Medicare Tweaks Kidney Dialysis Payments: Bureaucracy Flows On
Published Date: 11/24/2025
Rule
Summary
Starting January 1, 2026, Medicare is updating how it pays for kidney dialysis services for people with end-stage kidney disease and those with acute kidney injury. The rule changes payment rates, improves quality programs, and ends some parts of the kidney treatment choices model. These updates aim to make care better and smarter while adjusting how money flows to dialysis providers.
Analyzed Economic Effects
8 provisions identified: 1 benefits, 4 costs, 3 mixed.
TDAPA Payments Continue; $500M in Drug Payments
TDAPA payment periods for DefenCath, Vafseo, and certain oral phosphate binders continue into CY 2026. CMS estimates combined TDAPA payments for these drugs in CY 2026 will be about $500 million, of which roughly $100 million will be beneficiary coinsurance. CMS also finalizes post-TDAPA add-on amounts for 2026: Korsuva at $0.1131 per treatment and DefenCath at $2.3710 per treatment (applies to Q3–Q4).
ESRD Dialysis Base Rate Raised to $281.71
Starting January 1, 2026, the Medicare ESRD per-treatment base rate is $281.71 (up from $273.82). CMS estimates aggregate Medicare payments to dialysis providers will increase by about $180 million in CY 2026 and estimates beneficiary coinsurance payments will rise by about 2.2 percent (about $40 million).
TDAPA Eligibility Window Tightened
Beginning for TDAPA applications submitted on or after January 1, 2028, a new renal dialysis drug or biological product must have been approved by the FDA within the past 3 years at the time of TDAPA application submission.
Outlier Payment Amounts Reduced for CY2026
For CY 2026 CMS reduced outlier thresholds: pediatric fixed dollar loss (FDL) falls from $234.26 to $162.43 and pediatric MAP from $59.60 to $50.19; adult FDL falls from $45.41 to $14.80 and adult MAP from $31.02 to $23.68. CMS also reports outlier payments represented about 0.8 percent of total Medicare payments in CY 2024 (below the 1.0 percent target).
ESRD QIP Measure Set and Survey Changes
Beginning with Payment Year (PY) 2027, CMS removes three ESRD Quality Incentive Program reporting measures (Facility Commitment to Health Equity; Screening for Social Drivers of Health; Screen Positive Rate for Social Drivers of Health). Beginning with PY 2028, CMS shortens the ICH CAHPS survey by removing 23 questions. CMS estimates the overall economic impact of the PY 2027 ESRD QIP will be about $146.6 million (including $125 million for information collection and about $21.6 million in payment reductions) and the PY 2028 impact about $145.6 million (including $125 million for information collection and about $20.6 million in payment reductions).
AKI Dialysis Paid at ESRD Base Rate
For calendar year 2026, Medicare payment for dialysis furnished to individuals with acute kidney injury (AKI) is set at $281.71 per treatment (the same as the ESRD PPS base rate). CMS estimates aggregate Medicare payments for AKI dialysis will increase by $1 million in CY 2026.
New Non-Contiguous Area Payment Adjustment (NAPA)
CMS is finalizing a Non-Contiguous Areas Payment Adjustment (NAPA) for ESRD facilities in Alaska, Hawaii, and the U.S. Pacific Territories (Guam, American Samoa, and the Northern Mariana Islands). To keep the change budget neutral, CMS applied a corresponding budget neutrality factor of 0.99860 to the CY 2026 ESRD PPS base rate.
Termination of the ETC Model Dec. 31, 2025
CMS finalizes termination of the End-Stage Renal Disease Treatment Choices (ETC) Model effective December 31, 2025. CMS will apply the payment adjustments described in 42 CFR part 512, subpart C only to claims with service dates beginning January 1, 2021 through December 31, 2025. CMS estimates the net Federal impact of termination will be about $1 million in savings during the final 18 months of the performance period (January 1, 2026 through June 30, 2027).
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