Calendar Year (CY) 2027 End-Stage Renal Disease (ESRD) Prospective Payment System Proposed Rule - CMS-1846-P
On June 24, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update payment rates and policies under the Medicare End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to Medicare beneficiaries on or after January 1, 2027. This rule also proposes updates to the acute kidney injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities for calendar year (CY) 2027 and proposes to update requirements for the ESRD Quality Incentive Program (QIP).
For CY 2027, CMS is proposing to increase the ESRD PPS base rate to $299.55, which CMS expects will increase total payments to all ESRD facilities, both freestanding and hospital-based, by approximately 1.1%. This amount includes a proposed $15.96 increase to account for the incorporation of phosphate binders into the ESRD PPS base rate. The CY 2027 ESRD PPS proposed rule also proposes changes to the low-volume payment adjustment, changes to the payment adjustments for pediatric patients, an increase to the home and self-dialysis training add-on amount and technical modifications to the transitional drug add-on payment adjustment (TDAPA), and a post-TDAPA add-on payment adjustment.
Beginning with CY 2029, CMS is proposing replacement of the Hypercalcemia reporting measure with the Facility-Level Percentage of Chronic Hyperphosphatemia in Dialysis Patients (Hyperphosphatemia) clinical measure and proposing removal of two reporting measures from the ESRD QIP. CMS is also proposing updates to the National Healthcare Safety Network (NHSN) Bloodstream Infection (BSI) in Hemodialysis Patients clinical measure national baseline data and risk adjustment methodology. Additionally, CMS is proposing updates to the measure domains and to the domain and measure weights used to calculate the total performance score. CMS is also seeking input through a request for information on the potential inclusion of the Dialysis Facility Discussion of Patient Life Goals (D-PaLS) Patient-Reported Outcome Performance measure (PRO-PM) in the ESRD QIP.
Proposed Updates to the ESRD PPS for CY 2027
The ESRD PPS provides a bundled, per-treatment payment to ESRD facilities that includes all renal dialysis services furnished for outpatient maintenance dialysis, including drugs and biological products. Additionally, the bundled payment includes all other renal dialysis items and services that were formerly separately payable under previous payment methodologies. The bundled payment rate is case mix adjusted for several factors relating to patient characteristics. There are also facility-level adjustments for ESRD facilities that have a low patient volume, for facilities in rural areas, for facilities in certain non-contiguous states and territories, and for the wage index. When applicable, the bundled payment rate also includes a training payment for home and self-dialysis modalities, an outlier payment for high-cost patients, add-on payment adjustments for certain drugs, equipment, and supplies, and a pediatric ESRD add-on payment adjustment (through 2026).
Annual Update to the ESRD PPS Base Rate
Under the ESRD PPS for CY 2027, Medicare expects to pay $6.2 billion to approximately 7,600 ESRD facilities for furnishing renal dialysis services. The proposed CY 2027 ESRD PPS base rate is $299.55, which would be an increase of $17.84 from the current CY 2026 base rate of $281.71. This proposed amount includes a $15.96 adjustment, which reflects the inclusion of phosphate binders into the ESRD PPS base rate. Additionally, this amount reflects the application of the proposed wage index budget neutrality adjustment factor (1.00267), the proposed CY 2027 ESRD Bundled market basket update of 1.6%, and a budget neutrality factor of 0.98783 for the budget neutral changes to low-volume, pediatric, and home and self-dialysis training payment adjustments, equaling $299.55 [($281.71 + $15.96) x 1.00267 x 0.98783) x 1.016 = $299.55]. CMS projects that the CY 2027 updates would increase the total payments to all ESRD facilities by 1.1% compared with CY 2026. For hospital-based ESRD facilities, CMS projects a 2% increase in total payments, and 1.1% increase for freestanding facilities.
