A recent GAO report found that CMS’s Medicare low-volume payment adjustment (LVPA) for dialysis facilities has not been effectively targeted at low-volume facilities with high costs. Specifically, based on a review of claims and cost reports, the GAO estimates that Medicare overpaid about $5.3 million in 2011 to dialysis facilities that were ineligible for the LVPA, but did not pay an estimated $6.7 million to facilities that were eligible. In addition, in 2011 almost 30% of LVPA-eligible facilities were located within 1 mile of another facility and more than half were within 5 miles, which the GAO believes indicates that the facilities “might not have been necessary for ensuring access to care.” The GAO also asserts that the LVPA program “gives facilities an adverse incentive to restrict service provision” since facilities could lose substantial Medicare revenues if they reach the program’s treatment threshold. To more effectively target the LVPA and promote payment accuracy, the GAO recommends that CMS, among other things, restrict payments to low-volume facilities that are isolated; consider changing the LVPA to a tiered adjustment to reduce the incentive for facilities to restrict service provision to avoid reaching the treatment threshold; recoup LVPA payments made in error; and improve guidance. HHS generally concurred with the recommendations.