Esrd Administrator Compensation Limits

10-Q: KERYX BIOPHARMACEUTICALS INC

10-Q: KERYX BIOPHARMACEUTICALS INC

(EDGAR Online via COMTEX) -- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context requires otherwise, references in this report to "Keryx," the "Company," "we," "us" and "our" refer to Keryx Biopharmaceuticals, Inc., its predecessor company and our subsidiaries.

The following discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our results could differ materially from the results anticipated by our forward-looking statements as a result of many known or unknown factors, including, but not limited to, those factors discussed in "Risk Factors." See also the "Special Cautionary Notice Regarding Forward-Looking Statements" set forth at the beginning of this report.

You should read the following discussion and analysis in conjunction with the unaudited consolidated financial statements, and the related footnotes thereto, appearing elsewhere in this report, and in conjunction with management's discussion and analysis and the audited consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2010.

OVERVIEW

We are a biopharmaceutical company focused on the acquisition, development and commercialization of medically important pharmaceutical products for the treatment of cancer and renal disease. We are developing KRX-0401 (perifosine), a novel, potentially first-in-class, oral anti-cancer agent that inhibits Akt activation in the phosphoinositide 3-kinase, or PI3K, pathway, and also affects a number of other key signal transduction pathways, including the JNK pathway, all of which are pathways associated with programmed cell death, growth, differentiation and survival. KRX-0401 is currently in Phase 3 clinical development for both refractory advanced colorectal cancer and multiple myeloma, and in Phase 1 and Phase 2 clinical development for several other tumor types. Each of the KRX-0401 Phase 3 programs is being conducted under Special Protocol Assessment, or SPA, agreements with the Food and Drug Administration, or FDA, and with Fast-Track Designation.

Bundled Payment for ESRD — Including ESAs in Medicare's Dialysis ...

In response to a congressional mandate, Medicare has introduced a more constrained method of paying for services covered by its end-stage renal disease (ESRD) program — a method with benefits and risks for patients and providers alike. In the Medicare Improvements for Patients and Providers Act (MIPPA), Congress bundled into a package most of the services provided to dialysis recipients and directed Medicare’s administrators to establish a fixed compensation amount for dialysis facilities. This system, which went into effect January 1, trims payments to ESRD facilities by 2% overall and reduces “incentives to overuse profitable, [previously] separately billable drugs,” particularly erythropoiesis-stimulating agents (ESAs), In bundling a more complete set of ESRD services for a fixed reimbursement, Congress created an incentive for dialysis facilities: they can pocket the difference if Medicare payments are higher than the cost of delivered services but must absorb any expenses exceeding the fixed payment amounts. Some providers may take this feature as an incentive to stint on services in order to reap higher returns. To avert this possibility and more actively track patient outcomes, as Congress requires, the Centers for Medicare and Medicaid Services (CMS) pledged to have “a comprehensive monitoring strategy in place when the payment system is implemented January 1, 2011.”

Since 1972, when the Medicare ESRD program was established (see the Perspective article by Rettig in this issue of the Journal, pages 596–598), Medicare has provided near-universal coverage to Americans, regardless of their age or income, who are eligible for Social Security and have permanent kidney failure necessitating either dialysis or kidney transplantation. (If the patient is covered by an employer-sponsored health plan at the time of diagnosis, that plan must be the primary payer for the first 33 months of treatment.) Nearly all experts regard kidney transplantation as preferable to dialysis, but since a limited number of kidneys are available for transplantation, 70% of patients with ESRD undergo dialysis.