ESRD PPS Outlier Services

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 variations in the amount of erythropoiesis stimulating agents necessary for anemia management. The outlier payment policy is designed to protect an ESRD facility from significant financial losses due to unusually high costs. Any outlier payment due is added to the per treatment, patient and facility-level adjusted ESRD PPS payment amount.

ESRD facilities that are treating patients with unusually high resource requirements as measured through their utilization of identified services beyond a specified threshold is entitled to outlier payments, that is, additional payment beyond the otherwise applicable case-mix adjusted prospective payment amount.

ESRD outlier services are the following items and services that 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 used to administer ESRD-related drugs that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B; and
4. renal dialysis service drugs that were or would have been, prior to January 1, 2011, covered under Medicare Part D, notwithstanding the delayed implementation of ESRD-related oral-only drugs effective January 1, 2014.

Services not included in the ESRD PPS that remain separately payable, including blood and blood processing, preventive vaccines, telehealth services, and items and services reported on claims with the AY modifier are not considered outlier services.

The outlier payment computations rely on predicted values for separately billable services. Those predicted values rely on the separately billable case-mix adjusters for their calculation because outlier payments are only made for separately billable services included in the payment bundle.