38464 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 413 and 512 

[CMS–1768–P] 

RIN 0938–AU79 

Medicare Program; End-Stage Renal 

Disease Prospective Payment System, 

Payment for Renal Dialysis Services 

Furnished to Individuals With Acute 

Kidney Injury, End-Stage Renal 

Disease Quality Incentive Program, 

and End-Stage Renal Disease 

Treatment Choices Model 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), Department 

of Health and Human Services (HHS). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

update and revise the End-Stage Renal 

Disease (ESRD) Prospective Payment 

System for calendar year 2023. This 

proposed rule also proposes to update 

the payment rate for renal dialysis 

services furnished by an ESRD facility 

to individuals with acute kidney injury. 

This rule also includes requests for 

information regarding potential 

payment adjustments for certain new 

renal dialysis drugs and biological 

products as well as health equity issues 

under the ESRD PPS with a focus on 

pediatric dialysis payment. In addition, 

this proposed rule proposes to update 

requirements for the ESRD Quality 

Incentive Program. Finally, this 

proposed rule would make updates to 

the ESRD Treatment Choices Model. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, by 

August 22, 2022. 

ADDRESSES: In commenting, please refer 

to file code CMS–1768–P. 

Comments, including mass comment 

submissions, must be submitted in one 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–1768–P, P.O. Box 8010, Baltimore, 

MD 21244–8010. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–1768–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

ESRDPayment@cms.hhs.gov, for 

issues related to the ESRD PPS and 

coverage and payment for renal dialysis 

services furnished to individuals with 

AKI. 

ESRDApplications@cms.hhs.gov, for 

issues related to applications for the 

Transitional Add-On Payment 

Adjustment for New and Innovative 

Equipment and Supplies (TPNIES) or 

the Transitional Drug Add-on Payment 

Adjustment (TDAPA). 

Delia Houseal, (410) 786–2724, for 

issues related to the ESRD QIP. 

ETC-CMMI@cms.hhs.gov, for issues 

related to the ESRD Treatment Choices 

(ETC) Model. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following 

website as soon as possible after they 

have been received: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. CMS will not post on 

Regulations.gov public comments that 

make threats to individuals or 

institutions or suggest that the 

individual will take actions to harm the 

individual. CMS continues to encourage 

individuals not to submit duplicative 

comments. We will post acceptable 

comments from multiple unique 

commenters even if the content is 

identical or nearly identical to other 

comments. 

Current Procedural Terminology 

(CPT) Copyright Notice: Throughout this 

proposed rule, we use CPT® codes and 

descriptions to refer to a variety of 

services. We note that CPT® codes and 

descriptions are copyright 2020 

American Medical Association (AMA). 

All Rights Reserved. CPT® is a 

registered trademark of the AMA. 

Applicable Federal Acquisition 

Regulations (FAR) and Defense Federal 

Acquisition Regulations (DFAR) apply. 

Table of Contents 

To assist readers in referencing 

sections contained in this preamble, we 

are providing a Table of Contents. 

I. Executive Summary 

A. Purpose 

B. Summary of the Major Provisions 

C. Summary of Cost and Benefits 

II. Calendar Year (CY) 2023 End-Stage Renal 

Disease (ESRD) Prospective Payment 

System (PPS) 

A. Background 

B. Provisions for the CY 2023 ESRD PPS 

Update 

C. Proposed Transitional Add-On Payment 

Adjustment for New and Innovative 

Equipment and Supplies (TPNIES) for 

CY 2023 Payment 

D. Request for Information About 

Addressing Issues of Payment for New 

Drugs After Transitional Drug Add-On 

Payment Adjustment (TDAPA) Period 

Ends 

E. Requests for Information on Health 

Equity Issues Within ESRD PPS With a 

Focus on the Pediatric Payment 

III. Calendar Year (CY) 2023 Payment for 

Renal Dialysis Services Furnished to 

Individuals With Acute Kidney Injury 

(AKI) 

A. Background 

B. Proposed Annual Payment Rate Update 

for CY 2023 

IV. End-Stage Renal Disease Quality 

Incentive Program (ESRD QIP) 

A. Background 

B. Extraordinary Circumstances Exception 

(ECE) Previously Granted for the ESRD 

QIP Including Notification of ECE Due to 

ESRD Quality Reporting System Issues 

C. Updates for the PY 2025 ESRD QIP 

V. End-Stage Renal Disease Treatment 

Choices (ETC) Model 

A. Background 

B. Proposed Updates to the ETC Model 

VI. Collection of Information Requirements 

A. Legislative Requirement for Solicitation 

of Comments 

B. Requirements in Regulation Text 

C. Additional Information Collection 

Requirements 

VII. Regulatory Impact Analysis 

A. Statement of Need 

B. Overall Impact 

C. Impact Analysis 

D. Detailed Economic Analysis 

E. Accounting Statement 

F. Regulatory Flexibility Act Analysis 

(RFA) 

G. Unfunded Mandates Reform Act 

Analysis (UMRA) 

H. Federalism 

VIII. Response to Comments 

IX. Files Available to the Public via the 

Internet 

Regulations Text 

I. Executive Summary 

A. Purpose 

This rule proposes changes related to 

the End-Stage Renal Disease (ESRD) 

Prospective Payment System (PPS), 

payment for renal dialysis services 

furnished to individuals with acute 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38465 

kidney injury (AKI), the ESRD Quality 

Incentive Program (QIP), and the ESRD 

Treatment Choices (ETC) Model. 

1. End-Stage Renal Disease (ESRD) 

Prospective Payment System (PPS) 

On January 1, 2011, we implemented 

the ESRD PPS, a case-mix adjusted, 

bundled PPS for renal dialysis services 

furnished by ESRD facilities as required 

by section 1881(b)(14) of the Social 

Security Act (the Act), as added by 

section 153(b) of the Medicare 

Improvements for Patients and 

Providers Act of 2008 (MIPPA) (Pub. L. 

110–275). Section 1881(b)(14)(F) of the 

Act, as added by section 153(b) of 

MIPPA, and amended by section 

3401(h) of the Patient Protection and 

Affordable Care Act (the Affordable Care 

Act) (Pub. L. 111–148), established that 

beginning calendar year (CY) 2012, and 

each subsequent year, the Secretary of 

the Department of Health and Human 

Services (the Secretary) shall annually 

increase payment amounts by an ESRD 

market basket increase factor, reduced 

by the productivity adjustment 

described in section 1886(b)(3)(B)(xi)(II) 

of the Act. This proposed rule would 

update the ESRD PPS for CY 2023. 

2. Coverage and Payment for Renal 

Dialysis Services Furnished to 

Individuals With Acute Kidney Injury 

(AKI) 

On June 29, 2015, the President 

signed the Trade Preferences Extension 

Act of 2015 (TPEA) (Pub. L. 114–27). 

Section 808(a) of the TPEA amended 

section 1861(s)(2)(F) of the Act to 

provide coverage for renal dialysis 

services furnished on or after January 1, 

2017, by a renal dialysis facility or a 

provider of services paid under section 

1881(b)(14) of the Act to an individual 

with AKI. Section 808(b) of the TPEA 

amended section 1834 of the Act by 

adding a new subsection (r) that 

provides for payment for renal dialysis 

services furnished by renal dialysis 

facilities or providers of services paid 

under section 1881(b)(14) of the Act to 

individuals with AKI at the ESRD PPS 

base rate beginning January 1, 2017. 

This proposed rule would update the 

AKI payment rate for CY 2023. 

3. End-Stage Renal Disease Quality 

Incentive Program (ESRD QIP) 

The End-Stage Renal Disease Quality 

Incentive Program (ESRD QIP) is 

authorized by section 1881(h) of the 

Act. The Program fosters improved 

patient outcomes by establishing 

incentives for facilities to meet or 

exceed performance standards 

established by the Centers for Medicare 

& Medicaid Services (CMS). This 

proposed rule proposes several updates 

for Payment Year (PY) 2023, including 

the suppression of individual ESRD QIP 

measures for PY 2023 under the 

measure suppression policy previously 

finalized for the duration of the COVID– 

19 public health emergency (PHE), as 

well as updates for PY 2024 and PY 

2025. At this time, no new requirements 

are being proposed beginning with the 

PY 2026 ESRD QIP. 

4. End-Stage Renal Disease Treatment 

Choices (ETC) Model 

The ETC Model is a mandatory 

Medicare payment model tested under 

section 1115A of the Act. The ETC 

Model is operated by the Center for 

Medicare and Medicaid Innovation 

(Innovation Center), and tests the use of 

payment adjustments to encourage 

greater utilization of home dialysis and 

kidney transplants, to preserve or 

enhance the quality of care furnished to 

Medicare beneficiaries while reducing 

Medicare expenditures. The ETC Model 

was finalized as part of a final rule 

published in the Federal Register on 

September 29, 2020, titled, ‘‘Medicare 

Program: Specialty Care Models to 

Improve Quality of Care and Reduce 

Expenditures’’ (85 FR 61114), referred to 

herein as the ‘‘Specialty Care Models 

final rule.’’ This proposed rule would 

make certain changes to the ETC Model, 

including adding a parameter to the 

Performance Payment Adjustment (PPA) 

achievement scoring methodology and 

adding an additional protection related 

to flexibilities for furnishing and billing 

kidney disease patient education 

services by ETC Participants. This 

proposed rule also discusses our intent 

to disseminate participant-level model 

performance information to the public. 

B. Summary of the Major Provisions 

1. ESRD PPS 

• Rebasing and revision of the EndStage Renal Disease Bundled (ESRDB) 

market basket for CY 2023: We are 

proposing to rebase and revise the 

ESRDB market basket to a 2020 base 

year, reflecting the most recent and 

complete set of Medicare Cost Report 

data as well as other publicly available 

data. In addition, we are proposing to 

update the labor-related share of the 

ESRD PPS base rate to reflect the 

proposed 2020 labor-related cost share 

weights designated in the ESRDB 

market basket. 

• Update to the ESRD PPS base rate 

for CY 2023: The proposed CY 2023 

ESRD PPS base rate is $264.09. This 

proposed amount reflects the 

application of the wage index budgetneutrality adjustment factor (0.999997) 

and a proposed productivity-adjusted 

market basket increase of 2.4 percent as 

required by section 1881(b)(14)(F)(i)(I) 

of the Act, equaling $264.09 (($257.90 × 

0.999997) × 1.024 = $264.09). 

• Annual update to the wage index: 

We adjust wage indices on an annual 

basis using the most current hospital 

wage data and the latest core-based 

statistical area (CBSA) delineations to 

account for differing wage levels in 

areas in which ESRD facilities are 

located. For CY 2023, we are proposing 

to update the wage index values based 

on the latest available data. 

• Permanent cap on wage index 

decreases: For CY 2023 and subsequent 

years, we are proposing to apply a 

permanent 5-percent cap on any ESRD 

facility’s wage index decrease from its 

wage index in the prior year, regardless 

of the circumstances causing the 

decline. 

• Wage index floor: We are proposing 

to raise the wage index floor, for areas 

with wage index values below the floor, 

from 0.5000 to 0.6000. 

• Outlier policy refinement: The 

ESRD PPS has an outlier policy that 

targets 1.0 percent of total Medicare 

ESRD PPS expenditures in outlier 

payments for ESRD beneficiaries who 

require a high level of renal dialysis 

services. We are proposing to modify 

the methodology for calculating the 

fixed-dollar loss (FDL) amounts for 

adult patients. 

• Annual update to the outlier policy: 

We are proposing to update the outlier 

policy based on the most current data 

and our proposed refinement to the 

outlier policy. Accordingly, we propose 

to update the Medicare allowable 

payment (MAP) amounts for adult and 

pediatric patients for CY 2023 using the 

latest available CY 2021 claims data. We 

propose to update the ESRD outlier 

services FDL amount for pediatric 

patients using the latest available CY 

2021 claims data, and we propose to use 

the latest available claims data from CY 

2019, CY 2020, and CY 2021 to calculate 

the FDL amount for adults, in 

accordance with the proposed 

methodology discussed in section 

II.B.1.c.(4) of this proposed rule. For 

pediatric beneficiaries, the proposed 

FDL amount would decrease from 

$26.02 to $21.51, and the proposed 

MAP amount would decrease from 

$27.15 to $25.62, as compared to CY 

2022 values. For adult beneficiaries, the 

proposed FDL amount would decrease 

from $75.39 to $40.75, and the proposed 

MAP amount would decrease from 

$42.75 to $36.85. The 1.0 percent target 

for outlier payments was not achieved 

in CY 2021. Outlier payments 

represented approximately 0.4 percent 


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38466 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

of total payments rather than 1.0 

percent. 

• Definition of oral-only drugs: We 

are proposing that, beginning January 1, 

2025, we would include the word 

functional in the definition of oral-only 

drug at § 413.234(a). Specifically, under 

the proposed definition, an oral-only 

drug would be a drug or biological 

product with no injectable functional 

equivalent or other form of 

administration other than an oral form. 

• Update to the offset amount for the 

transitional add-on payment adjustment 

for new and innovative equipment and 

supplies (TPNIES) for CY 2023: The 

proposed CY 2023 average per treatment 

offset amount for the TPNIES for 

capital-related assets that are home 

dialysis machines is $9.73. This 

proposed offset amount reflects the 

application of the productivity-adjusted 

market basket increase of 2.4 percent 

($9.50 × 1.024 = $9.73). 

• TPNIES applications received for 

CY 2023: This proposed rule presents a 

summary of the three CY 2023 TPNIES 

applications that we received by the 

February 1, 2022 deadline and our 

preliminary analysis of the applicants’ 

claims related to substantial clinical 

improvement and other eligibility 

criteria for the TPNIES. 

2. Payment for Renal Dialysis Services 

Furnished to Individuals With AKI 

We are proposing to update the AKI 

payment rate for CY 2023. The proposed 

CY 2023 payment rate is $264.09, which 

is the same as the base rate proposed 

under the ESRD PPS for CY 2023. 

3. ESRD QIP 

We are proposing to suppress the 

Standardized Hospitalization Ratio 

(SHR) clinical measure, the 

Standardized Readmission Ratio (SRR) 

clinical measure, the In-Center 

Hemodialysis Consumer Assessment of 

Healthcare Providers and Systems (ICH 

CAHPS) clinical measure, the LongTerm Catheter Rate clinical measure, the 

Percentage of Prevalent Patients 

Waitlisted (PPPW) clinical measure, and 

the Kt/V Dialysis Adequacy 

Comprehensive clinical measure for PY 

2023 under our previously finalized 

measure suppression policy because we 

have determined that circumstances 

caused by the public health emergency 

(PHE) due to COVID–19 have 

significantly affected the measures and 

resulting performance scores. We are 

also proposing to use CY 2019 data to 

calculate performance standards for the 

PY 2023 ESRD QIP. We are also 

updating the technical specifications of 

the SHR clinical measure and SRR 

clinical measure so that the measure 

results are expressed as rates instead of 

ratios beginning with the PY 2024 ESRD 

QIP. Beginning with the PY 2025 ESRD 

QIP, we are proposing to add the 

COVID–19 Vaccination Coverage among 

Healthcare Personnel (HCP) measure to 

the ESRD QIP measure set. We are also 

proposing to convert the Standardized 

Transfusion Ratio (STrR) reporting 

measure to a clinical measure beginning 

with PY 2025, and are further proposing 

to express the measure as a rate to align 

with the technical updates to express 

the SHR and SRR clinical measure 

results as rates. In addition, we are 

proposing to convert the Hypercalcemia 

clinical measure to a reporting measure, 

beginning with PY 2025. Furthermore, 

we are proposing to create a new 

Reporting Measure domain and to reweight current measure domains 

beginning with PY 2025. 

This proposed rule also includes 

requests for information on several 

important topics, including potential 

quality measures for home dialysis, the 

expansion of our quality reporting 

programs to allow us to provide more 

actionable and comprehensive 

information on health care disparities 

across multiple variables and new care 

settings, and on the possible future 

inclusion of two potential social drivers 

of health screening measures. 

4. ETC Model 

We are proposing to update the PPA 

achievement scoring methodology 

beginning in the fifth Measurement Year 

(MY5) of the ETC Model, which begins 

January 1, 2023. We are also proposing 

to clarify the requirements for qualified 

staff to furnish and bill kidney disease 

patient education services under the 

ETC Model’s Medicare program waivers. 

In addition, we discuss our intent to 

disseminate participant-level model 

performance information to the public. 

C. Summary of Costs and Benefits 

In section VII.D.5 of this proposed 

rule, we set forth a detailed analysis of 

the impacts that the proposed changes 

would have on affected entities and 

beneficiaries. The impacts include the 

following: 

1. Impacts of the Proposed ESRD PPS 

The impact table in section VII.D.5.a 

of this proposed rule displays the 

estimated change in payments to ESRD 

facilities in CY 2023 compared to 

estimated payments in CY 2022. The 

overall impact of the CY 2023 changes 

is projected to be a 3.1 percent increase 

in payments. Hospital-based ESRD 

facilities have an estimated 3.7 percent 

increase in payments compared with 

freestanding facilities with an estimated 

3.1 percent increase. We estimate that 

the aggregate ESRD PPS expenditures 

would increase by approximately $320 

million in CY 2023 compared to CY 

2022. This reflects a $250 million 

increase from the proposed payment 

rate update, a $70 million increase due 

to the proposed updates to the outlier 

threshold amounts, and approximately 

$2.5 million in estimated TPNIES 

amounts. Because of the projected 3.1 

percent overall payment increase, we 

estimate there would be an increase in 

beneficiary coinsurance payments of 3.1 

percent in CY 2023, which translates to 

approximately $60 million. 

2. Impacts of the Proposed Payment for 

Renal Dialysis Services Furnished to 

Individuals With AKI 

The impact table in section VII.D.5.b 

of this proposed rule displays the 

estimated change in payments to ESRD 

facilities in CY 2023 compared to 

estimated payments in CY 2022. The 

overall impact of the CY 2023 changes 

is projected to be a 2.4 percent increase 

in payments for individuals with AKI. 

Hospital-based ESRD facilities have an 

estimated 2.1 percent increase in 

payments compared with freestanding 

ESRD facilities with an estimated 2.4 

percent increase. The overall impact 

reflects the effects of the proposed 

update to the labor-related share, 

proposed CY 2023 wage index, 

proposed permanent cap on wage index 

decreases, and the proposed payment 

rate update. We estimate that the 

aggregate payments made to ESRD 

facilities for renal dialysis services 

furnished to patients with AKI, at the 

proposed CY 2023 ESRD PPS base rate, 

would increase by $2 million in CY 

2023 compared to CY 2022. 

3. Impacts of the Proposed ESRD QIP 

Our proposals to suppress measures 

for the PY 2023 ESRD QIP necessitate a 

modification to our previously 

estimated overall economic impact of 

the PY 2023 ESRD QIP (85 FR 71400). 

In the CY 2021 ESRD PPS final rule, we 

estimated that the overall economic 

impact of the PY 2023 ESRD QIP would 

be approximately $224 million as a 

result of the policies we had finalized at 

that time. The $224 million figure for 

PY 2023 included costs associated with 

the collection of information 

requirements, which we estimated 

would be approximately $208 million, 

and $16 million in estimated payment 

reductions across all facilities. However, 

as a result of the proposals impacting 

the PY 2023 ESRD QIP that we are 

making in this proposed rule, we are 

modifying our previous estimate. We 

now estimate that the overall economic 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38467 

impact of the PY 2023 ESRD QIP would 

be approximately $218 million. The 

$218 million figure for PY 2023 

includes costs associated with the 

collection of information requirements 

and recalculated estimated payment 

reductions based on the six measures 

we are proposing to suppress for PY 

2023. Although we are updating the way 

we express the SHR clinical measure 

and the SRR clinical measure results 

beginning with PY 2024, these technical 

updates would not impact our 

previously estimated economic impact 

for the PY 2024 ESRD QIP. We estimate 

that the overall economic impact of the 

PY 2025 ESRD QIP would be 

approximately $252 million as a result 

of the policies we have previously 

finalized and the proposals in this 

proposed rule. The $252 million figure 

for PY 2025 includes costs associated 

with the collection of information 

requirements, which we estimate would 

be approximately $215 million, and $37 

million in estimated payment 

reductions across all facilities. We also 

estimate that the overall economic 

impact of the PY 2026 ESRD QIP would 

be approximately $252 million as a 

result of the policies we have previously 

finalized. The $252 million figure for PY 

2026 includes costs associated with the 

collection of information requirements, 

which we estimate would be 

approximately $215 million, and $37 

million in estimated payment 

reductions across all facilities. 

4. Impacts of the Proposed Changes to 

the ETC Model 

The impact estimate in section 

VII.D.5.d of this proposed rule describes 

the estimated change in anticipated 

Medicare program savings arising from 

the ETC Model over the duration of the 

ETC Model as a result of the proposed 

changes. We estimate that the ETC 

Model would result in $28 million in 

net savings over the 6.5 year duration of 

the ETC Model. We also estimate that 

the changes proposed in this proposed 

rule would produce no change in net 

savings for the ETC Model. 

II. CY 2023 ESRD PPS 

A. Background 

1. Statutory Background 

On January 1, 2011, CMS 

implemented the ESRD PPS, a case-mix 

adjusted bundled PPS for renal dialysis 

services furnished by ESRD facilities, as 

required by section 1881(b)(14) of the 

Act, as added by section 153(b) of the 

Medicare Improvements for Patients and 

Providers Act of 2008 (MIPPA). Section 

1881(b)(14)(F) of the Act, as added by 

section 153(b) of MIPPA and amended 

by section 3401(h) of the Patient 

Protection and Affordable Care Act (the 

Affordable Care Act), established that 

beginning with CY 2012, and each 

subsequent year, the Secretary shall 

annually increase payment amounts by 

an ESRD market basket increase factor 

reduced by the productivity adjustment 

described in section 1886(b)(3)(B)(xi)(II) 

of the Act. 

Section 632 of the American Taxpayer 

Relief Act of 2012 (ATRA) (Pub. L. 112– 

240) included several provisions that 

apply to the ESRD PPS. Section 632(a) 

of ATRA added section 1881(b)(14)(I) to 

the Act, which required the Secretary, 

by comparing per patient utilization 

data from 2007 with such data from 

2012, to reduce the single payment for 

renal dialysis services furnished on or 

after January 1, 2014, to reflect the 

Secretary’s estimate of the change in the 

utilization of ESRD-related drugs and 

biologicals (excluding oral-only ESRDrelated drugs). Consistent with this 

requirement, in the CY 2014 ESRD PPS 

final rule, we finalized $29.93 as the 

total drug utilization reduction and 

finalized a policy to implement the 

amount over a 3- to 4-year transition 

period (78 FR 72161 through 72170). 

Section 632(b) of ATRA prohibited 

the Secretary from paying for oral-only 

ESRD-related drugs and biologicals 

under the ESRD PPS prior to January 1, 

2016. Section 632(c) of ATRA required 

the Secretary, by no later than January 

1, 2016, to analyze the case-mix 

payment adjustments under section 

1881(b)(14)(D)(i) of the Act and make 

appropriate revisions to those 

adjustments. 

On April 1, 2014, the Protecting 

Access to Medicare Act of 2014 (PAMA) 

(Pub. L. 113–93) was enacted. Section 

217 of PAMA included several 

provisions that apply to the ESRD PPS. 

Specifically, sections 217(b)(1) and (2) 

of PAMA amended sections 

1881(b)(14)(F) and (I) of the Act and 

replaced the drug utilization adjustment 

that was finalized in the CY 2014 ESRD 

PPS final rule (78 FR 72161 through 

72170) with specific provisions that 

dictated the market basket update for 

CY 2015 (0.0 percent) and how the 

market basket should be reduced in CY 

2016 through CY 2018. 

Section 217(a)(1) of PAMA amended 

section 632(b)(1) of ATRA to provide 

that the Secretary may not pay for oralonly ESRD-related drugs under the 

ESRD PPS prior to January 1, 2024. 

Section 217(a)(2) of PAMA further 

amended section 632(b)(1) of ATRA by 

requiring that in establishing payment 

for oral-only drugs under the ESRD PPS, 

the Secretary must use data from the 

most recent year available. Section 

217(c) of PAMA provided that as part of 

the CY 2016 ESRD PPS rulemaking, the 

Secretary shall establish a process for— 

(1) determining when a product is no 

longer an oral-only drug; and (2) 

including new injectable and 

intravenous products into the ESRD PPS 

bundled payment. 

Finally, on December 19, 2014, the 

President signed the Stephen Beck, Jr., 

Achieving a Better Life Experience Act 

of 2014 (ABLE) (Pub. L. 113–295). 

Section 204 of ABLE amended section 

632(b)(1) of ATRA, as amended by 

section 217(a)(1) of PAMA, to provide 

that payment for oral-only renal dialysis 

services cannot be made under the 

ESRD PPS bundled payment prior to 

January 1, 2025. 

2. System for Payment of Renal Dialysis 

Services 

Under the ESRD PPS, a single pertreatment payment is made to an ESRD 

facility for all the renal dialysis services 

defined in section 1881(b)(14)(B) of the 

Act and furnished to individuals for the 

treatment of ESRD in the ESRD facility 

or in a patient’s home. We have codified 

our definition of renal dialysis services 

at § 413.171, which is in 42 CFR part 

413, subpart H, along with other ESRD 

PPS payment policies. The ESRD PPS 

base rate is adjusted for characteristics 

of both adult and pediatric patients and 

accounts for patient case-mix 

variability. The adult case-mix adjusters 

include five categories of age, body 

surface area, low body mass index, 

onset of dialysis, and four comorbidity 

categories (that is, pericarditis, 

gastrointestinal tract bleeding, 

hereditary hemolytic or sickle cell 

anemia, myelodysplastic syndrome). A 

different set of case-mix adjusters are 

applied for the pediatric population. 

Pediatric patient-level adjusters include 

two age categories (under age 22, or age 

22 to 26) and two dialysis modalities 

(that is, peritoneal or hemodialysis) 

(§ 413.235(a) and (b)). 

The ESRD PPS provides for three 

facility-level adjustments. The first 

payment adjustment accounts for ESRD 

facilities furnishing a low volume of 

dialysis treatments (§ 413.232). The 

second payment adjustment reflects 

differences in area wage levels 

developed from core-based statistical 

areas (CBSAs) (§ 413.231). The third 

payment adjustment accounts for ESRD 

facilities furnishing renal dialysis 

services in a rural area (§ 413.233). 

There are four additional payment 

adjustments under the ESRD PPS. The 

ESRD PPS provides adjustments, when 

applicable, for: (1) a training add-on for 

home and self-dialysis modalities 

(§ 413.235(c)); (2) an additional payment 


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38468 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

for high cost outliers due to unusual 

variations in the type or amount of 

medically necessary care (§ 413.237); (3) 

a TDAPA for certain new renal dialysis 

drugs and biological products 

(§ 413.234(c)); and (4) a TPNIES for 

certain qualifying, new and innovative 

renal dialysis equipment and supplies 

(§ 413.236(d)). 

3. Updates to the ESRD PPS 

Policy changes to the ESRD PPS are 

proposed and finalized annually in the 

Federal Register. The CY 2011 ESRD 

PPS final rule was published on August 

12, 2010 in the Federal Register (75 FR 

49030 through 49214). That rule 

implemented the ESRD PPS beginning 

on January 1, 2011 in accordance with 

section 1881(b)(14) of the Act, as added 

by section 153(b) of MIPPA, over a 4- 

year transition period. Since the 

implementation of the ESRD PPS, we 

have published annual rules to make 

routine updates, policy changes, and 

clarifications. 

We published a final rule, which 

appeared in the November 8, 2021 issue 

of the Federal Register, titled ‘‘Medicare 

Program; End-Stage Renal Disease 

Prospective Payment System, Payment 

for Renal Dialysis Services Furnished to 

Individuals With Acute Kidney Injury, 

and End-Stage Renal Disease Quality 

Incentive Program, and End-Stage Renal 

Disease Treatment Choices Model,’’ 

referred to herein as the ‘‘CY 2022 ESRD 

PPS final rule.’’ In that rule, we updated 

the ESRD PPS base rate, wage index, 

and outlier policy for CY 2022. We also 

updated the average per treatment offset 

amount for the TPNIES for CY 2022. In 

addition, we announced our approval of 

one application for the TPNIES for CY 

2022 payment. For further detailed 

information regarding these updates, see 

86 FR 61874. 

B. Provisions of the Proposed Rule 

1. Proposed CY 2023 ESRD PPS Update 

a. Proposed CY 2023 ESRD Bundled 

(ESRDB) Market Basket Rebasing and 

Revision; Market Basket Increase Factor; 

Productivity Adjustment; and LaborRelated Share 

(1) Proposed Rebasing and Revising of 

the ESRDB Market Basket 

(a) Background 

In accordance with section 

1881(b)(14)(F)(i) of the Act, as added by 

section 153(b) of MIPPA and amended 

by section 3401(h) of the Affordable 

Care Act, beginning in 2012, the ESRD 

PPS payment amounts are required to be 

annually increased by an ESRD market 

basket increase factor and reduced by 

the productivity adjustment described 

in section 1886(b)(3)(B)(xi)(II) of the 

Act. The application of the productivity 

adjustment may result in the increase 

factor being less than 0.0 for a year and 

may result in payment rates for a year 

being less than the payment rates for the 

preceding year. Section 1881(b)(14)(F)(i) 

of the Act also provides that the market 

basket increase factor should reflect the 

changes over time in the prices of an 

appropriate mix of goods and services 

included in renal dialysis services. 

As required under section 

1881(b)(14)(F)(i) of the Act, CMS 

developed an all-inclusive ESRD 

Bundled (ESRDB) input price index 

using CY 2008 as the base year (75 FR 

49151 through 49162). We subsequently 

revised and rebased the ESRDB input 

price index to a base year of CY 2012 

in the CY 2015 ESRD PPS final rule (79 

FR 66129 through 66136). In the CY 

2019 ESRD PPS final rule (83 FR 56951 

through 56964), we finalized a rebased 

ESRDB input price index to reflect a CY 

2016 base year. Effective for CY 2023, 

we are proposing to rebase and revise 

the ESRDB market basket to a base year 

of CY 2020. 

Although ‘‘market basket’’ technically 

describes the mix of goods and services 

used for ESRD treatment, this term is 

also commonly used to denote the input 

price index (that is, cost categories, their 

respective weights, and price proxies 

combined) derived from a market 

basket. Accordingly, the term ‘‘ESRDB 

market basket,’’ as used in this 

document, refers to the ESRDB input 

price index. 

The ESRDB market basket is a fixedweight, Laspeyres-type price index. A 

Laspeyres-type price index measures the 

change in price, over time, of the same 

mix of goods and services purchased in 

the base period. Any changes in the 

quantity or mix of goods and services 

(that is, intensity) purchased over time 

are not measured. 

The index is constructed in three 

steps. First, a base period is selected 

where total base period expenditures are 

estimated for a set of mutually exclusive 

and exhaustive spending categories, 

with the proportion of total costs that 

each category represents being 

calculated. These proportions are called 

‘‘cost weights’’ or ‘‘expenditure 

weights.’’ Second, each expenditure 

category is matched to an appropriate 

price or wage variable, referred to as a 

‘‘price proxy.’’ In almost every instance, 

these price proxies are derived from 

publicly available statistical series that 

are published on a consistent schedule 

(preferably at least on a quarterly basis). 

Finally, the expenditure weight for each 

cost category is multiplied by the level 

of its respective price proxy. The sum of 

these products (that is, the expenditure 

weights multiplied by their price index 

levels) for all cost categories yields the 

composite index level of the market 

basket in a given period. Repeating this 

step for other periods produces a series 

of market basket levels over time. 

Dividing an index level for a given 

period by an index level for an earlier 

period produces a rate of growth in the 

input price index over that timeframe. 

As noted previously, the market 

basket is described as a fixed-weight 

index because it represents the change 

in price over time of a constant mix 

(quantity and intensity) of goods and 

services purchased to provide renal 

dialysis services. The effects on total 

expenditures resulting from changes in 

the mix of goods and services purchased 

subsequent to the base period are not 

measured. For example, an ESRD 

facility hiring more nurses to 

accommodate the needs of patients 

would increase the volume of goods and 

services purchased by the ESRD facility, 

but would not be factored into the price 

change measured by a fixed-weight 

ESRD market basket. Only when the 

index is rebased would changes in the 

quantity and intensity be captured, with 

those changes being reflected in the cost 

weights. Therefore, we rebase the 

market basket periodically so that the 

cost weights reflect changes between 

base periods in the mix of goods and 

services that ESRD facilities purchase to 

furnish ESRD treatment. 

We last rebased the ESRDB market 

basket cost weights effective for CY 

2019 (83 FR 56951 through 56964), with 

2016 data used as the base period for the 

construction of the market basket cost 

weights. We are proposing to use 2020 

as the base year for the proposed 

rebased ESRDB market basket cost 

weights. The cost weights for this 

proposed ESRDB market basket are 

based on the cost report data for 

independent ESRD facilities. We refer to 

the proposed market basket as a CY 

market basket because the base period 

for all price proxies and weights are set 

to CY 2020 (that is, the average index 

level for CY 2020 is equal to 100). The 

major source data for the proposed 

ESRDB market basket is the 2020 

Medicare cost reports (MCRs) (Form 

CMS–265–11, OMB NO. 0938–0236), 

supplemented with 2012 data from the 

United States (U.S.) Census Bureau’s 

Services Annual Survey (SAS) inflated 

to 2020 levels. The 2012 SAS data is the 

most recent year of detailed expense 

data published by the Census Bureau for 

North American International 

Classification System (NAICS) Code 

621492: Kidney Dialysis Centers. We 

also are proposing to use May 2020 


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Occupational Employment Statistics 

data from the U.S. Department of 

Labor’s Bureau of Labor Statistics (BLS) 

to estimate the weights for the Wages 

and Salaries and Employee Benefits 

occupational blends. We provide more 

detail on our proposed methodology in 

section II.B.1.a.(1)(b) of this proposed 

rule. 

The terms ‘‘rebasing’’ and ‘‘revising,’’ 

while often used interchangeably, 

actually denote different activities. The 

term ‘‘rebasing’’ means moving the base 

year for the structure of costs of an input 

price index (that is, in this exercise, we 

are proposing to move the base year cost 

structure from 2016 to 2020) without 

making any other major changes to the 

methodology. The term ‘‘revising’’ 

means changing data sources, cost 

categories, and/or price proxies used in 

the input price index. For CY 2023, we 

are proposing to rebase the ESRDB 

market basket to reflect the 2020 cost 

structure of ESRD facilities and to revise 

the index, that is, make changes to cost 

categories or price proxies used in the 

index. 

We are proposing CY 2020 as the new 

base year because 2020 is the most 

recent year for which relatively 

complete MCR data are available. We 

analyzed the cost weights for the years 

2017 through 2020 and found that the 

expenses reported in the ESRD facility 

MCRs for 2020 were consistent with 

those in the prior years. Additionally, 

given the nature of renal dialysis 

services, any impacts on utilization due 

to the COVID–19 PHE were minimal as 

dialysis is not an optional treatment and 

must continue even during the PHE. In 

developing the proposed market basket, 

we reviewed ESRD expenditure data 

from ESRD MCRs (CMS Form 265–11, 

OMB NO. 0938–0236) for 2020 for each 

freestanding ESRD facility that reported 

expenses and payments. The 2020 

MCRs are for those ESRD facilities 

whose cost reporting period began on or 

after October 1, 2019, and before 

October 1, 2020. Of the 2020 MCRs, 

approximately 91 percent of 

freestanding ESRD facilities had a begin 

date on January 1, 2020, approximately 

5 percent had a begin date prior to 

January 1, 2020, and approximately 4 

percent had a begin date after January 1, 

2020. Using this methodology allowed 

our sample to include ESRD facilities 

with varying cost report years including, 

but not limited to, the federal fiscal year 

(FY) or CY. 

