[Federal Register Volume 59, Number 4 (Thursday, January 6, 1994)]
[Proposed Rules]
[Pages 714-717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-65]
[[Page Unknown]]
[Federal Register: January 6, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Part 406
[BPD-738-P]
RIN: 0938-AG19
Medicare Program; Revisions to the Definition of End-Stage Renal
Disease and Resumption of Entitlement
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Proposed rule.
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SUMMARY: We propose to revise the definition of end-stage renal disease
to reflect that more than one dialysis treatment is required for there
to be a ``regular course of dialysis'' and to require that generally
accepted diagnostic criteria and laboratory findings must form the
basis of the physician's certification of end-stage renal disease. The
purpose of this proposed revision is to eliminate any misinterpretation
of the definition of end-stage renal disease. We propose to do so by
clarifying that only those individuals whose kidneys have failed and
for whom the disease is expected to be a lifelong affliction are
eligible for Medicare end-stage renal disease benefits.
We also propose to amend the regulations to specify that Medicare
entitlement is resumed for individuals who again begin a regular course
of renal dialysis treatments after a previous course is terminated
(with or without a transplant), and to add the same considerations for
those who have a second transplant. Therefore, the purpose of these
proposed revisions is to conform the regulations more closely to the
intent of sections 226A (c)(2) and (c)(3) of the Social Security Act
regarding resumption of entitlement to Medicare.
DATES: Comments will be considered if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on March
7, 1994.
ADDRESSES: Mail comments to the following address:
Health Care Financing Administration, Department of Health and Human
Services, Attention: BPD-738-P, P.O. Box 26676, Baltimore, MD 21207.
If you prefer, you may deliver your written comments to one of the
following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC. 20201, or
Room 132, East High Rise Building, 6325 Security Boulevard, Baltimore,
Maryland 21207.
Due to staffing and resource limitations, we cannot accept
facsimile (FAX) copies of comments. In commenting, please refer to file
code BPD-738-P. Comments received timely will be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, in room 309-G of the
Department's offices at 200 Independence Avenue, SW., Washington, DC,
on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone:
(202) 690-7890).
FOR FURTHER INFORMATION CONTACT: Denis Garrison, (410) 966-5643.
SUPPLEMENTARY INFORMATION:
I. Background
End-stage renal disease (ESRD) is a disease which occurs from the
destruction of normal kidney tissues over a long period of time. The
individual often does not experience any symptoms until the kidney has
lost more than half of its function. The loss of kidney function in
ESRD is usually irreversible and permanent.
A. Related Law and Regulations for Medicare Coverage of ESRD and the
Definition of ESRD
Section 226A(a)(2) of the Social Security Act (the Act) provides
for Medicare coverage for certain individuals who are medically
determined to have end-stage renal disease. Once an individual is
medically determined to have ESRD, section 226A(b) of the Act specifies
that one of two conditions must be met before entitlement begins. That
is, a regular course of dialysis must begin or a kidney transplant must
be performed. Section 226A(b)(1)(A) of the Act provides that
entitlement begins with the third month after the month in which a
regular course of renal dialysis is initiated.
The statute does not give a definition of ESRD; however, the
Medicare regulations in title 42 of the Code of Federal Regulations do
define the term. The definition of ESRD is given in two sections of the
regulations. For purposes of Medicare eligibility and entitlement, ESRD
is currently defined in Sec. 406.13(b) as that stage of kidney
impairment that appears irreversible and permanent and requires a
regular course of dialysis or kidney transplantation to maintain life.
A parallel definition of ESRD also appears in Sec. 405.2102 which
defines ESRD as it relates to the conditions for coverage that must be
met by suppliers furnishing ESRD care to Medicare beneficiaries.
B. Potential Misinterpretation of the Current ESRD Definition
In calendar year 1989, 21,200 individuals were certified by their
physicians as having an irreversible, permanent kidney impairment and
obtained Medicare entitlement solely because of this certification.
That is, they could not qualify for Medicare on any other basis, such
as age or disability status. In calendar year 1990, the number of
similar new beneficiaries was 22,800. Soon after obtaining Medicare
eligibility, nearly 1 percent of these individuals terminated their
course of dialysis with a return of kidney function. We are concerned
that the diagnosis and certification of ESRD for these individuals was
incorrect. The regulations in Secs. 405.2102 and 406.13(b) define ESRD
as a condition that appears irreversible and permanent; Medicare
entitlement on the basis of the patient's need for dialysis is usually
terminated only if the individual dies or receives a kidney transplant.
