Medicare drops end-stage renal disease payment rule that aims to close health equity gaps

The Biden administration dropped a final rule Friday that will reward providers that improve rates of home dialysis and kidney transplants among low-income Medicare and dual-eligible beneficiaries.

The Centers for Medicare & Medicaid Services (CMS) finalized a rule that updates payment rates for the End-Stage Renal Disease Prospective Payment System (ESRD PPS) and makes changes to the quality incentive program and the ESRD Treatment Choices (ETC) model. The goal of the changes is to encourage dialysis providers to decrease disparities in home dialysis and transplant rates, part of a larger effort by the Biden administration.

It marks the first CMS Innovation Center model to directly address health equity.

“Today’s final rule is a decisive step to ensure people with Medicare with chronic kidney disease have easy access to quality care and convenient treatment options,” said CMS Administrator Chiquita Brooks-LaSure in a statement. “Enabling dialysis providers to offer more dialysis treatment options for Medicare patients will catalyze better health outcomes, greater autonomy and better quality of life for all patients with kidney disease.” 
According to the CMS Office of Minority Health’s studies on racial, ethnic and socioeconomic factors, disadvantaged people with Medicare have higher rates of ESRD. They are also more likely to experience higher hospital readmissions and costs as well as more likely to receive in-center hemodialysis (versus home dialysis). Studies also indicate non-white ESRD patients are less likely to receive pre-ESRD kidney care, become waitlisted for a transplant or receive a kidney transplant.

RELATED: CMS wants to reward dialysis providers for improving home dialysis among low-income beneficiaries

The end-stage renal disease payment model rule also includes small payment increases for dialysis facilities, including 2.5% for hospital-based facilities and 3.3% for freestanding providers.

The total increases represent an estimated 2.5% increase overall from 2021, CMS said.

CMS is improving access to home dialysis for patients of all socioeconomic backgrounds. The agency is finalizing changes to the ETC model to test a new payment incentive that rewards ESRD facilities and clinicians who manage dialysis patients for achieving significant improvement in the home dialysis rate and kidney transplant rate for lower-income beneficiaries.

CMS also is approving the first-ever technology under a recently established policy that allows for enhanced payments for innovative technologies that represent a substantial clinical improvement relative to existing options, agency officials said. This approval will help ESRD facilities offer an additional option to beneficiaries for home dialysis at this critical time in the pandemic. 

Under the 2022 prospective payment system for ESRD, Medicare expects to pay an estimated $8.8 billion to approximately 7,700 ESRD facilities for furnishing renal dialysis services. The final 2022 ESRD PPS base rate is $257.90, which is an increase of nearly $5 to the current base rate of $253.13, the agency said.

RELATED: CVS, Anthem, Intermountain form coalition to push for regulatory changes for home dialysis

Consistent with President Joe Biden’s executive order on "advancing racial equity and support for underserved communities through the federal government,” CMS is addressing health inequities and improving patient outcomes in the U.S. through improved data collection for better measurement and analysis of disparities across programs and policies. In response to the proposed rule, CMS received valuable feedback on potential opportunities to collect and leverage diverse sets of data such as race, ethnicity, Medicare/Medicaid dual-eligible status, disability status, LGBTQ+ and socioeconomic status to better measure disparities.

CMS also received feedback on various methodical approaches to advance equity through the ESRD Quality Incentive Program (ESRD QIP).

The rule finalizes policies for the ESRD QIP that address the circumstances of the COVID-19 public health emergency and functionality challenges relating to the implementation of a new data collection system. These challenges include a special scoring and payment policy under which no facility will receive a payment reduction under the ESRD QIP for the upcoming year, especially since such payment reductions would have been based on performance during the height of the pandemic in 2020, CMS said.