We are proposing to maintain our 

policy of using data from freestanding 

ESRD facilities (which account for over 

90 percent of total ESRD facilities in CY 

2020) because freestanding ESRD 

facility data reflect the actual cost 

structure faced by the ESRD facility 

itself. In contrast, expense data for 

hospital-based ESRD facilities reflect the 

allocation of overhead from the entire 

institution. 

We developed cost category weights 

for the proposed 2020-based ESRDB 

market basket in two stages. First, we 

derived base year cost weights for ten 

major categories (Wages and Salaries, 

Employee Benefits, Pharmaceuticals, 

Supplies, Laboratory Services, 

Housekeeping, Operations & 

Maintenance, Administrative & General, 

Capital-Related Building and Fixtures, 

and Capital-Related Moveable 

Equipment) from the ESRD MCRs. 

Second, we are proposing to divide the 

Administrative & General cost category 

into further detail using 2012 SAS data 

for the industry Kidney Dialysis Centers 

NAICS 621492 inflated to 2020 levels. 

We apply the estimated 2020 

distributions from the SAS data to the 

2020 Administrative & General cost 

weight to yield the more detailed 2020 

cost weights in the proposed market 

basket. This is the same methodology 

we used in the CY 2019 ESRD PPS 

rulemaking to break the Administrative 

& General costs into more detail for the 

2016-based ESRDB market basket (83 FR 

56951 through 56964). 

We are proposing to include a total of 

21 detailed cost categories for the 

proposed 2020-based ESRDB market 

basket, whereas the 2016-based ESRDB 

market basket had 20 detailed cost 

categories. A detailed discussion of the 

proposals is provided in section 

II.B.1.a.(1)(b) of this proposed rule. 

(b) Cost Category Weights 

Using Worksheets A and B from the 

2020 MCRs, we first computed cost 

shares for ten major expenditure 

categories: Wages and Salaries, 

Employee Benefits, Pharmaceuticals, 

Supplies, Laboratory Services, 

Housekeeping, Operations & 

Maintenance, Administrative and 

General, Capital-Related Building and 

Fixtures, and Capital-Related Moveable 

Equipment. Edits were applied to 

include only cost reports that had total 

costs greater than zero. Total costs as 

reported on the MCR include those costs 

reimbursable under the ESRD PPS. For 

example, we excluded expenses related 

to vaccine costs from total expenditures 

since these are not paid for under the 

ESRD PPS. 

In order to reduce potential 

distortions from outliers in the 

calculation of the individual cost 

weights for the major expenditure 

categories for each cost category, values 

less than the 5th percentile or greater 

than the 95th percentile were excluded 

from the major cost weight 

computations. The proposed data set, 

after removing cost reports with total 

costs equal to or less than zero and 

excluding outliers, included 

information from approximately 6,625 

independent ESRD facilities’ cost 

reports from an available pool of 7,413 

cost reports. 

Table 1 presents the proposed 2020- 

based ESRDB and 2016-based ESRDB 

market basket major cost weights as 

derived directly from the MCR data. 


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38470 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

We are proposing to disaggregate the 

Administrative & General major cost 

category developed from the MCR into 

more detail to more accurately reflect 

ESRD facility costs. Those categories 

include: Benefits, Professional Fees, 

Telephone, Utilities, and All Other 

Goods and Services. We describe below 

how the initially computed categories 

and weights from the cost reports were 

modified to yield the proposed 2020 

ESRDB market basket expenditure 

categories and weights presented in this 

proposed rule. 

Wages and Salaries 

The proposed Wages and Salaries cost 

weight is comprised of direct patient 

care wages and salaries and non-direct 

patient care wages and salaries. Direct 

patient care wages and salaries for 2020 

was derived from Worksheet B, column 

5, lines 8 through 17 of the MCR. Nondirect patient care wages and salaries 

includes all other wages and salaries 

costs for non-health workers and 

physicians, which we are proposing to 

derive using the following steps: 

Step 1: To capture the salary costs 

associated with non-direct patient care 

cost centers, we calculated salary 

percentages for non-direct patient care 

from Worksheet A of the MCR. The 

estimated ratios were calculated as the 

ratio of salary costs (Worksheet A, 

columns 1 and 2) to total costs 

(Worksheet A, column 4). The salary 

percentages were calculated for seven 

distinct cost centers: ‘Operations and 

Maintenance of Plant’ combined with 

‘Capital Related Costs-Renal Dialysis 

Equipment’ (line 3 and 6), 

Housekeeping (line 4), Employee Health 

and Wellness (EH&W) Benefits for 

Direct Patient Care (line 8), Supplies 

(line 9), Laboratory (line 10), 

Administrative & General (line 11), and 

Pharmaceuticals (line 12). 

Step 2: We then multiplied the salary 

percentages computed in step 1 by the 

total costs for each corresponding 

reimbursable cost center totals as 

reported on Worksheet B. The 

Worksheet B totals were based on the 

sum of reimbursable costs reported on 

lines 8 through 17. For example, the 

salary percentage for Supplies (as 

measured by line 9 on Worksheet A) 

was applied to the total expenses for the 

Supplies cost center (the sum of costs 

reported on Worksheet B, column 7, 

lines 8 through 17). This provided us 

with an estimate of Non-Direct Patient 

Care Wages and Salaries. 

Step 3: The estimated Wages and 

Salaries for each of the cost centers on 

Worksheet B derived in step 2 were 

subsequently summed and added to the 

direct patient care wages and salaries 

costs. 

Step 4: The estimated non-direct 

patient care wages and salaries (see step 

2) were then subtracted from their 

respective cost categories to avoid 

double-counting their values in the total 

costs. 

Using this methodology, we derive a 

proposed Wages and Salaries cost 

weight of 34.5 percent, reflecting an 

estimated direct patient care wages and 

salaries cost weight of 25.7 percent and 

non-direct patient care wages and 

salaries cost weight of 8.9 percent, as 

seen in Table 2. 

The final adjustment made to this 

category is to include Contract Labor 

costs. These costs appear on the MCR; 

however, they are embedded in the 

Other Costs from the trial balance 

reported on Worksheet A, Column 3 and 

cannot be disentangled using the MCRs. 

To avoid double counting of these 

expenses we are proposing to move the 

estimated cost weight for the contract 

labor costs from the Administrative and 

General category (where we believe the 

majority of the contract labor costs 

would be reported) to the Wages and 

Salaries category. We are proposing to 

use data from the SAS (2012 data 

inflated to 2020), which reported 2.4 

percent of total expenses were spent on 

contract labor costs. We allocated 80 

percent of that contract labor cost 

weight to the Wages and Salaries 

category. At the same time, we 

subtracted that same amount from the 

Administrative and General category, 

where the majority of contract labor 

expenses would likely be reported on 

the MCR. The 80 percent figure that was 

used was determined by taking salaries 

as a percentage of total compensation 

(excluding contract labor) from the 2020 

MCR data. This is the same method that 

was used to allocate contract labor costs 

to the Wages and Salaries cost category 


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TABLE 1: Proposed 2020-based ESRDB Market Basket Major Cost Weights Derived 

from the Medicare Cost Report Data 

Proposed 2020-based 2016-based ESRDB Cost Category ESRDB Market Basket Market Basket (%) (%) 

Wages and Salaries 34.5 32.6 

Employee Benefits 7.7 7.0 

Pharmaceuticals 10.1 12.4 

Supplies 11.0 10.4 

Laboratory Services 1.3 2.2 

Housekeeping* 0.5 3.9 

Operations & Maintenance 3.7 n/a 

Administrative & General 17.5 18.5 

Capital-related Building and Fixtures 9.4 9.2 

Capital-related Moveable Equipment 4.4 3.8 

Note: Totals may not sum to 100.0 percent due to rounding. 

* For the 2016-based ESRDB market basket, this category was referred to as the Housekeeping and Operations cost 

category. For the proposed 2020-based ESRDB market basket, the Housekeeping and Operations cost category is 

split into two detailed cost categories: Housekeeping and Operations & Maintenance. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38471 

for the 2016-based ESRDB market 

basket. 

The resulting proposed cost weight 

for Wages and Salaries increases to 36.5 

percent when contract labor wages are 

added. The calculation of the proposed 

Wages and Salaries cost weight for the 

2020-based ESRDB market basket is 

shown in Table 2 along with the similar 

calculation for the 2016-based ESRDB 

market basket. 

Employee Benefits 

The proposed Employee Benefits cost 

weight was derived from the MCR data 

for direct patient care and 

supplemented with data from the SAS 

(2012 data inflated to 2020) to account 

for non-direct patient care Employee 

Benefits. The MCR data only reflects 

Employee Benefit costs associated with 

health and wellness; that is, it does not 

reflect retirement benefits. 

In order to reflect the benefits related 

to non-direct patient care for employee 

health and wellness, we estimated the 

impact on the benefit weight using SAS. 

Unlike the MCR, the SAS collects 

detailed expenses for employee benefits 

including expenses related to the 

retirement and pension benefits. 

Incorporating the SAS data produced an 

Employee Benefits (both direct patient 

care and non-direct patient care) weight 

that was 1.3 percentage points higher 

(9.0 vs. 7.7) than the Employee Benefits 

weight for direct patient care calculated 

directly from the MCR. To avoid doublecounting and to ensure all of the market 

basket weights still totaled 100 percent, 

we removed this additional 1.3 

percentage points for Non-Direct Patient 

Care Employee Benefits from the 

Administrative and General cost 

category. 

The final adjustment made to this 

category is to include contract labor 

benefit costs. Once again, these costs 

appear on the MCR; however, they are 

embedded in the Other Costs from the 

trial balance reported on Worksheet A, 

Column 3 and cannot be disentangled 

using the MCR data. Identical to our 

methodology previously for allocating 

Contract Labor Costs to Wages and 

Benefits, we applied 20 percent of total 

Contract Labor Costs, as estimated using 

the SAS, to the Benefits cost weight 

calculated from the cost reports. The 20 

percent figure was determined by taking 

benefits as a percentage of total 

compensation (excluding contract labor) 

from the 2020 MCR data. The resulting 

cost weight for Employee Benefits 

increases to 9.5 percent when contract 

labor benefits are added. This is the 

same method that was used to allocate 

contract labor costs to the Benefits cost 

category for the 2016-based ESRDB 

market basket. 

Table 3 compares the 2016-based 

Benefits cost share derivation as 

detailed in the CY 2019 ESRD PPS final 

rule (83 FR 56954) to the proposed 

2020-based Benefits cost share 

derivation. 


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TABLE 2: Proposed 2020 and 2016 ESRD Wages and Salaries Cost Weight Determination 

Proposed 2016 Cost Components 2020 Cost Weight Source 

Weight 

Wages and Salaries Direct Patient Care 25.2% 25.1% MCR 

Wages and Salaries Non-direct Patient Care 8.9% 7.5% MCR 

Contract Labor (Wages) 1.9% 1.9% 80% of SAS Contract 

Labor weight 

Total Wages and Salaries 36.5% 34.5% 

TABLE 3: Proposed 2020 and 2016 ESRD Employee Benefits Cost Weight Determination 

Proposed 2016 Cost Components 2020 Cost Weight Source 

Weight 

Employee Benefits Direct Patient Care 7.7% 7.0% MCR 

Employee Benefits Non-direct Patient Care 1.3% 1.6% SAS 

Contract Labor (Benefits) 0.5% 0.5% 20% of SAS Contract 

Labor weight 

Total Employee Benefits 9.5% 9.1% 
38472 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

Pharmaceuticals 

The proposed 2020-based ESRDB 

market basket includes expenditures for 

all drugs, including formerly separately 

billable drugs and all other ESRDrelated drugs that were covered under 

Medicare Part D before the ESRD PPS 

was implemented. We calculated a 

Pharmaceuticals cost weight from the 

following cost centers on Worksheet B, 

the sum of lines 8 through 17, for the 

following columns: column 11, ‘‘Drugs 

Included in Composite Rate,’’ column 

12, ‘‘Erythropoiesis stimulating agents 

(ESAs)’’; and column 13, ‘‘ESRD-Related 

and AKI -Related Drugs.’’ We did not 

include the drug expenses for NonESRD Related Drugs, Supplies, and Labs 

as reported on line 5, column 10 or the 

AKI Non-Renal Related Drugs, Supplies, 

& Lab as reported on line 5.01 column 

10 as these expenses are not included in 

the ESRD PPS bundled payment 

amount. Section 1842(o)(1)(A)(iv) of the 

Act requires that influenza, 

pneumococcal, COVID–19, and hepatitis 

B vaccines described in paragraph (A) or 

(B) of section 1861(s)(10) of the Act be 

paid based on 95 percent of average 

wholesale price (AWP) of the drug. 

Since these vaccines are not paid for 

under the ESRD PPS, we did not 

include expenses reported on worksheet 

B, column 9 line 7 in the proposed 

2020-based ESRDB market basket. 

Finally, to avoid double-counting, the 

weight for the Pharmaceuticals category 

was reduced to exclude the estimated 

share of Non-Direct Patient Care Wages 

and Salaries associated with the 

applicable pharmaceutical cost centers 

referenced previously. This resulted in 

a proposed ESRDB market basket weight 

for Pharmaceuticals of 10.1 percent. 

ESA expenditures accounted for 6.0 

percentage points of the proposed 

Pharmaceuticals cost weight, and All 

Other Drugs accounted for the 

remaining 4.1 percentage points. 

The Pharmaceuticals cost weight 

decreased 2.3 percentage points from 

the 2016-based ESRDB market basket to 

the proposed 2020-based ESRDB market 

basket (12.4 percent to 10.1 percent). 

Most ESRD facilities experienced a 

decrease in their Pharmaceuticals cost 

weight since 2016. 

Supplies 

We calculated the proposed Supplies 

cost weight using the costs reported in 

the Supplies cost center (Worksheet B, 

line 5 and the sum of lines 8 through 17, 

column 7) of the MCR. To avoid doublecounting, the Supplies costs were 

reduced to exclude the estimated share 

of Non-Direct patient care Wages and 

Salaries associated with this cost center. 

The resulting proposed 2020-based 

ESRDB market basket weight for 

Supplies is 11.0 percent, approximately 

0.6 percentage point higher than the 

weight for the 2016-based ESRDB 

market basket. 

Laboratory Services 

We calculated the proposed 

Laboratory Services cost weight using 

the costs reported in the Laboratory cost 

center (Worksheet B, line 5 and the sum 

of line 8 through 17, column 8) of the 

MCR. To avoid double-counting, the 

Laboratory Services costs were reduced 

to exclude the estimated share of NonDirect Patient Care Wages and Salaries 

associated with this cost center. The 

proposed 2020-based ESRDB market 

basket weight for Laboratory Services is 

estimated at 1.3 percent, which is a 0.9 

percentage point decrease from the 

2016-based ESRDB market basket. 

Housekeeping 

We calculated the proposed 

Housekeeping cost weight using the 

costs reported on Worksheet A, line 4, 

column 8, of the MCR. To avoid doublecounting, the weight for the 

Housekeeping category was reduced to 

exclude the estimated share of NonDirect Patient Care Wages and Salaries 

associated with this cost center. These 

costs were divided by total costs to 

derive a proposed 2020-based ESRDB 

market basket weight for Housekeeping 

of 0.5 percent. For the 2016-based 

ESRDB market basket the cost category 

weight for both Housekeeping and 

Operations costs were combined into a 

single cost weight. The Housekeeping 

cost weight in the 2016-based ESRDB 

market basket would have been 0.5 

percent if it had been broken out 

separately. 

Operations & Maintenance 

We are proposing a new Operations & 

Maintenance cost category that includes 

the direct expenses incurred in the 

operation and maintenance of the plant 

and equipment such as heat, light, water 

(excluding water treatment for dialysis 

purposes), air conditioning, and air 

treatment; the maintenance and repair 

of building, parking facilities, and 

equipment; painting; elevator 

maintenance; performance of minor 

renovation of buildings and equipment; 

and protecting employees, visitors, and 

facility property. As previously 

discussed, these costs had formerly been 

combined with the Housekeeping 

expenses in a single cost category for 

Housekeeping and Operations. The 

proposed 2020-based ESRDB market 

basket Operations & Maintenance cost 

category reflects the expenses for 

Operations & Maintenance, which also 

includes the costs for Water and 

Sewerage that was a stand alone cost 

category in the 2016-based ESRDB 

market basket. We calculated the 

Operations & Maintenance cost weight 

using the costs reported on Worksheet 

A, line 3, column 8, of the MCR. To 

avoid double-counting, the weight for 

the Operations & Maintenance category 

was reduced to exclude the estimated 

share of Non-Direct Patient Care Wages 

and Salaries associated with this cost 

center. The resulting proposed 2020- 

based ESRDB market basket weight for 

Operations & Maintenance is 3.7 

percent. 

Capital 

We developed a proposed market 

basket weight for the Capital category 

using data from Worksheet B of the 

MCRs. Capital-related costs include 

depreciation and lease expenses for 

buildings, fixtures and movable 

equipment, property taxes, insurance 

costs, the costs of capital improvements, 

and maintenance expense for buildings, 

fixtures, and machinery. The MCR 

captures Capital-related Costs including: 

(1) Capital-Related- Building and 

Fixtures (2) Capital-Related Costs— 

Moveable Equipment and (3) 

Housekeeping, and Operations & 

Maintenance costs in Worksheet B, 

column 2. Since we developed separate 

expenditure categories for 

Housekeeping, and Operations & 

Maintenance, as detailed previously, we 

excluded these costs from the Capital 

cost weights. To calculate the Capitalrelated Buildings and Fixtures cost 

weight we sum expenses reported in 

Worksheet B lines 8 through 17, column 

2 less Housekeeping, Operations & 

Maintenance (as derived from expenses 

reported on Worksheet A, as described 

previously), and less Capital-related 

Moveable equipment costs (calculated 

as Worksheet A, column 8, line 2 

divided by the sum of Worksheet A, 

column 8, lines 1 and 2). The Capitalrelated moveable equipment cost weight 

is equal to Capital-related Renal Dialysis 

Equipment costs (Worksheet B, the sum 

of lines 8 through 17, column 4 plus 

Capital-Related Moveable Equipment (as 

described in the prior sentence)). We 

reasoned this delineation was 

particularly important given the critical 

role played by dialysis machines. 

Likewise, because price changes 

associated with Buildings and Fixtures 

could move differently than those 

associated with Machinery, we continue 

to believe that two capital-related cost 

categories are appropriate. The resulting 

proposed 2020-based ESRDB market 

basket weights for Capital-related 


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Buildings and Fixtures and Capitalrelated Moveable Equipment are 9.4 and 

4.4 percent, respectively. 

Administrative & General 

We computed the proportion of total 

Administrative & General expenditures 

using the Administrative and General 

cost center data from Worksheet B, the 

sum of lines 8 through 17, (column 9) 

of the MCRs. Additionally, we removed 

contract labor from this cost category 

and apportioned these costs to the 

Wages and Salaries and Employee 

Benefits cost weights. Similar to other 

expenditure category adjustments, we 

then reduced the computed weight to 

exclude Wages and Salaries and 

Benefits associated with the 

Administrative and General cost center 

for Non-direct Patient Care as estimated 

from the SAS data. The resulting 

Administrative and General cost weight 

is 13.7 percent. 

We are proposing to further 

disaggregate the Administrative and 

General cost weight to derive detailed 

cost weights for Electricity, Natural Gas, 

Telephone, Professional Fees, and All 

Other Goods and Services. These 

detailed cost weights were derived by 

inflating the detailed 2012 SAS data 

forward to 2020 by applying the annual 

price changes from the respective price 

proxies to the appropriate market basket 

cost categories that are obtained from 

the 2012 SAS data. We repeated this 

practice for each year to 2020. We then 

calculated the cost shares that each cost 

category represents of the 2012 data 

inflated to 2020. These resulting 2020 

cost shares were applied to the 

Administrative and General cost weight 

derived from the MCR (net of contract 

labor and additional benefits) to obtain 

the detailed cost weights for the 

proposed 2020-based ESRDB market 

basket. This method is similar to the 

method used for the 2016-based ESRDB 

market basket. 

Table 4 lists all of the cost categories 

and cost weights in the proposed 2020- 

based ESRDB market basket compared 

to the 2016-based ESRDB market basket. 

BILLING CODE 4120–01–P 


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TABLE 4: Comparison of the Proposed 2020-based and the 2016-based ESRDB Market 

Basket Cost Categories and Weights 

Proposed 2020 2016 Cost Weights Proposed 2020 Cost Category Cost Weights (percent) (percent) 

Total 100.0 100.0 

Compensation 45.9 43.6 

Wages and Salaries 36.5 34.5 

Employee Benefits 9.5 9.1 

Utilities 1.4 2.0 

Electricity 1.2 1.1 

Natural Gas 0.1 0.1 

Water and Sewerage n/a 0.8 

Medical Supplies & Laboratory Services 22.4 24.9 

Pharmaceuticals 10.1 12.4 

ESAs 6.0 10.0 

Other Drugs (except ESAs) 4.1 2.4 

Supplies 11.0 10.4 

Laboratory Services 1.3 2.2 

All Other Goods and Services 16.6 16.4 

Telephone & Internet Services 0.5 0.5 

Housekeeping 0.5 3.9 

Operations & Maintenance 3.7 n/a 

Professional Fees 0.8 0.7 

All Other Goods and Services 11.1 11.3 

Capital Costs 13.8 13.0 

Capital Related-Building and Fixtures 9.4 9.2 

Capital Related-Machinery 4.4 3.8 

Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying 

one decimal and, therefore, the detail may not add to the total due to rounding. 
38474 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

BILLING CODE 4120–01–C 

(c) Proposed Price Proxies for the 2020- 

Based ESRDB Market Basket 

After developing the cost weights for 

the proposed 2020-based ESRDB market 

basket, we are proposing to select the 

most appropriate wage and price 

proxies currently available to represent 

the rate of price change for each 

expenditure category. We based the 

proposed price proxies on BLS data and 

group them into one of the following 

BLS categories: 

• Employment Cost Indexes. 

Employment Cost Indexes (ECIs) 

measure the rate of change in 

employment wage rates and employer 

costs for employee benefits per hour 

worked. These indexes are fixed-weight 

indexes and strictly measure the change 

in wage rates and employee benefits per 

hour. ECIs are superior to Average 

Hourly Earnings (AHE) as price proxies 

for input price indexes because they are 

not affected by shifts in occupation or 

industry mix, and because they measure 

pure price change and are available by 

both occupational group and by 

industry. The industry ECIs are based 

on the NAICS and the occupational ECIs 

are based on the Standard Occupational 

Classification System (SOC). 

• Producer Price Indexes. Producer 

Price Indexes (PPIs) measure price 

changes for goods sold in other than 

retail markets. PPIs are used when the 

purchases of goods or services are made 

at the wholesale level. 

• Consumer Price Indexes. Consumer 

Price Indexes (CPIs) measure change in 

the prices of final goods and services 

bought by consumers. CPIs are only 

used when the purchases are similar to 

those of retail consumers rather than 

purchases at the wholesale level, or if 

no appropriate PPIs are available. 

We evaluated the price proxies using 

the criteria of reliability, timeliness, 

availability, and relevance: 

Reliability. Reliability indicates that 

the index is based on valid statistical 

methods and has low sampling 

variability. Widely accepted statistical 

methods ensure that the data were 

collected and aggregated in a way that 

can be replicated. Low sampling 

variability is desirable because it 

indicates that the sample reflects the 

typical members of the population. 

(Sampling variability is variation that 

occurs by chance because only a sample 

was surveyed rather than the entire 

population.) 

Timeliness. Timeliness implies that 

the proxy is published regularly, 

preferably at least once a quarter. The 

market baskets are updated quarterly, 

and therefore, it is important for the 

underlying price proxies to be up-todate, reflecting the most recent data 

available. We believe that using proxies 

that are published regularly (at least 

quarterly, whenever possible) helps to 

ensure that we are using the most recent 

data available to update the market 

basket. We strive to use publications 

that are disseminated frequently, 

because we believe that this is an 

optimal way to stay abreast of the most 

current data available. 

Availability. Availability means that 

the proxy is publicly available. We 

prefer that our proxies are publicly 

available because this helps to ensure 

that our market basket increase factors 

are as transparent to the public as 

possible. In addition, this enables the 

public to be able to obtain the price 

proxy data on a regular basis. 

Relevance. Relevance means that the 

proxy is applicable and representative 

of the cost category weight to which it 

is applied. The CPIs, PPIs, and ECIs that 

we have selected to propose in this 

proposed rule meet these criteria. 

Therefore, we believe that they continue 

to be the best measure of price changes 

for the cost categories to which they 

would be applied. 

Table 7 lists all proposed price 

proxies for the proposed 2020-based 

ESRDB market basket. We note that we 

are proposing to use the same proxies as 

those used in the 2016-based ESRDB 

market basket, except for the price 

proxy for the Other Drugs (except ESAs) 

cost category. Below is a detailed 

explanation of the proposed price 

proxies used for each cost category. 

Wages and Salaries 

We are proposing to continue using a 

blend of ECIs to proxy the Wages and 

Salaries cost weight in the proposed 

2020-based ESRDB market basket, and 

to continue using four occupational 

categories and associated ECIs based on 

full-time equivalents (FTE) data from 

ESRD MCRs and ECIs from BLS. We 

calculated occupation weights for the 

blended Wages and Salaries price proxy 

using 2020 FTE data from the MCR data 

multiplied by the associated 2020 

Average Mean Wage data from the 

Bureau of Labor Statistics’ Occupational 

Employment Statistics. This is similar to 

the methodology used in the 2016-based 

ESRDB market basket to derive these 

occupational wages and salaries 

categories. 

Health Related Wages and Salaries 

We are proposing to continue using 

the ECI for Wages and Salaries for All 

Civilian Workers in Hospitals (BLS 

series code #CIU1026220000000I) as the 

price proxy for health-related 

occupations. Of the two health-related 

ECIs that we considered (‘‘Hospitals’’ 

and ‘‘Health Care and Social 

Assistance’’), the wage distribution 

within the Hospital NAICS sector (622) 

is more closely related to the wage 

distribution of ESRD facilities than it is 

to the wage distribution of the Health 

Care and Social Assistance NAICS 

sector (62). 

The Wages and Salaries—Health 

Related subcategory weight within the 

Wages and Salaries cost category 

accounts for 79.4 percent of total Wages 

and Salaries in 2020. The ESRD MCR 

FTE categories used to define the Wages 

and Salaries—Health Related 

subcategory include ‘‘Physicians,’’ 

‘‘Registered Nurses,’’ ‘‘Licensed 

Practical Nurses,’’ ‘‘Nurses’ Aides,’’ 

‘‘Technicians,’’ and ‘‘Dieticians’’. 

Management Wages and Salaries 

We are proposing to continue using 

the ECI for Wages and Salaries for 

Private Industry Workers in 

Management, Business, and Financial 

(BLS series code #CIU2020000110000I). 

We believe this ECI is the most 

appropriate price proxy to measure the 

wages and salaries price growth of 

management personnel at ESRD 

facilities. 

The Wages and Salaries— 

Management subcategory weight within 

the Wages and Salaries cost category is 

9.0 percent in 2020. The ESRD MCR 

FTE category used to define the Wages 

and Salaries—Management subcategory 

is ‘‘Management.’’ 

Administrative Wages and Salaries 

We are proposing to continue using 

the ECI for Wages and Salaries for 

Private Industry Workers in Office and 

Administrative Support (BLS series 

code #CIU2020000220000I). We believe 

this ECI is the most appropriate price 

proxy to measure the wages and salaries 

price growth of administrative support 

personnel at ESRD facilities. 

The Wages and Salaries— 

Administrative subcategory weight 

within the Wages and Salaries cost 

category is 5.3 percent in 2020. The 

ESRD MCR FTE category used to define 

the Wages and Salaries—Administrative 

subcategory is ‘‘Administrative.’’ 

Services Wages and Salaries 

We are proposing to continue using 

the ECI for Wages and Salaries for 

Private Industry Workers in Service 

Occupations (BLS series code 

#CIU2020000300000I). We believe this 

ECI is the most appropriate price proxy 

to measure the wages and salaries price 

growth of all other non-health related, 

non-management, and nonVerDate Sep<11>2014 17:23 Jun 27, 2022 Jkt 256001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 E:\FR\FM\28JNP2.SGM 28JNP2

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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38475 

administrative service support 

personnel at ESRD facilities. 

The Services subcategory weight 

within the Wages and Salaries cost 

category is 6.3 percent in 2020. The 

ESRD MCR FTE categories used to 

define the Wages and Salaries—Services 

subcategory are ‘‘Social Workers’’ and 

‘‘Other.’’ 

Table 5 lists the four ECI series and 

the corresponding weights used to 

construct the proposed ECI blend for 

Wages and Salaries compared to the 

2016-based weights for the 

subcategories. We believe this proposed 

ECI blend is the most appropriate price 

proxy to measure the growth of wages 

and salaries faced by ESRD facilities. 

Employee Benefits 

We are proposing to continue using 

an ECI blend for Employee Benefits in 

the proposed 2020-based ESRDB market 

basket where the components match 

those of the proposed Wage and Salaries 

ECI blend. The proposed occupation 

weights for the blended Benefits price 

proxy (Table 6) are the same as those 

proposed for the wages and salaries 

price proxy blend as shown in Table 5. 

BLS does not publish ECI for Benefits 

price proxies for each Wage and Salary 

ECI; however, where these series are not 

published, they can be derived by using 

the ECI for Total Compensation and the 

relative importance of wages and 

salaries with total compensation as 

published by BLS for each detailed ECI 

occupational index. 

Health Related Benefits 

We are proposing to continue using 

the ECI for Benefits for All Civilian 

Workers in Hospitals to measure price 

growth of this subcategory. This is 

calculated using the ECI for Total 

Compensation for All Civilian Workers 

in Hospitals (BLS series code 

#CIU1016220000000I) and the relative 

importance of Wages and Salaries 

within Total Compensation as 

published by BLS. We believe this 

constructed ECI series is technically 

appropriate for the reason stated in the 

Wages and Salaries price proxy section. 

Management Benefits 

We are proposing to continue using 

the ECI for Benefits for Private Industry 

Workers in Management, Business, and 

Financial to measure price growth of 

this subcategory. This ECI is calculated 

using the ECI for Total Compensation 

for Private Industry Workers in 

Management, Business, and Financial 

(BLS series code #CIU2010000110000I) 

and the relative importance of wages 

and salaries within total compensation. 

We believe this constructed ECI series is 

technically appropriate for the reason 

stated in the Wages and Salaries price 

proxy section. 

Administrative Benefits 

We are proposing to continue using 

the ECI for Benefits for Private Industry 

Workers in Office and Administrative 

Support to measure price growth of this 

subcategory. This ECI is calculated 

using the ECI for Total Compensation 

for Private Industry Workers in Office 

and Administrative Support (BLS series 

code #CIU2010000220000I) and the 

relative importance of Wages and 

Salaries within Total Compensation. We 

believe this constructed ECI series is 

technically appropriate for the reason 

stated in the wages and salaries price 

proxy section. 

Services Benefits 

We are proposing to continue using 

the ECI for Total Benefits for Private 

Industry Workers in Service 

Occupations (BLS series code 

#CIU2030000300000I) to measure price 

growth of this subcategory. We believe 

this ECI series is technically appropriate 

for the reason stated in the Wages and 

Salaries price proxy section. We believe 

the proposed benefits ECI blend 

continues to be the most appropriate 

price proxy to measure the growth of 

benefits prices faced by ESRD facilities. 

Table 6 lists the four ECI series and the 

corresponding weights used to construct 

the proposed benefits ECI blend. 


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TABLE 5: Proposed ECI Blend for Wages and Salaries in the Proposed 2020-Based 

and 2016-Based ESRDB Market Baskets 

Health Related ECI for Wages and Salaries for All Civilian 79.4% 79.9% 

Workers in Hospitals 

Management ECI for Wages and Salaries for Private Industry 9.0% 6.7% 

Workers in Management, Business, and Financial 

Administrative ECI for Wages and Salaries for Private Industry 5.3% 7.7% 

Workers in Office and Administrative Support 

Services ECI for Wages and Salaries for Private Industry 6.3% 5.7% 

Workers in Service Occupations 
38476 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

Electricity 

We are proposing to continue using 

the PPI Commodity for Commercial 

Electric Power (BLS series code 

#WPU0542) to measure the price growth 

of this cost category. 

Natural Gas 

We are proposing to continue using 

the PPI Commodity for Commercial 

Natural Gas (BLS series code 

#WPU0552) to measure the price growth 

of this cost category. 

Pharmaceuticals 

ESAs: We are proposing to continue 

using the PPI Commodity for Biological 

Products, Excluding Diagnostic, for 

Human Use (which we will abbreviate 

as PPI–BPHU) (BLS series code 

#WPU063719) as the price proxy for the 

ESA drugs in the market basket. The 

PPI–BPHU measures the price change of 

prescription biologics, and ESAs would 

be captured within this index, if they 

are included in the PPI sample. Since 

the PPI relies on confidentiality with 

respect to the companies and drugs/ 

biologicals included in the sample, we 

do not know if these drugs are indeed 

reflected in this price index. However, 

we believe the PPI–BPHU is an 

appropriate proxy to use because 

although ESAs may be a small part of 

the fuller category of biological 

products, we can examine whether the 

price increases for the ESA drugs are 

similar to the drugs included in the PPI– 

BPHU. We did this by comparing the 

historical price changes in the PPI– 

BPHU and the average sales price (ASP) 

for ESAs and found the cumulative 

growth to be consistent over the past 4 

years. We would continue to monitor 

the trends in the prices for ESA drugs 

as measured by other price data sources 

to ensure that the PPI–BPHU is still an 

appropriate price proxy. 

