2006 proposed fee schedule - American Society of Clinical Oncology

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wage index values and then simulated payments for CY 2006 to
ensure that estimated aggregate payments to ESRD facilities
would remain budget neutral. This proposed adjustment factor
would be 1.023024.
Each ESRD wage index value has been adjusted by this
factor to establish the budget neutral wage index values
that we propose to use to adjust the labor portion of the
composite payment rate beginning January 1, 2006. (See
Tables 27 and 28.) By using these adjusted ESRD wage index
values, the estimated aggregate payments to ESRD facilities
will meet the estimated target expenditure amount.
This calculation becomes more complex because of our
proposed transition policy. Under that policy an ESRD
facility that would receive a higher composite rate payment
using the new geographic adjustment would receive 100
percent of that rate in the first year of transition.
However, if an ESRD facility’s composite rate using the new
geographic adjustment is less than its current rate, then
that facility will receive 50 percent of the composite rate
payment it would have received using the current wage index
and 50 percent of the composite rate using the revised wage
index. To account for the differential payments, we compare
the target amount of expenditures for all ESRD facilities in
an iterative fashion until the time that the ESRD wage index
adjustment factor would result in the target amount of