Payment Matters: CMS Implements Value-Based Payment System for Dialysis Facilities

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The Centers for Medicare & Medicaid Services (CMS) issued a final rule [PDF] on December 29, 2010 that establishes performance standards for dialysis facilities and providers (e.g., hospital-based dialysis programs) (collectively, "facilities" for this article), and provides payment adjustments to individual End-Stage Renal Disease (ESRD) facilities based on how well they meet these standards. The ESRD Quality Incentive Program (QIP) links CMS payments directly to facility performance on certain quality measures. The ESRD QIP was mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) as a companion to the ESRD Prospective Payment System (PPS), which became effective on January 1, 2011. The final rule issued on December 29, 2010 establishes the ESRD QIP performance standards, sets out the scoring methodology CMS will use to rate providers’ quality of dialysis care, and establishes a sliding scale for payment adjustments based on the facility’s performance.

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