Other Drugs (except ESA): For all 

other drugs included in the ESRD PPS 

bundled payment other than ESAs, we 

are proposing to use a blend of 50 

percent of the PPI Commodity for 

Vitamin, Nutrient, and Hematinic 

Preparations (which we will abbreviate 

as PPI–VNHP) (BLS series code 

#WPU063807), and 50 percent of the 

PPI Commodity for Pharmaceuticals for 

human use, prescription (which we will 

abbreviate as PPI-Pharmaceuticals) (BLS 

series code #WPUSI07003). We 

continue to believe that the PPI–VNHP 

is an appropriate price proxy for the 

iron supplements commonly used in the 

treatment of ESRD, and an analysis of 

claims data indicate that iron 

supplement costs account for about half 

of the All Other ESRD-related Drugs 

costs. For the remaining drugs 

represented in the non-ESA drug 

category (such as calcimimetics and 

Vitamin D analogs) we believe a 

different price proxy would be more 

appropriate and we are proposing to use 

the PPI Commodity for Pharmaceuticals 

for human use, prescription, which 

captures the inflationary price pressures 

for all types of prescription drugs rather 

than a single therapeutic category of 

drugs. Though this PPI measure 

includes a wide variety of prescription 

drugs, we believe it is technically 

appropriate to use a broad indicator of 

prescription drug price trends for three 

key reasons: (1) the more detailed PPI 

measure where we believe these types of 

non-ESA drugs would be captured 

would more likely reflect price trends 

not faced by ESRD facilities, such as 

cancer drugs, (2) there have been 

notable changes to the types and mix of 

drugs paid for under the ESRD PPS 

bundled payment since 2016, such as 

the inclusion of formerly oral-only 

calcimimetics and the addition of AKIrelated drugs, and (3) the potential for 

future changes to the types and mix of 

drugs that may be paid for under the 

ESRD PPS bundled payment, such as 

when other drugs that are currently oralonly drugs are included in the ESRD 

PPS beginning for CY 2025. For these 

reasons, we believe that a broader drug 

index representing a larger mix of 

prescription drugs is a technical 

improvement to the proposed price 

proxy for this cost category. We will 

continue to monitor the relative share of 

expenses for iron supplements and 

other types of drugs for this cost 

category to determine if the proposed 

50/50 PPI blend warrants an adjustment, 

and if so, we would propose such an 

adjustment in future rulemaking. 

Supplies 

We are proposing to continue using 

the PPI Commodity for Surgical and 

Medical Instruments (BLS series code 

#WPU1562) to measure the price growth 

of this cost category. 

Laboratory Services 

We are proposing to continue using 

the PPI Industry for Medical 

Laboratories (BLS series code 

#PCU621511621511) to measure the 

price growth of this cost category. 

Telephone Service 

We are proposing to continue using 

the CPI U.S. city average for Telephone 

Services (BLS series code 

#CUUR0000SEED) to measure the price 

growth of this cost category. 

Housekeeping 

We are proposing to continue using 

the PPI Commodity for Cleaning and 

Building Maintenance Services (BLS 

series code #WPU49) to measure the 

price growth of this cost category. 

Operations & Maintenance 

For the Operations & Maintenance 

cost category, we are proposing to use 

the ECI for Total compensation for All 

Civilian workers in Installation, 

maintenance, and repair (BLS series 

code #CIU1010000430000I) to measure 

the price growth of this cost category. 


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TABLE 6: Proposed ECI Blend for Benefits in the Proposed 2020-Based and 2016-Based 

ESRDB Market Baskets 

Health Related ECI for Benefits for All Civilian Workers in 79.4% 79.9% 

Hospitals. 

Management ECI for Benefits for Private Industry Workers in 9.0% 6.7% 

Management, Business, and Financial. 

Administrative ECI for Benefits for Private Industry Workers in 5.3% 7.7% 

Office and Administrative Support. 

SeIVices ECI for Benefits for Private Industry Workers in 6.3% 5.7% 

SeIVice Occupations. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38477 

This price proxy accounts for the 

compensation expenses related to 

maintenance and repair workers. We 

believe the majority of expenses for 

maintenance and repair to be laborrelated costs and therefore, believe that 

this ECI is the most technically 

appropriate price proxy for this cost 

category. 

Professional Fees 

We are proposing to continue using 

the ECI for Total Compensation for 

Private Industry Workers in Professional 

and Related (BLS series code 

#CIU2010000120000I) to measure the 

price growth of this cost category. 

All Other Goods and Services 

We are proposing to continue using 

the PPI Commodity for Final demand— 

Finished Goods Less Foods and Energy 

(BLS series code #WPUFD4131) to 

measure the price growth of this cost 

category. 

Capital-Related Building and Fixtures 

We are proposing to continue using 

the PPI Industry for Lessors of 

Nonresidential Buildings (BLS series 

code #PCU531120531120) to measure 

the price growth of this cost category. 

Capital-Related Moveable Equipment 

We are proposing to continue using 

the PPI Commodity for Electrical 

Machinery and Equipment (BLS series 

code #WPU117) to measure the price 

growth of this cost category. 

Table 7 shows all the proposed price 

proxies and cost weights for the 

proposed 2020-based ESRDB Market 

Basket. 

BILLING CODE 4120–01–P 


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38478 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 


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TABLE 7: Proposed Price Proxies and associated Cost Weights for the 2020-based ESRDB 

Market Basket 

Total ESRDB Market 

Bask.et 

Compensation 

Wages and Salaries 

HealU1-related 

Management 

Administrative 

Services 

Employee Benefits 

Healili-relaled 

Management 

Administrative 

Services 

Utilities 

Electricity 

Natural Gas 

Medical Materials and 

Supplies 

Pharmaceuticals 

ESAs 

Other Drugs 

Supplies 

Laboratory Services 

All Other Goods and 

Services 

Telephone Service 

Housekeeping 

Operations & 

Maintenance 

Professional Fees 

ECI for Wages and Salaries for All Civilian Workers in Hospitals. 

ECI for Wages and Salaries for Private Industry Wotkers in 

Mana cmcnt, Business, and Financial. 

ECl for Wages and Salaries for Private Industry Workers in 

Office and Administrative Support. 

ECI for Wages and Salaries for Private Industry Wotkers in 

Service Occupations. 

ECI for Total Benefits for All Civilian workers in Hospitals. 

ECT for Total Benefits for Private Industry workers in 

Mana ement, Business, and Financial. 

ECl for Total Benefits for Private Industry wotkcrs in Office and 

Administrative Support. 

ECI for Total Benefits for Private Industry wotkers in Service 

Occupations. 

PPI Commodity for Commercial Electric Power. 

PPI Commodity for Commercial Natural Gas. 

PPI Commodity for Biological Products, Excluding Diagnostics, 

for Human Use. 

50/50 blend of the PPI Commodity for Vitamin, Nutrient, and 

Hematinic Preparations, and the PPI Commodity for 

Pharmaceuticals for human use, prescription 

PPI Commodity for Surgical and Medical Instruments. 

PPI Industry for Medical Laboratories. 

CPI-U for Telephone Services. 

PPI Commodity for Cleaning and Building Maintenance Services. 

ECI for Total compensation for All Civilian wotkers in 

Installation, maintenance, and repair 

ECI for Total Compensation for Private Industry Workers in 

Professional and Related. 

100.0% 

45.9% 

36.5% 

28.9% 

3.3% 

1.9% 

2.3% 

9.5% 

7.5% 

0.9% 

0.5% 

0.6% 

1.4% 

1.2% 

0.1% 

22.4% 

10.1% 

6.0% 

4.1% 

11.0% 

1.3% 

16.6% 

0.5% 

0.5% 

3.7% 

0.8% 

All Other Goods and 11. 1 % 

Services PPI for Final demand - Finished Goods less Foods and Energy. 

Capital Costs 

Capital Related 

Building and 

Fi.x1urcs 

Capital Related 

Moveable 

PPI Industry for Lessors of Nonresidential Buildings. 

Equipment PPT Commodity for Electrical Machinery and Equipment. 

13.8% 

9.4% 

4.4% 

Note: The cost weights are calculated using three decimal places. For presentational purposes, we are displaying 

one decimal and therefore, the detail may not add to the total due to rounding. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38479 

(d) Proposed Rebasing Results 

A comparison of the yearly 

differences of increase factors from CY 

2019 to CY 2023 for the 2016-based 

ESRDB market basket and the proposed 

2020-based ESRDB market basket is 

shown in Table 8. The CY 2023 ESRDB 

market basket increase factor would be 

0.2 percentage point lower if we 

continued to use the 2016-based ESRDB 

market basket. For the years prior to CY 

2023 the annual market basket increase 

factors were the same, except for CY 

2021 where the proposed 2020-based 

market basket was 0.1 percentage point 

lower. 

(2) Proposed Labor-Related Share for 

ESRD PPS 

We define the labor-related share 

(LRS) as those expenses that are laborintensive and vary with, or are 

influenced by, the local labor market. 

The labor-related share of a market 

basket is determined by identifying the 

national average proportion of operating 

costs that are related to, influenced by, 

or vary with the local labor market. 

We are proposing to use the proposed 

2020-based ESRDB market basket cost 

weights to determine the proposed 

labor-related share for ESRD facilities. 

Therefore, effective for CY 2023, we are 

proposing a labor-related share of 55.2 

percent, compared to the current 52.3 

percent that was based on the 2016- 

based ESRDB market basket, as shown 

in Table 9. These figures represent the 

sum of Wages and Salaries, Benefits, 

Housekeeping, Operations & 

Maintenance, 87 percent of the weight 

for Professional Fees (details discussed 

later in this subsection), and 46 percent 

of the weight for Capital-related 

Building and Fixtures expenses (details 

discussed later in this subsection). We 

used the same methodology for the 

2016-based ESRDB market basket. 

BILLING CODE 4120–01–C 

The proposed labor-related share for 

Professional Fees reflects the proportion 

of ESRD facilities’ professional fees 

expenses that we believe vary with local 

labor market (87 percent). We 

conducted a survey of ESRD facilities in 

2008 to better understand the 

proportion of contracted professional 


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TABLE 8: Historical and Projected Market Basket Increase Factors under the Proposed 

2020-based ESRDB Market Basket and 2016-based ESRDB Market Basket 

Proposed 2020-based 

Calendar Year Proposed 2020-based 2016-based ESRDB ESRDB Market Basket 

(CY) ESRDB Market Basket Market Basket less 2016-based ESRDB 

Market Basket 

Historical Data: 

CY 2019 2.3 2.3 0.0 

CY2020 1.9 1.9 0.0 

CY 2021 3.0 3.1 -0.1 

Forecast: 

CY2022 4.5 4.5 0.0 

CY 2023 2.8 2.6 0.2 

Source: IHS Global Inc. 1'1 quarter 2022 forecast with historical data through 4th quarter 2021 

TABLE 9: Labor-Related Share of Current and Proposed ESRD Bundled Market Baskets 

Cost Category Proposed 2020-based ESRDB 2016-based ESRDB Market 

Market Basket Weights Basket Weights 

Wages and Salaries 36.5 34.5 

Employee Benefits 9.5 9.1 

Housekeeping* 0.5 3.9 

Operations & Maintenance 3.7 n/a 

Professional Fees (Labor-Related) 0.7 0.6 

Capital Labor-Related 4.3 4.2 

Total Labor-Related Share 55.2 52.3 

*The 2016-based ESRDB labor-related share had a combined category weight for Housekeeping and Operations 
38480 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

1Total Factor Productivity in Major Industries— 

2020. Available at: https://www.bls.gov/ 

news.release/prod5.nr0.htm. 

services that ESRD facilities typically 

purchase outside of their local labor 

market. These purchased professional 

services include functions such as 

accounting and auditing, management 

consulting, engineering, and legal 

services. Based on the survey results, we 

determined that, on average, 87 percent 

of professional services are purchased 

from local firms and 13 percent are 

purchased from businesses located 

outside of the ESRD’s local labor 

market. Thus, we are proposing to 

include 87 percent of the cost weight for 

Professional Fees in the labor-related 

share (87 percent is the same percentage 

as used in prior years). 

The proposed labor-related share for 

capital-related expenses reflects the 

proportion of ESRD facilities’ capitalrelated expenses that we believe varies 

with local labor market wages (46 

percent of ESRD facilities’ Capitalrelated Building and Fixtures expenses). 

Capital-related expenses are affected in 

some proportion by variations in local 

labor market costs (such as construction 

worker wages) that are reflected in the 

price of the capital asset. However, 

many other inputs that determine 

capital costs are not related to local 

labor market costs, such as interest 

rates. The 46-percent figure is based on 

regressions run for the inpatient 

hospital capital PPS in 1991 (56 FR 

43375). We use a similar methodology 

to calculate capital-related expenses for 

the labor-related shares for 

rehabilitation facilities (70 FR 30233), 

psychiatric facilities, long-term care 

facilities, and skilled nursing facilities 

(66 FR 39585). 

(3) Proposed CY 2023 ESRD Market 

Basket Increase Factor, Adjusted for 

Productivity 

Under section 1881(b)(14)(F)(i) of the 

Act, beginning in CY 2012, the ESRD 

PPS payment amounts are required to be 

annually increased by an ESRD market 

basket percentage increase factor and 

reduced by the productivity adjustment 

described in section 1886(b)(3)(B)(xi)(II) 

of the Act. We are proposing to use the 

2020-based ESRDB market basket as 

described in section II.B.1 of this 

proposed rule to compute the CY 2023 

ESRDB market basket increase factor 

and labor-related share based on the 

best available data. Consistent with 

historical practice, we propose to 

estimate the ESRDB market basket 

increase factor based on IHS Global 

Inc.’s (IGI) forecast using the most 

recently available data. IGI is a 

nationally recognized economic and 

financial forecasting firm with which 

CMS contracts to forecast the 

components of the market baskets. 

(a) Proposed CY 2023 Market Basket 

Increase Factor 

Using this methodology and the IGI 

forecast available in the first quarter of 

2022 of the proposed 2020-based ESRDB 

market basket (with historical data 

through the fourth quarter of 2021), and 

consistent with our historical practice of 

estimating market basket increases 

based on the best available data, the 

proposed CY 2023 ESRDB market basket 

increase factor is 2.8 percent. 

(b) Proposed Productivity Adjustment 

Under section 1881(b)(14)(F)(i) of the 

Act, as amended by section 3401(h) of 

the Affordable Care Act, for CY 2012 

and each subsequent year, the ESRD 

market basket percentage increase factor 

shall be reduced by the productivity 

adjustment described in section 

1886(b)(3)(B)(xi)(II) of the Act. The 

statute defines the productivity 

adjustment to be equal to the 10-year 

moving average of changes in annual 

economy-wide, private nonfarm 

business multifactor productivity (MFP) 

(as projected by the Secretary for the 10- 

year period ending with the applicable 

FY, year, cost reporting period, or other 

annual period) (the ‘‘productivity 

adjustment’’). MFP is derived by 

subtracting the contribution of labor and 

capital input growth from output 

growth. The detailed methodology for 

deriving the MFP projection was 

finalized in the CY 2012 ESRD PPS final 

rule (76 FR 70232 through 70235). 

BLS publishes the official measures of 

productivity for the U.S. economy. We 

note that previously the productivity 

measure referenced in section 

1886(b)(3)(B)(xi)(II) of the Act was 

published by BLS as private nonfarm 

business MFP. Beginning with the 

November 18, 2021 release of 

productivity data, BLS replaced the 

term ‘‘multifactor productivity’’ with 

‘‘total factor productivity’’ (TFP). BLS 

noted that this is a change in 

terminology only and will not affect the 

data or methodology.1 As a result of the 

BLS name change, the productivity 

measure referenced in section 

1886(b)(3)(B)(xi)(II) of the Act is now 

published by BLS as private nonfarm 

business TFP; however, as mentioned 

previously, the data and methods are 

unchanged. We refer readers to https:// 

www.bls.gov/productivity/ for the BLS 

historical published TFP data. A 

complete description of IGI’s TFP 

projection methodology is available on 

the CMS website at https://

www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/ 

MarketBasketResearch. In addition, in 

the CY 2022 ESRD PPS final rule (86 FR 

61879), we noted that effective for CY 

2022 and future years, CMS would be 

changing the name of this adjustment to 

refer to it as the productivity adjustment 

rather than the MFP adjustment. We 

stated this was not a change in policy, 

as we will continue to use the same 

methodology for deriving the 

adjustment and rely on the same 

underlying data. 

Using this methodology and IGI’s first 

quarter 2022 forecast, the proposed 

productivity adjustment for CY 2023 

(the 10-year moving average of TFP for 

the period ending CY 2023) is projected 

to be 0.4 percentage point. 

(c) Proposed CY 2023 Market Basket 

Increase Factor Adjusted for 

Productivity 

As a result of these provisions, the 

proposed CY 2023 ESRD market basket 

increase factor reduced by the 

productivity adjustment is 2.4 percent. 

This proposed market basket increase 

factor is calculated by starting with the 

proposed 2020-based ESRDB market 

basket percentage increase factor of 2.8 

percent for CY 2023, and reducing it by 

the proposed productivity adjustment 

(the 10-year moving average of TFP for 

the period ending CY 2023) of 0.4 

percentage point. As is our general 

practice, we are also proposing that if 

more recent data are subsequently 

available (for example, a more recent 

estimate of the market basket increase 

factor or productivity adjustment), we 

would use such data to determine the 

market basket increase factor and 

productivity adjustment in the CY 2023 

ESRD PPS final rule. 

b. Proposed CY 2023 ESRD PPS Wage 

Indices 

(1) Background 

Section 1881(b)(14)(D)(iv)(II) of the 

Act provides that the ESRD PPS may 

include a geographic wage index 

payment adjustment, such as the index 

referred to in section 1881(b)(12)(D) of 

the Act, as the Secretary determines to 

be appropriate. In the CY 2011 ESRD 

PPS final rule (75 FR 49200), we 

finalized an adjustment for wages at 

§ 413.231. Specifically, CMS adjusts the 

labor-related portion of the base rate to 

account for geographic differences in 

the area wage levels using an 

appropriate wage index, which reflects 

the relative level of hospital wages and 

wage-related costs in the geographic 

area in which the ESRD facility is 

located. We use OMB’s CBSA-based 


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2ESRD facilities received 50 percent of their CY 

2015 wage index value based on the OMB 

delineations for CY 2014 and 50 percent of their CY 

2015 wage index value based on the newer OMB 

delineations. 79 FR 66142. 

geographic area designations to define 

urban and rural areas and their 

corresponding wage index values (75 FR 

49117). OMB publishes bulletins 

regarding CBSA changes, including 

changes to CBSA numbers and titles. 

The bulletins are available online at 

https://www.whitehouse.gov/omb/ 

information-for-agencies/bulletins/. 

For CY 2023, we are proposing to 

update the wage indices to account for 

updated wage levels in areas in which 

ESRD facilities are located using our 

existing methodology. We use the most 

recent pre-floor, pre-reclassified 

hospital wage data collected annually 

under the inpatient PPS. The ESRD PPS 

wage index values are calculated 

without regard to geographic 

reclassifications authorized under 

sections 1886(d)(8) and (d)(10) of the 

Act and utilize prefloor hospital data 

that are unadjusted for occupational 

mix. For CY 2023, the updated wage 

data are for hospital cost reporting 

periods beginning on or after October 1, 

2018, and before October 1, 2019 (FY 

2019 cost report data). 

We have also adopted methodologies 

for calculating wage index values for 

ESRD facilities that are located in urban 

and rural areas where there is no 

hospital data. For a full discussion, see 

the CY 2011 and CY 2012 ESRD PPS 

final rules at 75 FR 49116 through 

49117 and 76 FR 70239 through 70241, 

respectively. For urban areas with no 

hospital data, we compute the average 

wage index value of all urban areas 

within the state to serve as a reasonable 

proxy for the wage index of that urban 

CBSA, that is, we use that value as the 

wage index. For rural areas with no 

hospital data, we compute the wage 

index using the average wage index 

values from all contiguous CBSAs to 

represent a reasonable proxy for that 

rural area. We apply the statewide urban 

average based on the average of all 

urban areas within the state to 

Hinesville-Fort Stewart, Georgia (78 FR 

72173), and we apply the wage index for 

Guam to American Samoa and the 

Northern Mariana Islands (78 FR 

72172). 

A wage index floor value (0.5000) is 

applied under the ESRD PPS as a 

substitute wage index for areas with 

very low wage index values. Currently, 

all areas with wage index values that 

fall below the floor are located in Puerto 

Rico. However, the wage index floor 

value is applicable for any area that may 

fall below the floor. A description of the 

history of the wage index floor under 

the ESRD PPS can be found in the CY 

2019 ESRD PPS final rule (83 FR 56964 

through 56967). 

An ESRD facility’s wage index is 

applied to the labor-related share of the 

ESRD PPS base rate. In the CY 2019 

ESRD PPS final rule (83 FR 56963), we 

finalized a labor-related share of 52.3 

percent, which was based on the 2016- 

based ESRDB market basket. In the CY 

2021 ESRD PPS final rule (85 FR 71436), 

we updated the OMB delineations as 

described in the September 14, 2018 

OMB Bulletin No. 18–04, beginning 

with the CY 2021 ESRD PPS wage 

index. In addition, we finalized the 

application of a 5 percent cap on any 

decrease in an ESRD facility’s wage 

index from the ESRD facility’s wage 

index from the prior CY. We finalized 

that the transition would be phased in 

over 2 years, such that the reduction in 

an ESRD facility’s wage index would be 

capped at 5 percent in CY 2021, and no 

cap would be applied to the reduction 

in the wage index for the second year, 

CY 2022. For CY 2023, as discussed in 

section II.B.1.a (2) of this proposed rule, 

the proposed labor-related share to 

which the wage index would be applied 

is 55.2 percent, based on the proposed 

2020-based ESRDB market basket. 

For CY 2023, we are proposing to 

update the ESRD PPS wage index to use 

the most recent hospital wage data. The 

proposed CY 2023 ESRD PPS wage 

index is set forth in Addendum A and 

is available on the CMS website at 

https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

ESRDpayment/End-Stage-RenalDisease-ESRD-Payment-Regulationsand-Notices. Addendum A provides a 

crosswalk between the CY 2022 wage 

index and the proposed CY 2023 wage 

index. Addendum B provides an ESRD 

facility level impact analysis. 

Addendum B is available on the CMS 

website at https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/ESRDpayment/End-StageRenal-Disease-ESRD-PaymentRegulations-and-Notices. 

(2) Proposed Permanent Cap on Wage 

Index Decreases 

As discussed in section II.B.1.b(1) of 

this proposed rule and in previous 

ESRD PPS rules, under the authority of 

section 1881(b)(14)(D)(iv)(II) of the Act, 

we have proposed and finalized 

temporary, budget-neutral transition 

policies in the past to help mitigate 

negative impacts on ESRD facilities 

following the adoption of certain ESRD 

PPS wage index changes. In the CY 2015 

ESRD PPS final rule (79 FR 66142), we 

implemented revised OMB area 

delineations using a 2-year transition, 

with a 50/50 blended wage index for all 

ESRD facilities in CY 2015 2 and 100 

percent of the wage index based on the 

new OMB delineations in CY 2016. In 

the CY 2021 ESRD PPS proposed rule 

(85 FR 42160 through 42161), we 

proposed a transition policy to help 

mitigate any negative impacts that ESRD 

facilities may experience due to our 

proposal to adopt the 2018 OMB 

delineations under the ESRD PPS. We 

noted that because the overall amount of 

ESRD PPS payments would increase 

slightly due to the 2018 OMB 

delineations, the effect of the wage 

index budget neutrality factor would be 

to reduce the ESRD PPS per treatment 

base rate for all ESRD facilities paid 

under the ESRD PPS, despite the fact 

that the majority of ESRD facilities 

would be unaffected by the 2018 OMB 

delineations. Thus, we explained that 

we believed it would be appropriate to 

provide for a transition period to 

mitigate the resulting short-term 

instability of a lower ESRD PPS base 

rate as well as consequential negative 

impacts to ESRD facilities that 

experience reduced payments. We 

proposed to apply a 5-percent cap on 

any decrease in an ESRD facility’s wage 

index from its final wage index from the 

prior calendar year, that is, CY 2020. We 

explained that we believed the 5- 

percent cap would provide greater 

transparency and would be 

administratively less complex than the 

prior methodology of applying a 50/50 

blended wage index (85 FR 71478). We 

proposed that no cap would be applied 

to the reduction in the wage index for 

the second year, that is, CY 2022 (85 FR 

42161). 

Several commenters to the CY 2021 

ESRD PPS proposed rule supported the 

wage index transition policy that we 

proposed for CY 2021; however, as 

discussed in the CY 2021 ESRD PPS 

final rule (86 FR 71434 through 71436), 

some commenters expressed concerns 

about the large negative effects of the 

new labor market area delineations on 

certain areas. A patient organization 

suggested that the 5 percent cap may not 

provide an adequate transition for labor 

market areas that would experience a 

decrease in their wage index of greater 

than 10 percent. Similarly, a national 

non-profit dialysis organization 

recommended that CMS provide an 

extended transition period, beyond the 

proposed 5 percent limit for 2021, for at 

least 3 years. Some commenters, 

including MedPAC, suggested 


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alternatives to the methodology. 

MedPAC suggested that the 5 percent 

cap limit should apply to both increases 

and decreases in the wage index. 

We stated in the CY 2021 ESRD PPS 

final rule that we believed a 5 percent 

cap on the overall decrease in an ESRD 

facility’s wage index value would be an 

appropriate transition, as it would 

effectively mitigate any significant 

decreases in an ESRD facility’s wage 

index for CY 2021. With respect to 

extending the transition period for at 

least 3 years, we stated that we believed 

this would undermine the goal of the 

wage index policy, which is to improve 

the accuracy of payments under the 

ESRD PPS, and would serve to further 

delay improving the accuracy of the 

ESRD PPS by continuing to pay certain 

ESRD facilities more than their wage 

data suggest is appropriate. We also 

stated that the transition policies are not 

intended to curtail the positive impacts 

of certain wage index changes, so it 

would not be appropriate to also apply 

the 5 percent cap on wage index 

increases. We acknowledged that a 

transition policy was necessary to help 

mitigate initial significant negative 

impacts from revised OMB delineations, 

but expressed that this mitigation must 

be balanced against the importance of 

ensuring accurate payments. We 

finalized the transition policy for CY 

2021 as proposed. We did not propose 

to extend the transition policy for CY 

2022 or future years, however, as we 

discussed in the CY 2022 ESRD PPS 

final rule (86 FR 61881), we received 

comments acknowledging and 

supporting the final phase-in of the 

updated OMB delineations for CY 2022. 

Based on our past wage index 

transition policies and public 

comments, we recognize that certain 

changes to our wage index policy may 

significantly affect Medicare payments 

to ESRD facilities. Commenters have 

raised concerns about scenarios in 

which changes to wage index policy 

may have significant negative impacts 

on ESRD facilities. Therefore, we 

considered for this CY 2023 ESRD PPS 

proposed rule how best to address those 

scenarios. 

In the past, we have established 

transition policies of limited duration to 

phase in significant changes to labor 

market areas, such as revised OMB 

delineations. In taking this approach in 

the past, we sought to mitigate shortterm instability and fluctuations that 

can negatively impact ESRD facilities 

due to wage index changes. In 

accordance with the ESRD PPS wage 

index regulations at § 413.231(a), we 

adjust the labor-related portion of the 

base rate to account for geographic 

differences in the area wage levels using 

an appropriate wage index that is 

established by CMS, and which reflects 

the relative level of hospital wages and 

wage-related costs in the geographic 

area in which the ESRD facility is 

located. Our policy is generally to use 

the most current hospital wage data and 

analysis available in order to ensure the 

accuracy of the ESRD PPS wage index, 

in accordance with § 413.196(d)(2). As 

discussed earlier in this section of the 

proposed rule, we believe that past wage 

index transition policies have helped 

mitigate initial significant negative 

impacts from changes such as revised 

OMB delineations. However, we 

recognize that changes to the wage 

index have the potential to create 

instability and significant negative 

impacts on certain ESRD facilities even 

when labor market areas do not change 

as a result of revised OMB delineations. 

In addition, year-to-year fluctuations in 

an area’s wage index can occur due to 

external factors beyond an ESRD 

facility’s control, such as the COVID–19 

PHE, and for an individual ESRD 

facility, these fluctuations can be 

difficult to predict. While we have 

maintained that temporary transition 

policies provide sufficient time for 

facilities to make operational changes 

for future CYs and have noted separate 

agency actions to address certain 

external factors, such as the issuance of 

waivers and flexibilities during the 

COVID–19 PHE (85 FR 71435), we also 

recognize that predictability in 

Medicare payments is important to 

enable ESRD facilities to budget and 

plan their operations. 

In light of these considerations, we 

are proposing a permanent mitigation 

policy to smooth the impact of year-toyear changes in ESRD PPS payments 

related to decreases in the ESRD PPS 

wage index. We are proposing a policy 

that we believe would increase the 

predictability of ESRD PPS payments for 

ESRD facilities; mitigate instability and 

significant negative impacts to ESRD 

facilities resulting from changes to the 

wage index; and use the most current 

data to maintain the accuracy of the 

ESRD PPS wage index. 

As previously discussed, we believe 

our transition policy that applied a 5- 

percent cap on wage index decreases for 

CY 2021 provided greater transparency 

and was administratively less complex 

than prior transition methodologies. In 

addition, we believe this methodology 

mitigated short-term instability and 

fluctuations that can negatively impact 

ESRD facilities due to wage index 

changes. Lastly, we believe the 5- 

percent cap we applied to all wage 

index decreases for CY 2021 provided 

an adequate safeguard against 

significant and unpredictable payment 

reductions in that year, related to the 

adoption of the revised OMB 

delineations. However, as discussed 

earlier in this section of the proposed 

rule, we recognize there are 

circumstances that a 2-year transition 

policy, like the one adopted for CY 

2021, would not effectively address for 

future years in which ESRD facilities 

continue to be negatively affected by 

significant wage index decreases. We 

believe our proposed permanent policy 

would eliminate the need for temporary 

and potentially uncertain transition 

adjustments to the wage index in the 

future due to specific policy changes or 

circumstances outside ESRD facilities’ 

control (for example, public health or 

other emergencies, or the adoption of 

future OMB revisions to the CBSA 

delineations through rulemaking). 

Typical year-to-year variation in the 

ESRD PPS wage index has historically 

been within 5 percent, and we expect 

this will continue to be the case in 

future years. Because ESRD facilities are 

usually experienced with this level of 

wage index fluctuation, we believe 

applying a 5-percent cap on all wage 

index decreases each year, regardless of 

the reason for the decrease, would 

effectively mitigate instability in ESRD 

PPS payments due to any significant 

wage index decreases that may affect 

ESRD facilities in a year. Therefore, we 

believe this approach would address 

concerns about instability that 

commenters raised in response to the 

CY 2021 ESRD PPS proposed rule. In 

addition, we believe that applying a 5- 

percent cap on all wage index decreases 

would support increased predictability 

about ESRD PPS payments for ESRD 

facilities, enabling them to more 

effectively budget and plan their 

operations. Lastly, because applying a 5- 

percent cap on all wage index decreases 

would represent a small overall impact 

on the labor market area wage index 

system, we believe it would still ensure 

the wage index is a relative measure of 

the value of labor in prescribed labor 

market areas. With a permanent cap, we 

would be able to continue to update the 

wage index with the most current 

hospital wage data as required under 

§ 413.196(d)(2) in order to more 

accurately align the use of labor 

resources with ESRD PPS payment 

while mitigating the instability in 

payments to individual ESRD facilities 

that such updates may otherwise cause. 

As discussed in section II.B.1.d(2) of 

this proposed rule, we compute a wage 

index budget-neutrality adjustment 

factor that is applied to the ESRD PPS 


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3https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/AcuteInpatientPPS/

wageindex#:∼:text=A%20labor%

20market%20area’s%20wage,portion%20of%20

the%20standardized%20amounts. 

base rate. As discussed in further detail 

in that section, we estimate that 

applying a 5-percent cap on all wage 

index decreases would have a very 

small effect on the wage index budget 

neutrality factor for CY 2023, and 

therefore would have a small effect on 

the ESRD PPS base rate. This small 

effect on budget neutrality also 

demonstrates that this policy would 

have a minimal impact on the ESRD 

PPS wage index overall. The wage 

index 3 is a measure of the value of labor 

(wage and wage-related costs) in a 

prescribed labor market area relative to 

the national average. Therefore, we 

anticipate that in the absence of any 

proposed wage index policy changes 

such as changes to OMB delineations, 

most ESRD facilities would not 

experience year-to-year wage index 

declines greater than 5 percent in any 

given year. Therefore, we anticipate that 

the impact to the wage index budget 

neutrality factor in future years would 

continue to be minimal. We also believe 

that when the 5-percent cap would be 

applied under this proposed policy, it 

likely would be applied similarly to all 

ESRD facilities in the same labor market 

area, as the hospital average hourly 

wage data in the CBSA (and any relative 

decreases compared to the national 

average hourly wage) would be similar. 

While this proposed policy may result 

in ESRD facilities in a CBSA receiving 

a higher wage index than others in the 

same area (such as in situations when 

OMB delineations change), we believe 

the impact would be temporary, as the 

average hourly wage of facilities in a 

labor market would tend to converge to 

the mean average hourly wage of the 

CBSA. 

As noted previously in this section of 

the proposed rule, section 

1881(b)(14)(D)(iv)(II) of the Act provides 

that the ESRD PPS may include a 

geographic wage index payment 

adjustment, such as the index referred 

to in section 1881(b)(12)(D) of the Act, 

as the Secretary determines to be 

appropriate. Under our regulations at 

§ 413.231(a), we must use an 

appropriate wage index to adjust the 

labor-related portion of the base rate to 

account for geographic differences in 

the area wage levels. For the reasons 

discussed in this section of the 

proposed rule, we believe a 5-percent 

cap on wage index decreases would be 

appropriate for the ESRD PPS. 

Therefore, for CY 2023 and subsequent 

years, we are proposing to apply a 5- 

percent cap on any decrease to an ESRD 

facility’s wage index from its wage 

index in the prior year, regardless of the 

circumstances causing the decline. That 

is, we are proposing that an ESRD 

facility’s wage index for CY 2023 would 

not be less than 95 percent of its final 

wage index for CY 2022, regardless of 

whether the ESRD facility is part of an 

updated CBSA, and that for subsequent 

years, an ESRD facility’s wage index 

would not be less than 95 percent of its 

wage index calculated in the prior CY. 

This also would mean that if an ESRD 

facility’s prior CY wage index is 

calculated with the application of the 5- 

percent cap, the following year’s wage 

index would not be less than 95 percent 

of the ESRD facility’s capped wage 

index in the prior CY. For example, if 

an ESRD facility’s wage index for CY 

2023 is calculated with the application 

of the 5-percent cap, then its wage index 

for CY 2024 would not be less than 95 

percent of its capped wage index in CY 

2023. Lastly, we are proposing that a 

newly opened or newly certified ESRD 

facility would be paid the wage index 

for the area in which it is geographically 

located for its first full or partial CY 

with no cap applied, because a new 

ESRD facility would not have a wage 

index in the prior CY. We would reflect 

the proposed permanent cap on wage 

index decreases in our regulations at 

§ 413.231(c). 

As previously discussed in this 

proposed rule, we believe this proposed 

mitigation policy would maintain the 

ESRD PPS wage index as a relative 

measure of the value of labor in 

prescribed labor market areas, increase 

predictability of ESRD PPS payments for 

ESRD facilities, and mitigate instability 

and significant negative impacts to 

ESRD facilities resulting from 

significant changes to the wage index. In 

section VII.D.5 of this proposed rule, we 

estimate the impact to payments for 

ESRD facilities in CY 2023 based on this 

proposed policy. We also note that we 

would examine the effects of this 

proposed policy, if finalized, on an 

ongoing basis in the future in order to 

assess its continued appropriateness. 

(3) Proposed Update to ESRD PPS Wage 

Index Floor 

(a) Background 

A wage index floor value is applied 

under the ESRD PPS as a substitute 

wage index for areas with very low wage 

index values. Currently, all areas with 

wage index values that fall below the 

floor are located in Puerto Rico; 

however, the wage index floor value is 

applicable for any area that may fall 

below the floor. 