Any severe kidney condition (particularly acute kidney failure) may
appear to be irreversible and permanent if the diagnosis is based on
only limited tests and criteria. We believe that certifications for the
patients who terminated dialysis may have arisen from a
misunderstanding of the extent of the kidney failure which constitutes
ESRD for which the law grants Medicare entitlement. We believe that
specifying that the diagnosis must be based on generally accepted
diagnostic criteria and laboratory findings may result in not enrolling
in Medicare those patients whose renal disease is not ``end-stage''.
However, we do not wish to eliminate the word, ``appears,'' from the
regulation since the law recognizes that dialysis treatments may end in
some ESRD cases.
C. Related Laws and Regulations for Termination of Medicare Entitlement
and Resumption of Entitlement to ESRD Benefits
Section 226A(b)(2) of the Act specifies that Medicare entitlement
for individuals on the basis of ESRD terminates with the end of the
36th month after the month of transplant or with the end of the 12th
month after the last month of renal dialysis treatments. Section
226A(c)(2) and (c)(3) of the Act specifically provides for beginning a
new period of entitlement when a kidney transplant fails or a course of
renal dialysis begins again, whether during or after the 36 or 12
months, as applicable. Current regulations in Sec. 406.13(f) address
these situations by specifying that entitlement does not end as
scheduled if the treatment begins again during the applicable periods.
The regulations in Sec. 406.13(g) deal with resumption of entitlement
after termination of entitlement has occurred and require the
submission of a new application.
In addition, the provisions in section 226A(c)(2) and (c)(3) of the
Act ensure that resumption of entitlement to Medicare will begin
without the 3-month waiting period that usually applies in cases when
Medicare entitlement is sought on the basis of dialysis (except for
certain cases involving self-care training).
II. Provisions of the Proposed Regulations
A. Proposed Revision to ESRD Definition
We analyzed the payment records of patients who terminated dialysis
shortly after becoming eligible for Medicare based on a diagnosis of
ESRD. Our records indicate an annual mean cost per patient of
approximately $8,000, which is significantly below the average annual
cost of $40,000 for a patient who remains on dialysis. Because these
individuals were able to discontinue dialysis shortly after beginning a
course of treatment and incurred only limited medical costs, we believe
that many of these patients may have been incorrectly certified as
having ESRD as a result of physicians misinterpreting the ESRD
definition as it appears in Sec. 406.13(b). We also find the current
ESRD definition (Sec. 406.13(b)) inadequate for Medicare Part A
(hospital insurance) eligibility and entitlement purposes because
entitlement to Medicare based on ESRD depends on the existence of ESRD,
not on the sole fact that dialysis treatments are being given.
Therefore, in order to eliminate any possible misinterpretation, we
propose to revise the definition of ESRD in Sec. 406.13(b). After the
phrase ``* * * a regular course of dialysis'', we propose to add the
word ``treatments''. This revision would clarify that more than one
dialysis treatment is required for there to be a regular course of
dialysis.
We also propose to add to the end of the definition of ESRD, the
phrase ``as evidenced by generally accepted diagnostic criteria and
laboratory findings''. We believe that requiring generally accepted
diagnostic criteria and laboratory findings as the basis for diagnosis
of ESRD serves as a reminder to physicians that they must have medical
evidence to substantiate their certification of ESRD. We do not believe
this addition to the definition would have a substantial effect on most
physicians since they already depend on such medical information.
We do not believe it is necessary to add the word ``treatments'' or
the phrase ``as evidenced by generally accepted diagnostic criteria and
laboratory findings'' to the definition of ESRD in Sec. 405.2102, which
defines ESRD as it relates to the conditions for coverage of suppliers
of ESRD services. This is because that section does not establish who
is eligible or entitled to Medicare ESRD benefits, which is the purpose
of this proposed rule.
B. Proposed Revisions to the Termination of Entitlement and to the
Resumption of Entitlement
Section 226A(c)(2) and (c)(3) of the Act specifies the conditions
for beginning a new period of entitlement when a kidney transplant
fails or a regular course of dialysis begins again. However, this
section refers to those instances when entitlement has not yet ended
and specifies that Part A entitlement ``begins'' (although it may not
yet have ended) with the month when regular dialysis treatments begin
again. The importance of ``beginning'' Part A entitlement is that it
offers the opportunity for those who do not have Part B (Supplementary
Medical Insurance) entitlement to enroll in Part B without waiting for
the annual general enrollment period (January through March).
Supplementary Medical Insurance is a voluntary program available to
most individuals age 65 or over and to disabled individuals who are
under age 65 and entitled to Medicare Part A. In addition, since Part A
entitlement has not ended, we believe that the intention is to re-
enroll the individual in Part A with that month, without a new
application.
