Final Rule Encourages Home Dialysis and Living Donor Kidney Transplants

Mandatory model aims to reduce Medicare expenditures for ESRD patients while improving their quality of care.

Medicare beneficiaries suffering with end-stage renal disease (ESRD) will have more treatment options in 2021. In a final rule published in the Sept. 29 Federal Register, the Centers for Medicare & Medicaid Services (CMS) have established the End-Stage Renal Disease Treatment Choices (ETC) Model — a mandatory payment model that aims to test whether greater use of home dialysis and living donor kidney transplantation will reduce Medicare expenditures and enhance the quality of patient care.

Current Approach

About 88 percent of ESRD patients receive in-center dialysis, even though those with kidney failure may enjoy increased independence and quality of life by choosing in-home dialysis or kidney transplantation. Kidney transplantation is widely viewed as the best treatment for most patients with ESRD, generally increasing survival and quality of life while reducing medical expenditures. Unfortunately, donations from deceased donors do not meet the demand for those waiting for a transplant, and current government regulations discourage transplants anyway. This new rule will offer incentives for providers to change their patients’ course of care when appropriate to improve their health outcomes.

How It Will Work

New incentives will drive this test model. Under the rule, about one third of Medicare patients (120,000) with ESRD will be enrolled in a system which rewards better patient outcomes. The current fee-for-service (FFS) plan incentivizes providers to focus on cookie-cutter government rules which pay for the illness and procedures done instead of tailoring the best treatment for each individual patient. In a recent press conference, Health and Human Services Secretary Alex Azar said, “Under the status quo in kidney care, our rules and government incentives so often do stand in the way of treatment that a patient and his or her doctor might agree makes sense.”

Dollars and Sense

Americans with kidney disease represent more than one in five dollars spent in traditional Medicare, but patient outcomes don’t reflect this. Only 1 percent of ESRD patients receive Medicare, but they comprise 7 percent of Medicare spending. CMS currently provides incentives for in-center dialysis with little focus on prevention and tailored treatments. The new rule aims to work to not only expand home dialysis and better support living donor kidney transplants, but to also strive to slow the progression of chronic kidney disease. By doing so, Medicare hopes to improve patient quality of life and save more than $23 million in the next 5 years. CMS Administrator Seema Verma says, “The model increases home dialysis payment rates from 2021 to 2023 to incentivize a change. We will also increase or decrease the amount we pay dialysis facilities and nephrologists starting in July 2022 based on their relative performance increasing rates of home dialysis, transplant wait-listing, and living donor transplants.” CMS estimates a savings of roughly $32,000 per beneficiary over 10 years for living donor kidney transplant.

Payment Model

The ETC model will shift Medicare payments to encourage ESRD facilities and managing clinicians to offer more choices — utilization of home dialysis and kidney transplants — while simultaneously reducing Medicare costs. It includes two payment adjustments:

  • Home Dialysis Payment Adjustment (HDPA): a positive adjustment on certain home dialysis and home dialysis-related claims during the first three years of the model.
  • Performance Payment Adjustment (PPA): a positive or negative adjustment on dialysis and dialysis-related Medicare payments for both home dialysis and in-center dialysis based on ESRD facilities’ and managing clinicians’ rates of home dialysis, as well as kidney transplant waitlisting and living donor transplantation.

Payment adjustments will be implemented under the ETC model from Jan. 1, 2021, to June 30, 2027.

Living Donor Transplants

ETC participants will now be able to support ESRD Medicare patients who wish to pursue a living donor transplant. They will be able to provide education, help navigate the transplant process, provide referrals, and coordinate care during the transplant process.

This is a great step forward. At any time, there are roughly 100,000 people in the United States waiting for a kidney transplant — and the number of deceased donors cannot meet this demand. Under the new rule, qualified living donors may apply for financial assistance through the National Living Donor Assistance Center (NLDAC). Approved applicants can receive up to $6,000 to cover travel, lodging, meals, and incidental expenses. Secretary Azar announced “We’re significantly expanding support for living organ donation, to include compensation for lost wages, child care, and elder care, because no generous American who wants to save a life by becoming a kidney donor should face barriers to doing so.”


42 CFR § 512:

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