In the CY 2011 ESRD PPS final rule 

(75 FR 49116 through 49117), we 

finalized a policy to reduce the wage 

index floor by 0.05 for each of the 

remaining years of the ESRD PPS 

transition, that is, until CY 2014. We 

applied a 0.05 reduction to the wage 

index floor for CYs 2012 and 2013, 

resulting in a wage index floor of 0.5500 

and 0.5000, respectively (CY 2012 ESRD 

PPS final rule, 76 FR 70241). We 

continued to apply and reduce the wage 

index floor by 0.05 in CY 2013 (77 FR 

67459 through 67461). Although we 

only intended to provide a wage index 

floor during the 4-year transition in the 

CY 2014 ESRD PPS final rule (78 FR 

72173), we decided to continue to apply 

the wage index floor and reduce it by 

0.05 per year for CY 2014 and for CY 

2015, resulting in a wage index floor of 

0.4500 and 0.4000, respectively. 

In the CY 2016 ESRD PPS final rule 

(80 FR 69006 through 69008), however, 

we decided to maintain a wage index 

floor of 0.4000, rather than further 

reduce the floor by 0.05. We stated that 

we needed more time to study the wage 

indices that are reported for Puerto Rico 

to assess the appropriateness of 

discontinuing the wage index floor (80 

FR 69006). 

In the CY 2017 ESRD PPS proposed 

rule (81 FR 42817), we presented the 

findings from analyses of ESRD facility 

cost report and claims data submitted by 

facilities located in Puerto Rico and 

mainland facilities. We solicited public 

comments on the wage index for CBSAs 

in Puerto Rico as part of our continuing 

effort to determine an appropriate 

policy. We did not propose to change 

the wage index floor for CBSAs in 

Puerto Rico, but we requested public 

comments in which interested parties 

could provide useful input for 

consideration in future decision making. 

Specifically, we solicited comment on 

the suggestions that were submitted in 

the CY 2016 ESRD PPS final rule (80 FR 

69007). After considering the public 

comments we received regarding the 

wage index floor, in the CY 2017 ESRD 

PPS final rule, we finalized a wage 

index floor of 0.4000 (81 FR 77858). 

In the CY 2018 ESRD PPS final rule 

(82 FR 50747), we finalized a policy to 

permanently maintain the wage index 

floor of 0.4000, because we believed it 

was set at an appropriate level to 

provide additional payment support to 

the lowest wage areas. This policy also 

obviated the need for an additional 

budget-neutrality adjustment that would 

reduce the ESRD PPS base rate, beyond 

the adjustment needed to reflect 

updated hospital wage data, in order to 


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4A Laspeyres index is an index formula used in 

price statistics for measuring price development of 

the basket of goods and services consumed in the 

base period (https://ec.europa.eu/eurostat/ 

statistics-explained/ 

index.php?title=Glossary:Laspeyres_price_index#:∼:

text=The%20Laspeyres%20price%20index%20

is,cost%20in%20the%20current%20period.) 

maintain budget neutrality for wage 

index updates. 

In the CY 2019 ESRD PPS proposed 

rule (83 FR 34328 through 34330), we 

proposed to increase the wage index 

floor from 0.4000 to 0.5000. We 

conducted various analyses to support 

our proposal to increase the wage index 

floor from 0.4000 to 0.5000. We 

calculated alternative wage indexes for 

Puerto Rico that combined labor 

quantities, that is FTEs, from cost 

reports with BLS wage information to 

create two regular Laspeyres price 

indexes 4 (ranging between 0.510 and 

0.550). We discuss this analysis in detail 

in the following paragraphs, however, 

the complete discussion can be found in 

the CY 2019 ESRD PPS proposed rule at 

83 FR 34328 through 34330. 

In response to the CY 2019 wage 

index floor proposal, we received 

several comments. One commenter 

opposed the proposal and expressed 

concern over the data sources used to 

develop the wage indexes in general. 

This commenter requested additional 

documentation of our analysis to 

determine the two alternative wage 

indices for Puerto Rico. Several 

commenters expressed support for the 

proposal to increase the wage index 

from 0.40 in 2018 to 0.50 for CY 2019 

and subsequent years, because they 

believed it would assist ESRD facilities 

in providing access to high-quality care 

particularly in rural areas where access 

challenges may be present. Some 

commenters expressed support for 

CMS’s position that the then-current 

wage index floor was too low; however, 

they recommended CMS set the wage 

index floor higher than 0.5000 

(specifically, at 0.5936, which was 

identified as the lower boundary of 

CMS’s statistical outlier analysis as 

discussed further in this section of the 

proposed rule). 

In response to these comments, in the 

CY 2019 ESRD PPS final rule (83 FR 

56967), we stated that we continued to 

believe that a wage index floor of 0.5000 

struck an appropriate balance between 

providing additional payments to areas 

that fell below the wage floor while 

minimizing the impact on the ESRD PPS 

base rate. We noted that the purpose of 

the wage index adjustment is to 

recognize differences in ESRD facility 

resource use for wages specific to the 

geographic area in which facilities are 

located. While a wage index floor of 

0.5000 continued to be the lowest wage 

index nationwide, we noted that the 

areas subject to the floor continued to 

have the lowest wages compared to 

mainland facilities. We noted that the 

increase to the wage index floor to 

0.5000 was a 25 percent increase over 

the then-current floor and would 

provide a higher wage index for all 

facilities in Puerto Rico where wage 

indexes, based on hospital reported 

data, range from .3300 to .4400. For 

these reasons, we stated that we 

believed a wage index floor of 0.5000 

was appropriate and would support 

labor costs in low wage areas. 

Therefore, in the CY 2019 ESRD PPS 

final rule (83 FR 56964 through 56967), 

we finalized an increase to the wage 

index floor from 0.4000 to 0.5000 for CY 

2019 and subsequent years. We 

explained that we revisited our 

evaluation of payments to ESRD 

facilities located in the lowest wage 

areas to be responsive to comments from 

interested parties and to ensure 

payments under the ESRD PPS are 

appropriate. We provided statistical 

analyses that supported a higher wage 

index floor and finalized an increase 

from 0.4000 to 0.5000 to safeguard 

access to care in affected areas. 

As noted previously in this proposed 

rule, currently, all areas with wage 

index values that fall below the floor are 

located in Puerto Rico; however, the 

wage index floor value is applicable for 

any area that may fall below the floor. 

The wage index floor of 0.5000 has been 

in effect since January 1, 2019. 

We did not include any wage index 

floor proposals in the CY 2022 ESRD 

PPS proposed rule, however, we 

received several public comments 

regarding the wage index floor. As 

discussed in the CY 2022 ESRD PPS 

final rule (86 FR 61881), three 

commenters, including a large dialysis 

organization, a non-profit health 

insurance organization in Puerto Rico, 

and a healthcare group in Puerto Rico, 

commented on the wage index for ESRD 

facilities located in Puerto Rico. These 

commenters recommended that CMS 

increase the wage index floor from 

0.5000 to 0.5500, noting that in the CY 

2019 ESRD PPS proposed rule, CMS 

reported that its own analysis indicated 

that Puerto Rico’s wage index likely lies 

between 0.5100 and 0.5500. They noted 

that CMS further stated that any wage 

index values less than 0.5936 are 

considered outlier values. They also 

pointed out that CMS still finalized a 

floor at 0.5000 and that we 

characterized it as a balance between 

providing additional payments to 

affected areas while minimizing the 

impact on the ESRD PPS base rate. 

Another commenter recommended that 

CMS evaluate policy inequities between 

the ESRD PPS wage index for ESRD 

facilities located in Puerto Rico 

compared to other states and territories, 

taking into consideration the unique 

circumstances that affect Puerto Rico, 

including its shortage of healthcare 

specialists and labor work force, remote 

geography, transportation and freighting 

costs, drug pricing, and lack of 

transitional care services. 

In response to these comments, we 

stated in the CY 2022 ESRD PPS final 

rule that we would not finalize any 

changes to those policies since we did 

not propose any changes to the wage 

index floor or wage index methodology 

for CY 2022, but would take these 

suggestions into account when 

considering future rulemaking. 

(b) Wage Index Floor Proposal 

Section 1881(b)(14)(D)(iv)(II) of the 

Act provides that the ESRD PPS may 

include a geographic wage index 

adjustment, such as the index referred 

to in section 1881(b)(12)(D) of the Act, 

as the Secretary determines to be 

appropriate. Based on this authority, we 

believe a proposal to increase the wage 

index floor would be in accordance with 

the Secretary’s efforts to account for 

geographic differences in an area’s wage 

levels using an appropriate wage index 

which reflects the relative level of 

hospital wages and wage-related costs in 

the geographic area in which the ESRD 

facility is located. 

For CY 2023 and subsequent years, 

we are proposing to increase the wage 

index floor to 0.6000. We believe that 

this wage floor increase would be 

responsive to comments from interested 

parties, safeguard access to care in areas 

at the lowest end of the current wage 

index distribution, and be supported by 

data and analyses that support a higher 

wage index floor, as discussed in the 

following subsections. 

(i) Analysis of Puerto Rico Cost Reports 

for the CY 2019 ESRD PPS Rulemaking 

For the CY 2019 ESRD PPS proposed 

rule (83 FR 34329 through 34330), we 

performed an analysis using ESRD 

facility cost reports and wage 

information specific to Puerto Rico from 

the BLS (https://www.bls.gov/oes/2015/ 

may/oes_pr.htm). The analysis utilized 

data from cost reports for freestanding 

facilities and for hospital-based facilities 

in Puerto Rico for CYs 2013 through 

2015. 

Using these data, we calculated 

alternative wage indexes for Puerto Rico 

that combined labor quantities, that is 

FTEs, from cost reports with BLS wage 


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information to create two regular 

Laspeyres price indexes. In the context 

of this analysis, a Laspeyres price index 

can be viewed as a relative, weighted 

average wage of labor in each 

geographical area. This average 

combines the wages of various labor 

categories according to certain weights. 

The two indexes we considered used 

the same BLS-derived wages but 

different weights. The first index used 

quantity weights derived from the 

overall U.S. use of labor inputs. The 

second index used quantity weights 

derived from the Puerto Rico use of 

labor inputs. The alternative wage 

indexes derived from the analysis 

indicated that Puerto Rico’s wage index 

likely lies between 0.5100 and 0.5500. 

As noted earlier in this section of this 

proposed rule and discussed in the CY 

2019 ESRD PPS final rule (83 FR 56967), 

commenters have noted that both of 

these values are above the current wage 

index floor and suggest that the current 

0.5000 wage index floor may be too low. 

Commenters pointed out CMS’s analysis 

shows that Puerto Rico’s wage index 

likely lies between 0.51 and 0.55, while 

additional analyses note that any wage 

index values less than 0.5936 are 

considered outlier values, with 0.5936 

therefore as the lower wage index 

boundary. They expressed concern that 

in the CY 2019 ESRD PPS proposed rule 

CMS proposed a new floor of only 

0.5000 even though the present 

methodology applied to Puerto Rico has 

created the only outlier in the U.S. As 

we stated in the CY 2019 ESRD PPS 

final rule (83 FR 56967), at that time, we 

believed that a wage index floor of 

0.5000 struck an appropriate balance 

between providing additional payments 

to areas that fall below the wage floor 

while minimizing the impact on the 

ESRD PPS base rate. At the time, we 

conducted analyses to gauge the 

appropriateness of the then-current 

wage index floor of 0.4000 and 

determine whether it was too low. We 

did not propose to use these analyses to 

determine the exact value for a new 

wage index floor. 

Specifically, as we explained in the 

CY 2019 ESRD PPS final rule, CMS 

performed a statistical outlier analysis 

to identify the upper and lower 

boundaries of the distribution of the 

current wage index values and remove 

outlier values at the edges of the 

distribution. In the general sense, an 

outlier is an observation that lies 

outside a defined range from other 

values in a population. In this case, the 

population of values is the various wage 

indexes within the CY 2019 wage index. 

The lower and upper quartiles (the 25th 

and 75th percentiles) are also used. The 

lower quartile is Q1 and the upper 

quartile is Q3. The difference (Q3¥Q1) 

is called the interquartile range (IQR). 

The IQR is used in calculating the inner 

and outer fences of a data set. The inner 

fences are needed for identifying mild 

outlier values in the edges of the 

distribution of a data set. Any values in 

the data set that are outside of the inner 

fences are identified as an outlier. The 

standard multiplying value for 

identifying the inner fences is 1.5. First, 

we identified the Q1 and Q3 quartiles of 

the CY 2018 wage index, which are as 

follows: Q1 = 0.8303 and Q3 = 0.9881. 

Next, we identified the IQR: IQR = 

0.9881¥0.8303 = 0.1578. Finally, we 

identified the inner fence values as 

shown below. Lower inner fence: 

Q1¥1.5*IQR = 0.8303¥(1.5 × 0.1578) = 

0.5936. This statistical outlier analysis 

demonstrated that any wage index 

values less than 0.5936 are considered 

outlier values, and 0.5936 as the lower 

boundary also suggested that the current 

wage index floor could be appropriately 

reset at a higher level. 

Based on these analyses, we finalized 

a wage index floor of 0.5000 in the CY 

2019 ESRD PPS final rule. We 

continued to apply the wage index floor 

of 0.5000 per year through CY 2022. 

Although we did not propose specific 

policies relating to the wage index floor 

in the CY 2022 ESRD PPS proposed 

rule, commenters on that rule noted that 

past hurricanes and the COVID–19 PHE 

have created infrastructure challenges 

that lead to high costs of dialysis care. 

These commenters requested CMS 

increase the wage index floor. In 

response to comments and our 

continued concern regarding access, in 

this proposed rule, we are revisiting the 

CY 2019 analysis, and believe that the 

statistical analysis of the CY 2019 data 

indicated that a wage index floor as high 

as 0.5936 would be appropriate. 

(ii) Analysis of the CY 2023 ESRD PPS 

Proposed Rule Analytic File 

We performed an analysis to compare 

the impact of three options to adjust the 

wage index floor upward using the CY 

2023 ESRD PPS proposed rule analytic 

file. The analytic file includes 

qualifying data for beneficiaries for 

whom a 72x claim for renal dialysis 

services was submitted in the outpatient 

file setting during CY 2021. We 

analyzed the impact of three options for 

adjustment for the wage index floor: (1) 

wage index floor of 0.5000 (that is, no 

change), (2) wage index floor of 0.5500, 

and (3) wage index floor of 0.6000. 

Specifically, we examined how these 

three options would potentially impact 

the base rate, outlier thresholds, and 

average payment rates for all ESRD 

facilities. 

Among the three options, we 

considered the wage index floor of 

0.5000 as the baseline or starting point 

used for comparisons. We then 

compared the impact on various aspects 

of the ESRD PPS under the alternative 

options using the 0.5500 and 0.6000 

wage index floor. 

First, we examined the potential 

impact on the base rate. Under the 

baseline (wage index value of 0.5000), 

the proposed base rate for CY 2023 

would be $264.14. The remaining two 

options (0.5500 floor and 0.6000 floor) 

would result in a base rate of $264.11 

and $264.09, respectively. These 

options would decrease the proposed 

ESRD PPS base rate due to the 

application of the budget neutrality 

factor for each option, however as 

discussed in the following paragraph, 

the overall impact to ESRD PPS 

payments would be negligible. 

Next, we examined the potential 

impact to the outlier thresholds. 

Relative to the baseline (wage index 

floor value of 0.5000), all options would 

have little or no impact on either the 

outlier MAP or the FDL. Lastly, we 

examined the potential impact to overall 

ESRD facility payments. After 

accounting for all payment adjustments 

under the ESRD PPS and applying the 

required budget neutrality factor for 

each option, all options would be 

associated with a 3.00 percent increase 

in projected payments for CY 2023 due 

to the proposed market basket update 

and proposed outlier FDL and MAP 

amounts. We estimate that the change in 

overall payments attributable to 

increasing the wage index floor would 

be less than 0.01 percentage point. 

However, we estimate that there would 

be a significant increase in payments to 

ESRD facilities located in Puerto Rico. 

Under the 0.5500 wage index floor 

option, we estimate that payments to 

ESRD facilities in Puerto Rico would 

increase by approximately 3.8 percent 

relative to the 0.5000 wage index floor 

option. Under the 0.6000 wage index 

floor option, we estimate that payments 

to Puerto Rico facilities would increase 

by approximately 7.6 percent relative to 

the 0.5000 floor. In other words, 

increasing the wage index floor to 

0.6000 would maximize the positive 

impacts for ESRD facilities located in 

Puerto Rico while continuing to 

minimize the impact to overall ESRD 

PPS payments. 

As noted previously in this section of 

the proposed rule, the statistical 

analysis presented in the CY 2019 ESRD 

PPS rulemaking resulted in values for 

the lower and upper fences for 


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5Under § 413.237(a)(1)(vi), as of January 1, 2012, 

the laboratory tests that comprise the Automated 

Multi-Channel Chemistry panel are excluded from 

the definition of outlier services. 

6Transmittal 2033 issued August 20, 2010, was 

rescinded and replaced by Transmittal 2094, dated 

November 17, 2010. Transmittal 2094 identified 

additional drugs and laboratory tests that may also 

be eligible for ESRD outlier payment. Transmittal 

2094 was rescinded and replaced by Transmittal 

2134, dated January 14, 2011, which included one 

technical correction. https://www.cms.gov/ 

Regulations-and-Guidance/Guidance/Transmittals/ 

downloads/R2134CP.pdf. 

appropriate wage index values (lower = 

0.5936, upper = 0.7514). Any values in 

the data set that are outside of the fences 

are identified as an outlier. Therefore, 

the analysis indicated that a wage index 

floor of 0.5936 would be appropriate, 

because any wage index values less than 

0.5936 or greater than 0.7514 would be 

considered outlier values, and a wage 

index value within the fences could be 

appropriate. For greater simplicity and 

public understanding, we propose to 

round the lower fence of 0.5936 to the 

nearest 0.05, to align with the increment 

of change that we previously adopted in 

the CY 2011 ESRD PPS final rule (75 FR 

49116 through 49117) for historical 

reductions to the ESRD PPS wage index 

floor. As a result, after rounding to the 

nearest 0.05, a wage index floor of 

0.6000 would be in line with the data. 

We strive for a wage index floor value 

that maintains the accuracy of payments 

under the ESRD PPS, that is, has 

minimal impact on the base rate, outlier 

thresholds, and average payment rates 

for all ESRD facilities. Based on our 

analysis of several options using the 

most recent analytic file for this 

proposed rule, a value near the lower 

fence of 0.5936 as described in the prior 

paragraph would maximize the positive 

impacts for ESRD facilities with wage 

indexes below the floor while 

continuing to minimize the impact to 

overall ESRD PPS payments. 

(iii) Wage Index Floor Proposed Action 

Based on our re-evaluation the CY 

2019 analysis and subsequent analysis 

of several options using the most recent 

analytic file for this proposed rule, we 

are proposing to increase the wage 

index floor to 0.6000. We believe our 

analyses support that wage index floor 

value and would strike the right balance 

between providing increased payment 

to areas to areas for which labor costs 

are higher than the current wage index 

for the relevant CBSAs indicate, while 

maintaining the accuracy of payments 

under the ESRD PPS and minimizing 

the overall impact to all ESRD facilities. 

In addition, we are proposing to amend 

§ 413.231 by adding new paragraph (d) 

to reflect this change and to codify the 

wage index floor policy. We believe this 

proposed increase from the current 

0.5000 wage index floor value would 

minimize the impact to the base rate 

while providing increased payment to 

areas that need it. 

Currently, only rural Puerto Rico and 

8 urban CBSAs in Puerto Rico receive 

the wage index floor of 0.5000. The next 

lowest wage index is the Virgin Islands 

CBSA with a value of 0.6004. Under this 

proposal, all CBSAs in Puerto Rico 

would be subject to the wage index floor 

of 0.6000. Though the proposed wage 

index floor value currently would only 

affect areas in Puerto Rico, we note that, 

consistent with our established policy, 

the proposed wage index floor value of 

6.000 that would be applicable for any 

area that may fall below the floor. 

We solicit comment on the proposal 

to increase the wage index floor from 

0.5000 to 0.6000. 

c. Proposed CY 2023 Update to the 

Outlier Policy 

(1) Background 

Section 1881(b)(14)(D)(ii) of the Act 

requires that the ESRD PPS include a 

payment adjustment for high cost 

outliers due to unusual variations in the 

type or amount of medically necessary 

care, including variability in the amount 

of ESAs necessary for anemia 

management. Some examples of the 

patient conditions that may be reflective 

of higher facility costs when furnishing 

dialysis care would be frailty and 

obesity. A patient’s specific medical 

condition, such as secondary 

hyperparathyroidism, may result in 

higher per treatment costs. The ESRD 

PPS recognizes high cost patients, and 

we have codified the outlier policy and 

our methodology for calculating outlier 

payments at § 413.237. 

Section 413.237(a)(1) enumerates the 

following items and services that are 

eligible for outlier payments as ESRD 

outlier services. (i) Renal dialysis drugs 

and biological products that were or 

would have been, prior to January 1, 

2011, separately billable under 

Medicare Part B; (ii) Renal dialysis 

laboratory tests that were or would have 

been, prior to January 1, 2011, 

separately billable under Medicare Part 

B; (iii) Renal dialysis medical/surgical 

supplies, including syringes, used to 

administer renal dialysis drugs and 

biological products that were or would 

have been, prior to January 1, 2011, 

separately billable under Medicare Part 

B; (iv) Renal dialysis drugs and 

biological products that were or would 

have been, prior to January 1, 2011, 

covered under Medicare Part D, 

including renal dialysis oral-only drugs 

effective January 1, 2025; and (v) renal 

dialysis equipment and supplies, except 

for capital-related assets that are home 

dialysis machines (as defined in 

§ 413.236(a)(2)), that receive the 

transitional add-on payment adjustment 

as specified in § 413.236 after the 

payment period has ended.5

In the CY 2011 ESRD PPS final rule 

(75 FR 49142), CMS stated that for 

purposes of determining whether an 

ESRD facility would be eligible for an 

outlier payment, it would be necessary 

for the facility to identify the actual 

ESRD outlier services furnished to the 

patient by line item (that is, date of 

service) on the monthly claim. Renal 

dialysis drugs, laboratory tests, and 

medical/surgical supplies that are 

recognized as ESRD outlier services 

were specified in Transmittal 2134, 

dated January 14, 2011.6 We use 

administrative issuances and guidance 

to continually update the renal dialysis 

service items available for outlier 

payment via our quarterly update CMS 

Change Requests, when applicable. For 

example, we use these issuances to 

identify renal dialysis oral drugs that 

were or would have been covered under 

Part D prior to 2011 in order to provide 

unit prices for determining the imputed 

MAP amounts. In addition, we use these 

issuances to update the list of ESRD 

outlier services by adding or removing 

items and services that we determined, 

based our monitoring efforts, are either 

incorrectly included or missing from the 

list. 

Under § 413.237, an ESRD facility is 

eligible for an outlier payment if its 

imputed (that is, calculated) MAP 

amount per treatment for ESRD outlier 

services exceeds a threshold. The MAP 

amount represents the average estimated 

expenditure per treatment for services 

that were or would have been 

considered separately billable services 

prior to January 1, 2011. The threshold 

is equal to the ESRD facility’s predicted 

MAP amount per treatment plus the 

FDL amount. As described in the 

following paragraphs, the facility’s 

predicted MAP amount is the national 

adjusted average ESRD outlier services 

MAP amount per treatment, further 

adjusted for case-mix and facility 

characteristics applicable to the claim. 

We use the term ‘‘national adjusted 

average’’ in this section of this proposed 

rule in order to more clearly distinguish 

the calculation of the average ESRD 

outlier services MAP amount per 

treatment from the calculation of the 

predicted MAP amount for a claim. The 

average ESRD outlier services MAP 

amount per treatment is based on 


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7https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/ 

bp102c11.pdf. 

8https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ESRDpayment/Outlier_

Services. 

utilization from all ESRD facilities, 

whereas the calculation of the predicted 

MAP amount for a claim is based on the 

individual ESRD facility and patient 

characteristics of the monthly claim. In 

accordance with § 413.237(c), ESRD 

facilities are paid 80 percent of the per 

treatment amount by which the imputed 

MAP amount for outlier services (that is, 

the actual incurred amount) exceeds 

this threshold. ESRD facilities are 

eligible to receive outlier payments for 

treating both adult and pediatric 

dialysis patients. 

In the CY 2011 ESRD PPS final rule 

and codified in § 413.220(b)(4), using 

2007 data, we established the outlier 

percentage, which is used to reduce the 

per treatment base rate to account for 

the proportion of the estimated total 

payments under the ESRD PPS that are 

outlier payments, at 1.0 percent of total 

payments (75 FR 49142 through 49143). 

We also established the FDL amounts 

that are added to the predicted outlier 

services MAP amounts. The outlier 

services MAP amounts and FDL 

amounts are different for adult and 

pediatric patients due to differences in 

the utilization of separately billable 

services among adult and pediatric 

patients (75 FR 49140). As we explained 

in the CY 2011 ESRD PPS final rule (75 

FR 49138 through 49139), the predicted 

outlier services MAP amounts for a 

patient are determined by multiplying 

the adjusted average outlier services 

MAP amount by the product of the 

patient-specific case-mix adjusters 

applicable using the outlier services 

payment multipliers developed from the 

regression analysis used to compute the 

payment adjustments. We discuss the 

details of our current methodology for 

calculating the MAP and FDL amounts 

in the following section. 

(2) Overview of Current Outlier 

Methodology 

We update the national adjusted 

average MAP amounts and FDL 

amounts each year using the latest 

available data in the annual regulatory 

updates to the ESRD PPS, in accordance 

with our longstanding policy (75 FR 

49174). As noted earlier in this section 

of the proposed rule, based on our 

longstanding policy finalized in the CY 

2011 ESRD PPS final rule (75 FR 49139 

through 49140), the national adjusted 

average MAP amounts represent the 

national average estimated expenditure 

per treatment for ESRD outlier services, 

adjusted by a standardization factor. As 

detailed in the following paragraph, 

when evaluating outlier eligibility for a 

particular patient treated in a particular 

facility for a particular month, this 

national adjusted average is further 

adjusted to reflect the patient-specific 

case-mix severity and facility 

characteristics. We refer to this further 

adjusted MAP amount as the predicted 

MAP amount. Unlike the national 

average outlier MAP amount per 

treatment, the predicted MAP amount 

varies across patients (and even across 

patient-months). The national adjusted 

average MAP amounts and FDL 

amounts are different for adult and 

pediatric patients due to differences in 

the utilization of separately billable 

services among adult and pediatric 

patients (75 FR 49140). 

Under the methodology finalized in 

the CY 2011 ESRD PPS final rule (75 FR 

49174), each year, using the latest 

available ESRD PPS data, we compute 

the national average MAP amount, and 

establish the FDL amount at a level that 

results in projected outlier payments 

that equal 1.0 percent of total payments 

under the ESRD PPS. When setting the 

outlier thresholds for the ESRD PPS 

rule, we first identify all ESRD outlier 

services for all beneficiaries using the 

most recently complete 72x claims data, 

which is claims from two years prior. 

For example, for the CY 2022 ESRD PPS 

rulemaking (86 FR 61882), we used 

2020 claims. For items billed using 

HCPCS codes, we include injectable 

drugs as eligible ESRD outlier services 

if they belong to one of the ESRD PPS 

functional categories but are not in one 

of the composite rate drug categories 

(both are described in Chapter 11, 

Section 20.3 of the Medicare Benefit 

Policy Manual).7 We do not include 

composite rate items because they are 

not eligible for outlier payments, in 

accordance with our longstanding ESRD 

PPS policy of including only formerly 

separately billable items and services as 

eligible ESRD outlier services (75 FR 

49138). For items billed using National 

Drug Codes (NDCs), we include all oral 

drugs included on the ESRD outlier 

services list, which includes oral 

calcimimetics (starting January 1, 2021), 

and oral vitamin D analogs. We also 

include laboratory services that are on 

the list of eligible ESRD outlier services 

published by CMS.8 Two supply HCPCS 

codes are eligible for outlier payments 

(A4657 syringe and A4913 

miscellaneous supplies). 

(a) Methodology for Calculating 

Imputed MAP Amounts and Predicted 

MAP Amounts 

As we explained in the CY 2011 ESRD 

PPS final rule (75 FR 49142), the ESRD 

facility must identify all ESRD outlier 

services furnished to the patient by line 

item on the monthly claim that it 

submits to Medicare in order to receive 

the outlier payment adjustment. We 

estimate the imputed MAP amount for 

these services by applying the 

established pricing methodologies 

described in the following paragraph of 

this proposed rule. The imputed MAP 

amounts for each of these services are 

summed and divided by the 

corresponding number of treatments 

identified on the claim to yield the 

imputed ESRD outlier services MAP 

amount per treatment. 

We multiply the utilization (that is, 

units of ESRD outlier services reported 

on the 72X claim) with prices to obtain 

the outlier-eligible amount. We obtain 

the utilization only from claim lines that 

are fully covered by Medicare (that is, 

claim lines that do not include any noncovered charge amount) containing 

ESRD outlier services. Separately 

billable services that are performed in 

the ESRD facility during dialysis that 

are not related to the treatment of ESRD 

are not included in the outlier-eligible 

amount. In the CY 2011 ESRD PPS final 

rule (75 FR 49142), we finalized the 

basis for estimating imputed MAP 

amounts as follows. For pricing of ESRD 

outlier services that are Part B renal 

dialysis drugs reported with HCPCS 

codes, we use the latest Average Sales 

Price (ASP) data, which is updated 

quarterly. ESRD outlier services that are 

renal dialysis drugs formerly covered 

under Part D and reported with NDCs 

are priced based on the national average 

pricing data retrieved from the Medicare 

Prescription Drug Plan Finder, which 

reflect pharmacy dispensing and 

administration fees. For ESRD outlier 

services that are laboratory tests billed 

using HCPCS codes, we use the latest 

payment rates from the Clinical 

Laboratory Fee Schedule. For renal 

dialysis supplies used to administer 

ESRD outlier services Part B drugs (for 

example, syringes), we estimate MAP 

amounts based on the predetermined 

fees that apply to these items, that is, we 

pay $0.50 for each syringe identified on 

an ESRD facility’s claims form. For 

other medical/surgical supplies such as 

intravenous sets and gloves, the 

Medicare Claims Processing Manual 

currently allows Medicare contractors to 

elect among various options to price 

these supplies, such as the Drug Topics 

Red Book, Med-Span, or First Data Bank 


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9We use a blended 4-quarter moving average of 

the ESRDB market basket price proxies for 

pharmaceuticals to inflate drug prices to the rule 

year. We inflate laboratory test prices to the rule 

year based on the estimated change in payment 

rates under the Clinical Laboratory Fee Schedule, 

using a CPI forecast to estimate changes for years 

in which a new survey will be implemented. For 

supplies, we apply a 0 percent inflation factor, 

because these prices are based on predetermined 

fees or prices established by the Medicare 

contractor. 

(CMS Pub. 100–04, Chapter 8, § 60.2.1). 

We sum up the outlier-eligible amounts 

for drugs, laboratory tests, and supplies 

separately. 

Next, we inflate the outlier-eligible 

amounts calculated for drugs, laboratory 

tests, and supplies from the latest 

available prices to forecasted prices for 

the rule year.9 For example, in the CY 

2022 ESRD PPS rulemaking (86 FR 

61882), we used 2021 prices inflated to 

the forecasted prices for CY 2022. Then, 

we add the inflated drug, laboratory test, 

and supply amounts and multiply the 

total amount by 0.98, in accordance 

with the budget neutrality requirement 

under section 153(b) of MIPPA. Lastly, 

we divide the amount by the number of 

treatments reported on the claim in 

order to obtain imputed MAP amount 

per treatment. 

After calculating the imputed MAP 

amount per treatment, we then compute 

the predicted MAP amount for the 

claim. As we explained in the CY 2011 

ESRD PPS final rule (75 FR 49138 

through 49139), the patient-specific 

predicted MAP amount is equal to the 

national adjusted average MAP amount 

multiplied by the patient-specific casemix adjusters. The national average 

MAP amount is adjusted by applying a 

standardization factor that reflects the 

national average of patients’ outlier 

services case-mix severity. We apply 

this standardization factor in order to 

avoid systematically biasing the 

national average MAP amount 

calculation, which would result in 

setting the FDL amounts at a level that 

is too low. By applying the 

standardization factor to the national 

average MAP amount when calculating 

the patient-specific predicted MAP 

amount, we ensure that total imputed 

MAP dollars equal total predicted MAP 

dollars. The methodology for calculating 

this standardization factor is discussed 

in detail in the following section. 

(b) Methodology for Calculating CaseMix Standardization Factor and 

National Adjusted Average MAP 

Amount 

We publish the national adjusted 

average MAP amount each year in the 

ESRD PPS proposed and final rule along 

with the adjustment factor. We currently 

use the ESRD outlier services 

multipliers that are the separately 

billable (SB) multipliers developed from 

the regression analysis used in the CY 

2016 ESRD PPS refinement (80 FR 

68993 and 80 FR 69002). As discussed 

in the CY 2016 ESRD PPS final rule (80 

FR 68970), in accordance with section 

632(c) of ATRA, we analyzed the casemix payment adjustments under the 

ESRD PPS using more recent data. We 

revised the adjustments by changing the 

adjustment payment amounts based on 

our updated regression analysis using 

CYs 2012 and 2013 ESRD claims and 

cost report data. There was no change in 

the ESRD PPS outlier methodology for 

CY 2016, however, we updated the 

ESRD outlier services multipliers (80 FR 

69008). The current ESRD outlier 

services multipliers are presented in 

Tables 10 and 11 in this section. A more 

detailed description of the steps is 

provided in the following paragraphs. 

BILLING CODE 4120–01–P 


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TABLE 10: Adult Outlier Services Multipliers 

Variable Outlier 

Services 

Multioliers 

Age 

18-44 1.044 

45-59 1.000 

60-69 1.005 

70-79 1.000 

80+ 0.961 

Body surface area (BSA) (per 0.1 m2) 1.000 

Underweight (BMl < 18.5) 1.090 

Time since onset of renal dialysis < 4 months 1.409 

Facility low volume status 0.955 

Comorbidities 

Pericarditis (acute) 1.209 

Gastro-intestinal tract bleeding (acute) 1.426 

Bacterial pneumonia (acute) ---

Hereditary hemolytic or sickle cell anemia 1.999 

(chronic) 

Myelodysplastic syndrome (chronic) 1.494 

Monoclonal gammopathy (chronic) ---

Rural 0.978 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38489 

BILLING CODE 4120–01–C 

As discussed in the CY 2011 ESRD 

PPS final rule (75 FR 49138 through 

49140), in order to calculate the 

predicted MAP amount per treatment, 

we first compute the weighted mean of 

the imputed MAP amounts per 

treatment, separately for adult and 

pediatric patients, at the national level. 

