FOR IMMEDIATE RELEASE, Wednesday, February 20, 2008
CONTACT: Yoni Cohen, (202) 225-3202

WASHINGTON, D.C. – Representative Pete Stark (D-CA), Chairman of the Ways and Means Health Subcommittee, today reacted to the new CMS Report to Congress on a bundled payment system for treatment of End Stage Renal Disease (ESRD).

“Today’s report makes it clear that HHS has done the analytical work and is ready to move to a Medicare bundled payment system for End Stage Renal Disease. CMS Acting Administrator Kerry Weems further confirmed that CMS is ready to proceed with a bundled system, without a demonstration or other delay, at a Ways and Means hearing last week.

“I have been very concerned that Medicare’s overpayments for the anti-anemia drug Epogen create a perverse incentive for dialysis centers to raise doses, which the FDA warns can put dialysis patients at increased risk of heart attack, heart failure, stroke and death. A well-designed bundled payment system will remove the incentive to over-utilize drugs, and encourage more appropriate provision of care.

“It is critically important that a fully bundled payment system accommodates the individual clinical needs of the patient, and the variance in treatment that may be needed to ensure proper care. It cannot be a ‘one-size-fits-all’ system. It must also include rigorous quality reporting and monitoring. The CMS report makes it clear that this type of flexibility and quality control is attainable within a bundled system.

“None of this will happen tomorrow. It will take a couple of years to design and implement these changes, but I bet the system could be up and running by 2011. I wouldn’t be surprised to hear calls for delay and other scare tactics generated by those in the industry who make money off of the status quo. Regardless, I will work to enact legislation this year that gets this much-needed payment reform underway.”

Background: Section 623 of the Medicare Modernization Act of 2003 required a CMS report to Congress on the design and implementation of a bundled prospective payment system for services furnished by End Stage Renal Disease (ESRD) facilities. The Medicare Payment Advisory Commission and the Government Accountability Office have both recommended a Medicare bundled payment system for ESRD.

The House-Passed CHAMP Act (H.R. 3162) would move Medicare to an ESRD bundled system. CHAMP allowed for variation in patient need via case mix adjustment, an outlier payment system, and a rigorous system of quality reporting and investment. CHAMP also provided protections to ease the transition to a bundled payment system for certain small providers.

A proposal to move to an ESRD bundled system by 2011 is also included in the President’s Fiscal Year 2009 budget submission.