CMS Proposes Revisions to Medicare ESRD Payment System for 2027
The Centers for Medicare & Medicaid Services (CMS) released a proposed rule on June 24, 2026, announcing revisions to the payment rates and policies under the Medicare End-Stage Renal Disease (ESRD) Prospective Payment System (PPS). These changes will affect services delivered to Medicare beneficiaries starting January 1, 2027. The proposal also includes updates to the acute kidney injury (AKI) dialysis payment rate and adjustments to the ESRD Quality Incentive Program (QIP).
For 2027, CMS proposes increasing the ESRD PPS base rate to $299.55, corresponding to a 1.1% rise in total payments to facilities in both freestanding and hospital-based settings. This adjustment includes a $15.96 add-on for phosphate binders. Additional changes target the low-volume payment adjustment, pediatric patient payments, home and self-dialysis training add-ons, and modifications to the transitional drug add-on payment adjustment (TDAPA).
Measure Revisions and Additions
By 2029, CMS intends to replace the Hypercalcemia reporting measure with a new clinical measure for hyperphosphatemia in dialysis patients, while removing two other measures from the ESRD QIP. Updates to the National Healthcare Safety Network (NHSN) Bloodstream Infection (BSI) measure are also planned. Furthermore, CMS seeks feedback on incorporating the Dialysis Facility Discussion of Patient Life Goals measure into the QIP.
Under the ESRD PPS, facilities receive a bundled payment per dialysis treatment, encompassing all related services and products. Payments adjust based on patient characteristics, facility location, low patient volume, non-contiguous status, and wage index factors. Additional payments for training, high-cost patients, and specific supplies are included in the bundle.
CMS anticipates $6.2 billion in Medicare payments for dialysis services in 2027. The proposed base rate adjustment includes a 1.6% market basket update and ensures budget neutrality. Geographic wage differences will align with the latest BLS wage index data, incorporating a wage-index floor and decrease cap.
Proposed Payment and Policy Changes
Outlier policy updates suggest increased fixed dollar loss (FDL) and Medicare allowable payment (MAP) amounts for pediatric and adult beneficiaries, reflecting drug usage projections. For phosphate binder integration, the base rate is set to rise by $15.96, aligning with sales and utilization data.
CMS plans to raise the Low-Volume Payment Adjustment threshold, acknowledging the higher costs faced by facilities with fewer annual treatments. Proposed pediatric payment adjustments reflect updated cost data and the needs of low-volume facilities. The proposed increase for home and self-dialysis training payments aligns with training costs incurred during initial treatment periods, with technical revisions for TDAPA to adjust post-TDAPA payments according to drug costs.
The AKI dialysis payment rate will align with the proposed ESRD base rate, using the ESRD wage index. CMS outlines updates to the ESRD QIP, including performance measure replacements and Bloodstream Infection measure refinements to enhance quality objectives.
CMS is soliciting comments on these proposed changes, exploring the inclusion of new measures reflecting patient life goals discussions in future policymaking. Interested parties can review the full proposal in the Federal Register.