Then, for each claim, we identify the 

patient’s case-mix adjustments that are 

applicable for the month based on 

conditions recorded on the 72x claims, 

and multiply all applicable ESRD 

outlier services multipliers together to 

obtain the combined ESRD outlier 

services multiplier. For pediatric 

patients, the ESRD outlier services 

multipliers are the age and modality 

adjusters; for adults, the ESRD outlier 

services multipliers include all case-mix 

and facility-level adjusters. We then 

calculate the national per-treatment 

weighted mean of the combined outlier 

services multipliers for adult and 

pediatric patients separately. We 

calculate one standardization factor for 

adult patients and one for pediatric 

patients. Each standardization factor is 

calculated as follows: 

1/(weighted mean of the combined 

outlier services multipliers). 

We calculate the adjusted national 

average outlier MAP amount per 

treatment by multiplying the pertreatment weighted mean of the 

imputed outlier MAP amount per 

treatment by the standardization factor, 

separately for adults and pediatric 

patients. 

In order to calculate the predicted 

outlier MAP amount per treatment for 

each claim, we multiply the national 

adjusted average MAP amount per 

treatment, separate for adults and 

pediatrics, by all applicable outlier 

services multipliers for that claim. 

(c) Methodology for Calculating FDL 

Amounts 

In accordance with our longstanding 

methodology, FDL amounts are 

calculated separately for adult and 

pediatric patients so that projected 

outlier payments equal 1.0 percent of 

total ESRD PPS payments (75 FR 49142 

through 49144). For the FDL amounts, 

we begin by computing total payments 

for the particular rule year separately for 

adults and pediatric patients. We 

include all anticipated updates such as 

the wage index, market basket update, 

and productivity adjustment. For each 

claim, we compute: 

Outlier payment per Treatment = 

Outlier loss share amount * (Imputed 

MAP amount per 

Treatment¥(Threshold per 

Treatment)) = 

0.8 * (Imputed MAP amount per 

Treatment¥(Predicted MAP 

amount per Treatment + FDL)) 

A claim is eligible for an outlier 

payment if the imputed MAP amount 

per treatment¥(Threshold per 

Treatment) >0. 

We simulate total outlier payments, 

separately for adult and pediatric 

patients, starting with the prior rule 

year’s FDL amounts. If the sum of 

projected outlier payments for the 

particular rule year is higher than 1.0 

percent of total payments, we increase 

the FDL amounts in order to decrease 

the amount of outlier payments. In 

contrast, if projected outlier payments 

are lower than 1.0 percent of total 

payments, we decrease the FDL 

amounts in order to increase the amount 

of outlier payments. We determine the 

separate adult and pediatric FDL 

amounts that bring projected adult and 

pediatric outlier payments to 1.0 

percent of total payments for each 

patient population. We announce the 

proposed and final MAP amounts and 

FDL amounts in the annual ESRD PPS 

proposed and final rules, respectively. 

(d) Example of Outlier Calculation 

The following is an example of the 

calculation of the outlier payment. John, 

a 68-year-old male Medicare 

beneficiary, is 187.96 cm. in height and 

weighs 95 kg. John receives 

hemodialysis 3 times weekly. In January 

2022, he was hospitalized for 4 days for 

a compound ankle fracture. During the 

hospitalization John did not undergo 

any dialysis treatments. After discharge 

John resumed his dialysis treatments, 

but required additional laboratory 

testing and above-average doses of 

several injectable drugs, particularly 

EPO, to return his hemoglobin levels to 

the normal range. During January 2022, 

John received 9 hemodialysis treatments 

at his usual ESRD facility. The facility 

submitted a claim for eligible ESRD 

outlier services including drugs and 

biological products, laboratory tests, and 

supplies totaling $3,000.00. 

We begin by computing the predicted 

MAP amount per treatment based on the 

ESRD outlier services case-mix 

adjustment factors applicable to John. 

These factors are age and BSA. John’s 

BSA is 2.2161. Applying the ESRD 

outlier services multiplier set forth in 

Table 10 of this proposed rule for BSA, 

John’s ESRD outlier services payment 

multiplier (PM) for BSA is computed as 

follows: 

1.000(2.2161¥1.9)/0.1 = 1.0003.16135 = 1.000 

Using this calculated PM for BSA and 

the PM for age from Table 10, John’s 

outlier services PM is calculated as: 

1.005 * 1.000 = 1.005 

For CY 2022, the national average 

MAP amount per treatment for adult 

patients is $42.75. Therefore, the 

predicted MAP amount per treatment 

for John is: $42.75 * 1.005 = $42.96. 

Next, we determine the imputed MAP 

amount per treatment which reflects the 

estimated expenditure for ESRD outlier 

services incurred by the ESRD facility. 

John’s imputed MAP amount per 

treatment is equal to the total amount of 


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TABLE 11: Pediatric Outlier Services Multipliers 

Patient 

Characteristics 

Age 

<13 PD 

<13 HD 

13-17 PD 

13-17 HD 
38490 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

10https://www.cms.gov/Medicare/MedicareFeefor-Service-Payment/ESRDpayment/ 

Educational_Resources. 

drugs and biological products, 

laboratory tests, and supplies submitted 

on the claim, divided by the number of 

treatments. We calculate this as: 

$3000.00/9 = $333.33. 

Next, we must determine if John’s 

ESRD facility is entitled to outlier 

payments for John’s January claim by 

comparing the predicted MAP amount 

to the threshold per treatment. We 

calculate the threshold per treatment by 

adding the CY 2022 FDL amount to the 

predicted MAP amount for John. 

The threshold amount for John is 

calculated to reflect the case-mix 

adjustments for age and BSA. 

Threshold = Predicted MAP amount 

($42.96) + FDL ($75.39) = $118.35 

Because John’s imputed MAP amount 

per treatment was $333.33, which 

exceeds the sum of the predicted MAP 

amount and FDL amount ($118.35), 

John’s ESRD facility is eligible for 

outlier payments. 

The outlier payments for John’s 9 

treatments are calculated as the amount 

by which the imputed MAP amount 

exceeds the threshold, then multiplied 

by the 80 percent loss-sharing ratio. 

Imputed MAP amount minus 

Threshold: $333.33¥$118.35 = 

$214.98 

Outlier payments per treatment: $214.98 

* .80 = $171.98 

Total outlier payments: $171.98 * 9 = 

$1,547.82 

(3) Current Issue and Concerns From 

Interested Parties 

For several years, outlier payments 

have consistently landed below the 

target of 1.0 percent of total ESRD PPS 

payments. Commenters have raised 

concerns that the methodology we 

currently use to calculate the outlier 

payment adjustment results in 

underpayment to ESRD facilities, as 

money was removed from the base rate 

to balance the outlier payment (85 FR 

71409, 71438 through 71439; 84 FR 

60705 through 60706; 83 FR 56969). 

Therefore, they have urged us to adopt 

an alternative modeling approach that 

accounts for declining trends in 

spending for eligible ESRD outlier 

services over time. 

MedPAC echoed these concerns in a 

comment in response to the CY 2021 

ESRD PPS proposed rule (85 71438 

through 71440), and also suggested that 

the introduction of calcimimetics as an 

eligible ESRD outlier service could 

perpetuate this issue. MedPAC 

predicted that if calcimimetic use 

decreases between 2019 (when the 

products were paid under the ESRD PPS 

using the TDAPA) and 2021 (when the 

products would be paid as part of the 

ESRD PPS base rate), the outlier 

threshold would be set too high, and 

outlier payments would be lower than 

the target of 1.0 percent of total CY 2021 

payments. 

In response to the concerns raised by 

MedPAC and others, CMS has been 

conducting research in conjunction with 

its contractor, including holding three 

technical expert panels (TEPs), to 

investigate possible improvements to 

the ESRD PPS payment methodologies. 

As discussed in the CY 2022 ESRD PPS 

proposed rule (86 FR 36401 through 

36402), during the second and third TEP 

meetings convened by the CMS 

contractor in 2019 and 2020, panelists 

discussed their specific concerns 

regarding the current outlier policy and 

alternative methodologies to achieve the 

1.0 percent outlier target. Some TEP 

panelists and interested parties have 

strongly advocated that we establish a 

new outlier methodology using 

alternative modeling approaches that 

account for trends in formerly 

separately billable spending over time. 

Other interested parties advocated for 

changing the outlier percentage. Overall, 

panelists expressed support for any 

change to outlier calculations that result 

in total outlier payments being closer to 

the target. 

In the CY 2022 ESRD PPS proposed 

rule (86 FR 36402), we stated that we 

were considering potential revisions to 

the calculation of the outlier threshold 

to address concerns from interested 

parties. In that rule, we presented the 

information that was previously 

provided to the TEP in order to solicit 

comments from interested parties in the 

dialysis community and the public (86 

FR 36402). We published an RFI to 

solicit comments on the approaches 

noted in the previous paragraph and any 

information that would better inform 

future modifications to the methodology 

(86 FR 36402). In addition to generally 

seeking input regarding calculating the 

outlier payment adjustment, we 

specifically requested responses to the 

following questions: 

• An alternative approach could be to 

estimate the retrospective FDL trend by 

using historical utilization data. How 

many years of data should be included 

in calculation of this trend to best 

capture changes in treatment patterns? 

• The simulation of the FDL can be 

improved by better anticipating changes 

in utilization of ESRD outlier services. 

What are the factors that affect the use 

of ESRD outlier services over time, and 

to what extent should CMS try to 

forecast the effect of these factors? 

• As ESRD beneficiaries can now 

choose to enroll in Medicare Advantage 

(MA), please describe any anticipated 

effects of this enrollment change on the 

use of ESRD outlier services in the 

ESRD PPS. 

• Adoption of the suggested 

methodology may account for 

systematic changes in the use of high 

cost outlier items. However, inherently 

unpredictable changes may still push 

the outlier payment off the 1.0 percent 

target. Please comment on the 

acceptability of the following payment 

adjustment methods: Payment 

reconciliation in the form of an add-on 

payment adjustment or a payment 

reduction might be necessary to bring 

payments in line with the 1 percent 

target. An add-on payment adjustment 

would be distributed after sufficient 

data reveal the magnitude of the 

deviation (1 year after the end of the 

payment year). The distribution of these 

monies could be done via a lump sum 

or via a per-treatment payment add-on 

effective for 1 year. This add-on 

payment adjustment would be paid 

irrespective of the outlier claim status in 

that year. A payment reduction could 

take the form of a reduction in the base 

rate, also to be applied 1 year after the 

end of the payment year. 

As discussed in the CY 2022 ESRD 

PPS final rule (86 FR 61996), we 

received numerous public comments in 

response to our RFI on payment reform 

under the ESRD PPS. As discussed in a 

more detailed comment summary on the 

CMS website,10 we received comments 

from major national patient and 

provider organizations and MedPAC on 

the RFI regarding the outlier policy. 

Commenters reiterated their concerns 

that outlier payments under the ESRD 

PPS have not achieved the 1.0 percent 

target since the system was 

implemented. Commenters focused on 

three main suggestions for the outlier 

policy: (1) reducing the target outlier 

percentage to 0.5 or 0.6 percent, which 

commenters argued would more closely 

align with the historical percentage that 

has been paid under the ESRD PPS; (2) 

changing the methodology used to 

calculate the FDL and MAP amounts in 

order to better account for not only 

historical trends in utilization but also 

changes in prices and utilization of new 

and innovative products; and (3) reallocating money from the ESRD PPS 

that is not paid out for outliers—either 

by allowing unspent funds to apply to 

a subsequent year’s withhold amount or 

establishing a payment mechanism to 

support ESRD facilities’ activities aimed 

at reducing health disparities. 


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11https://www.cms.gov/Medicare/MedicareFeefor-Service-Payment/ESRDpayment/ 

Educational_Resources. 

12https://www.cms.gov/Medicare/MedicareFeefor-Service-Payment/ESRDpayment/ 

Educational_Resources. 13We believe the commenters were referring to a 

CMS decision to remove outpatient dialysis from 

the list of facility types subject to network adequacy 

standards and require that MA organizations submit 

an attestation that it has as an adequate network 

that provides the required access and availability to 

dialysis services, including outpatient facilities. 

CMS indicated in the Medicare Program; Contract 

Year 2021 Policy and Technical Changes to the 

Medicare Advantage Program, Medicare 

Prescription Drug Benefit Program, and Medicare 

Cost Plan Program (CMS–4190–F) final rule that we 

believe there is more than one way to access 

medically necessary dialysis care and that we 

wanted plans to exercise all of their options to best 

meet a beneficiary’s health care needs. (85 FR 

33796, 33852 through 33866). Further, regardless of 

whether a facility or provider specialty type is 

subject to network adequacy standards, MA 

organizations are required in § 422.112(a)(3) to 

arrange for health care services outside of the plan 

provider network when network providers are 

unavailable or inadequate to meet an enrollee’s 

medical needs. Section 422.112(a)(10) requires MA 

plans to ensure access and availability to covered 

services consistent with the prevailing community 

pattern of health care delivery in the areas served 

by the network. (85 FR 33858 through 33860). 

(4) Proposed Changes to the Outlier 

Methodology for CY 2023 

In response to significant public 

comments received over many years, we 

are proposing changes to the outlier 

policy for CY 2023 and subsequent 

years. In developing these proposed 

changes, we considered the three main 

suggestions that commenters raised in 

response to the CY 2022 RFI. 

First, we considered the 

recommendation from commenters that 

CMS reduce the outlier percentage from 

1.0 percent to 0.5 percent or 0.6 percent. 

Although this approach would allow us 

to potentially increase payment under 

the ESRD PPS base rate for treatment of 

those patients who do not qualify for 

outlier payments, we are chiefly 

concerned that this approach would not 

directly address the root cause of outlier 

payments totaling less than 1 percent of 

overall ESRD PPS payments in prior 

years. Although reducing the target 

outlier percentage would reduce the size 

of outlier payments relative to total 

ESRD PPS payments, we are concerned 

that if we do not change the 

methodology that we use to 

prospectively determine the outlier 

threshold, we may continue to not meet 

even the lower target outlier percentage. 

Additionally, as discussed in the CY 

2011 ESRD PPS final rule (75 FR 49134), 

we established the 1.0 percent outlier 

percentage because it struck an 

appropriate balance between our 

objective of paying an adequate amount 

for the most costly, resource-intensive 

patients while providing an appropriate 

level of payment for those patients who 

do not qualify for outlier payments. We 

are concerned that a reduced outlier 

percentage may not provide the 

appropriate level of payment for outlier 

cases, and may not protect access for 

beneficiaries whose care is unusually 

costly. This is because if we were to 

decrease the target outlier percentage, 

we would need to significantly increase 

the FDL amounts, which would make it 

more difficult for ESRD facilities to 

receive outlier payment based on their 

claims. Therefore, after careful 

consideration, we are not proposing to 

reduce the outlier percentage. 

Next, we considered the 

recommendation to re-allocate money 

from the ESRD PPS that is not paid out 

for outliers. As explained earlier in this 

section of the proposed rule, we 

solicited comments in the CY 2022 

ESRD PPS proposed rule (86 FR 36402) 

about a potential payment reconciliation 

in the form of an add-on payment 

adjustment or a payment reduction, 

which might be necessary to bring 

outlier payments in line with the 1.0 

percent target. As we described in the 

detailed RFI comment summary 

document on the CMS website,11 several 

commenters supported this idea, and 

recommended that CMS allow unspent 

outlier funds from the prior year to 

reduce the amount set aside for outliers 

in the next year. Other commenters 

suggested that unspent outlier funds 

could be used to fund initiatives that 

support health equity. One national 

dialysis organization pointed out that 

lags in the claims process and refiling of 

claims, often over different calendar 

years, would present challenges to such 

an approach. This organization noted 

that these challenges could make it 

difficult to accurately calculate the 

amount of the add-on payment 

adjustment or ‘‘clawback’’ payment 

amount for each year. We agree with the 

concerns this organization raised, and 

believe that these challenges would 

make it difficult to accurately 

operationalize commenters’ 

recommendations that we allow 

unspent funds to apply to a subsequent 

year’s withhold amount or establish a 

payment mechanism to support ESRD 

facilities’ activities aimed at reducing 

health disparities. Therefore, after 

careful consideration, we are not 

proposing to establish a payment 

reconciliation methodology for the 

ESRD PPS outlier policy. 

Lastly, we considered the feedback 

from interested parties and commenters 

in the past ESRD PPS TEPs and in 

comments to the RFI in the CY 2022 

ESRD PPS proposed rule regarding the 

methodology used to calculate the FDL 

amounts. As commenters have 

previously noted, the current 

methodology that we use to 

prospectively calculate the FDL 

amounts has not been able to effectively 

account for declining use of eligible 

ESRD outlier services (that is, separately 

billable items and services prior to 

2011) each year since the 

implementation of the ESRD PPS. For 

example, the CY 2021 FDL amounts 

($48.33 for adult and $41.04 pediatric 

patients) were added to the predicted 

MAP amounts to determine the outlier 

thresholds using 2019 data. The outlier 

MAP amount continued to fall from 

2019 to 2021. Consequently, in 2021 

claims, outlier payments comprised 

approximately 0.4 percent of total ESRD 

PPS payments, demonstrating that the 

use of 2019 data resulted in thresholds 

too high to achieve the targeted 1.0 

percent outlier payment. 

Several organizations that commented 

in response to the RFI 12 in the CY 2022 

ESRD PPS proposed rule expressed that 

using a retrospective FDL trend based 

on historical utilization data would 

provide a better calculation of the 

appropriate prospective FDL amounts. 

These organizations also cautioned that 

such a methodology would remain 

sensitive to changes in utilization or 

price increases for new and innovative 

products. Commenters suggested that 

such a methodology would likely not 

succeed in estimating the appropriate 

FDL amounts in years when there are 

significant changes to the ESRD PPS, 

such as in years that immediately follow 

the end of a period during which CMS 

has paid for a product using the TDAPA 

or TPNIES payment adjustments under 

the ESRD PPS. MedPAC suggested that 

CMS consider modeling alternative 

approaches to establishing the outlier 

threshold and use an approach that 

reflects the trend over time in spending 

for items in the ESRD PPS bundled 

payment that were separately billable 

prior to 2011. 

In the CY 2022 ESRD PPS proposed 

rule (86 FR 36402), we also solicited 

comments on any anticipated effects 

enrollment changes in MA plans might 

have on the use of ESRD outlier 

services. National provider 

organizations pointed out that to the 

extent that MA plans are not permitted 

to systematically include healthier 

ESRD beneficiaries and exclude costly 

beneficiaries, there would seem to be 

little impact on the outlier pool. They 

expressed concern about the decision 13

to eliminate network adequacy 

standards that apply to ESRD facilities. 


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They predicted these decisions would 

discourage many ESRD patients from 

enrolling in MA plans, especially those 

needing specialized treatment or 

requiring additional medications. To the 

extent this scenario were to occur, 

commenters argued that it could result 

in ‘‘outlier’’ patients, specifically, those 

sicker, costlier patients, remaining in 

traditional Medicare and the healthier, 

less costly patients enrolling in MA 

plans. 

Based on these comments, we are 

proposing an approach that would 

account for the historical trend in 

spending for formerly separately billable 

items and services and would also 

effectively account for the introduction 

of new and innovative products under 

the ESRD PPS. We believe that our 

proposed methodology would also 

adapt to changes in the ESRD PPS 

patient population, such as the potential 

scenario that commenters raised in 

which costlier ‘‘outlier’’ patients might 

remain in traditional Medicare while 

healthier, less costly patients enroll in 

MA plans. 

As we discussed earlier in this section 

of the proposed rule, our current 

methodology prospectively calculates 

the adult and pediatric FDL and MAP 

amounts based on simulated outlier 

payments. The utilization of outlier 

services for these simulated outlier 

payments comes from a single year of 

ESRD PPS claims, and the prices come 

from the pricing methodology described 

earlier in this section of the proposed 

rule using latest available prices inflated 

to forecasted prices for the rule year. 

Under the current methodology, we 

prospectively set the adult and pediatric 

FDL amounts so that simulated outlier 

payments for the rule year are estimated 

to equal 1.0 percent. 

For CY 2023 and subsequent years, 

we are proposing to continue to 

calculate the adult and pediatric MAP 

amounts for the rule year (CY 2023) 

following our established methodology, 

but we are proposing to prospectively 

calculate the adult FDL amounts based 

on the historical trend in FDL amounts 

that would have achieved the 1.0 

percent outlier target in the 3 most 

recent available data years. We are also 

proposing to adjust the calculation of 

the historical FDL trend for years that 

immediately follow the end of a period 

during which CMS has paid for a 

product using the TDAPA or TPNIES 

payment adjustments under the ESRD 

PPS. We note that we are not proposing 

to apply this method to pediatric FDL 

amount calculations, as the pediatric 

population is too small to reliably use 

this method. 

We are proposing the following steps 

for prospectively calculating the adult 

FDL amounts: 

• Step 1: Use ESRD PPS claims from 

the 3 most recent available data years, 

relative to the rule year. For CY 2023, 

this would include data from CY 2019, 

CY 2020, and CY 2021. Using these 

claims, the projected base rate for the 

rule year, and the latest available prices 

of ESRD outlier services, we would use 

our established methodology to 

calculate the FDL amounts that would 

have achieved the 1.0 percent outlier 

target for each year. In the following 

steps, we refer to these calculated FDL 

amounts as the ‘‘retrospective’’ FDL 

amounts. 

• Step 2: If any items or services that 

were previously paid for using the 

TDAPA or TPNIES in any of the 3 most 

recent available data years would be 

ESRD outlier services for the rule year, 

then we would also calculate an 

alternative series of retrospective FDL 

amounts. This alternative series would 

account for any new ESRD outlier 

services, that is, any ESRD outlier 

services for the rule year that were 

previously paid for using the TDAPA or 

TPNIES in any of the 3 most recent 

available data years. In the following 

steps, we refer to this alternative series 

of retrospective FDL amounts as the 

‘‘adjusted’’ retrospective FDLs. 

Specifically, we would calculate the 

adjusted retrospective FDL amounts as 

follows: 

++ If a new ESRD outlier service was 

paid for using the TDAPA or TPNIES in 

the most recent available data year, as 

in the case of calcimimetics in the CY 

2020 data used for the CY 2022 ESRD 

PPS rulemaking, then we would 

calculate the first retrospective FDL 

amount for that year using the latest 

available prices and historical 

utilization of ESRD outlier services that 

includes TDAPA or TPNIES utilization 

for the new ESRD outlier service. We 

would also calculate a second 

retrospective FDL amount for that year 

that excludes the new ESRD outlier 

service. In order to calculate the 

adjusted retrospective FDLs for the 

preceding 2 data years, we would take 

the difference between the 

corresponding FDL amount with and 

without the new ESRD outlier service 

for the most recent data year, and add 

this amount to each retrospective FDL 

amount calculated in Step 1. For CY 

2023, we would add the difference 

calculated for CY 2021 to the 

retrospective FDL amounts for CY 2020 

and CY 2019. 

++ If a new ESRD outlier service first 

became eligible in the most recent 

available data year, as in the case of 

calcimimetics in the CY 2021 data used 

for this CY 2023 ESRD PPS proposed 

rule, then we would calculate the first 

retrospective FDL amount for the most 

recent data year using the latest 

available prices and historical 

utilization of ESRD outlier services. We 

would also calculate a second 

retrospective FDL amount for that year 

that excludes the new ESRD outlier 

service. In order to calculate the 

adjusted retrospective FDL amounts for 

the preceding 2 data years, we would 

take the difference between the 

corresponding FDL amount with and 

without the new ESRD outlier service 

for the most recent data year, and add 

this amount to each retrospective FDL 

amount calculated in Step 1. For CY 

2023, we would add the difference 

calculated for CY 2021 to the 

retrospective FDL amounts for CY 2020 

and CY 2019. 

++ If a new ESRD outlier service first 

became eligible in the second most 

recent available data year, as in the case 

of calcimimetics in the CY 2022 data 

that we would expect to use for the CY 

2024 rulemaking, then we would 

calculate retrospective FDL amounts for 

the most recent two data years using the 

latest available prices and historical 

utilization of outlier services. For the 

earliest historical year, in which the 

new ESRD outlier service was still being 

paid for using the TDAPA or the 

TPNIES, we would also calculate a 

second retrospective FDL amount for 

that year that excludes the new ESRD 

outlier service. In order to calculate the 

adjusted retrospective FDL amount for 

the earliest historical year, we would 

take the difference between the 

corresponding FDL amount with and 

without the new ESRD outlier service in 

the second most recent available data 

year, and add this amount to the 

retrospective FDL amount calculated in 

Step 1. For CY 2023, we would add the 

difference calculated for CY 2020 to the 

retrospective FDL amount for CY 2019. 

++ If a new ESRD outlier service first 

became outlier eligible earlier than any 

of the 3 most recent available data years, 

we would not calculate any adjusted 

retrospective FDL amounts for that item 

or service. For example, for CY 2025, we 

would not calculate any adjusted 

retrospective FDL amounts to account 

for calcimimetics in the CY 2021, CY 

2022, and CY 2023 claims. We would 

calculate only the series of retrospective 

FDL amounts for these years in 

accordance with Step 1. 

• Step 3: Using either the series of 

retrospective FDL amounts or adjusted 

retrospective FDL amounts, as 

appropriate, for the 3 most recent 

available data years, we would use a 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38493 

linear regression to calculate the 

historical trend in FDL amounts. We 

would project this trend forward to 

determine the appropriate FDL amount 

for the rule year. 

For illustration purposes, Figure 1 

presents an example of the adult 

retrospective FDL amounts and adjusted 

retrospective FDL amounts calculated 

for CY 2019, CY 2020, and CY 2021, as 

well as the projected FDL trend through 

CY 2023, under our proposed 

methodology. The adjusted 

retrospective FDL amounts shown in 

Figure 1 would account for the 

difference in retrospective FDL amounts 

calculated with and without 

calcimimetics, which became ESRD 

outlier services beginning January 1, 

2021. Figure 1 illustrates how the 

proposed methodology would 

incorporate data for new ESRD outlier 

services while continuing to account for 

the downward historical trend in 

spending for formerly separately billable 

items and services. 

BILLING CODE 4120–01–P 

(5) Proposed CY 2023 Update to the 

Outlier Services MAP Amounts and 

FDL Amounts 

We recognize that the utilization of 

ESAs and other outlier services have 

continued to decline under the ESRD 

PPS, and that we have lowered the MAP 

amounts and FDL amounts every year 

under the ESRD PPS. As discussed in 

the CY 2022 ESRD PPS final rule (86 FR 

61883), CY 2020 claims data showed 

outlier payments represented 

approximately 0.6 percent of total 

payments. CY 2021 claims data show 

outlier payments represent 

approximately 0.4 percent of total 

payments. Accordingly, as discussed in 

section II.B.1.c.(4) of this proposed rule, 

we are proposing to change our ESRD 

PPS outlier methodology to better target 

1.0 percent of total payments. We are 

proposing that the outlier services MAP 

amounts and pediatric FDL amounts for 

CY 2023 would be derived from claims 

data from CY 2021, consistent with our 

policy to base any adjustments made to 

the MAP amounts under the ESRD PPS 

upon the most recent data year 

available. We are proposing that the 

adult FDL amounts for CY 2023 would 

be derived from the projected FDL trend 

calculated according to the proposed 

methodology described in section 

II.B.1.c.(4) of this proposed rule. 

The impact of this proposed update is 

shown in Table 12, which compares the 

outlier services MAP amounts and FDL 

amounts used for the outlier policy in 

CY 2022 with the updated proposed 

estimates for this rule. The estimates for 

the proposed CY 2023 MAP amounts, 

which are included in Column II of 

Table 12, were inflation adjusted to 

reflect projected 2023 prices for ESRD 

outlier services. 


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Figure 1. Proposed Retrospective FDL Amounts and Adjusted Retrospective FDL 

Amounts (CY 2019 through CY 2021) and Their Corresponding Projected FDLs through 

CY 2023 for Adults 

$60 

$50 

$40 

$30 

$20 

$10 

$-

2019 

......_,Retrospective FDts 

2020 

• Retrospective FDls Without Caldmimetics 

2021 

D = Difference Due To 

Calcimimetics in 2021 

2022 2023 

-+--Projection Using Retrospective FDts 

_._Adjusted Retrospective FOts 

•II-Projection Using Adjusted Retrospective FIJts ........... Linear (Retrospective FDts) 

, ....... .., tin ear (Adjusted .Retrospective fDls) 
38494 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

BILLING CODE 4120–01–C 

As demonstrated in Table 12, the 

estimated FDL per treatment that 

determines the CY 2023 outlier 

threshold amount for adults (Column II; 

$40.75) is lower than that used for the 

CY 2022 outlier policy (Column I; 

$75.39). The lower threshold is 

accompanied by a decrease in the 

adjusted average MAP for outlier 

services from $42.75 to $36.85. For 

pediatric patients, there is a decrease in 

the FDL from $26.02 to $21.51. There is 

a corresponding decrease in the 

adjusted average MAP for outlier 

services among pediatric patients, from 

$27.15 to $25.62. 

We estimate that the percentage of 

patient months qualifying for outlier 

payments in CY 2023 will be 11.54 

percent for adult patients and 13.58 

percent for pediatric patients, based on 

the 2021 claims data and proposed 

methodology described in section 

II.B.1.c.(4) of this proposed rule. The 

outlier MAP and FDL amounts continue 

to be lower for pediatric patients than 

adults due to the continued lower use 

of outlier services (primarily reflecting 

lower use of ESAs and other injectable 

drugs). 

(6) Outlier Percentage 

In the CY 2011 ESRD PPS final rule 

(75 FR 49081) and under 

§ 413.220(b)(4), we reduced the per 

treatment base rate by 1 percent to 

account for the proportion of the 

estimated total payments under the 

ESRD PPS that are outlier payments as 

described in § 413.237. Based on the 

2021 claims, outlier payments 

represented approximately 0.4 percent 

of total payments, which is below the 1 

percent target due to declines in the use 

of outlier services. Recalibration of the 

thresholds using 2021 data and the 

proposed methodology described in 

section II.B.1.c.(4) of this proposed rule 

are expected to result in aggregate 

outlier payments closer to the 1 percent 

target in CY 2022. We believe the 

update to the outlier MAP and FDL 

amounts for CY 2023 would increase 

payments for ESRD beneficiaries 

requiring higher resource utilization. 

This would move us closer to meeting 

our 1 percent outlier policy goal, 

because we are using more current data 

for computing the MAP and FDL 

amounts, which is more in line with 

current outlier services utilization rates. 

We also note that recalibration of the 

FDL amounts would result in no change 

in payments to ESRD facilities for 

beneficiaries with renal dialysis items 

and services that are not eligible for 

outlier payments. 

d. Proposed Impacts to the CY 2023 

ESRD PPS Base Rate 

(1) ESRD PPS Base Rate 

In the CY 2011 ESRD PPS final rule 

(75 FR 49071 through 49083), CMS 

established the methodology for 

calculating the ESRD PPS per-treatment 

base rate, that is, the ESRD PPS base 

rate, and calculating the per treatment 

payment amount, which are codified at 

§ 413.220 and § 413.230. The CY 2011 

ESRD PPS final rule also provides a 

detailed discussion of the methodology 

used to calculate the ESRD PPS base 

rate and the computation of factors used 

to adjust the ESRD PPS base rate for 

projected outlier payments and budget 

neutrality in accordance with sections 

1881(b)(14)(D)(ii) and 1881(b)(14)(A)(ii) 

of the Act, respectively. Specifically, the 

ESRD PPS base rate was developed from 

CY 2007 claims (that is, the lowest per 

patient utilization year as required by 

section 1881(b)(14)(A)(ii) of the Act), 

updated to CY 2011, and represented 

the average per treatment MAP for 

composite rate and separately billable 

services. In accordance with section 

1881(b)(14)(D) of the Act and our 

regulation at § 413.230, the pertreatment payment amount is the sum of 

the ESRD PPS base rate, adjusted for the 

patient specific case-mix adjustments, 


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TABLE 12: Outlier Policy: Impact of Proposal to Use Updated Data for the Outlier Policy 

Average outlier services MAP amount 

er treatment 

Standardization for outlier 

services 

MIPP A reduction 

Adjusted average outlier services 

MAP amount 

ixed-dollar loss amount that is added 

o the predicted MAP to determine the 

outlier threshold 

atient-month-facilities qualifying for 

outlier payment 

Column I 

Final outlier policy for CY 2022 

(based on 2020 data, price inflated 

to 2022)* 

Age< 18 Age>= 18 

1.0693 0.9805 

0.98 0.98 

$27.15 $42.75 

$26.02 $75.39 

Column II 

Proposed outlier policy for CY 

2023 (based on 2021 data, price 

inflated to 2023)** 

Age< 18 Age>= 18 

1.0809 0.9785 

0.98 0.98 

$25.62 $36.85 

$21.51 $40.75 

12.89% 7.08% 13.58% 11.54% 

*Column I was obtained from Column II of Table 1 from the CY 2022 ESRD PPS final rule (86 FR 61883). 

**The proposed FDL amount for adults incorporates retrospective adult FDL amounts calculated using data from 

CYs 2019, 2020, and 2021. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38495 

applicable facility adjustments, 

geographic differences in area wage 

levels using an area wage index, and 

any applicable outlier payment, training 

adjustment add-on, TDAPA, and 

TPNIES. 

(2) Annual Payment Rate Update for CY 

2023 

We are proposing an ESRD PPS base 

rate for CY 2023 of $264.09. This 

proposed update reflects several factors, 

described in more detail as follows: 

Wage Index Budget-Neutrality 

Adjustment Factor: We compute a wage 

index budget-neutrality adjustment 

factor that is applied to the ESRD PPS 

base rate. For CY 2023, we are not 

proposing any changes to the 

methodology used to calculate this 

factor, which is described in detail in 

the CY 2014 ESRD PPS final rule (78 FR 

72174). We computed the proposed CY 

2023 wage index budget-neutrality 

adjustment factor using treatment 

counts from the 2021 claims and 

facility-specific CY 2022 payment rates 

to estimate the total dollar amount that 

each ESRD facility would have received 

in CY 2022. The total of these payments 

became the target amount of 

expenditures for all ESRD facilities for 

CY 2023. Next, we computed the 

estimated dollar amount that would 

have been paid for the same ESRD 

facilities using the proposed CY 2023 

ESRD PPS wage index and proposed 

labor-related share for CY 2023. As 

discussed in section II.B.1.b of this 

proposed rule, the proposed ESRD PPS 

wage index for CY 2023 includes an 

update to the most recent hospital wage 

data and continued use of the 2018 

OMB delineations. Additionally, as 

discussed in section II.B.1.b(3)(b)(iii) of 

this proposed rule, we are proposing to 

increase the ESRD PPS wage index floor 

from 0.5000 to 0.6000 and to apply a 

permanent 5-percent cap on any 

decrease to an ESRD facility’s wage 

index from its wage index in the prior 

year, regardless of the circumstances 

causing the decline. The total of these 

payments becomes the new CY 2023 

amount of wage-adjusted expenditures 

for all ESRD facilities. The wage index 

budget-neutrality factor is calculated as 

the target amount divided by the new 

CY 2023 amount. When we multiplied 

the wage index budget neutrality factor 

by the applicable CY 2023 estimated 

payments, aggregate payments to ESRD 

facilities would remain budget neutral 

when compared to the target amount of 

expenditures. That is, the wage index 

budget neutrality adjustment factor 

ensures that wage index adjustments do 

not increase or decrease aggregate 

Medicare payments with respect to 

changes in wage index updates. The CY 

2023 proposed wage index budgetneutrality adjustment factor is 0.999997. 

