Proposed End-Stage Renal Disease Treatment Choices (ETC) Mandatory Model
CMS is proposing the End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model to encourage greater use of home dialysis and kidney transplants for Medicare beneficiaries with ESRD, while reducing Medicare expenditures and preserving or enhancing the quality of care furnished to beneficiaries with ESRD. Both of these modalities have support among health care providers and patients as preferable alternatives to in-center hemodialysis, but utilization has been less than in other developed nations.
CMS proposes to achieve these goals by adjusting certain payments to nephrologists and other clinicians managing beneficiaries with ESRD (Managing Clinicians) and ESRD facilities selected to participate in the model. In particular, the proposed model would apply payment adjustments to the adjusted ESRD Prospective Payment System (PPS) per treatment base rate under the ESRD PPS to selected ESRD facilities, as well as the monthly capitation payment (MCP) to selected Managing Clinicians. These payment adjustments would offer the incentive to participating ESRD facilities and Managing Clinicians to work with beneficiaries and caregivers in the choice of treatment modality, and to provide additional resources to support greater utilization of home dialysis and kidney transplants.
Why develop a model for home dialysis and transplantation?
Both of these modalities, home dialysis and transplantation, seem to have support among health care providers and patients as preferable alternatives to in-center hemodialysis, but utilization has been less than in other developed nations. For example, studies have shown that for patients who require dialysis, dialyzing at home is often preferred by patients and physicians. The benefits include increased independence and quality of life. The rate of home dialysis in the U.S. – about 12% in 2016 – falls far below that of other developed nations.
In addition, kidney is widely viewed as the optimal treatment for most patients with ESRD, generally increasing survival and quality of life while reducing medical expenditures. However, in 2016 only 29.6% of prevalent ESRD patients in the U.S. had a functioning transplant and only 2.8% of incident patients received a preemptive transplant. These rates are below those of other developed nations. The U.S. was ranked 39th of 61 countries reporting USRDS in kidney transplants per 1,000 dialysis patients in 2016. 
What is the proposed model timeline?
The payment adjustments for those ESRD facilities and Managing Clinicians selected for participation in the proposed ETC model would apply to applicable Medicare claims with dates from January 1, 2020 through June 30, 2026.
Would the model require Medicare payment adjustments for any health care providers?
The model would require certain Medicare payment adjustments for the selected ESRD facilities and Managing Clinicians. For the proposed model, a Managing Clinician would be a Medicare-enrolled physician or non-physician practitioner who furnishes and bills the monthly capitation payment (MCP) for managing one or more adult ESRD beneficiaries. Payment to ESRD facilities and Managing Clinicians not selected to participate in the model would not be affected.
CMS’s proposals for the ETC Model are included in the Medicare proposed rule for Specialty Care Models to Improve Quality of Care and Reduce Expenditures. This notice of proposed rulemaking (NPRM) was issued on July 10, 2019. CMS will review public comments timely submitted before establishing final policies.
Why is CMS proposing required participation for selected ESRD facilities and Managing Clinicians?
CMS is proposing required participation in order to obtain model participation by a broader set of ESRD care provides than have participated in CMS models to date and to support. CMS’s ability to conduct a robust test and evaluation of the models. Requiring participation for certain models helps CMS understand the impact on a variety of provider and supplier types so that the resulting data would be more broadly representative.
How would ESRD facilities and Managing Clinicians be selected for participation in the model?
CMS would select ESRD facilities and Managing Clinicians to participate in the proposed model according to their location in randomly-selected geographic areas, stratified by region, so as to account for approximately 50 percent of adult ESRD beneficiaries in all 50 states and the District of Columbia. The geographic unit of selection would be the Hospital Referral Region (HRR). A specific element of the selection would be that ESRD facilities and Managing Clinicians in HRRs for which at least 20 percent of the component zip codes are located in Maryland would generally be included in the model’s interventions, so as to be consistent with the ongoing Maryland Total Cost of Care Model being tested in that Maryland. Across the U.S., certain ESRDERSD facilities and Managing Clinicians would be excluded from certain portions of the model’s interventions for serving low volumes of adult ESRD beneficiaries.