Wage Index Update
CMS is proposing routine annual updates to the ESRD PPS-specific wage index that is used to adjust ESRD PPS payments for geographic differences in area wages. The ESRD PPS wage index methodology, finalized in the CY 2025 ESRD PPS final rule, combines data from the Bureau of Labor Statistics (BLS) Occupational Employment & Wage Statistics (OEWS) program and freestanding ESRD facility cost reports to produce the ESRD PPS-specific wage index. We are proposing updates to the ESRD PPS wage index for CY 2027 to use the latest available BLS OEWS data. CMS will continue to apply the wage-index floor of 0.6000 and a 5% cap on wage-index decreases from the prior year, as finalized in the CY 2023 ESRD PPS final rule.
Updates to the Outlier Policy
CMS is proposing routine updates to the fixed dollar loss (FDL) and Medicare allowable payment (MAP) amounts for CY 2027. For pediatric beneficiaries, the proposed FDL amount would increase from $162.43 to $206.43, and the proposed MAP amount would increase from $50.19 to $60.86 as compared to CY 2026 values. For adult beneficiaries, the proposed FDL amount would increase from $14.80 to $114.98, and the proposed MAP amount would increase from $23.68 to $41.24. These proposed increases are primarily attributable to the projected utilization of drugs currently paid for through the TDAPA that will be ESRD outlier services in CY 2027.
Addition to the ESRD PPS Base Rate for the Inclusion of Phosphate Binders
CMS is proposing to permanently increase the ESRD PPS base rate by $15.96 to account for the costs of phosphate binders, marking the completion of the incorporation of phosphate binders into the bundled payment, which began January 1, 2025. This proposed amount is based on the most recent average sales price (ASP) data for each of the six types of phosphate binders and on utilization during the TDAPA period, and includes operational costs equal to 6% of ASP.
Low-Volume Payment Adjustment
CMS is proposing to increase the Low-Volume Payment Adjustment (LVPA) volume threshold from 4,000 to 8,000. This change would also expand the number of LVPA tiers from two to six. Under this proposal, ESRD facilities with fewer than 3,000 median treatments over the past three cost reporting years would receive the greatest payment adjuster and ESRD facilities with between 7,000 and 7,999 median treatments would receive the smallest adjuster.
This budget-neutral proposal would reduce the ESRD PPS base rate by approximately 1.1% (~$3). The proposed adjustment would better align payments with costs by recognizing that ESRD facilities furnishing between 4,000 and 8,000 treatments annually generally incur higher costs than higher-volume facilities.
Payment Adjustments for Pediatric Patients
CMS is proposing to modify the payment adjustments for pediatric ESRD patients commensurate with the end of the temporary pediatric payment adjustment in 2027. We are proposing two permanent changes that would appropriately recognize the higher costs for pediatric patients and the ESRD facilities that treat them. First, we are proposing to update the case-mix adjusters for pediatric patients based on more recent cost data. Second, we are proposing to begin applying the LVPA to treatments furnished to pediatric ESRD beneficiaries by ESRD facilities that meet the low-volume criteria. These two proposed changes would result in roughly the same expected spending on pediatric patients, but with payments better targeted to lower-volume ESRD facilities with higher anticipated resource use. These two changes are proposed on a budget-neutral basis.
Home and Self-Dialysis Training Add-on Payment
CMS is proposing to increase the payment for home and self-dialysis training from $95.60 to $138.22. We are also proposing to allow the add-on payment for home and self-dialysis training during the onset period (the first four months of ESRD dialysis), during which the ESRD PPS does not currently pay the home and self-dialysis training add-on adjustment. These proposed changes would better align the training payment with the actual cost of training patients and caretakers to perform home and self-dialysis. These changes are proposed on a budget-neutral basis.
Technical Changes for the TDAPA and Post-TDAPA Add-on Payment Adjustment
CMS is proposing several changes to better align payment adjustment amounts for the TDAPA and post-TDAPA add-on payment adjustment with the actual costs of drugs. CMS is proposing to use older ASP data when current ASP data are unavailable, such as when the reported ASP reflects zero or negative sales. CMS is also proposing to update the post-TDAPA add-on payment adjustment quarterly through change requests throughout the year to ensure that the post-TDAPA is always based on the most recent pricing and utilization data available.