Therefore, we propose to treat the situation where dialysis or
transplant recurs during the 12-month or 36-month periods as a
resumption of entitlement. Accordingly, we delete from Sec. 406.13(f)
the reference to continuation of entitlement, and instead revise
Sec. 406.13(g), which specifies the conditions for resumption of
entitlement, to include this situation where coverage resumes despite a
previous course of treatment.
We propose to revise Sec. 406.13(g) to state that entitlement would
be resumed under any one of three conditions. Using the language we
propose to remove from paragraph (f), a new period of entitlement would
begin if an individual initiates a regular course of renal dialysis
during the 12-month period after the previous course of dialysis ended,
and he or she would be entitled to resume Part A benefits and eligible
to enroll in Part B benefits effective with the month the regular
course of dialysis is resumed.
The statute does not mention the beginning of a new period of
entitlement when a second kidney transplant occurs during the 36-month
period following the initial transplant, since there is never a waiting
period for entitlement based on a transplant. However, we believe that,
by analogy, the provisions for beginning a new period of entitlement in
cases where a regular course of dialysis begins or recurs during the 36
months indicate that we should construe the law as requiring resumption
of entitlement and a new period of Part B enrollment in cases of re-
transplantation that occur without the beneficiary's resuming (or
initiating) dialysis treatments. We, therefore, propose to revise
Sec. 406.13(g) to state that entitlement would begin when an individual
initiates a new, regular course of renal dialysis, or has a kidney
transplant, during the 36-month period after an earlier kidney
transplant, and that he or she would be entitled to resume Part A
benefits and eligible to enroll in Part B benefits effective with the
month the regular course of dialysis begins or with the month the
subsequent kidney transplant occurs.
We also propose to make technical revisions to Sec. 406.13(g) to
clarify the other condition for resumption of entitlement. That is,
entitlement is resumed if an individual initiates a regular course of
renal dialysis more than 12 months after the previous regular course of
dialysis ended or more than 36 months after the month of a kidney
transplant, and the individual is eligible to enroll in Part A and Part
B benefits effective with the month in which the regular course of
dialysis treatment is resumed. If he or she is otherwise entitled to
Part A benefits under the conditions specified in Sec. 406.13(c), and
files an application, entitlement would begin with the month in which
dialysis treatments are initiated or resumed, without a waiting period,
subject to the basic limitations of entitlement in Sec. 406.13(e)(1).
C. Proposed Revisions' Effect on Medicare Part B
The revised definition of ESRD in Sec. 406.13(b) and revisions to
resumption of entitlement in Sec. 406.13(g) would also be used as the
basis for eligibility for Medicare Part B. This is because, in
accordance with Sec. 407.10(a)(1), an individual who qualifies for
Medicare Part A on the basis of ESRD is also eligible for Medicare Part
B.
D. Manuals Affected
When we publish these proposed requirements as a final rule, the
Social Security Program Operations Manual System, Part 6, ``HI''; the
Medicare Part A Intermediary Manual, Part 3, ``Claims Processing''; the
Medicare Part B Carriers Manual, Part 3, ``Claims Processing''; and the
Medicare Renal Dialysis Facilities Manual, would be revised to reflect
the changes made to the definition of ESRD and the resumption of
entitlement.
III. Collection of Information Requirements
This rule contains no information collection requirements.
Consequently, this rule need not be reviewed by the Office of
Management and Budget under the authority of the Paperwork Reduction
Act of 1980 (44 U.S.C. 3501 et seq.).
IV. Response to Comments
Because of the large number of items of correspondence we normally
receive on a proposed rule, we are not able to acknowledge or respond
to them individually. However, we will consider all comments that we
receive by the date and time specified in the ``Dates'' section of this
preamble, and if we proceed with the final rule, we will respond to the
comments in the preamble to the final rule.
V. Regulatory Impact Statement
In calendar year 1989, over 21,200 individuals were certified by
their physicians as having an irreversible, permanent kidney
impairment, and obtained Medicare entitlement solely on the basis of
this certification. In 1990, that number was 22,800. As reported in the
National Institute of Diabetes and Digestive and Kidney Disease's U.S.
Renal Data System Annual Data Report, approximately 1 percent of
individuals receiving dialysis treatments during these years were able
to terminate their course of dialysis treatment because kidney function
returned. This figure is consistent with data that we maintain on the
number of individuals whose Medicare eligibility terminated.