This application would yield a CY 2023 

ESRD PPS proposed base rate of $257.90 

prior to the application of the market 

basket increase factor ($257.90 × 

0.999997= $257.90). This CY 2023 

proposed wage index budget-neutrality 

adjustment factor reflects the impact of 

all proposed wage index changes, 

including the proposed CY 2023 ESRD 

PPS wage index and labor-related share, 

proposed increase to the wage index 

floor, and proposed permanent 5- 

percent cap on wage index decreases. 

For purposes of illustration and 

analysis, we also calculated a separate 

budget neutrality factor in order to 

estimate the impact that the proposed 

permanent 5-percent cap on wage index 

decreases would have on CY 2023 ESRD 

PPS payments. Following the steps 

described earlier in this section of the 

proposed rule, we divided estimated 

payments without the proposed 5- 

percent cap by estimated payments with 

the cap. We calculated the resulting 

budget neutrality factor as 0.999910. 

Applying this budget neutrality factor to 

the ESRD PPS base rate, we estimate 

that the proposed permanent 5-percent 

cap would result in a $0.02 decrease to 

the ESRD PPS base rate ($257.90 × 

0.999910 = $257.88). The overall CY 

2023 proposed wage index budgetneutrality adjustment factor is higher, 

because the effect on budget neutrality 

of the proposed 5-percent cap is offset 

by the effect of the proposed increase to 

the labor-related share. 

Market Basket Increase: Section 

1881(b)(14)(F)(i)(I) of the Act provides 

that, beginning in 2012, the ESRD PPS 

payment amounts are required to be 

annually increased by the ESRD market 

basket percentage increase factor. The 

latest CY 2023 projection of the 

proposed ESRDB market basket 

percentage increase factor is 2.8 percent. 

In CY 2023, this amount must be 

reduced by the productivity adjustment 

described in section 1886(b)(3)(B)(xi)(II) 

of the Act, as required by section 

1881(b)(14)(F)(i)(II) of the Act. As 

discussed previously in section II.B.1.a 

of this proposed rule, the proposed 

productivity adjustment for CY 2023 is 

0.4 percent, thus yielding a proposed 

update to the base rate of 2.4 percent for 

CY 2023. Therefore, the proposed CY 

2023 ESRD PPS base rate is $264.09 

($257.90 × 1.024 = $264.09). 

e. Update to the Average per Treatment 

Offset Amount for Home Dialysis 

Machines 

In the CY 2021 ESRD PPS final rule 

(85 FR 71427), we expanded eligibility 

for the TPNIES under § 413.236 to 

include certain capital-related assets 

that are home dialysis machines when 

used in the home for a single patient. To 

establish the TPNIES basis of payment 

for these items, we finalized the 

additional steps that the Medicare 

Administrative Contractors (MACs) 

must follow to calculate a pre-adjusted 

per treatment amount, using the prices 

they establish under § 413.236(e) for a 

capital-related asset that is a home 

dialysis machine, as well as the 

methodology that CMS uses to calculate 

the average per treatment offset amount 

for home dialysis machines that is used 

in the MACs’ calculation, to account for 

the cost of the home dialysis machine 

that is already in the ESRD PPS base 

rate. For purposes of this proposed rule, 

we will refer to this as the ‘‘TPNIES 

offset amount.’’ 

The methodology for calculating the 

TPNIES offset amount is set forth in 

§ 413.236(f)(3). Section 413.236(f)(3)(v) 

states that effective January 1, 2022, 

CMS annually updates the amount 

determined in § 413.236(f)(3)(iv) by the 

ESRD bundled market basket percentage 

increase factor minus the productivity 

adjustment factor. The TPNIES for 

capital-related assets that are home 

dialysis machines is based on 65 

percent of the MAC-determined preadjusted per treatment amount, reduced 

by the TPNIES offset amount, and is 

paid for 2 calendar years. 

The proposed CY 2023 TPNIES offset 

amount for capital-related assets that are 

home dialysis machines is $9.73. As 

discussed previously in section 

II.B.1.a(3)(c) of this proposed rule, the 

proposed CY 2023 ESRD bundled 

market basket increase factor minus the 

productivity adjustment is 2.4 percent 

(2.8 percent minus 0.4 percentage 

point). Applying the proposed update 

factor of 1.024 to the CY 2022 offset 

amount results in the proposed CY 2023 

offset amount of $9.73 ($9.50 × 1.024 = 

$9.73). We propose to update this 

calculation to use the most recent data 

available in the CY 2023 ESRD PPS final 

rule. 

f. Proposed Revision to the Oral-Only 

Drug Definition and Clarification 

Regarding the ESRD PPS Functional 

Category Descriptions 

(1) Background 

Section 1881(b)(14)(A)(i) of the Act 

requires the Secretary to implement a 

payment system under which a single 

payment is made to a provider of 

services or a renal dialysis facility for 

renal dialysis services in lieu of any 

other payment. Section 1881(b)(14)(B) of 

the Act defines renal dialysis services, 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
38496 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

14As discussed in the CY 2019 ESRD PPS final 

rule (83 FR 56922), we began using the term 

‘‘biological products’’ instead of ‘‘biologicals’’ 

under the ESRD PPS to be consistent with FDA 

nomenclature. We use the term ‘‘biological 

products’’ in this CY 2023 ESRD PPS proposed rule 

except where referencing specific language in the 

Act or regulations. 

and subclause (iii) of such section states 

that these services include other drugs 

and biologicals 14 that are furnished to 

individuals for the treatment of ESRD 

and for which payment was made 

separately under this title, and any oral 

equivalent form of such drug or 

biological. 

When we implemented the ESRD PPS 

in 2011 (75 FR 49030), we interpreted 

this provision as including not only 

injectable drugs and biological products 

used for the treatment of ESRD (other 

than ESAs and any oral form of ESAs, 

which are included under clause (ii) of 

section 1881(b)(14)(B) of the Act), but 

also all oral drugs and biological 

products used for the treatment of ESRD 

and furnished under title XVIII of the 

Act. We also concluded that, to the 

extent oral-only drugs or biological 

products used for the treatment of ESRD 

do not fall within clause (iii) of section 

1881(b)(14)(B) of the Act, such drugs or 

biological products would fall under 

clause (iv) of such section, and 

constitute other items and services used 

for the treatment of ESRD that are not 

described in clause (i) of section 

1881(b)(14)(B) of the Act. 

We finalized and promulgated the 

payment policies for oral-only renal 

dialysis service drugs or biological 

products in the CY 2011 ESRD PPS final 

rule (75 FR 49038 through 49053). In 

that rule we defined renal dialysis 

services at § 413.171 as including other 

drugs and biologicals that are furnished 

to individuals for the treatment of ESRD 

and for which payment was made 

separately prior to January 1, 2011 

under Title XVIII of the Act, including 

drugs and biologicals with only an oral 

form. Although we included oral-only 

renal dialysis service drugs and 

biologicals in the definition of renal 

dialysis services in the CY 2011 ESRD 

PPS final rule (75 FR 49044), we also 

finalized a policy to delay payment for 

these drugs under the ESRD PPS until 

January 1, 2014. In the CY 2011 ESRD 

PPS proposed rule (74 FR 49929), we 

noted that the only oral-only drugs that 

we identified were phosphate binders 

and calcimimetics, specifically, 

cinacalcet hydrochloride, lanthanum 

carbonate, calcium acetate, sevelamer 

hydrochloride, and sevelamer 

carbonate. All of these drugs fall into 

the ESRD PPS functional category for 

bone and mineral metabolism. In the CY 

2011 ESRD PPS final rule (75 FR 49043), 

we explained that there were certain 

advantages to delaying the 

implementation of payment for oralonly drugs and biological products 

under the ESRD PPS, including 

allowing ESRD facilities additional time 

to make operational changes and 

logistical arrangements in order to 

furnish oral-only renal dialysis service 

drugs and biological products to their 

patients. Accordingly, we codified the 

delay in payment for oral-only renal 

dialysis service drugs and biological 

products at § 413.174(f)(6), and 

provided that payment to an ESRD 

facility for renal dialysis service drugs 

and biological products with only an 

oral form would be incorporated into 

the PPS payment rates effective January 

1, 2014. Since oral-only drugs are 

generally not a covered service under 

Medicare Part B, this delay of payment 

under the ESRD PPS also allowed 

coverage to continue under Medicare 

Part D. 

On January 3, 2013, ATRA was 

enacted. Section 632(b) of ATRA 

precluded the Secretary from 

implementing the policy under 

§ 413.174(f)(6) relating to oral-only 

ESRD-related drugs in the ESRD PPS 

prior to January 1, 2016. Accordingly, in 

the CY 2014 ESRD PPS final rule (78 FR 

72185 through 72186), we delayed 

payment for oral-only renal dialysis 

service drugs and biological products 

under the ESRD PPS until January 1, 

2016. We implemented this delay by 

revising the effective date at 

§ 413.174(f)(6) for providing payment 

for oral-only renal dialysis service drugs 

under the ESRD PPS from January 1, 

2014 to January 1, 2016. In addition, we 

changed the date when oral-only renal 

dialysis service drugs and biological 

products would be eligible for outlier 

services under the outlier policy 

described in § 413.237(a)(1)(iv) from 

January 1, 2014 to January 1, 2016. 

On April 1, 2014, PAMA was enacted. 

Section 217(a)(1) of PAMA amended 

section 632(b)(1) of ATRA to preclude 

the Secretary from implementing the 

policy under § 413.174(f)(6) relating to 

oral-only renal dialysis service drugs 

and biological products prior to January 

1, 2024. We implemented this delay in 

the CY 2015 ESRD PPS final rule (79 FR 

66262) by modifying the effective date 

for providing payment for oral-only 

renal dialysis service drugs and 

biological products under the ESRD PPS 

at § 413.174(f)(6) from January 1, 2016 to 

January 1, 2024. We also changed the 

date in § 413.237(a)(1)(iv) regarding 

outlier payments for oral-only renal 

dialysis service drugs made under the 

ESRD PPS from January 1, 2016 to 

January 1, 2024. Section 217(a)(2) of 

PAMA further amended section 

632(b)(1) of ATRA by requiring that in 

establishing payment for oral-only drugs 

under the ESRD PPS, the Secretary must 

use data from the most recent year 

available. 

On December 19, 2014, ABLE was 

enacted. Section 204 of ABLE amended 

section 632(b)(1) of ATRA, as amended 

by section 217(a)(1) of PAMA, to 

provide that payment for oral-only renal 

dialysis services cannot be made under 

the ESRD PPS bundled payment prior to 

January 1, 2025. Similar to the CY 2014 

and CY 2015 ESRD PPS final rule 

changes, we implemented this delay in 

the CY 2016 ESRD PPS final rule (80 FR 

469028) by modifying the effective date 

for providing payment for oral-only 

renal dialysis service drugs and 

biological products under the ESRD PPS 

at § 413.174(f)(6) from January 1, 2024, 

to January 1, 2025. We also changed the 

date in § 413.237(a)(1)(iv) regarding 

outlier payments for oral-only renal 

dialysis service drugs made under the 

ESRD PPS from January 1, 2024 to 

January 1, 2025. We stated that we 

continue to believe that oral-only renal 

dialysis service drugs and biological 

products are an essential part of the 

ESRD PPS bundled payment and should 

be paid for under the ESRD PPS. 

Section 217(c)(1) of PAMA required 

us to adopt a process for determining 

when oral-only drugs are no longer oralonly. In the CY 2016 ESRD PPS 

proposed rule (80 FR 37839), when 

considering a definition for the term 

‘‘oral-only drug,’’ we noted that in the 

CY 2011 ESRD PPS final rule (75 FR 

49038 through 49039), we described 

oral-only drugs as those that have no 

injectable equivalent or other form of 

administration. In the CY 2016 ESRD 

PPS final rule (80 FR 69027), we 

finalized the definition of oral-only drug 

at § 413.234(a) to provide that an oralonly drug is a drug or biological with no 

injectable equivalent or other form of 

administration other than an oral form. 

We also finalized our process at 

§ 413.234(d) for determining that an oral 

only drug is no longer considered oralonly when a non-oral version of the 

oral-only drug is approved by FDA. We 

stated that we will undertake 

rulemaking to include the oral and any 

non-oral version of the drug in the ESRD 

PPS bundled payment when it is no 

longer considered an oral-only drug 

under this regulation. In addition, we 

noted that we will pay for the existing 

oral-only drugs (which were, at that 

time, only phosphate binders and 

calcimimetics) using the TDAPA, as 

applicable. We stated that this will 

allow us to collect data reflecting 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38497 

15Change Request 10065, Transmittal 1889, 

issued August 4, 2017, replaced by Transmittal 

1999, issued January 10, 2018, implemented the 

TDAPA for calcimimetics effective January 1, 2018. 

16Change Request 12011, Transmittal 10568, 

issued January 14, 2021, 

17 In the CY 2020 ESRD PPS final rule (84 FR 

60803), CMS made a technical change to 

§ 413.234(a) to revise the definitions of ‘‘ESRD PPS 

functional category’’ and ‘‘Oral-only drug’’ to use 

the term ‘‘biological product’’ instead of 

‘‘biological’’ for greater consistency with FDA 

nomenclature. 

current utilization of both the oral and 

injectable or intravenous forms of the 

drugs, as well as payment patterns and 

beneficiary co-pays, before we add these 

drugs to the ESRD PPS bundled 

payment. We also stated that for future 

oral-only drugs for which a non-oral 

form of administration comes on the 

market, we will apply our drug 

designation process as we would for all 

other new drugs. 

In the CY 2016 ESRD PPS final rule 

(80 FR 69017), we also codified the term 

ESRD PPS functional category at 

§ 413.234(a) as a distinct grouping of 

drugs and biologicals, as determined by 

CMS, whose end action effect is the 

treatment or management of a condition 

or conditions associated with ESRD. We 

explained that we codified this 

definition in regulation text to formalize 

the approach we adopted in CY 2011 

because the drug designation process is 

dependent on the ESRD PPS functional 

categories (80 FR 69015). We provided 

a detailed discussion of how we 

accounted for renal dialysis drugs and 

biological products in the ESRD PPS 

base rate since the implementation of 

the ESRD PPS (80 FR 69013 through 

69015). We discussed how we grouped 

renal dialysis drugs and biological 

products into functional categories 

based on their action (80 FR 37831). We 

explained that this was done for the 

purpose of adding new drugs and 

biological products with the same 

function into the functional categories 

and the ESRD PPS bundled payment as 

expeditiously as possible after the drug 

becomes commercially available to 

provide access for the ESRD Medicare 

population (80 FR 69014). Our approach 

of considering drugs and biological 

products as included in the ESRD PPS 

base rate if they fit within one of our 

ESRD PPS functional categories is 

reflected in the drug designation process 

set forth in our regulations at § 413.234. 

In 2017, FDA approved an injectable 

calcimimetic. In accordance with the 

policy finalized in the CY 2016 ESRD 

PPS final rule (80 FR 69013 through 

69027) described in the previous 

paragraphs, we issued a change request 

to implement payment under the ESRD 

PPS for both the oral and injectable 

forms of calcimimetics using the 

TDAPA.15 We paid for calcimimetics 

using the TDAPA under the ESRD PPS 

for 3 years, CY 2018 through CY 2020, 

during which time CMS collected 

utilization data. In the CY 2021 ESRD 

PPS final rule (85 FR 71406 through 

71410), we finalized a modification to 

the ESRD PPS base rate to account for 

the costs of calcimimetics following the 

methodology codified at § 413.234(f). 

Accordingly, effective January 1, 2021,16

calcimimetics are no longer paid for 

using the TDAPA and instead are 

included in the ESRD PPS base rate. We 

also noted that effective January 1, 2021, 

calcimimetics are eligible for outlier 

payments as ESRD outlier services 

under § 413.237.17

At the present time, phosphate 

binders are still considered oral-only 

drugs, and therefore under current law 

will be paid under Medicare Part D until 

January 1, 2025, as long as they remain 

oral-only drugs. Beginning January 1, 

2025, in accordance with § 413.174(f)(6), 

payment to an ESRD facility for renal 

dialysis service drugs and biologicals 

with only an oral form furnished to 

ESRD patients will be incorporated into 

the ESRD PPS and separate payment 

will no longer be provided. 

Under our current policy (80 FR 

69027), if an injectable equivalent or 

other form of administration of 

phosphate binders were to be approved 

by FDA prior to January 1, 2025, the 

phosphate binders would no longer be 

considered oral-only drugs and would 

no longer be paid outside the ESRD PPS. 

We would pay for the oral and any nonoral version of the drug using the 

TDAPA under the ESRD PPS for at least 

2 years, during which time we would 

collect and analyze utilization data. If 

no other injectable equivalent (or other 

form of administration) of phosphate 

binders is approved by the FDA prior to 

January 1, 2025 then we would pay for 

these drugs using the TDAPA under the 

ESRD PPS for at least 2 years beginning 

January 1, 2025. CMS will then 

undertake rulemaking to modify the 

ESRD PPS base rate to account for the 

cost of the drug in the ESRD PPS 

bundled payment. As required by 

section 632(b)(1) of ATRA, as amended 

by section 217(a)(2) of PAMA, in 

establishing payment for oral-only drugs 

under the ESRD PPS, we will use data 

from the most recent year available. 

(2) CMS Observations Regarding 

Decrease in Drug Utilization and 

Medicare Expenditures When Drugs Are 

Included in the ESRD PPS 

As we prepare for the incorporation of 

oral-only drugs into the ESRD PPS 

bundled payment beginning January 1, 

2025, we have been studying trends in 

drug utilization and Medicare 

expenditures for renal dialysis drugs 

and biological products. Our 

observations, presented below, provide 

further support for our longstanding 

view that oral-only renal dialysis service 

drugs and biological products are an 

essential part of the ESRD PPS bundled 

payment and should be paid for under 

the ESRD PPS. 

With the transition of payment for 

calcimimetics from Medicare Part D to 

Medicare Part B, we observed two 

distinct patterns. First, when the 

calcimimetics were paid for using the 

TDAPA under the ESRD PPS beginning 

2018, we observed a significant increase 

in the utilization of calcimimetics across 

patients of all races and ethnicities, with 

a more significant uptake by the 

African-American/Black minority 

population. As utilization increased, 

cost decreased. To demonstrate, before 

2018, only brand-name oral 

calcimimetics were available, but in 

2018, generic oral calcimimetics began 

to enter the market. We observed a 

greater than ten-fold decrease in the per 

milligram cost of Cinacalcet, the oral 

calcimimetic, from Q1 2018, which was 

the beginning of the TDAPA period for 

calcimimetics, and Q4 2020. We believe 

that the transition of payment for 

calcimimetics from Part D to Part B 

increased access for the population that 

lacked Part D coverage or had less 

generous coverage than the Part D 

standard benefit. Second, after we 

incorporated the calcimimetics into the 

ESRD PPS bundled payment beginning 

January 1, 2021, we noted a decrease in 

the calcimimetic utilization overall, 

with a pronounced decrease in the more 

expensive injectable calcimimetic. In 

order to mitigate the risk of potential 

access issues for minority populations, 

which include African-American/Black, 

Asian, Hispanic, and Other non-white 

populations, we believe it is important 

that any future oral-only drugs that fit 

into a current ESRD PPS functional 

category be included in the ESRD 

bundled payment through the processes 

previously finalized in our regulations 

at § 413.234 and described in this CY 

2023 ESRD PPS proposed rule. 

We have noted a similar pattern in the 

change in utilization with other renal 

dialysis service drugs, such as vitamin 

D agents, which were separately paid 


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18Report to the Congress: Medicare Payment 

Policy, March 2017. p. 169. https://

www.medpac.gov/wp-content/uploads/import_

data/scrape_files/docs/default-source/reports/ 

mar17_medpac_ch6.pdf. 

19Am J Kidney Dis 2018 Feb;71(2):246–253. doi: 

10.1053/j.ajkd.2017.09.007. Epub 2017 Nov 28. 

CMS’s data also confirms this figure. 

20https://www.medpac.gov/document/march2021-report-to-the-congress-medicare-paymentpolicy/. 

21https://www.medpac.gov/document/march2022-report-to-the-congress-medicare-paymentpolicy/. 

prior to the establishment of the ESRD 

PPS and subsequently included in the 

ESRD PPS bundled payment. Prior to 

the implementation of ESRD PPS, 

certain renal dialysis drugs and 

biological products were separately paid 

according to the number of units of the 

drug administered; in other words, the 

more units of a drug or biological 

product administered, the higher the 

Medicare payment.18 Between 2011 and 

2013, the first 3 years of the new ESRD 

PPS, the utilization of formerly 

separately billable renal dialysis drugs 

and biological products included in the 

ESRD PPS bundled payment declined. 

With the inclusion of the formerly 

separately billable renal dialysis drugs 

and biological products in the ESRD 

PPS bundled payment, the ESRD PPS 

increased the incentive for ESRD 

facilities to be more efficient in 

providing these products. 

CMS has observed that incorporation 

of formerly separately billable renal 

dialysis drugs and biological products 

into the ESRD PPS bundled payment is 

followed by a decrease in utilization of 

the drug. For example, by drug class, on 

a per treatment basis, between 2007 and 

2013, the use of vitamin D agents (part 

of the bone and mineral metabolism 

ESRD PPS functional category) declined 

by 20 percent, with most of the decline 

occurring between 2010 and 2013. 

Under the ESRD PPS, drug utilization 

and average sales price (ASP) data 

suggest increased competition between 

the two principal vitamin D agents in 

the ESRD PPS bundled payment. 

Between 2010 and 2014, per treatment 

use of paricalcitol, the costlier vitamin 

D drug (according to Medicare ASP 

data) declined, while per treatment use 

of doxercalciferol, the less costly 

vitamin D drug, increased. Between 

2010 and 2015, the ASP price per unit 

for both these products declined by 60 

percent. We have observed a similar 

pattern in price decline as a result of 

competition with the oral calcimimetics 

between 2018 and 2021. The brand 

name oral cinacalcet (a calcimimetic) 

was paid under Medicare Part D drug 

before 2018, but the price of the oral 

drug dropped significantly once the 

injectable calcimimetic became 

available and the oral (both brand name 

and generics) and the injectable 

calcimimetic became eligible for 

payment using the TDAPA under the 

ESRD PPS. 

We have been monitoring health 

outcomes since 2011 and have not 

observed any sustained increase in 

adverse outcomes related to 

incorporation of renal dialysis drugs or 

biological products into the ESRD PPS 

bundled payment, including adverse 

outcomes related to changes in 

utilization of different forms of 

calcimimetics, as noted in the previous 

paragraph. To date, we have monitored 

for hospitalizations, fractures, strokes, 

acute myocardial infarctions, heart 

failures, parathyroidectomies, and 

calciphylaxis. Utilization of 

calcimimetics remains higher among 

minority populations, which include 

African-American/Black, Asian, 

Hispanic, and Other non-white 

populations, and we have not observed 

any sustained adverse health outcomes 

due to this change in utilization. We 

continue to monitor these health 

outcomes on an ongoing basis. 

(3) CMS Observations on Part D 

Spending for Dialysis Drugs 

While the use of formerly separately 

billable renal dialysis drugs included in 

the ESRD PPS bundled payment 

declined between 2011 and 2013, the 

use of dialysis drugs paid under 

Medicare Part D (as measured by 

Medicare spending) increased. Medicare 

Part D spending for oral-only drugs in 

2016, which at that time only included 

calcimimetics and phosphate binders, 

grew to $2.3 billion, an increase of 22 

percent per year compared with 2011. 

When calculated on a per treatment 

basis, Medicare Part D spending for 

dialysis drugs increased by 20 percent 

per year. In addition, between 2011 and 

2016, total Medicare Part D spending for 

dialysis drugs grew more rapidly than 

total Medicare Part D spending for ESRD 

beneficiaries on dialysis (22 percent vs. 

11 percent, respectively). In 2016, 

Medicare Part D spending for dialysis 

drugs constituted 60 percent of gross 

Medicare Part D spending for ESRD 

beneficiaries. 

As noted previously in this section of 

the proposed rule, beginning on January 

1, 2018, calcimimetics were paid for 

using the TDAPA under the ESRD PPS 

and beginning on January 1, 2021, were 

incorporated into the ESRD PPS 

bundled payment. Currently, phosphate 

binders are the only drugs that are paid 

for under Medicare Part D as oral-only 

drugs. 

A number of studies, including 

studies by CMS, have examined trends 

in Medicare spending for phosphate 

binders. Between 2013 and 2014, 

Medicare Part D spending for phosphate 

binders increased by 24 percent to 

approximately $980 million. Medicare 

costs for phosphate binders for patients 

on dialysis and patients with chronic 

kidney disease enrolled in Medicare 

Part D exceeded $1.5 billion in 2015. 

Additionally, annual Medicare 

expenditures for phosphate binders 

increased by 118 percent 

(approximately $486 million) between 

2008 and 2013, reflecting increasing 

numbers of patients on dialysis being 

prescribed phosphate binders and large 

increases in per-user phosphate binder 

costs. During these 6 years, total costs 

per user-year for phosphate binders 

increased 67 percent, in contrast to a 21 

percent increase for all other Medicare 

Part D medications for patients 

receiving dialysis services.19

MedPAC has also studied Medicare 

spending under Part D for phosphate 

binders. According to MedPAC’s report 

titled March 2021 Report to the 

Congress: Medicare Payment Policy 20

between 2017 and 2018, spending for 

phosphate binders furnished to FFS 

beneficiaries on dialysis declined by 17 

percent to $1.1 billion. This decline is 

linked to FDA’s approval in 2017 for a 

generic version of Renvela (sevelamer 

carbonate), a phosphate binder. By 

contrast, spending grew 12 percent per 

year for the five-year period 2012 

through 2017. In 2018, Medicare Part D 

spending for phosphate binders 

accounted for 40 percent of all Medicare 

Part D spending for dialysis 

beneficiaries. The most recent CMS data 

through December 2020 indicates that 

total spending on phosphate binders is 

approximately $1 billion. The average 

spending per treatment of phosphate 

binders in 2020 is approximately $19.85 

among all adult ESRD beneficiaries, and 

$24.24 among all Part D eligible adult 

ESRD beneficiaries. This illustrates that 

Medicare Part D spending for the same 

category of drugs is more expensive for 

ESRD beneficiaries with Medicare Part 

D. 

MedPAC has also noted the benefits 

of the future incorporation of phosphate 

binders into the ESRD PPS bundled 

payment as of January 1, 2025. As noted 

in MedPAC’s report titled March 2022 

Report to the Congress: Medicare 

Payment Policy,21 this is expected to 

result in better drug therapy 

management for the ESRD beneficiary, 

and to improve their access to these 

medications. MedPAC stated that this is 

especially important since some 

beneficiaries lack Part D coverage, or 


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22FDA has defined the terms ‘‘pharmaceutical 

equivalents’’, ‘‘bioequivalence’’, and ‘‘therapeutic 

equivalents’’ at 21 CFR 314.3(b). Therapeutic 

equivalence, as used in FDA’s Orange Book: 

Approved Drug Products with Therapeutic 

Equivalence Evaluations (see Section 1.21.15), 

applies only to drug products containing the same 

active ingredient(s) and does not encompass a 

comparison of different therapeutic agents used for 

the same condition. https://

www.accessdata.fda.gov/scripts/cder/ob/index.cfm. 

23Neither ATRA, PAMA, nor ABLE includes a 

definition of ‘‘equivalent’’ for purposes of the oralonly drug determination. Additionally, CMS did 

not provide a definition for or elaborate on the 

meaning of ‘‘equivalent’’ for purposes of the oralonly drug determination in our prior rules. 

have coverage less generous than the 

standard Part D benefit. MedPAC also 

noted that in addition to supporting 

equitable access for the ESRD 

beneficiaries, including phosphate 

binders in the ESRD PPS bundled 

payment might improve provider 

efficiency. MedPAC stated, and we have 

confirmed, that between 2018 and 2019, 

Medicare total spending increased for 

the phosphate binders that did not have 

generic competitors. 

(4) The Oral-Only Drug Definition and 

‘‘Functional’’ Equivalence Under the 

ESRD PPS 

As noted previously in this section of 

the proposed rule, under § 413.234(a), 

we define an oral-only drug as ‘‘A drug 

or biological product with no injectable 

equivalent or other form of 

administration other than an oral form.’’ 

In addition, § 413.234(d) provides that 

an oral-only drug is no longer 

considered oral-only if an injectable or 

other form of administration of the oralonly drug is approved by the Food and 

Drug Administration. We note that there 

are various types of drug equivalences 

that are defined in regulation by FDA, 

including pharmaceutical equivalents, 

bioequivalents, and therapeutic 

equivalents.22 However, we have not 

relied on these types of drug 

equivalences defined by FDA for 

purposes of the oral-only drug policy 

under the ESRD PPS. 

Moreover, our regulations do not 

currently specify the meaning of the 

term ‘‘equivalent’’ in the definition of 

‘‘oral-only drug’’.23 We believe that the 

history of the ESRD PPS and our 

longstanding drug designation process 

indicate that CMS must consider 

‘‘functional’’ equivalence, which is not 

described in FDA’s regulations, in order 

to evaluate whether there is another 

form of administration other than an 

oral form and determine if a drug or 

biological product is an oral-only drug. 

For the purpose of ESRD PPS, we 

consider a drug or biological product to 

be functionally equivalent if it has the 

same end action effect as another renal 

dialysis drug or biological product. For 

example, when we first developed the 

Medicare ESRD PPS, we examined all 

renal dialysis drugs and biological 

products included in the prior 

composite rate payment system. 

Functional substitutes for those drugs or 

biological products were part of that 

evaluation. In the CY 2011 ESRD PPS 

final rule (75 FR 49044 through 49053) 

we explained our process for identifying 

drugs and biological products used for 

the treatment of ESRD that would be 

included in the ESRD PPS base rate. We 

performed an extensive analysis of 

Medicare payments for Part B drugs and 

biological products billed on ESRD 

claims and evaluated each drug and 

biological product to identify its 

category by indication or mode of 

action. We stated that categorizing drugs 

and biological products on the basis of 

drug action allows us to determine 

which categories (and therefore, the 

drugs and biological products within 

the categories) would be considered 

used for the treatment of ESRD (75 FR 

49047). 

In the CY 2016 ESRD PPS final rule, 

we codified our longstanding drug 

designation process at § 413.234 and 

reiterated that injectable and 

intravenous drugs and biological 

products were grouped into ESRD PPS 

functional categories based on their 

action (80 FR 69014). This was done for 

the purpose of adding new drugs or 

biological products with the same 

functions to the ESRD PPS bundled 

payment as expeditiously as possible 

after the drugs become commercially 

available so that beneficiaries have 

access to them. We further clarified that 

the ESRD PPS functional categories are 

not based on their mode of action, but 

rather end action effect (80 FR 69015 

through 69017). Accordingly, and as 

noted previously in this section of this 

proposed rule, we finalized the 

definition of an ESRD PPS functional 

category in § 413.234(a) as a distinct 

grouping of drugs or biological 

products, as determined by CMS, whose 

end action effect is the treatment or 

management of a condition or 

conditions associated with ESRD (80 FR 

69017 and 84 FR 60803). 

Our guidance has also indicated that 

we consider functional equivalence 

when assessing whether particular 

drugs are renal dialysis services paid for 

under the ESRD PPS. The Medicare 

Benefit Policy Manual, Chapter 11, 

Section 20.3F states, ‘‘Drugs that were 

used as a substitute for any of these 

drugs [that is, drugs that were 

considered composite rate drugs and not 

billed separately prior to the 

implementation of the ESRD PPS] or are 

used to accomplish the same effect are 

also covered under the composite rate.’’ 

Given that we rely on functional 

equivalence in determining whether 

drugs are reflected in an ESRD PPS 

functional category and thus are renal 

dialysis services paid for under the 

ESRD PPS, we believe the same 

standard should apply when 

determining if a drug is an oral-only 

drug. 

(5) Proposed Revision to the Definition 

of Oral-Only Drug 

Based on our observations regarding 

renal dialysis drug utilization and 

spending and the upcoming changes 

related to payment for oral-only drugs 

under the ESRD PPS, we are proposing 

a change to the definition of oral-only 

drug at § 413.234(a). The current 

definition states that an oral-only drug 

is a drug or biological product with no 

injectable equivalent or other form of 

administration other than an oral form. 

We are proposing to modify the 

definition to specify that equivalence 

refers to functional equivalence, in line 

with our current drug designation 

process, which relies on the ESRD PPS 

functional categories. The proposed 

definition would state that an oral-only 

drug is a drug or biological product with 

no functional equivalent or other form 

of administration other than an oral 

form. We are proposing that this change 

would take effect beginning January 1, 

2025, to coincide with the incorporation 

of oral-only drugs into the ESRD PPS 

bundled payment under § 413.174(f)(6). 

We are proposing this change for 

several reasons. First, we note that it 

would be consistent with the policies 

previously established for phosphate 

binders and calcimimetics. As discussed 

previously in this section of the 

proposed rule, in the CY 2016 ESRD 

PPS final rule, we finalized that when 

a non-oral form of administration of a 

phosphate binder or calcimimetic is 

approved by FDA, we would go through 

rulemaking to include the oral and any 

non-oral form of administration of the 

drug in the ESRD PPS bundled 

payment. We explained that we would 

not take this approach for any 

subsequent drugs that are approved by 

FDA and fall within the bone and 

mineral metabolism functional category 

(or any other ESRD PPS functional 

categories). This is because the 

phosphate binders and calcimimetics 

were the only renal dialysis drugs for 

which we delayed payment under the 

ESRD PPS because we did not have 

utilization data (80 FR 69025). We 

believe that a revision to the oral-only 

drug definition to clarify that a drug is 

not an oral-only drug if it has a 


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functional equivalent is consistent with 

that policy; that is, only oral-only drugs 

that are calcimimetics and phosphate 

binders would be eligible for a potential 

base rate addition and we would not 

take this approach for any subsequent 

drugs that fall within any of the ESRD 

PPS functional categories (80 FR 69025). 

While Congress has delayed the 

incorporation of oral-only drugs into the 

ESRD PPS until January 1, 2025, and 

this delay still applies to the phosphate 

binders as oral-only drugs, we believe 

we can still take action now to ensure 

that our drug designation process 

clearly reflects the longstanding ESRD 

PPS functional category framework. 

In addition, this proposed 

modification would help ensure that we 

do not perpetuate any further delays in 

payment for renal dialysis services 

under the ESRD PPS. As noted 

previously, throughout the years, a 

series of legislative actions delayed the 

inclusion of oral-only drugs into the 

ESRD PPS bundled payment, from 2014 

to 2016, to 2024, to January 1, 2025. 

When we first implemented the 

payment system in 2011, we noted that 

there were certain advantages to 

delaying payment for oral-only drugs 

under the ESRD PPS and continuing to 

pay for them under Part D, such as 

giving ESRD facilities additional time to 

make operational changes. CMS believes 

that sufficient time has passed since 

2011 and we have abundant data about 

historical patterns to incorporate all 

drugs and biological products that are 

renal dialysis services into the ESRD 

PPS bundled payment as soon as 

possible under current law. 

