Calendar Year (CY) 2027 End-Stage Renal Disease (ESRD) Prospective Payment System Final Rule — CMS-1846-F

Calendar Year (CY) 2027 End-Stage Renal Disease (ESRD) Prospective Payment System Final Rule - CMS-1846-F

Combating kidney disease starts with prevention, early detection, and timely treatment to help protect kidney health and slow disease progression. For Americans who depend on dialysis, high-quality care is vital to their health and daily lives. The Centers for Medicare & Medicaid Services (CMS) is committed to improving how our kidney care system serves patients by supporting access to lifesaving treatment so more Americans can live longer, healthier lives.

CMS is advancing its goals for dialysis access and quality through the calendar year (CY) 2027 Medicare End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) final rule. On Oct. 28, 2026, CMS issued a final rule to update payment rates and policies under the ESRD PPS for renal dialysis services furnished to Medicare beneficiaries on or after Jan. 1, 2027. This rule also finalizes updates to the acute kidney injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities for calendar year (CY) 2027 and updates requirements for the ESRD Quality Incentive Program (QIP).

For CY 2027, CMS will increase the ESRD PPS base rate to $297.52, which CMS expects will increase total payments to all ESRD facilities, both freestanding and hospital-based, by approximately 2.7%. This amount includes a $12.85 increase to account for the incorporation of phosphate binders into the ESRD PPS base rate. The CY 2027 ESRD PPS final rule also finalizes changes to the low-volume payment adjustment, changes to the payment adjustments for pediatric patients, an increase to the home and self-dialysis training add-on payment adjustment amount, and modifications to the transitional drug add-on payment adjustment (TDAPA), and modifications to the post-TDAPA add-on payment adjustment policies.

Beginning with Payment Year (PY) 2029, CMS is replacing the Hypercalcemia reporting measure with the Facility-Level Percentage of Chronic Hyperphosphatemia in Dialysis Patients (Hyperphosphatemia) clinical measure and removing two reporting measures from the ESRD QIP. CMS is also updating the National Healthcare Safety Network (NHSN) Bloodstream Infection (BSI) in Hemodialysis Patients clinical measure national baseline data and risk-adjustment methodology. Additionally, CMS is updating the measure domains and the domain and measure weights used to calculate the total performance score. CMS also summarizes input received on a request for information on the potential inclusion of the Dialysis Facility Discussion of Patient Life Goals (D-PaLS) Patient-Reported Outcome Performance measure (PRO-PM) in the ESRD QIP.

Final Updates to the ESRD PPS for CY 2027

The ESRD PPS provides a bundled, per-treatment payment to ESRD facilities that includes all renal dialysis services furnished for outpatient maintenance dialysis, including drugs and biological products. Additionally, the bundled payment includes all other renal dialysis items and services that were formerly separately payable under previous payment methodologies. The bundled payment rate is case-mix adjusted for several factors relating to patient characteristics. There are also facility-level adjustments for low patient volume, for ESRD facilities in rural areas, and for ESRD facilities in certain noncontiguous states and territories, as well as a wage index adjustment. When applicable, the bundled payment rate also includes a training payment for home and self-dialysis modalities; an outlier payment for high-cost patients; add-on payment adjustments for certain drugs, equipment, and supplies; and a pediatric ESRD add-on payment adjustment (through 2026).

Annual Update to the ESRD PPS Base Rate
Under the ESRD PPS for CY 2027, Medicare expects to pay $7.0 billion to approximately 7,600 ESRD facilities for furnishing renal dialysis services. The final CY 2027 ESRD PPS base rate is $297.52, which is an increase of $15.81 from the current CY 2026 base rate of $281.71. This amount includes $12.85 to reflect the inclusion of phosphate binders into the ESRD PPS base rate. Additionally, this amount reflects the application of the final wage index budget neutrality adjustment factor (1.00260), the final CY 2027 ESRD Bundled market basket update of 1.9%, and a budget neutrality factor of 0.98864 for the budget neutral changes to low-volume, pediatric, and home and self-dialysis training payment adjustments, equaling $297.52 [ ($281.71 + $12.85) x 1.00260 x 0.98864) x 1.019 = $297.52]. CMS projects that the CY 2027 updates will increase the total payments to all ESRD facilities by 2.7% compared with CY 2026. Hospital-based and freestanding ESRD facilities are both projected to have an estimated 2.7% increase in total payments.

