Fact Sheets

CY 2022 End Stage Renal Disease Prospective Payment System Final Rule (CMS-1749-F)

Today, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates payment rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to beneficiaries on or after January 1, 2022.  This rule also finalizes updates to the Acute Kidney Injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities.  Additionally, the rule finalizes modifications to the ESRD Treatment Choices (ETC) Model policies to encourage certain health care providers to decrease disparities in rates of home dialysis and kidney transplants among ESRD patients with lower socioeconomic status. This makes the model one of the agency’s first CMS Innovation Center models to directly address health equity.

The changes to the ETC Model, a mandatory payment model focused on encouraging greater use of home dialysis and kidney transplants, are expected to preserve or enhance the quality of care furnished to people with Medicare while reducing Medicare expenditures. In addition, this rule updates requirements for the ESRD Quality Incentive Program (QIP), and includes public comments received in response to requests for information on topics that are relevant to the ESRD QIP. CMS will use the comments to inform future rulemaking and policy development.

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 (with the exception of oral-only ESRD drugs until 2025). Additionally, the bundled payment includes all other renal dialysis items and services that were formerly separately payable under the previous payment methodologies. The bundled payment rate is case-mix adjusted for a number of 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, and for the wage index. When applicable, the bundled payment rate also includes a training add-on payment adjustment for home and self-dialysis modalities, an outlier payment for high-cost patients, and add-on payments for certain drugs, equipment and supplies.

Final Updates to ESRD PPS for CY 2022

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

CMS projects that the updates for CY 2022 will increase the total payments to all ESRD facilities by 2.5 percent compared with CY 2021. For hospital-based ESRD facilities, CMS projects an increase in total payments of 3.3 percent, and, for freestanding facilities, CMS projects an increase in total payments of 2.5 percent.

Wage Index: The ESRD PPS uses the latest core-based statistical area (CBSA) delineations and the latest available “pre-reclassified” hospital wage data collected under the Hospital Inpatient Prospective Payment System. The wage index is applied to the labor-related share of the payment rate to account for differing wage levels in areas in which ESRD facilities are located.

For CY 2022, CMS is updating the wage index values based on the latest available data and using the Office of Management and Budget (OMB) delineations as described in the September 14, 2018 OMB Bulletin No. 18–04.

Update to the Outlier Policy: CMS annually updates the outlier policy using the most current data. CMS is updating the outlier services fixed-dollar loss (FDL) amounts for CY 2022 using 2020 claims data as proposed. CMS’ analysis suggested no substantial ESRD utilization change during the COVID-19 public health emergency (PHE), likely due to the patients’ continued need for services; therefore, the agency used CY 2020 data.  Based on the use of the latest available data, the final FDL amount for pediatric beneficiaries will decrease from $44.78 to $26.02, and the Medicare allowable payment (MAP) amount will decrease from $30.88 to $27.15, as compared to CY 2021 values.  Fluctuations, including the decreases in the FDL and MAP amount, are not uncommon due to the small population of pediatric beneficiaries. For adult beneficiaries, the FDL amount will decrease from $122.49 to $75.39, and the MAP amount will decrease from $50.92 to 42.75.

Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) Applications: CMS is approving a TPNIES application, for the first time, for a home dialysis machine for CY 2022. The technology will receive the TPNIES for two calendar years.   

Final Updates to the Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury (AKI)

As required by section 1834(r) of the Social Security Act (the Act), CMS is updating the AKI dialysis payment rate for CY 2022 to equal the CY 2022 ESRD PPS base rate and to apply the CY 2022 wage index. The final CY 2022 payment rate is $257.90 compared to $253.13 for CY 2021.

Finalized Changes to the ESRD Quality Incentive Program

The ESRD QIP is authorized by section 1881(h) of the Act. Under the program, CMS assesses the total performance of each facility on measures specified for a payment year, applies an appropriate payment reduction to each facility that does not meet a minimum total performance score (TPS), and publicly reports the results.

For scoring and payment adjustment purposes in the performance year (PY) 2022 ESRD QIP, CMS determined that circumstances caused by the COVID-19 PHE have significantly affected the validity and reliability of the measures and resulting performance scores. The policies finalized in this rule are intended to ensure that these programs do not penalize facilities based on circumstances caused by the COVID-19 PHE that the measures were not designed to accommodate.

