ADVI Instant: CMS Releases CY 2025 ESRD PPS Proposed Rule

On June 27, 2024, the Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2025 End Stage Renal Disease (ESRD) Prospective Payment System (PPS) Proposed Rule (link) with accompanying fact sheet (link). 

Below, ADVI provides the initial topline review of relevant topics. In addition to annual updates to the ESRD base rate, CMS outlines the regulatory requirement to include oral-only drugs in the ESRD PPS bundled payment starting January 1, 2025, and proposes to allow payment for acute kidney injury home dialysis services. 

Comments on the proposed rule are due August 26, 2024.

Inclusion of Oral-Only Drugs in the ESRD PPS Bundled Payment 

• Under current regulation, payment for oral-only drugs and biological products (drugs and biological products with no injectable functional equivalent) is included in the ESRD PPS bundled payment, effective January 1, 2025.
  • Currently, oral-only drugs are covered under Medicare Part D. 
• CMS will incorporate these drugs into the ESRD PPS bundled payment using the Transitional Drug Add-on Payment Adjustment (TDAPA), as described in the CY 2016 ESRD PPS final rule. 
• For phosphate binders only, CMS will use the same process that it used for calcimimetics in incorporating the drugs into the ESRD PPS.
  • That is, CMS will pay for these drugs using the TDAPA for at least two years, beginning January 1, 2025. CMS will then undergo the rulemaking process to modify the ESRD PPS base rate, accounting for the cost and utilization of phosphate binders in the bundled payment. 
• CMS requests comment on the extent to which 100% of ASP is appropriate for the TDAPA payment amount for phosphate binders, and whether there are any additional costs not accounted for under the TDAPA payment of 100% of ASP. 
• CMS notes that they have previously issued guidance about this process, including information on billing, discarded drug policies, and reporting timelines. 

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

• CMS is proposing to allow payment for AKI renal dialysis services furnished to beneficiaries in their homes. Payment for these treatments would be made at the same payment rate as in-center dialysis treatments.
  • CMS notes that these proposed changes will allow Medicare beneficiaries with AKI a wider range of choices about how and where to receive dialysis services. These changes would also support more frequent dialysis at a lower ultrafiltration rate, which may support recovery of kidney function in patients with AKI. 
• CMS is also proposing to allow ESRD facilities to bill Medicare for the home and self-dialysis training add-on payment adjustment for beneficiaries with AKI. 
• Related, CMS is proposing to make conforming changes to the ESRD facility Conditions for Coverage, clarifying that home dialysis is available to both AKI and ESRD patients. 

Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) 

CMS received no applications for consideration under TPNIES for CY 2025. Additionally, because no new items were approved for the TPNIES for CY 2024, there are no items previously approved for the TPNIES for which payment is continuing in CY 2025. 

Proposed Changes to ESRD PPS 

CMS proposed the following changes to the CY2025 ESRD PPS: 

• Increase the ESRD PPS base rate to $273.20, a 2.2% increase from the CY 2024 base rate. 
• Establish a new ESRD PPS-specific wage index that would adjust fee schedule payments for geographic differences and area wages.  
• Expand the list of ESRD outlier services to include drugs and biological products that were or would have been included in the composite rate prior to establishment of the ESRD PPS. 
• Update the outlier services fixed-dollar loss (FDL) amounts for pediatric patients from $11.32 in CY 2024 to $223.44 in CY 2025.  
• Update the Medicare Allowable Payment (MAP) amounts for pediatric payments from $23.36 in CY 2024 to $58.39 in CY 2025. 
• Update the outlier services FDL amounts for adult patients from $71.76 in CY 2024 to $49.46 in CY 2025.  
• Update the MAP amounts for adult payments from $36.28 in CY 2023 to $33.57 in CY 2024. 
• For CY 2024, CMS proposes an average per treatment offset amount of $10.18 for the TPNIES for capital-related assets that are home dialysis machines. 

ESRD Quality Incentive Program (QIP) 

• CMS is proposing the following, beginning in Payment Year 2027:
  • Replace the Kt/V Dialysis Adequacy Comprehensive clinical measure with a Kt/V Dialysis Adequacy measure topic, which would be comprised of four individual Kt/V measures and scored based on a separate set of performance standards for each measure. 
  • Remove the National Healthcare Safety Network (NHSN) Dialysis Event reporting measure. 
• CMS is requesting public comment on a potential future health equity payment adjustment and potential future updates to the data validation policy. 

ETC Model 

• CMS is proposing to modify the definition of “ESRD Beneficiary” as used for the purposes of attributing beneficiaries to the ETC Model.  
• CMS is requesting information on policy interventions that could be enacted through CMS or CMMI to promote access to high quality home dialysis.

ADVI will continue monitoring developments and the next steps. This is a delayed release. ADVI Instant content is distributed in real-time for retainer clients. Get in touch to learn more about how we can support your commercialization, market access, and policy needs. 

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Lindsay Bealor Greenleaf, JD, MBA
Senior Vice President, Market Access and Policy Strategy