End-Stage Renal Disease (ESRD) Special Audits

Overview

Section 2991 of the Social Security Amendments of 1972 established the End-Stage Renal Disease (ESRD) program under Medicare. The law extended Medicare coverage to individuals regardless of age who have permanent kidney failure, requiring dialysis or kidney transplantation to maintain life, and meet certain other eligibility criteria. Section 217 (e) of The Protecting Access to Medicare Act of 2014 authorized CMS to audit Medicare cost reports for a representative sample of providers and renal dialysis facilities furnishing renal dialysis services. The purpose of the audits is to determine if the costs are supported by providers' and facilities’ accounting records and are reasonable and related to patient care. In addition, home office costs and related party transactions are reviewed to determine if they are appropriate and accurately allocated on the ESRD providers’ cost reports.

The ESRD Special Audits are performed by the ESRD Audit Contractor on behalf of CMS. The ESRD Audit Contractor utilizes CMS-approved ESRD and Home Office audit programs to audit ESRD cost reports, hospital cost reports, home office cost statements, and supporting documentation. The ESRD Audit Contractor is authorized to communicate with the provider or provider’s representative, and to conduct audit activities on the provider’s business premises for those providers and facilities selected for on-site audits.