Our proposed modification would 

help ensure that new drugs and 

biological products that become 

available in the future and that are 

reflected in the ESRD PPS functional 

categories, are properly paid as part of 

the ESRD PPS. In other words, by 

specifying that an oral-only drug is one 

with no injectable ‘‘functional’’ 

equivalent, we would limit the scope of 

any new drugs or biological products 

that could be considered oral-only drugs 

in the future, and would therefore 

facilitate incorporation of these renal 

dialysis services into ESRD PPS. Any 

new oral renal dialysis drugs or 

biological products that are reflected in 

existing ESRD PPS functional categories 

and have functional equivalents in those 

categories would not meet the definition 

of an oral-only drug and thus could be 

included in the ESRD PPS bundled 

payment without delay, even if the 

functional equivalents are not 

‘‘chemical equivalents’’ (that is, 

products containing identical amounts 

of the identical active drug ingredient). 

This would support beneficiary access 

to renal dialysis service drugs and 

would meet the intent of the ESRD PPS 

functional category framework, which is 

to be broad and to facilitate adding new 

drugs to the therapeutic armamentarium 

of the treating physician (83 FR 56941). 

We note that over the past decade, 

CMS has been monitoring and analyzing 

data regarding beneficiary access to 

Medicare Part D drugs, Medicare 

expenditure increases for renal dialysis 

drugs paid under Medicare Part D, 

health equity implications of varying 

access to Medicare Part D drugs among 

patients with ESRD, and ESRD facility 

behavior regarding drug utilization. We 

have seen that incorporating Medicare 

Part D drugs into the ESRD PPS has had 

a significant positive effect of expanding 

access to such drugs for beneficiaries 

who do not have Medicare Part D 

coverage. As discussed earlier in this 

section of this proposed rule, this has 

significant health equity implications. 

For example, we have identified among 

these beneficiaries a significant uptake 

by the African-American/Black minority 

population for calcimimetics once we 

began paying for those drugs using the 

TDAPA under the ESRD PPS. 

We believe the proposed modification 

of the oral-only drug definition would 

facilitate the inclusion of oral renal 

dialysis drugs into the ESRD PPS 

bundled payment, as opposed to 

payment under Medicare Part D, and 

therefore would support health equity 

for beneficiaries with oral-only drugs in 

their plan of care who lack Medicare 

Part D coverage, or have less generous 

than Medicare Part D standard benefit. 

From 2017 and 2021, between 10 to 20 

percent of FFS beneficiaries on dialysis 

either had no Medicare Part D coverage 

or had coverage less generous than the 

Medicare Part D standard benefit. 

Timely inclusion of renal dialysis drugs 

and biological products into the ESRD 

PPS bundled payment would promote 

health equity for those beneficiaries 

who are not enrolled in Part D or who 

do not have access to these drugs 

through alternate insurance programs. 

When compared with all FFS 

beneficiaries, FFS beneficiaries 

receiving dialysis are disproportionately 

young, male, disabled, and AfricanAmerican, have low income as 

measured by dual status, and reside in 

an urban setting. We believe a 

clarification to help ensure that renal 

dialysis drugs and biological products 

are properly included in the ESRD PPS 

bundled payment would increase the 

likelihood of pharmaceutical 

compliance for this population of 

patients, promote health equity for 

patients that lack Medicare Part D 

coverage or have coverage less generous 

than the Part D standard benefit, and 

contribute to better clinical outcomes by 

leveling the playing field for all patients 

with ESRD. In addition, this proposal 

would support Executive Order 13985, 

Advancing Racial Equity and Support 

for Underserved Communities through 

the Federal Government (86 FR 7009), 

which addresses conducting an equity 

assessment in federal agencies, and 

determining whether new policies, 

regulations, or guidance documents may 

be necessary to advance equity in 

agency action and programs. 

In summary, we believe that a 

proposed modification to the definition 

of oral-only drug to specify ‘‘functional’’ 

equivalence would be consistent with 

the current policy for oral-only drugs 

and the ESRD PPS functional category 

framework, would help ensure that new 

renal dialysis drugs and biological 

products are paid for under the ESRD 

PPS without delay, and would continue 

to support health care practitioners’ 

decision-making to meet the clinical 

needs of their patients. Additionally, the 

proposed modification would promote 

health equity and support proper 

financial incentives for ESRD facilities, 

in keeping with our fiduciary 

responsibility to the Medicare Trust 

Funds. For all of these reasons, we are 

proposing to include the word 

‘‘functional’’ in the definition of oralonly drug at § 413.234(a), so that the 

definition would be ‘‘a drug or 

biological product with no injectable 

functional equivalent or other form of 

administration other than an oral form.’’ 

We propose that this change would be 

effective January 1, 2025. We seek 

comments on this proposal. 

(6) Proposed Revisions To Clarify the 

ESRD PPS Functional Category 

Descriptions 

In the CY 2011 ESRD PPS final rule 

(75 FR 49044 through 49053), we 

discussed the extensive analysis of 

Medicare payments that we performed 

in order to identify drugs and biological 

products that are used for the treatment 

of ESRD and therefore meet the 

definition of renal dialysis services 

(defined at section 1881(b)(14)(B) of the 

Act and 42 CFR 413.171) that would be 

included in the ESRD PPS base rate. We 

analyzed Medicare Part B drugs and 

biological products billed on ESRD 

claims and evaluated each drug and 

biological product to identify its 

category by indication or mode of 

action. We also explained that 

categorizing drugs and biological 

products on the basis of drug action 

would allow us to determine which 

categories (and therefore, the drugs and 


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biological products within the 

categories) would be considered used 

for the treatment of ESRD (75 FR 49047). 

Using this approach, we established 

categories of drugs and biological 

products that are not considered for the 

treatment of ESRD, categories of drugs 

and biological products that are always 

considered for the treatment of ESRD, 

and categories of drugs and biological 

products that may be used for the 

treatment of ESRD but are also 

commonly used to treat other conditions 

(75 FR 49049 through 49051). Those 

drugs and biological products that were 

identified as not used for the treatment 

of ESRD were not considered renal 

dialysis services and were not included 

in computing the ESRD PPS base rate. 

The categories of drugs and biologicals 

that were always considered used for 

the treatment of ESRD were identified as 

access management, anemia 

management, anti-infectives 

(specifically vancomycin and 

daptomycin used to treat access site 

infections), bone and mineral 

metabolism, and cellular management 

(75 FR 49050). In the CY 2015 ESRD 

PPS final rule, we removed antiinfectives from the list of categories of 

drugs and biological products that are 

included in the ESRD PPS base rate and 

not separately payable (79 FR 66149 

through 66150). The categories of drugs 

that were considered always used for 

the treatment of ESRD have otherwise 

remained unchanged since we finalized 

them in the CY 2011 ESRD PPS final 

rule. The current categories of drugs that 

are included in the ESRD PPS base rate 

and that may be used for the treatment 

of ESRD but are also commonly used to 

treat other conditions are antiemetics, 

anti-infectives, antipruritics, 

anxiolytics, drugs used for excess fluid 

management, drugs used for fluid and 

electrolyte management including 

volume expanders, and pain 

management (analgesics) (79 FR 66150). 

Although commenters requested that 

we list the specific ESRD-only drugs in 

the CY 2011 ESRD PPS final rule rather 

than specifying drugs and biological 

products used for the treatment of 

ESRD, we chose to identify drugs and 

biological products by functional 

category. We did not finalize a drugspecific list because we did not want to 

inadvertently exclude drugs that may be 

substitutes for drugs identified. We 

stated that using categories of drugs 

allows CMS to update the bundled 

ESRD PPS base rate accordingly as new 

drugs and biological products become 

available (75 FR 49050). Because there 

are many drugs and biological products 

that have multiple uses, and because 

new drugs and biological products are 

being developed, we stated that we did 

not believe that a drug-specific list 

would be beneficial (75 FR 49050). 

However, we provided a list of the 

specific Part B drugs and biological 

products (75 FR 49205 through 49209) 

and the former Part D drugs that were 

included in the bundled ESRD PPS base 

rate (75 FR 49210). We emphasized that 

drugs or biological products furnished 

for the purpose of access management, 

anemia management, vascular access or 

peritonitis, cellular management and 

bone and mineral metabolism will be 

considered a renal dialysis service 

under the ESRD PPS and will not be 

eligible for separate payment. In 

addition, we noted that any drug or 

biological product used as a substitute 

for a drug or biological product that was 

included in the bundled ESRD PPS base 

rate would also be a renal dialysis 

service and would not be eligible for 

separate payment (75 FR 49050). 

In the CY 2016 ESRD PPS final rule 

(80 FR 69024), we finalized the drug 

designation process in our regulations at 

§ 413.234 as being dependent upon the 

ESRD PPS functional categories, 

consistent with our policy since the 

implementation of the ESRD PPS in 

2011. We discussed the history of the 

ESRD PPS functional category approach 

and noted that we grouped the 

injectable and intravenous drugs and 

biological products into ESRD PPS 

functional categories for the purpose of 

adding new drugs or biological products 

with the same functions to the bundled 

ESRD PPS base rate as expeditiously as 

possible. We also stated that in previous 

regulations we referred to these 

categories as drug categories, however, 

we believe the term functional 

categories is more precise and better 

reflects how we have used the 

categories. We explained that CMS has 

designated several new drugs and 

biological products as renal dialysis 

services because they fit within the 

ESRD PPS functional categories, 

consistent with the process noted in CY 

2011 ESRD PPS final rule. 

As described more fully in the CY 

2016 ESRD PPS final rule (80 FR 69023 

through 69024), CMS established a 

TDAPA policy in our regulation at 

§ 413.234 that is based on a 

determination as to whether or not a 

drug fits into an existing ESRD PPS 

functional category. We defined an 

ESRD PPS functional category in our 

regulation at § 413.234(a) as a distinct 

grouping of drugs or biological 

products, as determined by CMS, whose 

end action effect is the treatment or 

management of a condition or 

conditions associated with ESRD. 

In addition, in the CY 2016 ESRD PPS 

final rule (80 FR 69017), we explained 

that commenters suggested changes to 

our descriptions of some of the ESRD 

PPS functional categories in the 

preamble of the CY 2016 ESRD PPS 

proposed rule to more precisely define 

the drugs that would fit into the 

categories. In particular, the 

commenters suggested changes to the 

anti-infective, pain management, and 

anxiolytic ESRD PPS functional 

categories to better describe how each of 

the categories relate to the treatment of 

ESRD in accordance with the statute. 

The commenters suggested that we 

remove language from the description of 

the antiemetic functional category to 

eliminate drugs used to treat nausea 

caused by the use of oral-only drugs 

because these drugs are paid outside the 

ESRD PPS bundled payment and are 

covered under a separate benefit 

category. 

In response to these suggestions, in 

the CY 2016 ESRD PPS final rule, we 

moved the anti-infective functional 

group from the list of drugs always used 

for the treatment of ESRD to the list of 

drugs that may be used for the treatment 

of ESRD (80 FR 69017). We also adopted 

the commenters’ recommendations 

regarding narrowing the functional 

categories to describe how the category 

relates to the treatment of ESRD. We 

explained that many of the commenters’ 

recommendations were consistent with 

how we believe the categories should be 

defined and help to ensure that the 

drugs that fall into them are those that 

are essential for the delivery of 

maintenance dialysis. We presented the 

final ESRD PPS functional categories, as 

revised with suggestions from 

commenters, in Table 8B in the CY 2016 

ESRD PPS final rule (80 FR 69018). In 

that CY 2016 ESRD PPS final rule table, 

we listed each ESRD PPS functional 

category and rationale for association, 

meaning the reason we included drugs 

in each category, with examples of 

drugs in certain categories. Table 8B 

also separated the functional categories 

into those that describe drugs always 

considered used for the treatment of 

ESRD and those that described drugs 

that may be used for treatment of ESRD. 

In the CY 2019 ESRD PPS final rule 

(83 FR 56928) we discussed the current 

ESRD PPS functional categories as part 

of our final policy to expand the TDAPA 

to all new renal dialysis drugs and 

biological products without modifying 

the base rate for drugs in existing 

functional categories. We emphasized 

that the functional categories are 

deliberately broad in nature because, 

when a new drug becomes available, it 

is added to the therapeutic 


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24https://www.cms.gov/files/document/ 

r11295CP.pdf. 

armamentarium of the treating 

physician (83 FR 56941). 

In 2021, a new antipruritic drug was 

granted marketing authorization by 

FDA. The new antipruritic drug was 

approved for a single indication, 

chronic kidney disease associated 

pruritus. The new antipruritic drug was 

approved for the ESRD PPS TDAPA in 

December 2021 and will receive the 

TDAPA from April 1, 2022 until March 

31, 2024. The Change Request (CR) 

12583 that established the TDAPA for 

Korsuva® (difelikefalin) was issued on 

March 15, 2022.24 As stated in that CR, 

the drug qualifies for the TDAPA as a 

drug or biological product used to treat 

or manage a condition for which there 

is an existing ESRD PPS functional 

category, specifically, the antipruritic 

category. Because the new drug already 

fits within the antipruritic ESRD PPS 

functional category, the drug will 

receive the TDAPA for 2 years 

(§ 413.234(b)). After the TDAPA period, 

the drug will be considered included in 

the ESRD PPS bundled payment and 

there will be no modification to the base 

rate (§ 413.234(c)(1)(i)). 

In this proposed rule, we are taking 

the opportunity to review the 

descriptions for the existing ESRD PPS 

functional categories and propose 

certain clarifications to ensure our 

descriptions are as clear as possible for 

potential TDAPA applicants and the 

public. These proposed revisions to the 

descriptions would be consistent with 

our current policies for the ESRD PPS 

functional categories and would not be 

changes to the categories themselves. As 

required by the definition in 

§ 413.234(a), the drugs and biological 

products in the ESRD PPS functional 

categories are grouped by end action 

effect, and as we have stated in the past, 

the functional categories are deliberately 

broad by design to provide practitioners 

an array of drugs to use that meet the 

specific needs of the ESRD patient (83 

FR 56941). In offering category 

descriptions, which we have also 

identified as rationales for association 

(80 FR 69015, 69016, and 69018), it has 

not been our intention to strictly define 

or limit drugs in any functional category 

but rather to broadly describe the renal 

dialysis drugs and biological products 

that are currently available and fall into 

the categories. We are proposing to 

make the following clarifications: 

• Indicate that certain ESRD PPS 

functional categories may include, but 

are not limited to, drugs that have 

multiple clinical indications. For 

example, drugs and biological products 

in the anxiolytic functional category 

could have multiple clinical 

indications, and we are proposing to 

amend the description to reflect this 

understanding. 

• Add the term ‘‘biological products’’ 

to the descriptions of several ESRD PPS 

functional categories, which currently 

refer only to ‘‘drugs’’. 

• Update the examples provided in 

some category descriptions to describe 

the end-action effect of drugs or 

biological products included in that 

functional category. 

These proposed clarifications to the 

descriptions of the ESRD PPS functional 

categories are shown in italics in Table 

13 of this proposed rule. 

BILLING CODE 4120–01–P 


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BILLING CODE 4120–01–C 

C. Proposed Transitional Add-On 

Payment Adjustment for New and 

Innovative Equipment and Supplies 

(TPNIES) for CY 2023 Payment 

1. Background 

In the CY 2020 ESRD PPS final rule 

(84 FR 60681 through 60698), CMS 

established the transitional add-on 

payment adjustment for new and 

innovative equipment and supplies 

(TPNIES) under the ESRD PPS, under 

the authority of section 

1881(b)(14)(D)(iv) of the Act, in order to 

support ESRD facility use and 

beneficiary access to these new 

technologies. We established this addon payment adjustment to help address 

the unique circumstances experienced 

by ESRD facilities when incorporating 

new and innovative equipment and 

supplies into their businesses and to 

support ESRD facilities transitioning or 

testing these products during the period 

when they are new to market. We added 

§ 413.236 to establish the eligibility 

criteria and payment policies for the 

TPNIES. 

In the CY 2020 ESRD PPS final rule 

(84 FR 60650), we established in 

§ 413.236(b) that for dates of service 

occurring on or after January 1, 2020, we 

will provide the TPNIES to an ESRD 

facility for furnishing a covered 

equipment or supply only if the item: 

(1) has been designated by CMS as a 

renal dialysis service under § 413.171; 

(2) is new, meaning granted marketing 

authorization by the Food and Drug 

Administration (FDA) on or after 

January 1, 2020; (3) is commercially 

available by January 1 of the particular 

CY, meaning the year in which the 

payment adjustment would take effect; 

(4) has a Healthcare Common Procedure 

Coding System (HCPCS) application 

submitted in accordance with the 

official Level II HCPCS coding 

procedures by September 1 of the 

particular CY; (5) is innovative, meaning 

it meets the substantial clinical 

improvement criteria specified in the 

Inpatient Prospective Payment System 


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TABLE 13: Proposed Clarifications to ESRD PPS Functional Category Descriptions 

Functional Category Description and Examples 

Access Management Drugs/biological products used to ensure access by removing clots from 

grafts, reverse anticoagulation if too much medication is given, and provide 

anesthetic for access placement. 

Anemia Management Drugs/biological products used to stimulate red blood cell production and/or 

treat or prevent anemia. Examples of drugs/biological products in this 

categorv include ESAs and iron. 

Bone and Mineral Metabolism Drugs/biological products used to prevent/treat bone disease secondary to 

dialysis. Examples of drugs/biological products in this category include 

phosphate binders and calcimimetics. 

Cellular Management Drugs/biological products used for deficiencies of naturally occurring 

substances needed for cellular management. This category includes 

levocarnitine. 

Antiemetic Drugs/biological products used to prevent or treat nausea and vomiting 

secondary to dialysis. Excludes antiemetics used in conjunction with 

chemotherapy as these are covered under a separate benefit category. 

Anti-infectives Drugs/biological products used to treat infections. May include antibacterial 

and antifungal drugs. 

Antipruritic Drugs/biological products in this category are included for their action to 

treat itching secondary to dialysis but may have multiple clinical indications. 

Anxiolytic Drugs/biological products in this category are included for the treatment of 

restless leg syndrome secondary to dialysis but may have multiple clinical 

indications. 

Excess Fluid Management Drugs/biological productsAluids used to treat fluid excess or fluid overload. 

Fluid and Electrolyte Management Intravenous drugs/biological productsAluids used to treat fluid and 

Including Volume Expanders electrolyte needs. 

Pain Management Drugs/biological products used to treat graft site pain and to treat pain 

medication overdose. 
38504 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

(IPPS) regulations at § 412.87(b)(1) and 

related guidance; and (6) is not a capital 

related asset that an ESRD facility has 

an economic interest in through 

ownership (regardless of the manner in 

which it was acquired). 

Regarding the innovation requirement 

in § 413.236(b)(5), in the CY 2020 ESRD 

PPS final rule (84 FR 60690), we stated 

that we will use the following criteria to 

evaluate substantial clinical 

improvement for purposes of the 

TPNIES under the ESRD PPS based on 

the IPPS substantial clinical 

improvement criteria in § 412.87(b)(1) 

and related guidance: 

A new technology represents an 

advance that substantially improves, 

relative to renal dialysis services 

previously available, the diagnosis or 

treatment of Medicare beneficiaries. 

First, CMS considers the totality of the 

circumstances when making a 

determination that a new renal dialysis 

equipment or supply represents an 

advance that substantially improves, 

relative to renal dialysis services 

previously available, the diagnosis or 

treatment of Medicare beneficiaries. 

Second, a determination that a new 

renal dialysis equipment or supply 

represents an advance that substantially 

improves, relative to renal dialysis 

services previously available, the 

diagnosis or treatment of Medicare 

beneficiaries means one of the 

following: 

• The new renal dialysis equipment 

or supply offers a treatment option for 

a patient population unresponsive to, or 

ineligible for, currently available 

treatments; or 

• The new renal dialysis equipment 

or supply offers the ability to diagnose 

a medical condition in a patient 

population where that medical 

condition is currently undetectable, or 

offers the ability to diagnose a medical 

condition earlier in a patient population 

than allowed by currently available 

methods, and there must also be 

evidence that use of the new renal 

dialysis service to make a diagnosis 

affects the management of the patient; or 

• The use of the new renal dialysis 

equipment or supply significantly 

improves clinical outcomes relative to 

renal dialysis services previously 

available as demonstrated by one or 

more of the following: (1) a reduction in 

at least one clinically significant adverse 

event, including a reduction in 

mortality or a clinically significant 

complication; (2) a decreased rate of at 

least one subsequent diagnostic or 

therapeutic intervention; (3) a decreased 

number of future hospitalizations or 

physician visits; (4) a more rapid 

beneficial resolution of the disease 

process treatment including, but not 

limited to, a reduced length of stay or 

recovery time; (5) an improvement in 

one or more activities of daily living; an 

improved quality of life; or (6) a 

demonstrated greater medication 

adherence or compliance; or, 

• The totality of the circumstances 

otherwise demonstrates that the new 

renal dialysis equipment or supply 

substantially improves, relative to renal 

dialysis services previously available, 

the diagnosis or treatment of Medicare 

beneficiaries. 

Third, evidence from the following 

published or unpublished information 

sources from within the United States or 

elsewhere may be sufficient to establish 

that a new renal dialysis equipment or 

supply represents an advance that 

substantially improves, relative to renal 

dialysis services previously available, 

the diagnosis or treatment of Medicare 

beneficiaries: Clinical trials, peer 

reviewed journal articles; study results; 

meta-analyses; consensus statements; 

white papers; patient surveys; case 

studies; reports; systematic literature 

reviews; letters from major healthcare 

associations; editorials and letters to the 

editor; and public comments. Other 

appropriate information sources may be 

considered. 

Fourth, the medical condition 

diagnosed or treated by the new renal 

dialysis equipment or supply may have 

a low prevalence among Medicare 

beneficiaries. 

Fifth, the new renal dialysis 

equipment or supply may represent an 

advance that substantially improves, 

relative to services or technologies 

previously available, the diagnosis or 

treatment of a subpopulation of patients 

with the medical condition diagnosed or 

treated by the new renal dialysis 

equipment or supply. 

In the CY 2020 ESRD PPS final rule 

(84 FR 60681 through 60698), we also 

established a process modeled after 

IPPS’s process of determining if a new 

medical service or technology meets the 

substantial clinical improvement 

criteria specified in § 412.87(b)(1). As 

we discussed in the CY 2020 ESRD PPS 

final rule (84 FR 60682), we believe it 

is appropriate to facilitate access to new 

and innovative equipment and supplies 

through add-on payment adjustments 

similar to the IPPS New Technology 

Add-On Payment and to provide 

stakeholders with standard criteria for 

both inpatient and ESRD facility 

settings. In § 413.236(c), we established 

a process for our announcement of 

TPNIES determinations and a deadline 

for consideration of new renal dialysis 

equipment or supply applications under 

the ESRD PPS. We will consider 

whether a new renal dialysis equipment 

or supply meets the eligibility criteria 

specified in § 413.236(b) and summarize 

the applications received in the annual 

ESRD PPS proposed rules. Then, after 

consideration of public comments, we 

will announce the results in the Federal 

Register as part of our annual updates 

and changes to the ESRD PPS in the 

ESRD PPS final rule. In the CY 2020 

ESRD PPS final rule, we also specified 

certain deadlines for the application 

requirements. We noted that we would 

only consider a complete application 

received by February 1 prior to the 

particular CY. In addition, we required 

that FDA marketing authorization for 

the equipment or supply must occur by 

September 1 prior to the particular CY. 

We also stated in the CY 2020 ESRD 

PPS final rule (84 FR 60690 through 

60691) that we would establish a 

workgroup of CMS medical and other 

staff to review the materials submitted 

as part of the TPNIES application, 

public comments, FDA marketing 

authorization, and HCPCS application 

information and assess the extent to 

which the product provides substantial 

clinical improvement over current 

technologies. 

In the CY 2020 ESRD PPS final rule, 

we established § 413.236(d) to provide a 

payment adjustment for a new and 

innovative renal dialysis equipment or 

supply. We stated that the TPNIES is 

paid for two calendar years. Following 

payment of the TPNIES, the ESRD PPS 

base rate will not be modified and the 

new and innovative renal dialysis 

equipment or supply will become an 

eligible outlier service as provided in 

§ 413.237. 

Regarding the basis of payment for the 

TPNIES, in the CY 2020 ESRD PPS final 

rule, we finalized at § 413.236(e) that 

the TPNIES is based on 65 percent of 

the price established by the MACs, 

using the information from the invoice 

and other specified sources of 

information. 

In the CY 2021 ESRD PPS final rule 

(85 FR 71410 through 71464), we made 

several changes to the TPNIES eligibility 

criteria at § 413.236. First, we revised 

the definition of new at § 413.236(b)(2) 

as within 3 years beginning on the date 

of the FDA marketing authorization. 

Second, we changed the deadline for 

TPNIES applicants’ HCPCS Level II 

code application submission from 

September 1 of the particular CY to the 

HCPCS Level II code application 

deadline for biannual Coding Cycle 2 for 

durable medical equipment, orthotics, 

prosthetics, and supplies (DMEPOS) 

items and services as specified in the 

HCPCS Level II coding guidance on the 

CMS website prior to the CY. In 


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25The CY 2021 TPNIES offset amount was $9.32. 

The CY 2022 TPNIES offset amount is $9.50. CMS 

is proposing a CY 2023 TPNIES offset amount of 

$9.73, as discussed in section II.B.1.(e) of this 

proposed rule. 

26Peritoneal Dialysis: Waste products pass from 

the patient’s body through the peritoneal membrane 

into the peritoneal (abdominal) cavity where the 

bath solution (dialysate) is introduced and removed 

periodically. Medicare Benefit Policy Manual 

Chapter 11—End Stage Renal Disease (ESRD) (Rev. 

257, 03–01–19). 

27Mayo Clinic Staff, ‘‘Peritonitis,’’ June 18, 2020, 

available at: https://www.mayoclinic.org/diseasesconditions/peritonitis/symptoms-causes/syc20376247. 

28 Ibid. 

29 Ibid. 

addition, a copy of the applicable FDA 

marketing authorization must be 

submitted to CMS by the HCPCS Level 

II code application deadline for 

biannual Coding Cycle 2 for DMEPOS 

items and services as specified in the 

HCPCS Level II coding guidance on the 

CMS website in order for the equipment 

or supply to be eligible for the TPNIES 

the following year. Third, we revised 

§ 413.236(b)(5) to remove a reference to 

related guidance on the substantial 

clinical improvement criteria, as the 

guidance had already been codified. 

Finally, in the CY 2021 ESRD PPS 

final rule, we expanded the TPNIES 

policy to include certain capital-related 

assets that are home dialysis machines 

when used in the home for a single 

patient. We explained that capitalrelated assets are defined in the 

Provider Reimbursement Manual 

(chapter 1, section 104.1) as assets that 

a provider has an economic interest in 

through ownership (regardless of the 

manner in which they were acquired). 

We noted that examples of capitalrelated assets for ESRD facilities are 

dialysis machines and water 

purification systems. We explained that, 

although we stated in the CY 2020 ESRD 

PPS proposed rule (84 FR 38354) that 

we did not believe capital-related assets 

should be eligible for additional 

payment through the TPNIES because 

the cost of these items is captured in 

cost reports, they depreciate over time, 

and are generally used for multiple 

patients, there were a number of other 

factors we considered that led us to 

consider expanding eligibility for these 

technologies in the CY 2021 ESRD PPS 

rulemaking. We explained that, 

following publication of the CY 2020 

ESRD PPS final rule, we continued to 

study the issue of payment for capitalrelated assets under the ESRD PPS, 

taking into account information from a 

wide variety of stakeholders and recent 

developments and initiatives regarding 

kidney care. For example, we 

considered various HHS home dialysis 

initiatives, Executive Orders to 

transform kidney care, and how the risk 

of COVID–19 for particularly vulnerable 

ESRD beneficiaries could be mitigated 

by encouraging home dialysis. 

After closely considering these issues, 

we proposed a revision to 

§ 413.236(b)(6) in the CY 2021 ESRD 

PPS proposed rule to provide an 

exception to the general exclusion for 

capital-related assets from eligibility for 

the TPNIES for capital-related assets 

that are home dialysis machines when 

used in the home for a single patient 

and that meet the other eligibility 

criteria in § 413.235(b), and finalized the 

exception as proposed in the CY 2021 

ESRD PPS final rule. We finalized the 

same determination process for TPNIES 

applications for capital-related assets 

that are home dialysis machines as for 

all other TPNIES applications; that we 

will consider whether the new home 

dialysis machine meets the eligibility 

criteria specified in § 413.236(b) and 

announce the results in the Federal 

Register as part of our annual updates 

and changes to the ESRD PPS. In 

accordance with § 413.236(c), we will 

only consider, for additional payment 

using the TPNIES for a particular CY, an 

application for a capital-related asset 

that is a home dialysis machine received 

by February 1 prior to the particular CY. 

If the application is not received by 

February 1, the application will be 

denied and the applicant is able to 

reapply within 3 years beginning on the 

date of FDA marketing authorization in 

order to be considered for the TPNIES, 

in accordance with § 413.236(b)(2). 

In the CY 2021 ESRD PPS final rule, 

at § 413.236(f), we finalized a pricing 

methodology for capital-related assets 

that are home dialysis machines when 

used in the home for a single patient, 

which requires the MACs to calculate 

the annual allowance and the 

preadjusted per treatment amount. The 

pre-adjusted per treatment amount is 

reduced by an estimated average per 

treatment offset amount to account for 

the costs already paid through the ESRD 

PPS base rate.25 We finalized that this 

amount will be updated on an annual 

basis so that it is consistent with how 

the ESRD PPS base rate is updated. 

We revised § 413.236(d) to reflect that 

we would pay 65 percent of the preadjusted per treatment amount minus 

the offset for capital-related assets that 

are home dialysis machines when used 

in the home for a single patient. 

We revised § 413.236(d)(2) to reflect 

that following payment of the TPNIES, 

the ESRD PPS base rate will not be 

modified and the new and innovative 

renal dialysis equipment or supply will 

be an eligible outlier service as provided 

in § 413.237, except a capital-related 

asset that is a home dialysis machine 

will not be an eligible outlier service as 

provided in § 413.237. 

In summary, under the current 

eligibility requirements in § 413.236(b), 

CMS provides for a TPNIES to an ESRD 

facility for furnishing a covered 

equipment or supply only if the item: 

(1) has been designated by CMS as a 

renal dialysis service under § 413.171; 

(2) is new, meaning within 3 years 

beginning on the date of the FDA 

marketing authorization; (3) is 

commercially available by January 1 of 

the particular CY, meaning the year in 

which the payment adjustment would 

take effect; (4) has a complete HCPCS 

Level II code application submitted in 

accordance with the HCPCS Level II 

coding procedures on the CMS website, 

by the HCPCS Level II code application 

deadline for biannual Coding Cycle 2 for 

DMEPOS items and services as specified 

in the HCPCS Level II coding guidance 

on the CMS website prior to the CY; (5) 

is innovative, meaning it meets the 

criteria specified in § 412.87(b)(1); and 

(6) is not a capital-related asset, except 

for capital-related assets that are home 

dialysis machines. 

We received three applications for the 

TPNIES for CY 2023. A discussion of 

these applications is presented below. 

a. CloudCath Peritoneal Dialysis Drain 

Set Monitoring System (CloudCath 

System) 

CloudCath submitted an application 

for the TPNIES for the CloudCath 

Peritoneal Dialysis Drain Set Monitoring 

System (CloudCath System) for CY 

2023. According to the applicant, the 

CloudCath System is a tabletop passive 

drainage system that detects and 

monitors solid particles in dialysate 

effluent during peritoneal dialysis 

(PD) 26 treatments. Solid particles in 

dialysate effluent, manifesting itself as 

cloudy dialysate, may indicate that the 

patient has peritonitis, an inflammation 

of the peritoneum in the abdominal 

wall, usually due to a bacterial or fungal 

infection.27 PD therapy is a common 

cause of peritonitis.28 If left untreated, 

the condition can be life threatening.29

We note that CloudCath previously 

submitted an application for the TPNIES 

for the CloudCath System for CY 2022, 

as summarized in the CY 2022 ESRD 

PPS proposed rule (86 FR 36343 

through 36347), but withdrew that 

application prior to the issuance of the 

CY 2022 ESRD PPS final rule (86 FR 

61889). As indicated in the CY 2022 

ESRD PPS final rule (86 FR 61889), the 

applicant withdrew its application from 

consideration after the issuance of the 

CY 2022 ESRD PPS proposed rule 


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30 Kam-Tao Li, Philip, et al., ‘‘ISPD Peritonitis 

recommendations: 2016 Update on Prevention and 

Treatment,’’ Peritoneal Dialysis International 2016; 

36(5):481–508, June 9, 2016, available at: http://

dx.doi.org/10.3747/pdi.2016.00078. 

31Briggs, et al., ‘‘Early Detection of Peritonitis in 

Patients Undergoing Peritoneal Dialysis: A Device 

and Cloud-Based Algorithmic Solution,’’ 

unpublished report. 

32 Kam-Tao Li, Philip, et al., ‘‘ISPD Peritonitis 

recommendations: 2016 Update on Prevention and 

Treatment,’’ Peritoneal Dialysis International 2016; 

36(5):481–508, June 9, 2016, available at: http://

dx.doi.org/10.3747/pdi.2016.00078. 

33 Ibid. 

because it did not receive FDA 

marketing authorization by July 6, 2021, 

which was the HCPCS Level II code 

application deadline for biannual 

Coding Cycle 2 for DMEPOS items and 

services. Under § 413.236(c), an 

applicant for the TPNIES must receive 

FDA marketing authorization for its new 

equipment or supply by that deadline 

prior to the particular calendar year. 

Therefore, as we stated in the CY 2022 

ESRD PPS final rule, the CloudCath 

System was not eligible for 

consideration for the TPNIES for CY 

2022. 

PD-related peritonitis is a major 

complication and challenge to the longterm success and adherence of patients 

on PD therapy.30 The applicant stated 

that only about 12 percent of eligible 

patients are on PD therapy.31 The 

applicant claimed that the risk of PDrelated peritonitis, and the challenges to 

detect it, are the main reasons for these 

figures. The guidelines for diagnosis of 

PD-related peritonitis, as outlined by the 

International Society for Peritoneal 

Dialysis (ISPD), recommend that 

peritonitis be diagnosed when at least 

two of the following criteria are present: 

(1) the patient experiences clinical 

features consistent with peritonitis 

(abdominal pain and/or cloudy 

dialysate effluent); (2) the patient’s 

dialysate effluent has a whole blood 

count (WBC) >100 cells/mL or >0.1 × 10/ 

L with polymorphonuclear (PMN) cells 

>50 percent; and (3) positive dialysis 

effluent culture is identified.32

Additionally, the guidelines recommend 

that PD patients presenting with cloudy 

effluent be presumed to have peritonitis 

and treated as such until the diagnosis 

can be confirmed or excluded.33 Per the 

guidelines, this means that for patients 

undergoing PD treatments at home, it is 

recommended that they self-monitor for 

symptoms of peritonitis, cloudy 

dialysate and/or abdominal pain, and 

seek medical attention for additional 

testing and treatment upon experiencing 

any or both of these symptoms. 