In this final rule CMS is:

  • Finalizing its proposal to suppress the use of the following measures:
    • Standardized Hospitalization Ratio (SHR) clinical measure
    • Standardized Readmission Ratio (SRR) clinical measure
    • In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) clinical measure
    • Long-term Catheter Rate clinical measure
  • Finalizing a proposal to adopt special scoring and payment policies for PY 2022 to address technical issues with the ESRD Quality Reporting System (EQRS), and additionally, due to the impact of the COVID-19 PHE on some of the PY 2022 ESRD QIP measures. Under these finalized policies, no facility will receive a payment reduction for PY 2022.
  • Finalizing a proposal to calculate the performance standards for PY 2024 using CY 2019 data, which is the most recently available full calendar year of data we can use to calculate those standards.

Requests for Information (RFIs):

In this final rule, CMS also notes that it received public comment in response to RFIs that appeared in the proposed rule on topics relevant to the ESRD QIP: Commenters provided feedback on two COVID-19 vaccine measures that CMS is considering for inclusion in the ESRD QIP measure set in the next rulemaking cycle. Stakeholders also expressed support for and provided helpful insights on closing the health equity gap through future demographic data collection efforts and potential additional stratification of quality measure results by race, Medicare/Medicaid dual eligible status, disability status, LGBTQ+, and socioeconomic status.  Finally, stakeholders gave feedback on CMS’ plans to modernize its quality measurement enterprise by advancing to digital quality measurement for the ESRD QIP

Changes to the ESRD Treatment Choices Model

The ESRD Treatment Choices (ETC) Model is a mandatory payment model tested under the authority of section 1115A of the Act. Under the ETC Model, participating ESRD facilities and clinicians who manage dialysis patients (Managing Clinicians) will receive positive or negative adjustments on certain claims for dialysis and dialysis-related services based on the home dialysis rate and transplant rate among their attributed beneficiaries. The ETC Model began January 1, 2021, and payment adjustments under the Model will end June 30, 2027.

The ETC Model includes two payment adjustments:         

  • The Home Dialysis Payment Adjustment (HDPA) is an upward adjustment on home dialysis and home dialysis-related claims with claim service dates between January 1, 2021 and December 31, 2023, the initial three years of the ETC Model.
  • The Performance Payment Adjustment (PPA) creates upward or downward performance-based adjustment on dialysis and dialysis-related claims with claim service dates between July 1, 2022 and June 30, 2027. The PPA amount will depend on the ETC Participant’s performance on the ETC Model’s home dialysis rate and transplant rate among the beneficiaries attributed to the ETC Participant.

Changes in the Final Rule

  • CMS finalized changes to the ETC Model – one of the agency’s first CMS Innovation Center models to directly address health equity – to further address health and socioeconomic disparities, which are a major contributor to chronic kidney disease and ESRD. The changes include incentives for participating ESRD facilities and Managing Clinicians to address health equity among their patients, including enabling access to alternatives to in-center dialysis, specifically home dialysis and transplantation, for ESRD patients of lower socioeconomic status.
  • While people from all backgrounds can be diagnosed with ESRD, the disease disproportionately affects low-income populations. Social determinants of health impact the quality of health care individuals are able to access to prevent and treat ESRD. Closing these health equity gaps through better access to care would improve health care outcomes related to this devastating disease and reduce costs.
  • CMS finalized a two-tiered approach to address disparities in home dialysis and transplant rates through the ETC Model’s benchmarking and scoring methodology.
  • CMS added a Health Equity Incentive to the improvement scoring methodology for both the home dialysis rate and the transplant rate. With the Health Equity Incentive, ETC Participants who demonstrate significant improvement in the home dialysis rate or transplant rate among their attributed beneficiaries who are dual-eligible for Medicare and Medicaid or Low Income Subsidy (LIS) recipients could earn additional improvement points.
  • CMS will stratify achievement benchmarks by the proportion of beneficiaries who are dual-eligible for Medicare and Medicaid or are LIS recipients to ensure that ETC Participants who see a high volume of these patients are not disproportionately negatively affected under the achievement benchmark methodology.
  • Taken together, these two changes acknowledge that socioeconomic disparities in access to alternative renal replacement modalities exist and may impact the ability of ETC Participants to perform well in the ETC Model, while providing an incentive for all ETC Participants to reduce such disparities among their Medicare patients.
  • CMS also finalized additional modifications to the ETC Model, including changes to the home dialysis rate and transplant rate, the achievement and improvement benchmarking and scoring methodology, and a process for sharing certain beneficiary attribution and performance data with ETC Participants.  CMS is also finalizing an additional programmatic waiver and other flexibilities regarding kidney disease patient education services under the ETC Model. 
  • Learn more about the ETC Model here.

The final rule can be downloaded from the Federal Register at: