Baucus unveils legislation with significant ESRD reform

WASHINGTON—On May 6, Sen. Max Baucus, D-Mont., unveiled Medicare legislation to fix the physician fee cut that also includes a number of provisions that would directly affect dialysis care, such as a bundled payment system.

Baucus’ legislation, however,  faces a veto threat from President Bush and competition from other senators.

Congress is scrambling to pass legislation that would avert the 10.6 percent cut in physician Medicare fees that is set to go into effect July 1. Baucus, who is the Senate Finance Committee chairman, has called for a 1.1 percent rate increase for 2009 with his legislation.

The showdown, however, will come down to how Baucus’ bill intends to pay for the physician rate increase. His bill—titled the Medicare Improvements for Patients and Provider Act of 2008—calls on private insurance to cover the cost by cutting money to Medicare Advantage plans, which gives Medicare beneficiaries the option to receive their benefits through private plans.

As a result of cutting the private insurance plans, President Bush has already threatened to veto Baucus’ bill, and it will face opposition from Senate Republicans, despite support from Sens. Olympia Snowe, R-Maine, and Gordon Smith, R-Ore. Ranking Finance Committee member Chuck Grassley, R-Iowa, is expected to unveil his own Medicare plan later this week

Dialysis Bundled Payment

Aside from the fight on how to fix physician payment, dialysis care is at the center of current Medicare reform legislation. Most pressing to dialysis providers, perhaps, is a permanent annual update in payments and a bundled payment system that would lump current separately billable drugs into the composite rate, which is paid to providers to cover the cost of dialysis care.

Baucus’ bill calls for a 1 percent increase in the composite rate for 2009 and 2010—a bundled payment system for ESRD services would begin Jan. 1, 2011. The bundled system would start with a four-year phase-in and be fully implanted by Jan. 1, 2014.

Under the bill, the dialysis services in the bundle would include the following:

• Items and services already in the composite rate
• Erythropoiesis-stimulating agents (ESAs) and any oral form of such agents
• Other drugs or biologicals given to ESRD patients that used to be billed separately
• Diagnostic laboratory tests

Vaccines aren’t included in the proposed bundle.