CMS Finalizes New Mandatory Payment Model for ESRD Treatments

The Centers for Medicare & Medicaid Services (“CMS”) recently finalized the End-Stage Renal Disease (“ESRD”) Treatment Choices Model (the “ETC Model”), which is a mandatory payment model intended to reduce Medicare expenditures by encouraging greater use of home dialysis and kidney transplants for patients with chronic kidney disease, while maintaining or improving the quality of care for this patient population.

The ETC Model, which was part of the Improve Quality of Care and Reduce Expenditures Final Rule issued by CMS, will begin on January 1, 2021, and run through June 30, 2027. CMS issued a fact sheet along with the Final Rule; additional information can be found on the ETC Model website. The Final Rule also finalized the Radiation Oncology Model, which we previously discussed here.

ETC Model Design

Studies have shown transplantation is a favorable and effective treatment option for patients with ESRD. In addition, providers and patients prefer home dialysis as an alternative to in-center hemodialysis. However, both modalities are underutilized in the United States compared to other developed nations.

To test whether greater use of home dialysis and transplantation for ESRD beneficiaries will reduce Medicare expenditures, the ETC Model will provide two types of payment adjustments for participating ESRD facilities and clinicians managing beneficiaries with ESRD (“Managing Clinicians”)[1].

• Home Dialysis Payment Adjustment (“HDPA”). The HDPA will provide additional payments to ESRD facilities and Managing Clinicians based on their provision of home dialysis and dialysis-related services with claim service dates during the initial three years of the ETC Model (i.e., January 1, 2021, through December 31, 2023). These positive adjustments will be reflected in the ESRD Prospective Payment System payments for home dialysis claims and the monthly payment for home dialysis-related claims.
• Performance Payment Adjustment (“PPA”). The PPA will apply to both home and in‑center dialysis and dialysis-related Medicare payments with claim service dates beginning July 1, 2022, and ending June 30, 2027. These positive or negative adjustments will be based on ESRD facilities’ and Managing Clinicians’ rates of home dialysis, kidney transplantation waitlisting, and living donor transplantation among the beneficiaries attributed to the ETC Model.

Participation in the ETC Model

CMS will require participation in the ETC Model by ESRD facilities and Managing Clinicians in randomly-selected geographic areas, known as Hospital Referral Regions (“HRRs”). The list of HRRs may be found here. CMS estimates the ETC Model will affect approximately 30% of kidney care providers in the United States.

Interaction with the KCC Model

In a related development, on July 10, 2019, CMS announced the Kidney Care Choices (“KCC”) Model (formerly the Comprehensive Kidney Care Model), which is designed to provide financial incentives for successful transplants and coordinated care for beneficiaries with chronic kidney disease or ESRD.  In commentary to the ET Model Final Rule, CMS stated that it views the KCC Model as complementary to the ETC Model, as both promote a greater focus on kidney transplants. Therefore, the Final Rule commentary provides that the ETC and KCC Models will run simultaneously, and ESRD facilities and Managing Clinicians required to participate in the ETC Model will also be permitted to participate in the KCC Model.

Practical Takeaways

• As this is a mandatory model beginning January 1, 2021, ESRD facilities and Managing Clinicians should immediately begin reviewing the HRR list to determine whether their locations are covered by the ETC Model.
• Although CMS has not provided any guidance on initial steps that must be undertaken by providers subject to the ETC Model, ESRD facilities and Managing Clinicians who believe they will be required to participate in the ETC Model should contact CMS at ETC-CMMI@cms.hhs.gov to request initial guidance and access to any ongoing ETC Model announcements.
• ESRD facilities and Managing Clinicians selected to participate in the ETC Model should begin to evaluate and implement any necessary administrative adjustments to comply with the new requirements for the ETC Model as soon as possible.

If you have questions related to the ETC Model or would like assistance preparing for participation, please contact:

• Jennifer Skeels at 317.977.1497 or jskeels@wp.hallrender.com;
• Regan Tankersley at 317.977.1445 or rtankersley@wp.hallrender.com;
• Julie Mitchell at 317.429.3643 or jmitchell@wp.hallrender.com;
• Megan Culp at 317.429.3644 or mculp@wp.hallrender.com; or
• Your regular Hall Render attorney.

Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.