The Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health and Human Services (HHS), has issued a significant proposed rule for Calendar Year (CY) 2027. This rule introduces a series of crucial updates and revisions to the Medicare program's payment systems for End-Stage Renal Disease (ESRD), Acute Kidney Injury (AKI) dialysis, and the ESRD Quality Incentive Program (QIP). These proposed changes carry substantial implications for renal care providers and the hundreds of thousands of beneficiaries who rely on these vital services, signaling a continuous effort to align payment structures with evolving clinical practices and quality imperatives.
ESRD Prospective Payment System (PPS) Revisions
The proposed rule details a comprehensive overhaul of the ESRD PPS, the bundled payment system for renal dialysis services. A central element of this update is the proposed rebasing and revising of the ESRD Bundled (ESRDB) market basket to a 2024 base year. This technical adjustment is critical for ensuring that payment rates accurately reflect the current costs incurred by ESRD facilities, utilizing the most recent and complete Medicare cost report data and other publicly available information. Concurrently, the labor-related share of the ESRD PPS base rate would be updated to align with the proposed 2024 base year labor-related cost share weights within the revised ESRDB market basket.
For CY 2027, CMS proposes to increase the ESRD PPS base rate to $299.55, a notable rise from the CY 2026 rate of $281.71. This proposed amount is the culmination of several adjustments. It incorporates a wage index budget neutrality adjustment factor (1.00267), reflects the significant addition of $15.96 to the base rate to include phosphate binders, applies a budget neutrality factor for proposed changes to several payment adjustments (0.98783), and integrates a 1.6 percent ESRDB market basket update, as mandated by the Social Security Act. This explicit inclusion of phosphate binders into the bundled payment represents a significant policy shift, acknowledging the integral role of these medications in managing hyperphosphatemia in ESRD patients, regardless of their administration route.
Furthermore, the rule introduces budget-neutral changes to various ESRD PPS payment adjustments. These include modifications to the case mix adjusters for pediatric ESRD patients, aiming to better reflect the distinct clinical needs and resource utilization associated with this vulnerable population. The low-volume payment adjustment (LVPA) would also see proposed expansion, a measure designed to provide additional support to smaller facilities, particularly those in rural areas, that serve a limited number of patients. Technical adjustments to the Transitional Drug Add-on Payment Adjustment (TDAPA) and the Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) are also on the table, which are mechanisms designed to ensure access to new and innovative therapies and technologies within the bundled payment system.
The annual update to the wage index is another standard but impactful component. For CY 2027, CMS proposes to update the wage index based on the latest available mean hourly wage data from the Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) program, coupled with occupational mix data from Medicare cost reports. This ensures that payments account for geographic variations in labor costs, utilizing the latest core-based statistical area (CBSA) delineations.
Finally, the outlier policy would also undergo its annual update to protect facilities from unusually high-cost cases. Using the most current data, CMS proposes to adjust the Medicare allowable payment (MAP) amounts for both adult and pediatric patients for CY 2027. Notably, the fixed dollar loss (FDL) amount for adult patients is proposed to significantly increase from $14.80 to $114.98, while for pediatric beneficiaries, the FDL amount would rise from $162.43 to $206.43, and the MAP amount from $50.19 to $60.86. These adjustments are critical to ensuring that facilities are not unduly burdened by the costs of complex or high-need patients.
Acute Kidney Injury (AKI) Dialysis Payment Updates
The proposed rule also addresses payment for renal dialysis services furnished to individuals with Acute Kidney Injury. Coverage for AKI dialysis services, established by the Trade Preferences Extension Act of 2015 (TPEA), dictates that such services are paid at the ESRD PPS base rate. Consequently, the proposed updates to the AKI dialysis payment rate for CY 2027 are directly linked to the ESRD PPS base rate adjustments. Specifically, the proposed rebasing and revision of the ESRDB market basket under the ESRD PPS would indirectly affect the AKI dialysis payment rate, as it is based on the ESRD PPS base rate, which is updated annually by the ESRDB market basket percentage increase factor minus a productivity adjustment, adjusted by the wage index. It is important to note that while the AKI dialysis payment rate tracks the ESRD PPS base rate, certain ESRD PPS adjustments, such as those for pediatric case mix, LVPA, and TDAPA, do not directly apply to AKI dialysis payments.
ESRD Quality Incentive Program (QIP) Enhancements
The ESRD Quality Incentive Program (QIP), authorized by the Social Security Act, is a critical mechanism for encouraging high-quality performance among ESRD facilities to improve outcomes for beneficiaries. For Payment Year (PY) 2029, the proposed rule introduces several key changes to the ESRD QIP measure set.
Among the proposed modifications, CMS intends to replace the Hypercalcemia reporting measure with the Facility-Level Percentage of Chronic Hyperphosphatemia in Dialysis Patients (Hyperphosphatemia) clinical measure. This shift reflects a more targeted focus on managing a prevalent and clinically significant complication in ESRD patients. Additionally, the National Healthcare Safety Network Bloodstream Infection (NHSN BSI) clinical measure would be updated, emphasizing ongoing efforts to reduce infection rates within dialysis settings. The rule also proposes to remove the Medication Reconciliation (MedRec) reporting measure and the COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) reporting measure, potentially indicating a maturation of these quality areas or a strategic refocusing of QIP priorities.
Furthermore, the proposed rule includes a request for public comment on the inclusion of the Dialysis Facility Discussion of Patient Life Goals (D-PaLS) Patient-Reported Outcome Performance Measure (PRO-PM) in the ESRD QIP. This signals a growing emphasis on patient-centered care and the integration of patient perspectives into quality assessments.
Requests for Information (RFIs) on Advancing Dialysis Care
Beyond the specific payment and quality updates, CMS has also included several Requests for Information (RFIs). These RFIs seek public input to inform potential future policy developments aimed at advancing dialysis care. Key areas of inquiry include strategies to increase home dialysis uptake, improve palliative dialysis options, and support alternative dialysis schedules. By soliciting feedback on these topics, CMS aims to understand how Medicare payment policy can effectively support ESRD beneficiaries while maintaining the integrity of existing prospective payment systems, including the ESRD PPS, AKI dialysis payment, the Hospice benefit, and the Home Health PPS. This proactive engagement reflects a commitment to exploring innovative models of care that can enhance patient choice, quality of life, and overall outcomes in renal care.