Proposed Changes to the Payment for Renal Dialysis Services Furnished to Individuals with AKI
As required by section 1834(r) of the Social Security Act, CMS is proposing to update the AKI dialysis payment rate for CY 2027 to $299.55, which is equal to the proposed CY 2027 ESRD PPS base rate. CMS uses the CY 2027 ESRD PPS wage index to calculate AKI dialysis payments. The proposed increase to the home and self-dialysis training payment adjustment amount under the ESRD PPS would apply to training payments for AKI dialysis.
Proposed Changes to the ESRD QIP
The ESRD QIP is authorized by law and under the program, CMS assesses the total performance of each facility on quality measures specified for a payment year, applies an appropriate payment reduction to each facility that does not meet a minimum total performance score (mTPS), and publicly reports the results.
CMS is proposing to remove the Hypercalcemia reporting measure and replace it with the Hyperphosphatemia clinical measure beginning with payment year (PY) 2029. The Hyperphosphatemia clinical measure would help drive decreases in cardiovascular complications, hospitalizations, and overall mortality by incentivizing additional interventions such as nutritional counseling, phosphorus binding medications, or adjustment of dialysis prescription. Compared to the Hypercalcemia reporting measure, the Hyperphosphatemia clinical measure would more directly assess patient-focused clinical outcomes.
CMS is also proposing to remove the Medication Reconciliation (MedRec) reporting measure from the ESRD QIP measure set beginning with PY 2029. As recent measure analyses have indicated consistently high performance on the MedRec reporting measure, as well as the burden facilities incur in collecting, documenting, and reporting data for the measure, the costs associated with the measure outweigh the benefit of its continued use in the program. The proposal to remove this measure is consistent with evolving the ESRD QIP to focus on a measure set of high-value, impactful measures that have been developed to drive care improvements for a broader set of ESRD patients.
CMS is also proposing to remove the COVID-19 Vaccination Coverage Among Healthcare Personnel (COVID–19 HCP Vaccination) reporting measure from the ESRD QIP measure set beginning with PY 2029. Since the end of the Public Health Emergency (PHE), the CDC’s clinical recommendations for COVID–19 vaccination have changed. Based on evolving clinical guidelines, as the measure no longer aligns with current clinical guidelines or practice [§ 413.178(c)(5)(i)(C)], CMS proposes to remove the COVID–19 HCP Vaccination measure.
CMS is proposing updates to the NHSN BSI clinical measure to use the most recently available 2023 national baseline data and to update the risk adjustment methodology beginning with the PY 2029 ESRD QIP measure set. This proposed update would ensure that national benchmarks better reflect current healthcare practices, surveillance protocols, and infection prevention efforts. This proposed update would also revise the risk adjustment model to incorporate additional facility-level characteristics, including patient access type, facility hospital affiliation, and number of dialysis stations, which were identified as significant predictors of BSI risk. The proposed 2023 national baseline updates would not change the underlying Standardized Infection Ratio (SIR) calculation formula but would instead be used to calculate revised denominators for the SIR by estimating the number of predicted BSIs for a given facility.
CMS is also proposing updates to the measure domains and to the domain and measure weights used to calculate the total performance score. If the proposals to remove the three reporting measures–Hypercalcemia, MedRec, and COVID–19 HCP Vaccination–are finalized, the ESRD QIP measure set would no longer include any measures under the Reporting Measure Domain. Therefore, we are proposing to remove the Reporting Measure Domain and to update the domain weights and individual measure weights in the Care Coordination Domain and the Clinical Care Domain accordingly to reflect the proposed updates to the ESRD QIP measure set.
Finally, CMS is requesting public comment on the potential inclusion of the Dialysis Facility Discussion of Patient Life Goals Patient-Reported Outcome Performance measure (D-PaLS PRO-PM) in the ESRD QIP. CMS may propose this measure in future rulemaking. The measure would assess patient satisfaction with discussions about their life goals and the extent to which those goals are incorporated into treatment planning by the care team.
The proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/d/2026-12925.
###