Wage Index Update
CMS is making routine annual updates to the ESRD PPS-specific wage index that is used to adjust ESRD PPS payments for geographic differences in area wages. The ESRD PPS wage index methodology, finalized in the CY 2025 ESRD PPS final rule, combines data from the Bureau of Labor Statistics (BLS) Occupational Employment & Wage Statistics (OEWS) program and freestanding ESRD facility cost reports to produce the ESRD PPS-specific wage index. We are updating the ESRD PPS wage index for CY 2027 to use the latest available BLS OEWS data. CMS will continue to apply the wage-index floor of 0.6000 and a 5 % cap on wage-index decreases from the prior year, as finalized in the CY 2023 ESRD PPS final rule.

Updates to the Outlier Policy
CMS is making routine updates to the fixed dollar loss (FDL) and Medicare allowable payment (MAP) amounts for CY 2027. For pediatric beneficiaries, the final FDL amount will increase from $162.43 to $229.49, and the final MAP amount will increase from $50.19 to $63.27 as compared to CY 2026 values. For adult beneficiaries, the final FDL amount will increase from $14.80 to $90.60, and the final MAP amount will increase from $23.68 to $41.83. These increases are primarily attributable to the projected utilization of new drugs that will be ESRD outlier services in CY 2027.

Addition to the ESRD PPS Base Rate for the Inclusion of Phosphate Binders
CMS is finalizing its proposal to permanently increase the ESRD PPS base rate to account for the costs of phosphate binders, marking the completion of the incorporation of phosphate binders into the bundled payment, which began Jan. 1, 2025. This additional amount of $12.85 is based on the most recent average sales price (ASP) data for each of the six types of phosphate binders and on utilization during the TDAPA period, and includes operational costs equal to 6% of ASP.

Low-Volume Payment Adjustment
CMS is finalizing its proposal to increase the Low-Volume Payment Adjustment (LVPA) volume threshold from 4,000 to 8,000 treatments. This change will also expand the number of LVPA tiers from two to six. ESRD facilities with fewer than 3,000 median treatments over the past three cost reporting years will receive the greatest payment adjuster and ESRD facilities with between 7,000 and 7,999 median treatments will receive the smallest adjuster. We are also finalizing an extension to the attestation deadline for payment year 2027. ESRD facilities may attest that they meet the requirements of the LVPA up to Dec. 31, 2026, to receive the LVPA for CY 2027.

This budget-neutral change will reduce the ESRD PPS base rate by approximately 1.1% (~$3). The updated LVPA adjustment will better align payments with costs by recognizing that ESRD facilities furnishing between 4,000 and 8,000 treatments annually generally incur higher costs than higher-volume facilities.

Payment Adjustments for Pediatric Patients
CMS is finalizing its proposal to modify the payment adjustments for renal dialysis services furnished to pediatric ESRD patients to align with the end of the temporary pediatric payment adjustment in 2027. We are finalizing two permanent changes that will appropriately recognize the higher costs for ESRD facilities that treat pediatric patients. First, we are updating the case-mix adjusters for pediatric patients based on more recent cost data. This addresses the inherent higher costs for patients under 18 years of age. Second, we are finalizing our proposal to begin applying the LVPA to treatments furnished to pediatric ESRD beneficiaries by ESRD facilities that meet the low-volume criteria. Data analysis shows that smaller facilities incur high costs even in the pediatric ESRD patient population. These two changes will result in roughly the same expected spending on pediatric patients, but with payments better targeted toward lower-volume ESRD facilities with higher anticipated resource use and younger pediatric ESRD patients. We are finalizing these changes on a budget-neutral basis.

Home and Self-Dialysis Training Add-on Payment Adjustment
CMS is finalizing an increase to the payment adjustment amount for home and self-dialysis training from $95.60 to $138.00 beginning in CY 2027. We are also finalizing our proposal to allow the add-on payment adjustment for home and self-dialysis training during the onset period (the first four months of ESRD dialysis), during which the ESRD PPS does not currently pay the home and self-dialysis training add-on adjustment. We are finalizing a reduction to the onset adjustment factor to account for payment overlap during the onset period. The CY 2027 onset adjustment factor is 1.311. These changes will better align the training payment with the actual cost of training patients and caretakers to perform home and self-dialysis. We are finalizing these changes on a budget-neutral basis.

