On the evening of July 1, 2021, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2022 proposed rulemaking for end-stage renal disease (ESRD). The rule includes the annual update to the ESRD prospective payment system and the ESRD Quality Incentive Program (ESRD QIP). The rule also includes proposed changes to the ESRD Treatment Choices (ETC) Model in an effort to address health equity issues.

Comments on the rule are due on August 31, 2021.

CMS Estimates Payments to ESRD Facilities Will Increase in CY 2022

The ESRD PPS provides a patient-level and facility-level adjusted per treatment payment to ESRD facilities for renal dialysis services provided in an ESRD facility or in a beneficiary’s home. The bundled per treatment payment includes drugs (except for oral-only ESRD drugs that are included beginning in 2025), laboratory services, supplies, and capital-related costs related to furnishing maintenance dialysis.

Overall, CMS is estimating a 1.2 percent increase in payments to ESRD facilities in CY 2022. Payments to facilities are expected to increase by approximately $140 million in CY 2022, as compared to CY 2021 payment. Of this $140 million, about $120 million is due to an increase in the ESRD PPS payment rate and the remaining $20 million is due to updated outlier threshold amounts. CMS proposes a base rate of $255.55 for the ESRD PPS in CY 2022, which reflects the wage index budget-neutrality adjustment factor and a productivity-adjusted market basket increase. This is a slight increase from the CY 2021 base rate of $253.13.

The outlier policy, fixed-dollar loss (FDL) amounts, and Medicare allowable payment amounts will all be updated to reflect the most current data available to CMS, which is CY 2020. For pediatric beneficiaries, this results in a decreased proposed FDL amount of $30.38 and a decreased proposed MAP of $28.72, down from $44.78 and $30.88 respectively. For adult beneficiaries, the proposed FDL amount decreases to $111.18 and the MAP amount decreases to $50.92, down from $122.49 and $50.92 respectively. CMS estimates that 5.45 percent of adult patients and 11.37 percent of pediatric patients will quality for outlier payments based on the CY 2020 claims data.

AKI Payment Rate Mirrors ESRD Base Rate

Beginning in 2017, Medicare provides coverage for renal dialysis services provided to individual with acute kidney injury (AKI). CMS proposes an updated payment rate of $255.55 for AKI payment in CY 2022, which mirrors the proposed base rate for the ESRD PPS. Aggregate payments to ESRD facilities for renal dialysis services provided to AKI patients is expected to increase by $1 million in CY 2022, as compared to CY 2021 payment.

Two Applicants Under Consideration for Transitional Add-on Payment Adjustment for Certain New and Innovative Renal Dialysis Equipment and Supplies (TPNIES)

CMS established the transitional add-on payment adjustment for certain new and innovative renal dialysis equipment and supplies (TPNIES) in the 2020 ESRD PPS final rule and expanded eligibility for TPNIES to include certain capital-related assets that are home dialysis machines when used in the home for a single patient in 2021. In CY 2022, CMS proposes an average per treatment offset amount of $9.41 for TPNIES for capital related assets that are home dialysis machines.

In addition, CMS solicits feedback on the two TPNIES applications received, the Tablo® System and CloudCath Peritoneal Dialysis Drain Set Monitoring System.

Manufacturer Applicant	Indication	CMS Concerns
Outset Medical Inc. Tablo® System	Dialysis machine for patients with acute and/or chronic renal failure, with or without ultrafiltration, in an acute or chronic care facility.	Outset Medical claims that patients can achieve dialysis adequacy at a frequency of three treatment per week. However, the studies submitted did not test whether patients received adequate dialysis on a three times a week schedule.   Studies submitted to support the innovation criteria relied on historical comparisons and may be subject to recall bias.
CloudCath Peritoneal Dialysis Drain Set Monitoring System	Detection and monitoring of solid particles in dialysate effluent during Peritoneal Dialysis treatments.	Studies submitted under the innovation criteria did not test the device’s ability to diagnose a medical condition nor the impact the device had on patient management.   Does not meet the definition of a capital-related asset.

 

CMS Proposes Changes to ESRD Treatment Choices Model

The ESRD Treatment Choices (ETC) Model is an alternate payment model for the care of patients with chronic kidney disease (CKD), finalized in 2020[1]. The model tests the use of payment adjustments to encourage home hemodialysis and kidney transplants and its aim is for providers to invest in care coordination programs that will increase patient choice, reduce Medicare expenditures, and improve outcomes. The ETC model went into effect on January 1, 2021 and is mandatory for dialysis facilities and managing clinicians in randomly selected geographic areas across all 50 states and the District of Columbia.

The ETC model includes two payment adjustments:

• Home Dialysis Payment Adjustment (HDPA) – a positive adjustment on certain home dialysis and home dialysis-related claims during the initial 3 years of the model.
• Performance Payment Adjustment (PPA) – a positive or negative adjustment on dialysis and dialysis-related Medicare payments, for both home dialysis and in-center dialysis. This adjustment is based on ESRD facilities’ and Managing Clinicians’ rates of home dialysis, and of kidney transplant waitlisting and living donor transplantation, among attributed beneficiaries during the applicable model year (MY).