We analyzed the Medicare payment records of beneficiaries whose
sole reason for Medicare entitlement was ESRD, and who discontinued
dialysis (and thus, Medicare eligibility) within 2 years after
enrollment. Our records indicate that 70 percent of the individuals
incurred annual costs of less than $10,000, with an annual mean cost
per beneficiary to the Medicare program of approximately $8,000. This
is significantly below the average annual cost to the Medicare program
of $40,000 for a patient receiving regular dialysis treatments. Because
these beneficiaries were able to discontinue dialysis after incurring
only limited medical costs, we believe that most of these patients may
have been incorrectly certified as having ESRD, which requires long-
term maintenance dialysis or a kidney transplant. Although the number
of individuals who may have been incorrectly certified was less than
250 per year, they accounted for nearly $2 million in annual Medicare
program expenditures. These expenditures were unintended because the
disease did not reach ``end-stage'' in these individuals. As a result
of this proposed revision, we estimate the projected savings to the
Medicare program for the next 5 calendar years to be as follows:
[Millions of Dollars]
------------------------------------------------------------------------
1994 1995 1996 1997 1998
------------------------------------------------------------------------
2.8.......... 3.1 3.4 3.8 4.2
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With regard to the portion of this proposed rule concerning
resumption or continuation of entitlement after a terminating event, we
have no reason to believe, based on 13 years' experience, that more
than one or two people would have had their entitlement resumed earlier
under the proposed revised regulation relating to that issue.
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612) unless the Secretary certifies that a proposed rule would
not have a significant economic impact on a substantial number of small
entities. For purposes of the RFA, we consider all physicians and
dialysis facilities to be small entities.
Also, section 1102(b) of the Act requires the Secretary to prepare
a regulatory impact analysis if a proposed rule may have a significant
impact on the operations of a substantial number of small rural
hospitals. This analysis must conform to the provisions of section 603
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area and has fewer than 50 beds.
No additional time burden or monetary requirements would be placed
on physicians or dialysis facilities in order to comply with the
provisions of this proposed rule since physicians should already have
appropriate laboratory findings and generally accepted diagnostic
criteria to confirm a diagnosis of ESRD.
In addition, changes in the resumption of entitlement regulations
would have no effect on physicians or on dialysis facilities.
For the reasons stated above, we have determined, and the Secretary
certifies, that this proposed rule would not result in a significant
economic impact on a substantial number of small entities or on the
operations of a substantial number of small rural hospitals. We are,
therefore, not preparing analyses for either the RFA or section 1102(b)
of the Act.
List of Subjects in 42 CFR Part 406
Health facilities, Kidney diseases, Medicare.
42 CFR chapter IV, part 406 is amended as follows:
PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT
1. The authority citation for part 406 continues to read as
follows:
Authority: Secs. 202(t), 202(u), 226, 226A, 1102, 1818, and 1871
of the Social Security Act (42 U.S.C. 402(t), 402(u), 426, 426-1,
1302, 1395i-2, and 1395hh), and 3103 of Public Law 89-97 (42 U.S.C.
426a) unless otherwise noted.
2. In Sec. 406.13, the heading and introductory language in
paragraph (b) is republished, the definition of ``End-stage renal
disease'' in paragraph (b) is revised, and paragraphs (f) and (g) are
revised to read as follows:
Sec. 406.13 Individual who has end-stage renal disease.
* * * * *
(b) Definitions. As used in this section:
End-stage renal disease (ESRD) means that stage of kidney
impairment that appears irreversible and permanent and requires a
regular course of dialysis treatments or kidney transplantation to
maintain life, as evidenced by generally accepted diagnostic criteria
and laboratory findings.
* * * * *
(f) End of entitlement. Entitlement ends with--
(1) The end of the 12th month after the month in which a regular
course of dialysis ends; or
(2) The end of the 36th month after the month in which the
individual has received a kidney transplant.
(g) Resumption of entitlement. Entitlement is resumed under the
following conditions:
(1) An individual who initiates a regular course of renal dialysis
during the 12-month period after the previous course of dialysis ended
is entitled to Part A benefits and eligible to enroll in Part B with
the month the regular course of dialysis is resumed.
(2) An individual who initiates a regular course of renal dialysis,
or has a kidney transplant, during the 36-month period after an earlier
kidney transplant is entitled to Part A benefits and eligible to enroll
in Part B with the month the regular course of dialysis begins or with
the month the subsequent kidney transplant occurs.
(3) An individual who initiates a regular course of renal dialysis
more than 12 months after the previous course of regular dialysis ended
or more than 36 months after the month of a kidney transplant is
eligible to enroll in Part A and Part B with the month in which the
regular course of dialysis is resumed. If he or she is otherwise
entitled under the conditions specified in paragraph (c) of this
section, including the filing of an application, entitlement begins
with the month in which dialysis is initiated or resumed, without a
waiting period, subject to the limitations of paragraph (e)(1) of this
section.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: June 4, 1993.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Approved: October 4, 1993.
Donna E. Shalala,
Secretary.
[FR Doc. 94-65 Filed 1-5-94; 8:45 am]
BILLING CODE 4120-01-P
