Medicare, the U.S. government healthcare program for elderly and disabled people, will leave its overall reimbursement rates for kidney dialysis treatment unchanged for next year, and said it will take three to four years to implement a mandated adjustment to its base rates.
The 2014 payment rates are much less onerous than the 9.4 percent cut proposed by the agency in July.
The rates, announced on Friday by The Centers for Medicare and Medicaid Services (CMS), the federal agency that sets reimbursement rates for Medicare, come on top of a 2 percent reduction that kicked in earlier this year under automatic cuts to federal spending.
CMS said the final rule also finalized a 50 percent increase to home dialysis training payment adjustments. The agency said the rates reduce Medicare payments by 1.05 percent - the combined effects of an increase in the home health payment update percentage of 2.3 percent, offset by a decrease of 2.7 percent - the result of adjustments required by the Affordable Care Act - and a 0.6 percent decrease due to a refinement of the payment system.
Fresenius Medical Care AG, or FMC, and DaVita Healthcare Partners Inc are the largest dialysis providers in the United States.
FMC operates more than a third of the dialysis treatment centers in the United States and Medicare contracts account for about 30 percent of its revenues.
The industry had lobbied for more moderate cuts, arguing that lowering payments by 9.4 percent would force smaller operators out of business, hitting patient care mainly in rural areas.
The proposed reimbursement cuts for dialysis providers mainly reflect a drop in the use of the expensive hormone erythropoietin, or EPO, to treat anemia, a common side effect associated with dialysis.
Lower use of EPO came as a result of medical studies showing the dangers of overuse and after a new reimbursement regime was introduced in the U.S. that encouraged prudent use of EPO and more use of cheaper drugs that can partially substitute EPO.
FMC, indirectly controlled by a German charitable trust, derives about two-thirds of its total revenues from North America.
FMC launched a cost-cutting program at the beginning of the year in response to U.S. austerity measures, but it has not provided details.
(Reporting by Deena Beasley, additional reporting by Ludwig Burger; editing by G Crosse)