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CMS-1403-FC 75 percent of all ESRD drug expenditures. Moreover, this effect could distort our estimate of per patient utilization growth in CY 2009. Since CY 2007, we have analyzed 2 years of historical claims data for estimating growth in utilization (CY 2005 and CY 2006). During that period, utilization based on an analysis of independent ESRD facility drug data has indicated no growth. We believe the use of CY 2005 and CY 2006 drug data is the best data available for use in projecting utilization in CY 2009. Therefore, for CY 2009, we will continue to use our estimate of growth in utilization based on CY 2005 and CY 2006 data (72 FR 66282). That is, we are finalizing an estimation of no growth in utilization for CY 2009. 2. Applying the Proposed Growth Update to the Drug Add-on Adjustment In the CY 2007 PFS final rule with comment period (71 FR 69684), we revised our update methodology by applying the growth update to the per treatment drug add-on amount. That is, for CY 2007, we applied the growth update factor of 4.03 percent to the $18.88 per treatment drug add-on amount for an updated amount of $19.64 per treatment (71 FR 69684). For CY 2008, the per treatment drug add-on amount was updated to $20.33. 172
CMS-1403-FC For CY 2009, we proposed no update to the per treatment drug add-on amount of $20.33 established in CY 2008. 3. Update to the Drug Add-On Adjustment In the CY 2009 PFS proposed rule (73 FR 38529), we estimated a 1 percent reduction in per patient utilization of ESRD drugs for CY 2009. Using the projected decline of the CY 2009 ASP pricing for ESRD drugs of 1.9 percent, we projected that the combined growth in per patient utilization and pricing for CY 2009 would result in a negative update equal to -2.9 percent (0.99 * 0.981 = 0.971). However, we proposed to apply a zero percent update to the drug add-on adjustment and maintain the $20.33 per treatment drug add-on amount for CY 2009 that reflects a 15.5 percent drug add-on adjustment to the composite rate for CY 2009. In addition, for CY 2009 we presented an alternative approach to the zero percent update. The alternative approach would be to apply an adjustment of less than 1.0 to the drug add-on adjustment. For CY 2009, we would “increase” the drug add-on by 0.971. Applying the 0.971 increase to the $20.33 per treatment adjustment would yield a drug add-on amount of $19.74 per treatment, which represents a 0.4 percent decrease in the CY 2008 drug 173
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<strong>CMS</strong>-1403-FC<br />
75 percent of all ESRD drug expenditures. Moreover, this<br />
effect could distort our estimate of per patient<br />
utilization growth in CY 2009. Since CY 2007, we have<br />
analyzed 2 years of historical claims data for estimating<br />
growth in utilization (CY 2005 and CY 2006). During that<br />
period, utilization based on an analysis of independent<br />
ESRD facility drug data <strong>has</strong> indicated no growth. We<br />
believe the use of CY 2005 and CY 2006 drug data is the<br />
best data available for use in projecting utilization in<br />
CY 2009. Therefore, for CY 2009, we will continue to use<br />
our estimate of growth in utilization based on CY 2005 and<br />
CY 2006 data (72 FR 66282). That is, we are finalizing an<br />
estimation of no growth in utilization for CY 2009.<br />
2. Applying the Proposed Growth Update to the Drug Add-on<br />
Adjustment<br />
In the CY 2007 PFS final rule with comment period<br />
(71 FR 69684), we revised our update methodology by<br />
applying the growth update to the per treatment drug add-on<br />
amount. That is, for CY 2007, we applied the growth update<br />
factor of 4.03 percent to the $18.88 per treatment drug<br />
add-on amount for an updated amount of $19.64 per treatment<br />
(71 FR 69684). For CY 2008, the per treatment drug add-on<br />
amount was updated to $20.33.<br />
172