Changes to the TDAPA and Post-TDAPA Add-on Payment Adjustment Policies
CMS is finalizing several changes to better align payment adjustment amounts for the TDAPA and post-TDAPA add-on payment adjustment with the actual costs of drugs. CMS is finalizing its proposal to use older ASP data when current ASP data are unavailable, such as when the reported ASP reflects zero or negative sales. However, when a drug manufacturer fails to report ASP data to CMS, payment under the TDAPA or Post-TDAPA Add-on Payment Adjustment would be discontinued in accordance with our longstanding conditional ASP policy. CMS is also finalizing a proposal to update the post-TDAPA add-on payment adjustment quarterly through change requests throughout the year, ensuring that the post-TDAPA add-on payment adjustment is based on the most recent pricing and utilization data available.

Changes to the Payment for Renal Dialysis Services Furnished to Individuals with AKI

As required by section 1834(r) of the Social Security Act, CMS is updating the AKI dialysis payment rate for CY 2027 to $297.52, which is equal to the final CY 2027 ESRD PPS base rate. CMS uses the CY 2027 ESRD PPS wage index to calculate AKI dialysis payments. The increase to the home and self-dialysis training payment adjustment amount under the ESRD PPS will apply to training payments for AKI dialysis. Starting in CY 2027, ESRD facilities are responsible for providing medically necessary phosphate binders to beneficiaries with AKI that are under their direct care.

Final Updates to the ESRD QIP

The ESRD QIP is authorized by law, and under the program, CMS assesses the total performance of each facility on quality measures specified for a payment year, applies an appropriate payment reduction to each facility that does not meet a minimum total performance score (mTPS), and publicly reports the results.

CMS is removing the Hypercalcemia reporting measure and replacing it with the Hyperphosphatemia clinical measure beginning with PY 2029. The Hyperphosphatemia clinical measure will help drive decreases in cardiovascular complications, hospitalizations, and overall mortality by incentivizing additional interventions such as nutritional counseling, phosphorus binding medications, or adjustment of dialysis prescription. Compared to the Hypercalcemia reporting measure, the Hyperphosphatemia clinical measure will more directly assess patient-focused clinical outcomes.

CMS is also removing the Medication Reconciliation (MedRec) reporting measure from the ESRD QIP measure set beginning with PY 2029. As recent measure analyses have indicated consistently high performance on the MedRec reporting measure, as well as the burden facilities incur in collecting, documenting, and reporting data for the measure, the costs associated with the measure outweigh the benefit of its continued use in the program. The removal of this measure is consistent with evolving the ESRD QIP to focus on a measure set of high-value, impactful measures that have been developed to drive care improvements for a broader set of ESRD patients.

CMS is also removing the COVID-19 Vaccination Coverage Among Healthcare Personnel (COVID-19 HCP Vaccination) reporting measure from the ESRD QIP measure set beginning with PY 2029. Since the end of the Public Health Emergency (PHE), the CDC's clinical recommendations for COVID-19 vaccination have changed. Based on evolving clinical guidelines, as the measure no longer aligns with current clinical guidelines or practice, CMS is removing the COVID-19 HCP Vaccination measure under the measure removal factor at 42 C.F.R. § 413.178(c)(5)(i)(C).

CMS is updating the NHSN BSI clinical measure to use the most recently available 2023 national baseline data and updating the risk-adjustment methodology beginning with the PY 2029 ESRD QIP measure set. This update will ensure that national benchmarks better reflect current healthcare practices, surveillance protocols, and infection prevention efforts. This update will also revise the risk-adjustment model to incorporate additional facility-level characteristics, including vascular access type, facility hospital affiliation, and number of dialysis stations, which were identified as significant predictors of BSI risk. The 2023 national baseline updates will not change the underlying Standardized Infection Ratio (SIR) calculation formula but will instead be used to calculate revised denominators for the SIR by estimating the number of predicted BSIs for a given facility.

CMS is also updating the measure domains and the domain and measure weights used to calculate the total performance score. After finalizing the proposals to remove the three reporting measures - Hypercalcemia, MedRec, and COVID-19 HCP Vaccination - the ESRD QIP measure set will no longer include any measures under the Reporting Measure Domain. Therefore, we are removing the Reporting Measure Domain and updating the domain weights and individual measure weights in the Care Coordination Domain and the Clinical Care Domain accordingly to reflect the updates to the ESRD QIP measure set.

Finally, in the final rule CMS summarizes public comments received on the potential inclusion of the Dialysis Facility Discussion of Patient Life Goals Patient-Reported Outcome Performance measure (D-PaLS PRO-PM) in the ESRD QIP. CMS may consider proposing this measure in future rulemaking. The measure would assess patient satisfaction with discussions about their life goals and the extent to which those goals are incorporated into treatment planning by the care team.

The final rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/current .

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