How would beneficiaries be attributed for the proposed model?
Beneficiaries would be attributed to selected Managing Clinicians and ESRD facilities on a month-by-month basis for purposes of calculating certain payment adjustments under the model. A beneficiary would be attributed to the ESRD facility accounting for the most dialysis treatments during the month, and the Managing Clinician billing the MCP for the month.
How would the proposed model alter Medicare payment for selected ESRD facilities and Managing Clinicians?
Two types of payment adjustments would apply. The first would be a uniformly positive adjustment on Medicare claims for home dialysis and home dialysis-related services during the initial three years of the model, providing an additional payment to selected ESRD facilities and Managing Clinicians for supporting beneficiaries dialyzing at home. The second adjustment would apply to both home and in-center dialysis and related claims, and could be either positive or negative. These adjustments, which are based on the participant’s home dialysis rate and transplant rate performance, would be made to the adjusted ESRD PPS per treatment base rate under the ESRD PPS for selected ESRD facilities and to the MCP for selected Managing Clinicians. Greater positive and negative adjustments for model participants would be phased in over the model duration.
Does the proposed model include protections for beneficiaries or health care providers?
Yes, there would be safeguards for beneficiaries and providers participating in the model. In determining home dialysis and transplant rates for selected ESRD facilities and Managing Clinicians, certain beneficiaries would be excluded, including those under age 18, in hospice, diagnosed with dementia, and receiving dialysis for acute kidney injury. To standardize comparisons between ESRD facilities and Managing Clinicians with sicker patients and those with healthier patients, the model would risk adjust these rates. CMS would monitor for potential coercion, steering, and inappropriate referrals to the targeted modalities, and assess the impacts of the model on mortality and hospitalizations. Beneficiaries would maintain freedom of choice among health care providers, and all other current protections afforded by law. An ESRD facility or Managing Clinician selected for participation in the model would be required to post a notification to that effect, and no change in beneficiary cost sharing amounts would apply.
Does the proposed model include Medicare benefit enhancements?
Yes. Under the Kidney Disease Education benefit, Medicare currently covers up to six 1-hour sessions for beneficiaries with stage 4 CKD. The ETC Model would allow practitioners other than currently permitted clinicians to provide this service, and would permit this service to be furnished to beneficiaries with stage 5 CKD as well as certain beneficiaries with ESRD.
How would the proposed model be evaluated?
In accordance with section 1115A of the Social Security Act, CMS would conduct an evaluation to assess the quality of care furnished under the ETC Model and changes in Medicare program spending. This evaluation would inform the CMS Office of the Actuary’s decision whether to certify the model and the HHS Secretary’s determinations for model expansion. The evaluation would determine from CMS claims data whether the payment adjustments for Managing Clinicians and ESRD facilities under the model improve the uptake of home dialysis and transplants, improve quality, and reduce spending. The evaluation would depend on a rigorously selected comparison group to control for factors aside from the intervention that might affect quality and cost. The comparison group would be drawn from the pool of Managing Clinicians and ESRD facilities located in regions that are not subject to the ETC model’s payment adjustments. Model participants and comparators would be matched on key variables such as rates of home dialysis and transplants and Medicare spending in the years prior to the model as well, the socio-demographic and clinical characteristics of their patients, and market-level factors. A difference-in-difference design or similar approach would measure changes in outcomes in beneficiaries treated by ETC Participants to those treated by ESRD facilities and Managing Clinicians in comparison geographic areas, providing a robust measure of the ETC model’s impact.
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 United States Renal Data System, Annual Data Report, 2018. Volume 2, Chapter 11: International Comparisons. Figure F11.12
 United States Renal Data System. Annual Data Report, 2018; Volume 2. Chapter 1: Incidence, Prevalence, Patient Characteristics, and Treatment Modalities. https://www.usrds.org/2018/view/v2_01.aspx
 United States Renal Data System. Annual Data Report, 2018. Volume 2. Chapter 11. International Comparisons. Figure 11.16