Fact sheet

End Stage Renal Disease (ESRD) Prospective Payment System (PPS) Calendar Year (CY) 2022 Proposed Rule (CMS-1749-P) Fact Sheet

On July 1, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that proposes to update 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 proposed rule includes several requests for information to inform future payment reform under the ESRD PPS. This rule also proposes updates to the Acute Kidney Injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities.  The rule proposes 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, making the model the agency’s first CMS Innovation Center model to directly address health equity.

The proposed changes to the ETC Model, a mandatory payment model focused on encouraging greater use of home dialysis and kidney transplants, would preserve or enhance the quality of care furnished to people with Medicare while reducing Medicare expenditures. In addition, this rule proposes to update requirements for the ESRD Quality Incentive Program (QIP), and includes requests for information on topics that are relevant to the ESRD QIP.

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, as applicable.


Under the ESRD PPS for CY 2022, Medicare expects to pay $8.9 billion to approximately 7,700 ESRD facilities for furnishing renal dialysis services.  The proposed CY 2022 ESRD PPS base rate is $255.55, which is an increase of $2.42 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 1.2 percent compared with CY 2021. For hospital-based ESRD facilities, CMS projects a decrease in total payments of 1.3 percent, and a projected increase in total payments of 1.2 percent for freestanding facilities.

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. The proposed CY 2022 labor-related share is 52.3 percent.

For CY 2022, CMS is proposing to update the wage index values based on the latest available data and continuing the 2-year transition to 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 proposing to update the outlier services fixed-dollar loss (FDL) amounts for CY 2022, using 2020 claims data. Analysis suggests no substantial ESRD utilization change during the public health emergency, likely due to the patients’ need for services; therefore, we recommend the use of CY 2020 data. Based on the use of the latest available data, the proposed FDL amount for pediatric beneficiaries would decrease from $44.78 to $30.38, and the Medicare allowable payment (MAP) amount would decrease from $30.88 to $28.73, as compared to CY 2021 values. Fluctuations, including the decreases in FDL and MAP payment, are not uncommon due to the small population of pediatric beneficiaries. For adult beneficiaries, the proposed FDL amount would decrease from $122.49 to $111.18, and the MAP amount would decrease from $50.92 to $47.87.

Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) Applications: Two products, a home dialysis machine and a monitoring system for peritoneal dialysis, are under consideration for the TPNIES for CY 2022. CMS is requesting public comment on whether the products meet the eligibility criteria.  


As required by section 1834(r) of the Act, CMS is proposing to update 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 proposed CY 2022 payment rate is $255.55.


The End-Stage Renal Disease Quality Incentive Program (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.

In this proposed rule CMS is:

  • Announcing an extension of time for facilities to report data from September 2020 to December 2020 under our Extraordinary Circumstances Exception (ECE) policy due to CMS operational issues.  Facilities will have until September 1, 2021 to report 2020 data.
  • Proposing to suppress the use of certain ESRD QIP measures (for example, the Standardized Hospitalization Ratio (SHR) clinical measure and the Standardized Readmission Ratio (SRR) clinical measure) for scoring and payment adjustment purposes in the PY 2022 ESRD QIP because CMS has determined that circumstances caused by the COVID-19 Public Health Emergency (PHE) have significantly affected the validity and reliability of the measure and resulting performance scores.

This policy is intended to ensure that these programs do not penalize facilities based on circumstances caused by the PHE for COVID-19 that the measures were not designed to accommodate.

  • Proposing 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 proposals, we would modify the scoring and payment methodologies to provide that no facility would receive a payment reduction for PY 2022.
  • Proposing 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. Due to the impact of CY 2020 data that is excluded from the ESRD QIP for scoring purposes, we believe that using CY 2019 data for performance standard setting purposes is appropriate.

Requests for Information: In this proposed rule, CMS also requests information on the following topics relevant to the ESRD QIP:

  • COVID-19 Vaccination Measures: CMS is seeking comment on two COVID-19 vaccine measures for inclusion in the ESRD QIP measure set in the next rulemaking cycle: 1) COVID-19 Vaccination Coverage for Patients in ESRD Facilities measure; and 2) COVID-19 Vaccination Coverage Among Healthcare Personnel measure. Vaccination measure data are currently being collected via the Centers for Disease Control and Prevention’s National Healthcare Safety Network. We are evaluating options for publicly reporting the information on official CMS datasets that compare the quality of care provided in Medicare-certified dialysis facilities nationwide.
  • Closing the Health Equity Gap in CMS Quality Programs: Consistent with Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities through the Federal Government, CMS is committed to addressing significant and persistent inequities in health outcomes in the U.S. through improving data collection to better measure and analyze the ESRD QIP and to make reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable for facilities, providers, and patients. CMS is seeking comment from stakeholders on future potential additional stratification of quality measure results by race, Medicare/Medicaid dual eligible status, disability status, LGBTQ+, and socioeconomic status.
  • CMS is also seeking comment from stakeholders on the possible collection of a minimum set of demographic data elements by facilities at the time of admission, and using electronic data definitions to permit nationwide, interoperable health information exchange, for the purposes of incorporating into measure specifications and other data collection efforts relating to quality.
  • Future of Digital Quality Measurement: CMS is seeking comment on plans to modernize its quality measurement enterprise:
      • Clarifying the definition of digital quality measures;
      • Standardizing data required for quality measures for collection via Fast Healthcare Interoperability Resources (FHIR®)-based Application Programming Interfaces (APIs);
      • Leveraging technological opportunities to facilitate digital quality measurement;
      • Better supporting data aggregation;
      • Developing a common portfolio of measures for potential alignment across CMS regulated programs, federal programs and agencies, and the private sector.


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) receive positive or negative adjustments on certain claims for dialysis and dialysis-related services, based on rates of home dialysis and transplantation among their attributed beneficiaries. The ETC Model began January 1, 2021, and will end June 30, 2027.

The ETC Model includes two payment adjustments:

  1. 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.
  1. The Performance Payment Adjustment (PPA) creates upward or downward performance-based adjustment on all dialysis claims and Monthly Capitation Payment (MCP) claims with service dates between July 1, 2022 and June 30, 2027. The PPA amount will depend on the participant’s performance on the ETC Model’s home dialysis rate and transplant rate among the beneficiaries attributed to the ETC Participant.

Proposed Changes

CMS is proposing changes to the ETC Model to address health and socioeconomic disparities, which are a major contributor to chronic kidney disease and ESRD. The proposed changes include incentives for participating ESRD facilities and Managing Clinicians to address health equity among their patients. They also include incentives that would reduce the disparities in which ESRD patients of lower socioeconomic status are able to access alternatives to in-center dialysis, specifically home dialysis and transplantation.

If these changes are finalized, the ETC Model would be the agency’s first CMS Innovation Center model to directly address health equity.

While people from all backgrounds can be diagnosed with ESRD, it is more common in minority and low-income populations. Social determinants of health impact not just who ends up with ESRD, but the quality of health care they are able to access. Closing these health equity gaps would help address this devastating disease, provide better accessibility to care, and reduce costs to the U.S. healthcare system.

CMS is considering a two-tiered approach to address disparities in home dialysis and transplant rates through the ETC Model’s benchmarking and scoring methodology.

  • CMS is proposing to add 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 rates of home dialysis or transplantation among their beneficiaries who are dual-eligible for Medicare and Medicaid or low-income-subsidy (LIS) recipients could earn additional improvement points.
  • CMS is also proposing to stratify achievement benchmarks by proportion of beneficiaries who are dual-eligible for Medicare and Medicaid or are LIS recipients, so ETC participants who see a high volume of these patients would not face negative financial consequences as a result.

Taken together, these two proposed 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.

The most common form of home dialysis is peritoneal dialysis. Home dialysis and peritoneal dialysis often leads to greater patient autonomy, better health outcomes, and improved quality of life. Stakeholders have identified Medicare payment for peritoneal dialysis catheter placement as a barrier to home dialysis. In an effort to better understand barriers to peritoneal dialysis catheter placement, the proposed rule includes an RFI to seek information from the public on this topic to inform potential future modifications to the ETC Model.

Additionally, for purposes of the ETC Model, CMS is issuing an RFI seeking information from the public about a beneficiary experience measure for home dialysis care.

  • The In-Center Hemodialysis (ICH) Consumer Assessment of Healthcare Providers and Systems Survey (CAHPS)® survey includes perceptions of changes in quality of care to beneficiaries who receive in-center dialysis.[1] However, this survey is limited to in-center dialysis treatment.
  • CMS is considering and seeking comment on an existing or new home dialysis measure that addresses patient satisfaction, patient activation, and quality of life.

CMS also proposes 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 proposing additional programmatic waivers and other flexibilities regarding the Kidney Disease Education benefit under the ETC Model.  In particular, CMS is proposing to waive certain requirements such that the KDE benefit can be furnished via telehealth.

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




[1] CAHPS® is a registered trademark of the Agency for Healthcare Research and Quality.