End-Stage Renal Disease Risk Model Updates for 2023. (2022, September 13). Find-A-Code Articles. Retrieved from https://www.findacode.com/articles/endstage-renal-disease-esrd-risk-model-updates-for-2023-37180.html

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