CMS Proposes Medicare Payment for Use of Home Dialysis Machines

CMS is proposing to expand eligibility for an add-on Medicare payment to include certain home dialysis machines.

The End-State Renal Disease (ESRD) Prospective Payment System (PPS) rule proposed on Monday would allow the transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES) to include certain capital-related assets that are home dialysis machines.

When the machines are used in the home for a single patient, CMS is proposed to pay 65 percent of the rates determined by Medicare Administrative Contractors (MACs) pre-adjusted per treatment for two calendar years. After that, the home dialysis machines would not become eligible outlier services and no changes would be made to the ESRD PPS base rate, CMS stated.

“CMS data shows that those with ESRD have the highest rate of hospitalization of any single group, a trend consistent with having to frequently leave home to receive dialysis,” CMS Administrator Seema Verma stated in a press release. “In the midst of a deadly pandemic that poses a particular threat to those with serious underlying conditions, President Trump’s call for increased access to home dialysis has never been more urgent.”

“Unfortunately, government rules too often stand in the way,” Administrator Verma said. “Today’s action represents a sorely needed course direction, making it easier for ESRD facilities to make new and innovative home dialysis machines available to patients who need them.”

End-stage renal disease continues to be one of the costliest chronic conditions for Medicare. While just 1 percent of beneficiaries live with end-stage renal disease, the population accounts for about 7 percent of the Medicare budget, according to statistics from the University of California San Francisco.

Hemodialysis care – the only alternative to transplantation available today – costs Medicare an average of $90,000 per patient annually, researchers reported.

Transitioning beneficiaries from expensive dialysis centers to the home has been a top priority for the Trump administration, which launched the Advancing American Kidney Health Initiative almost exactly a year ago. As part of the initiative, HHS released the Kidney Care First and ESRD Treatment Choices (ETC) Model to delay the onset of dialysis and incent kidney transplantation.

 The mandatory Kidney Care First launched in 2020 without financial accountability despite criticism about how compulsory participation inappropriately incents kidney transplants.

However, the COVID-19 pandemic has lit a fire under CMS to implement additional incentives for providers to transition ESRD patients to the home for dialysis treatments that could put them at risk for exposure, the agency recently stated.

“Per the CDC, the risk factors for COVID-19 include older adults and people of any age who have serious underlying medical conditions, such as diabetes and chronic kidney disease undergoing dialysis,” CMS wrote in the proposed rule. “Medicare’s ESRD population aligns with the profile of patients who are more susceptible to COVID-19. Therefore, it is important to reduce the risk of infection and this can be done through isolating patients from in-center exposure by encouraging home dialysis.”

In addition to the new add-on payment for home dialysis machines, CMS also proposed to hold harmless ESRD facilities that would otherwise qualify for the Low Volume Payment Adjustment (LVPA) if not for hospitals transitioning patients to ESRD facilities to mitigate the risk of COVID-19.

In addition, the proposed rule included the following: an addition to the ESRD PPS base rate to include calcimimetics in the ESRD PPS bundled payment; changes to the eligibility criteria and determination process for the transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES); and an update to the ESRD PPS wage index to adopt the new Office of Management and Budget (OMB) delineations with a transition period.

Overall, CMS anticipates the proposed rule to increase Medicare payments to all ESRD facilities by 1.6 percent in calendar year (CY) 2021.

To read the full proposed rule, click here.