These adjustments are made to the adjusted ESRD PPS base rate for selected facilities and to the monthly capitation payment for selected Managing Clinicians. Greater positive and negative adjustments for model participants are to be phased in over the duration of the model.

CMS proposes to build on the current model to reward ESRD facilities and managing clinicians participating in the model for achieving significant improvement in the rates of home dialysis and kidney transplants for lower income beneficiaries. These proposed changes intend to decrease disparities in rates of home dialysis and kidney transplants among ESRD patients with lower socioeconomic status, making it the agency’s first CMS Innovation Center (CMMI) model to directly address health equity.

Specifically, CMS proposes to:

• Attribute preemptive living donor transplants (LDT) beneficiaries to Managing Clinicians who submitted the most claims for services furnished to the beneficiary during the 365 days prior to the transplant date.
• Add nocturnal in-center dialysis to the calculation of the home dialysis rate for ESRD facilities and Managing Clinicians not owned by a large dialysis organization.
• Exclude beneficiaries with a diagnosis of vital solid organ cancers who are receiving treatment with chemotherapy or radiation from the calculation of the transplant rate.
• Increase achievement benchmarks by 10 percent over rates observed in comparison geographic areas every two model years, beginning in model year 3 (2022). Additionally, stratify achievement benchmarks based on the proportion of attributed beneficiaries who are dual-eligibles or receive the Low Income Subsidy (LIS). This proposal recognizes that beneficiaries with lower socioeconomic status have lower rates of home dialysis and transplant than those with higher socioeconomic status.
• Introduce a Health Equity Incentive which would reward ETC participants that demonstrate a significant improvement in the home dialysis rate or transplant rate among dual-eligible or LIS attributed beneficiaries.
• Create a process where CMS would share certain model data with ETC participants.
• Add a Medicare waiver allowing Managing Clinicians who are ETC Participants furnishing kidney disease patient education services to do so via telehealth.
• Permit Managing Clinicians who are ETC Participants to reduce or waive beneficiary coinsurance for kidney disease patient education services, subject to certain requirements.

Lastly, CMS includes a request for information on the placement of peritoneal dialysis catheters and the development of a home dialysis beneficiary experience measure.

CMS Proposes Zero Payment Reductions Based on ESRD QIP Score in Performance Year 2022

Under the ESRD Quality Incentive Program (QIP), CMS assesses the total performance of each facility on measures specified for a payment year and applies an appropriate payment reduction to each facility that does not meet a minimum total performance score (TPS). A facility must meet or exceed a TPS of 57 to avoid a payment reduction.

For performance year (PY) 2022, CMS proposes not to score or award any a TPS to any facility or reduce payment to any facility due to the impact of the COVID-19 PHE on some QIP measures. Instead, CMS will provide confidential feedback reports that include rates calculated for PY 2022.

For PY 2024, CMS proposes to retain all 14 current ESRD-QIP measures and update the Standardized Hospitalization Ratio (SHR) Clinical Measure to aligned with National Quality Forum (NQF)-endorsed updates. The goal of the SHR clinical measure is to improve patient outcomes by measuring hospitalization ratios among dialysis facilities. CMS will calculate performance standards for PY 2024 using CY 2019 data instead of CY 2020 data.

Estimated Payment Reduction Scale for PY 2024 Based on the CY 2019 data

Total Performance Score	Reduction (%)
100-57	0%
56-47	-0.5%
46-37	-1.0%
36-27	-1.5%
26-0	-2.0%

 

CMS also announces a blanket extension for the remaining CY 2020 clinical reporting deadlines due to data submission system issues. Current data submission issues are not expected to be resolved until July 12, 2021. Under this extension, facilities will have until September 1, 2021 to submit September through December 2020 ESRD QIP clinical data.

As seen in all recent CMS proposed rules, CMS requests information on closing the health equity gap in the ESRD-QIP. To this end, CMS notes that expanding disparity methods to include social risk factors and adding an ESRD Facility Equity Score are under future consideration.

CMS Seeks Feedback on ESRD Payment System

In the proposed rule, CMS notes that the agency has been conducting research on possible improvements to the ESRD payment model, highlighting recent requests for information (RFI) in CY 2020 about the outlier policy, laboratory tests and supplies, patient characteristics, and improving data quality reflected in cost reports. Now, CMS is soliciting comments from the public “from all perspectives” on refinements to the ESRD PPS, including the following topics:

• Low volume payment adjustment (LVPA);
• Calculations for case-mix adjustment;
• Calculation for outlier payment adjustment;
• The current pediatric dialysis payment model;
• ESRD PPS and hospital cost report modifications;
• Pediatric cost report modifications; and
• Home dialysis for Medicare beneficiaries with AKI.

Potential proposals will be considered in CY 2023 rulemaking for implementation in CY 2025.

[1] The ETC Model was finalized as part of the final rule “Medicare Program; Specialty Care Models to Improve Quality of Care and Reduce Expenditures” published on September 29, 2020 (85 FR 61114). Federal Register :: Medicare Program; Specialty Care Models To Improve Quality of Care and Reduce Expenditures