According to the applicant, despite 

the fact that peritonitis is highly 

prevalent, symptom monitoring is 

insensitive and non-specific, which can 

contribute to late presentation for 

medical attention and treatment. The 

applicant asserted that under the 

current standard of care, PD patients 

face the following challenges in 

detecting peritonitis. First, the applicant 

stated that patients’ fluid observation 

has low compliance rates as it relies on 

patients’ close examination of their own 

dialysate effluent during PD treatments, 

which often occur while patients are 

asleep. Second, the applicant noted that 

it can be difficult for patients to visually 

detect peritonitis in dialysate effluent 

using a ‘‘newspaper test’’ for cloudiness, 

and can be even more difficult to see 

when the fluid is drained into a toilet, 

where it is diluted by water. The 

applicant stated that, as a result of these 

challenges, patients with ESRD suffer 

unsatisfactorily high mortality and 

morbidity from peritonitis, as well as 

high rates of PD modality loss, meaning 

they must discontinue PD and begin a 

different type of dialysis treatment. Per 

the applicant, the CloudCath System 

addresses these challenges by detecting 

changes in dialysate effluent at much 

lower levels of particle concentrations 

than the amount needed to accumulate 

for visual detection by patients. 

Per the applicant, the CloudCath 

System consists of three components: 

(1) drain set, (2) sensor, and (3) patient 

monitoring software. As explained in 

the application, the CloudCath System’s 

drain set connects to a compatible PD 

cycler’s drain line to enable draining 

and monitoring of dialysate effluent 

before routing the fluid to the drainage 

receptacle. Per the CloudCath System 

User Guide, included in the application, 

the CloudCath System is compatible 

with the following PD cyclers: Baxter 

Healthcare Home Choice PROTM, Baxter 

Healthcare AMIATM Automated PD 

System, and Fresenius Liberty® Select 

Cycler. Per the applicant, once the 

CloudCath System is attached to a 

compatible cycler, the dialysate effluent 

runs through the drain set, through the 

CloudCath System’s optical sensor. The 

applicant explained that the CloudCath 

System’s optical sensor detects and 

monitors changing concentrations of 

solid particles in the dialysate effluent 

during each dialysis cycle and reports 

the concentrations in a turbidity score. 

Per the applicant, the CloudCath System 

will indicate whether dialysate effluent 

has normal turbidity and will notify the 

patient and/or health care professional 

if the dialysate effluent turbidity has 

exceeded the notification threshold set 

by the patient’s dialysis provider. The 

applicant stated that the optical sensor’s 

hardware and software components 

allow for data trending over time and 

remote monitoring by a health care 

professional. 

(1) Renal Dialysis Service Criterion 

(§ 413.236(b)(1)) 

Regarding the first TPNIES eligibility 

criterion in § 413.236(b)(1), that the item 

has been designated by CMS as a renal 

dialysis service under § 413.171, 

monitoring for peritonitis is a service 

furnished to individuals for the 

treatment of ESRD that is essential for 

the delivery of maintenance dialysis, 

and therefore the CloudCath System 

would be considered a renal dialysis 

service under § 413.171. 

(2) Newness Criterion (§ 413.236(b)(2)) 

With respect to the second TPNIES 

eligibility criterion in § 413.236(b)(2), 

that the item is new, meaning within 3 

years beginning on the date of the FDA 

marketing authorization, the applicant 

stated that the CloudCath System 

received FDA marketing authorization 

on February 9, 2022. Therefore, the 

CloudCath System is considered new. 

(3) Commercial Availability Criterion 

(§ 413.236(b)(3)) 

Regarding the third TPNIES eligibility 

criterion in § 413.236(b)(3), that the item 

is commercially available by January 1 

of the particular calendar year, meaning 

the year in which the payment 

adjustment would take effect, the 

applicant stated that the CloudCath 

System is not currently commercially 

available but noted that it expects the 

CloudCath System will be commercially 

available immediately after receiving 

FDA marketing authorization. We do 

not have information as to whether the 

product became currently commercially 

available following the FDA marketing 

authorization on February 9, 2022. We 

seek comment on the CloudCath 

System’s commercial availability. 

(4) HCPCS Level II Application 

Criterion (§ 413.236(b)(4)) 

Regarding the fourth TPNIES 

eligibility criterion in § 413.236(b)(4) 

requiring that the applicant submit a 

complete HCPCS Level II code 

application by the HCPCS Level II 

application deadline of July 5, 2022, the 

applicant stated that it has not 

submitted an application yet, but 

intends to apply by the deadline. 

(5) Innovation Criteria (§§ 413.236(b)(5) 

and 412.87(b)(1)) 

(a) Substantial Clinical Improvement 

Claims and Sources 

With regard to the fifth TPNIES 

eligibility criterion under 

§ 413.236(b)(5), that the item is 


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34Briggs, et al., ‘‘Early Detection of Peritonitis in 

Patients Undergoing Peritoneal Dialysis: A Device 

and Cloud-Based Algorithmic Solution,’’ 

unpublished report. 

35 Intermittent Peritoneal Dialysis (IPD)—Waste 

products pass from the patient’s body through the 

peritoneal membrane into the peritoneal cavity 

where the dialysate is introduced and removed 

periodically by machine. Peritoneal dialysis 

generally is required for approximately 30 hours a 

week, either as three 10-hour sessions or less 

frequent, but longer, sessions. Medicare Benefit 

Policy Manual Chapter 11—End Stage Renal 

Disease (ESRD) (Rev. 257, 03–01–19). 

36Continuous Ambulatory Peritoneal Dialysis 

(CAPD)—In CAPD, the patient’s peritoneal 

membrane is used as a dialyzer. The patient 

connects a 2-liter plastic bag of dialysate to a 

surgically implanted indwelling catheter that 

allows the dialysate to pour into the beneficiary’s 

peritoneal cavity. Every 4 to 6 hours the patient 

drains the fluid out into the same bag and replaces 

the empty bag with a new bag of fresh dialysate. 

This is done several times a day. Medicare Benefit 

Policy Manual Chapter 11—End Stage Renal 

Disease (ESRD) (Rev. 257, 03–01–19). 

37Continuous Cycling Peritoneal Dialysis 

(CCPD)—CCPD is a treatment modality that 

combines the advantages of the long dwell, 

continuous steady-state dialysis of CAPD, with the 

advantages of automation inherent in intermittent 

peritoneal dialysis. The solution exchanges, are 

performed at nighttime and are performed 

automatically with a peritoneal dialysis cycler. 

Generally, there are three nocturnal exchanges 

occurring at intervals of 21⁄2 to 3 hours. Upon 

awakening, the patient disconnects from the cycler 

and leaves the last 2-liter fill inside the peritoneum 

to continue the daytime long dwell dialysis. 

Medicare Benefit Policy Manual Chapter 11—End 

Stage Renal Disease (ESRD) (Rev. 257, 03–01–19). 

38 Kam-Tao Li, Philip, et al., ‘‘ISPD Peritonitis 

recommendations: 2016 Update on Prevention and 

Treatment,’’ Peritoneal Dialysis International 2016; 

36(5):481–508, June 9, 2016, available at: http://

dx.doi.org/10.3747/pdi.2016.00078. 

39CloudCath, ‘‘A Prospective Clinical Study to 

Evaluate the Ability of the CloudCath System to 

Detect Peritonitis Compared to Standard of Care 

during In-Home Peritoneal Dialysis (CATCH),’’ 

Preliminary Clinical Study Report (NCT04515498), 

Jan 27, 2020. 

40CloudCath, ‘‘A Prospective Clinical Study to 

Evaluate the Ability of the CloudCath System to 

Detect Peritonitis Compared to Standard of Care 

during In-Home Peritoneal Dialysis (CATCH),’’ 

Study Protocol (CC–P–001), June 24, 2020. 

41 Ibid. 

42 Ibid. 

43CloudCath, ‘‘A Prospective Clinical Study to 

Evaluate the Ability of the CloudCath System to 

Detect Peritonitis Compared to Standard of Care 

during In-Home Peritoneal Dialysis (CATCH),’’ 

Preliminary Clinical Study Report (NCT04515498), 

Jan 27, 2020. 

44 Ibid. 

45 Ibid. 

46 Ibid. 

innovative, meaning it meets the 

substantial clinical improvement 

criteria specified in § 412.87(b)(1), the 

applicant made two claims. First, the 

applicant asserted that the CloudCath 

System offers substantial clinical 

improvement over technologies 

currently available for the Medicare 

patient population by offering the 

ability to monitor changes in turbidity 

of peritoneal dialysate effluent through 

continuous remote monitoring in 

patients with ESRD receiving PD 

therapy earlier than the current standard 

of care. Per the applicant, by allowing 

the clinical standard of care to be 

initiated earlier, the use of the 

CloudCath System changes the 

management of peritonitis patients by 

enabling clinicians to both diagnose 

peritonitis and initiate antibiotic 

treatment earlier. Second, the applicant 

asserted that the CloudCath System 

offers substantial clinical improvement 

over existing technologies because the 

device’s remote monitoring capabilities 

provides patients with oversight and 

increased confidence that should 

peritonitis occur, it will be detected 

more reliably than visual detection and 

earlier than the current standard of care, 

allowing for earlier diagnosis and 

treatment management. The applicant 

claimed that by alleviating the fear 

associated with peritonitis and 

providing this additional support and 

confidence to patients, the CloudCath 

System can enable patients to either 

switch to or remain on home–PD, 

ultimately improving quality of life. 

The applicant submitted two studies 

on the technology in support of its 

substantial clinical improvement 

claims. First, the applicant included a 

preliminary, unpublished report by 

Briggs, et al. of a proof of principle 

observational study that tested the 

ability of the CloudCath System and its 

dialysate effluent monitoring algorithm 

to detect indicators of peritonitis.34 The 

study consisted of 70 PD patients 

outside of the U.S. who had been on PD 

for a long interval of time (>10 days), 

and thus were at an increased risk of 

developing peritonitis. Out of the 64 PD 

patients whose data were included in 

the study, over 40 PD patients were 

receiving intermittent PD,35 which is 

not commonly used in the U.S. The 

remainder of the study participants 

were receiving Continuous Ambulatory 

Peritoneal Dialysis (CAPD).36 The report 

states that in the U.S., PD is generally 

performed in a modality called 

Continuous Cycling Peritoneal Dialysis 

(CCPD),37 in which a cycler 

automatically administers multiple 

dialysis exchange cycles, typically 

while patients sleep. Samples were 

collected from patients’ PD effluent 

drainage bags and measured in the 

CloudCath System against a proprietary 

Turbidity Score threshold value and 

also tested for reference laboratory 

measurements according to ISPD 

guidelines for WBC count and 

differential (>100 cells/mL, >50 percent 

PMN).38 Regarding the Turbidity Score 

threshold value, the study set a score to 

determine if the effluent sample in the 

CloudCath System was infected or not; 

samples greater than or equal to the 

Turbidity Score threshold value would 

be classified as infected, and samples 

less than the Turbidity Score threshold 

value would be classified as noninfected. The crude sensitivity and 

specificity of the CloudCath System was 

96.2 percent and 91.2 percent, 

respectively. A majority of false 

positives (44 of 77 samples) occurred 

among patients already receiving 

antibiotic treatment for peritonitis, and 

another 20 false positive reports 

occurred because the patient had 

elevated turbidity due to a cause other 

than peritonitis. The investigators 

subsequently removed samples from 

patients already receiving treatment for 

peritonitis, setting the sensitivity for 

detecting peritonitis using the 

CloudCath System at 99 percent and the 

specificity at 97.6 percent. 

The second study the applicant 

submitted is the Prospective Clinical 

Study to Evaluate the Ability of the 

CloudCath System to Detect Peritonitis 

Compared to Standard of Care during 

In-Home Peritoneal Dialysis (CATCH).39

The applicant stated that it initiated this 

ongoing single-arm, open-label, multicenter study to demonstrate that the 

CloudCath System is able to detect 

changes in turbidity associated with 

peritonitis in PD patients prior to 

laboratory diagnosis of peritonitis with 

a high degree of specificity and 

sensitivity. The target enrollment is 186 

participants over 18 years of age using 

CCPD as their PD modality, with at least 

2 exchanges per night.40 Patients with 

active infection and/or cancer are 

excluded from the trial.41 The primary 

endpoint is time of peritonitis detection 

by the CloudCath System (defined as 

two consecutive Turbidity Scores >7.0) 

as compared to laboratory evidence of 

peritonitis (defined as WBC count >100 

cells/mL or >0.1 × 109/L with percentage 

of PMN >50 percent).42 While the study 

is ongoing, the applicant included the 

study protocol and the first preliminary 

results with its application.43 According 

to the applicant, the first preliminary 

results demonstrate that as of December 

29, 2020, 132 participants were enrolled 

in the CATCH Study at 13 sites.44

Enrolled participants underwent an 

average of 4.5 dialysate exchanges per 

night.45 The preliminary results 

indicated that, as of December 29, 2020, 

there have been 7 peritonitis events that 

met the ISPD peritoneal fluid cell 

counts and differentials standard.46

According to the applicant, 5 of the 7 

peritonitis events described in the 

CATCH study occurred after initial use 


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47 Ibid. 48 Ibid. 49 Ibid. 50Muthucumarana, et al., ‘‘The Relationship 

Between Presentation and the Time of Initial 

Administration of Antibiotics With Outcomes of 

Peritonitis in Peritoneal Dialysis Patients: The 

PROMPT Study.,’’ Kidney Int Rep. 2016 Jun 

11;1(2):65–72. doi: 10.1016/j.ekir.2016.05.003. 

PMID: 29142915; PMCID: PMC5678844. 51 Ibid. 

52 Ibid. 

53 Ibid. 

54 Ibid. 

55 Gacouin, A. et al., ‘‘Severe pneumonia due to 

Legionella pneumophila: prognostic factors, impact 

of delayed appropriate antimicrobial therapy,’’ 

Intensive Care Medicine 28, 686–691 (2002), 

https://doi.org/10.1007/s00134-002-1304-8. 56Houck, PM. et al., ‘‘Timing of antibiotic 

administration and outcomes for Medicare patients 

hospitalized with community-acquired 

pneumonia,’’ Arch Intern Med. 2004 Mar 

22;164(6):637–44. doi: 10.1001/archinte.164.6.637. 

PMID: 15037492. 57Lodise TP, et al., ‘‘Outcomes analysis of 

delayed antibiotic treatment for hospital-acquired 

Staphylococcus aureus bacteremia,’’ Clin Infect Dis. 

2003 Jun 1;36(11):1418–23. doi: 10.1086/375057. 

Epub 2003 May 20. PMID: 12766837. 

58Mehrotra, Rajnish et al., ‘‘The Current State of 

Peritoneal Dialysis,’’ Journal of the American 

Society of Nephrology 27: 3238–3252, 2016. doi: 

10.1681/ASN.2016010112, available at: https://

jasn.asnjournals.org/content/jnephrol/27/11/ 

3238.full.pdf?with-ds=yes. 

of the CloudCath System, and all 5 of 

the peritonitis events were also detected 

by the CloudCath System.47 In the 5 

events, the CloudCath System detected 

peritonitis 44 to 368 hours prior to the 

time of detection from a clinical 

laboratory.48 The CloudCath System 

also detected peritonitis 27 to 344 hours 

prior to participants presenting to the 

hospital or clinic with signs or 

symptoms of peritonitis.49 The 

applicant stated that these results 

support the claim that the CloudCath 

System would enable diagnosis of 

peritonitis earlier than the current 

standard of care through turbidity 

monitoring. According to the applicant, 

in the remaining 2 peritonitis events, 

participants experienced peritonitis 

prior to initial use of the CloudCath 

System, however, the CloudCath System 

detected peritonitis upon initial use. 

In addition to the studies on the 

technology, the applicant submitted an 

article by Muthucumarana, et. al. on the 

impact of time-to-treatment on clinical 

outcomes of PD-related peritonitis.50

The article included data from the 

Presentation and the Time of Initial 

Administration of Antibiotics With 

Outcomes of Peritonitis (PROMPT) 

Study, a prospective multicenter study 

from 2012 to 2014 that observed 

symptom-to-contact time, contact-totreatment time, defined as the time from 

health care presentation to initial 

antibiotic, and symptom-to-treatment 

time in Australian PD patients. One 

hundred sixteen patients participated in 

the survey.51 Out of the sample size of 

116 survey participants, there were 159 

episodes of PD-related peritonitis. Of 

these, 38 patient episodes met the 

primary outcome of PD failure (defined 

as catheter removal or death) at 30 

days.52 The median symptom-totreatment time was 9.0 hours in all 

patients, 13.6 hours in the PD-fail group, 

and 8.0 hours in the PD-cure group.53

The study found that the risk of PDfailure increased by 5.5 percent for each 

hour of delay of administration of 

antibiotics once patients presented to a 

health care provider.54 However, neither 

symptom-to-contact nor symptom-totreatment was associated with PDfailure in non-adjusted analyses, and the 

time from presentation to a health care 

provider to treatment was only 

associated with PD-failure outcomes in 

multivariable-adjusted analyses in a 

subset of patients who presented to 

hospital-based facilities. In addition to 

the Muthucumarana et. al. article, the 

applicant cited to other studies that 

have found that antibiotic treatment 

should begin as soon as possible in 

order to effectively treat infections other 

than peritonitis. 55 56 57 Per the 

applicant, these articles on time-totreatment demonstrate that the 

CloudCath System’s ability to detect 

effluent changes substantially earlier 

improves the standard of care, enabling 

PD-related peritonitis diagnosis and 

antibiotic treatment earlier while 

decreasing the likelihood of PD-failure 

due to PD-related peritonitis. 

The applicant also submitted letters of 

support from a nephrologist at an 

academic institution and the following 

ESRD patient advocacy groups: the 

American Kidney Fund, the American 

Association of Kidney Patients, and the 

International Society of Nephrology. 

The nephrologist’s letter of support 

endorsed the CloudCath System’s ability 

to detect peritonitis and enable 

clinicians to begin to treat the infection 

earlier, preventing hospitalizations and 

complications such as the abandonment 

of home dialysis. The nephrologist’s 

letter also asserted that the CloudCath 

System helps address the challenge of 

peritonitis as the main reason for 

abandonment of PD for HD, and will 

encourage a greater number of patients 

to select PD as their dialysis modality of 

choice. The letters from the American 

Association of Kidney Patients and the 

International Society of Nephrology 

encouraged CMS to consider the 

CloudCath System’s TPNIES 

application, explaining that the 

technology would have several benefits 

to patients, for example, by reducing 

peritonitis-related hospitalizations, 

increasing adherence to PD, and 

encouraging higher utilization of PD as 

a viable alternative to in-center HD. The 

American Kidney Fund’s letter 

emphasized that peritonitis is a 

significant concern for PD patients 58

and requested CMS support of all efforts 

that ensure patients with ESRD 

undergoing PD treatments can quickly 

detect and treat infections. 

As noted previously in this section of 

the proposed rule, the applicant 

previously submitted a TPNIES 

application for CY 2022, but withdrew 

its application. Compared to the CY 

2022 application, the applicant updated 

the number of patients and sites that 

were enrolled in the CATCH study. In 

its CY 2022 application, the applicant 

reported that as of December 29, 2020, 

132 patients were enrolled in the 

CATCH study at 15 sites. In its CY 2023 

application, the applicant provided 

updated enrollment figures and stated 

that as of May 5, 2021, 185 patients 

were enrolled in the CATCH study at 15 

sites. 

In response to CMS’ preliminary 

assessment of CloudCath’s substantial 

clinical improvement claims in the CY 

2022 ESRD PPS proposed rule, the 

applicant provided additional 

information to clarify how the 

CloudCath System fits into the current 

standard of care and how use of the 

CloudCath System affects the 

management of the patient. The 

applicant stated that the monitoring of 

changes in turbidity enabled by the 

CloudCath System does not require 

clinicians to deviate from their current 

diagnosis or treatment sequence, since 

sign and symptom monitoring is an 

already accepted trigger for subsequent 

clinical steps and patient management. 

However, per the applicant, the 

detection of turbidity does allow 

clinicians to evaluate patients earlier in 

this clinical pathway for diagnosis of 

peritonitis and antibiotic/antimicrobial 

treatment in accordance with the ISPD 

guidelines. The applicant further stated 

that earlier detection of turbidity would 

not impact appropriate diagnosis and 

treatment with respect to false positives 

and that, while a small number of 

patients in the Briggs et al. study 

showed a change in turbidity that 

ultimately resulted in a false positive for 

infection, these patients would not have 

received inappropriate use of 

antimicrobial therapy compared to the 

standard of care per ISPD guidelines. 

The applicant further stated that even 

though the CloudCath System may in 

some instances detect change in 

turbidity in patients without infection, 


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59CloudCath, ‘‘A Prospective Clinical Study to 

Evaluate the Ability of the CloudCath System to 

Detect Peritonitis Compared to Standard of Care 

during In-Home Peritoneal Dialysis (CATCH),’’ 

Preliminary Clinical Study Report, NCT04515498, 

Jan 27, 2020. 

60Briggs, et al., ‘‘Early Detection of Peritonitis in 

Patients Undergoing Peritoneal Dialysis: A Device 

and Cloud-Based Algorithmic Solution,’’ 

unpublished report. 

61Muthucumarana, et. al., ‘‘The Relationship 

Between Presentation and the Time of Initial 

Administration of Antibiotics With Outcomes of 

Peritonitis in Peritoneal Dialysis Patients: The 

PROMPT Study.,’’ Kidney Int Rep. 2016 Jun 

11;1(2):65–72. doi: 10.1016/j.ekir.2016.05.003. 

PMID: 29142915; PMCID: PMC5678844. 62 Kam-Tao Li, Philip, et al., ‘‘ISPD Peritonitis 

recommendations: 2016 Update on Prevention and 

Treatment,’’ Peritoneal Dialysis International 2016; 

36(5):481–508, June 9, 2016, available at: http://

dx.doi.org/10.3747/pdi.2016.00078. 63CloudCath, ‘‘A Prospective Clinical Study to 

Evaluate the Ability of the CloudCath System to 

Detect Peritonitis Compared to Standard of Care 

during In-Home Peritoneal Dialysis (CATCH),’’ 

Preliminary Clinical Study Report (NCT04515498), 

Jan 27, 2020. 64 Ibid. 

65 Kam-Tao Li, Philip, et al., ‘‘ISPD Peritonitis 

recommendations: 2016 Update on Prevention and 

Continued 

these patients would still be clinically 

evaluated for peritonitis diagnosis and 

eligibility for antimicrobial treatment by 

a clinician as per the existing standard 

of care with the change in turbidity. 

Therefore, the applicant asserted, the 

CloudCath System does not result in 

increased provision of unnecessary 

antimicrobial therapy, nor deviate from 

the ISPD guidelines in terms of 

antimicrobial treatment pattern. 

(b) CMS Preliminary Assessment of 

Substantial Clinical Improvement 

Claims and Sources 

After a review of the information 

provided by the applicant regarding the 

CloudCath System, we note the 

following concerns with regard to the 

substantial clinical improvement 

criteria under § 413.236(b)(5) and 

§ 412.87(b)(1). We note that, consistent 

with § 413.236(c), CMS will announce 

its final determination regarding 

whether the CloudCath System meets 

the substantial clinical improvement 

criteria and other eligibility criteria for 

the TPNIES in the CY 2023 ESRD PPS 

final rule. 

Because the applicant claims to offer 

the ability to diagnose a medical 

condition, PD-related peritonitis, earlier 

in a patient population than allowed by 

currently available methods, the 

applicant must also include evidence 

that use of the new technology to make 

a diagnosis affects the management of 

the patient, as required under the 

substantial clinical improvement 

criteria at § 412.87(b)(1)(ii)(B). 

Specifically, § 412.87(b)(1)(ii)(B) states 

that a determination that a technology 

represents substantial clinical 

improvement over existing technology 

means: the new medical service or 

technology offers the ability to diagnose 

a medical condition in a patient 

population where that medical 

condition is currently undetectable, or 

offers the ability to diagnose a medical 

condition earlier in a patient population 

than allowed by currently available 

methods and there must also be 

evidence that use of the new medical 

service or technology to make a 

diagnosis affects the management of the 

patient. 

As we noted previously in the CY 

2022 ESRD PPS proposed rule (86 FR 

36346 through 36347), it is not clear to 

us whether the studies submitted 

demonstrate or examine the impacts of 

using the technology on patients with 

ESRD such that we can determine 

whether it represents an advance that 

substantially improves the treatment of 

Medicare beneficiaries compared to 

renal dialysis services previously 

available. We note that the studies 

submitted serve as ‘‘proof of concept,’’ 

as they are testing whether the 

CloudCath System detects turbidity in 

dialysate effluent that may indicate PDrelated peritonitis, and whether they do 

so earlier than patient observation and 

a cell count test. However, the studies 

are limited in that they do not observe 

how the CloudCath System, in 

measuring the turbidity in dialysate 

effluent and doing so earlier than 

traditional self-monitoring, affects the 

management of the patient as required 

under the substantial clinical 

improvement criteria at 

§ 412.87(b)(1)(ii)(B). For example, as 

part of the CATCH Study, investigators 

deactivated the notification capability of 

the CloudCath System for the duration 

of the study, so that neither the 

participants nor the investigators would 

be aware of the device measurements.59

Therefore, as currently designed, the 

CATCH study may not examine patient 

and clinician behavior, including the 

medical management of the patient, 

after the CloudCath System detected the 

solid particles in the dialysate effluent. 

The Briggs et al. study also did not 

examine how use of the CloudCath 

System impacted management of the 

patient. The investigators in that study 

stated that none of the data from the 

device was used for clinical decision 

making, which indicates to us that the 

study did not test how or if the 

CloudCath System offered the ability to 

diagnose a medical condition and how 

use of the CloudCath System to make a 

diagnosis affected the management of 

the patient.60 Because the studies 

submitted did not observe how patients 

and clinicians use the CloudCath 

System’s monitoring to make decisions 

regarding patient management, it is 

unclear how they support a finding that 

early detection of PD-related peritonitis 

by the CloudCath System meets the 

substantial clinical improvement 

criteria at § 412.87(b)(1)(ii)(B). 

Similarly, while the applicant 

submitted evidence to show that timeto-treatment plays a role in preventing 

PD failure in patients with ESRD with 

PD-related peritonitis,61 CMS has not 

received information regarding how the 

CloudCath System would affect 

management of the patient by reducing 

time-to-treatment for patients with 

ESRD receiving PD therapy. CMS also 

notes that the applicant referenced 

studies that support beginning 

antibacterial therapy for infections other 

than PD-related peritonitis, like 

pneumonia, and therefore, do not 

directly demonstrate the importance of 

time-to-treatment for PD-related 

peritonitis. 

As we noted in the CY 2022 ESRD 

PPS proposed rule, it is also not clear to 

us whether the CloudCath System 

would affect medical management of the 

patient because use of the technology 

may potentially detect turbidity changes 

in dialysate effluent so early, that, in 

some cases, health care providers may 

still decide to wait for confirmation via 

patient symptoms, cell count, or 

positive culture as stated in the ISPD 

guidelines on diagnosis.62 It is unclear 

whether clinicians would begin 

treatment for peritonitis without 

observing patient symptoms, cloudy 

dialysate, or confirming cell count via 

fluid test or how turbidity information 

would be incorporated into clinical 

practice among physicians who may 

empirically treat asymptomatic patients 

with antibiotics while awaiting cell 

count and culture results to confirm a 

peritonitis diagnosis. 

We note that the applicant stated that 

the first preliminary results of the 

CATCH study demonstrated that the 

CloudCath System detected PD-related 

peritonitis 33 to 367 hours prior to the 

time of detection from a clinical 

laboratory, and it also detected PDrelated peritonitis 27 to 344 hours prior 

to participants presenting to a 

healthcare facility with symptoms of 

PD-related peritonitis. 63 64 However, we 

note that no evidence was submitted to 

show that clinicians would begin to 

treat suspected peritonitis if the 

CloudCath System alerted the patient 

and clinician of possible PD-related 

peritonitis that was too early to detect 

via any of the ISPD guidelines.65 In 


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Treatment,’’ Peritoneal Dialysis International 2016; 

36(5):481–508, June 9, 2016, available at: http://

dx.doi.org/10.3747/pdi.2016.00078. 

66 Ibid. 

67Bonenkamp AA, van Eck van der Sluijs et al. 

Kidney Medicine, Health-Related Quality of Life in 

Home Dialysis Patients Compared to In-Center 

Hemodialysis Patients: A Systematic Review and 

Meta-analysis. Vol.2(2) P139–154. 

68 25 Ronco C, Crepaldi C, Rosner MH (eds): 

Remote Patient Management in Peritoneal Dialysis. 

Contrib Nephrol. Basel, Karger, 2019, vol 197, pp 

I–VI. 

69Hansson JH, Finkelstein FO. Kidney Med. 2020 

Sep 1;2(5):529–531. 

70See also CMS Provider Reimbursement 

Manual, Chapter 1, Section 104.1. Available at: 

https://www.cms.gov/Regulations-and-Guidance/ 

Guidance/Manuals/Paper-Based-Manuals-Items/ 

CMS021929. 

other words, we have not received 

evidence to demonstrate that the 

CloudCath System would affect medical 

management of the patient by replacing 

one of the ISPD guidelines for 

diagnosis.66 As two criteria are 

necessary for diagnosis of peritonitis 

(per ISPD guidelines noted by the 

applicant), it is unclear why the 

CloudCath System detection alone in 

the control arm (absent clinical 

manifestations such as symptomatic 

patients or cloudy effluent) is 

comparable as a diagnosis of peritonitis 

to patients with clinical manifestations 

plus laboratory evidence of peritonitis. 

In other words, we question whether a 

more appropriate comparison to 

demonstrate a time difference would be 

time to laboratory-confirmed peritonitis 

in both study arms, or time to antibiotic 

initiation following the CloudCath 

System notification versus antibiotic 

initiation following standard of care 

patient monitoring. 

Further, we are concerned by the 

applicant’s statements in response to the 

concerns we noted in the CY 2022 ESRD 

PPS proposed rule that the monitoring 

of changes in turbidity enabled by the 

CloudCath System does not require 

clinicians to deviate from their current 

diagnosis or treatment sequence. As 

stated previously, our regulations under 

§ 412.87(b)(1)(ii)(B) require evidence 

that use of the new medical service or 

technology to make a diagnosis affects 

the management of the patient. 

Therefore, we request information that 

demonstrates that the CloudCath System 

affects the management of the patient, 

including by impacting clinicians’ 

diagnosis or treatment sequence. 

While the applicant updated the CY 

2023 application to include more 

patient and site enrollment, CMS has 

concerns that the CATCH trial is not 

designed to indicate potential changes 

in clinical practice in a way that would 

be helpful for substantial clinical 

improvement assessment. We welcome 

additional information regarding 

whether use of CloudCath has 

demonstrated lower hospitalization 

rates, an increase in PD use, or decrease 

in peritoneal dialysis modality loss, or 

improved mortality for our analysis. We 

also believe that any data on clinician 

and patient behavior while using the 

CloudCath System, for example by 

enabling CloudCath notifications or 

alarms in the CATCH Study, would be 

informative in our assessment. 

Finally, regarding the applicant’s 

claim that the CloudCath System’s 

remote monitoring capabilities help to 

assure patients that peritonitis could be 

detected and treated earlier, and that by 

alleviating the fear of peritonitis, the 

CloudCath System enables patients to 

either switch to or remain on home-PD, 

ultimately improving quality of life, we 

are concerned there may be insufficient 

evidence to demonstrate that the 

CloudCath System improves patients’ 

quality of life. The applicant referenced 

literature regarding health-related 

quality of life in home dialysis patients 

as well as information regarding the 

challenges of managing PD patients 

remotely. 67 68 69 However, we did not 

receive any data demonstrating 

improved quality of life or PD retention 

with the use of the CloudCath System, 

and we would be interested in 

additional evidence to support this 

claim. 

We are inviting public comments on 

whether the CloudCath System meets 

the substantial clinical improvement 

criteria for the TPNIES. 

(6) Capital-Related Assets Criterion 

(§ 413.236(b)(6)) 

Regarding the sixth TPNIES eligibility 

criterion in § 413.236(b)(6), limiting 

capital-related assets from being eligible 

for the TPNIES, except those that are 

home dialysis machines, the applicant 

stated that the CloudCath System is not 

a capital-related asset. We note that the 

CloudCath System does not meet the 

definition of a capital-related asset 

under § 413.236(a)(2), because it is not 

an asset that the ESRD facility has an 

economic interest in through ownership 

and is subject to depreciation.70

b. SunWrapTM System 

Sun Scientific, Inc. submitted an 

application for the TPNIES for the 

SunWrapTM System for CY 2023. 

According to the applicant, the 

technology is comprised of a 

compression sleeve with a transparent 

air bladder and hand pump designed to 

provide static pneumatic compression 

to the forearm and/or upper arm 

following dialysis needle removal from 

the arteriovenous (AV) fistula access. 

The applicant explained that following 

hemodialysis (HD), gauze is placed over 

the puncture sites as the needles are 

removed, and then the SunWrapTM

System is placed around the arm with 

the transparent bladder positioned over 

the gauze-covered access site. Per the 

applicant, the SunWrapTM System is 

then inflated, compressing the site to 

stop bleeding. Per the applicant, the 

SunWrapTM System provides a 

sufficient source of pressure to 

compress the AV intervention puncture 

site and has adjustable compression at 

20–30mmHg and 30–40 mmHg. The 

applicant also stated that the inflation 

portion of the wrap is composed of 

completely transparent film, allowing 

for visualization of the puncture site(s) 

and ensuring that the hemostasis can be 

monitored. The applicant stated that the 

SunWrapTM System is easy to apply, 

safe, non-invasive, requires minimal 

training of only one tutorial, and has 

been proven to meet patient satisfaction 

and safety requirements after multiple 

trials. 

The applicant also submitted a 

SunWrapTM System brochure noting 

that the product is indicated for post-HD 

treatment needle puncture management 

for hemostasis of needle site and that it 

is contraindicated for use directly on an 

open wound. The applicant submitted 

the following listing of the SunWrapTM

System’s line of products: Upper Arm— 

Right Small, Upper Arm—Right Large, 

Forearm Right, Upper Arm—Left Small, 

Upper Arm- Left Large, Forearm Left, 

and MINI—Single Site. 

The applicant stated that the 

SunWrapTM System is meant to replace 

the current method of compression for 

bleeding control, which relies on the 

patient or skilled caregiver manually 

applying pressure to the puncture site 

for up to 15 minutes following HD. Per 

the applicant, inadequate or incorrect 

application of compression can result in 

discomfort, excessive bleeding, 

hematoma, fistula damage, and 

potentially even death. The applicant 

stated that use of the SunWrapTM

System allows for more consistent 

application of compression, frees up the 

hands of the patient or skilled caregiver, 

and allows for simultaneous visual 

management of the needle site. 

(1) Renal Dialysis Service Criterion 

(§ 413.236(b)(1)) 

Regarding the first TPNIES eligibility 

criterion in § 413.236(b)(1), that the item 

has been designated by CMS as a renal 

dialysis service under § 413.171, 

compression to the HD access site 

following dialysis needle removal is a 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38511 

71Food & Drug Administration. Learn if a Medical 

Device Has Been Cleared by FDA for Marketing. 

Available at: https://www.fda.gov/medical-devices/ 

consumers-medical-devices/learn-if-medicaldevice-has-been-cleared-fda-marketing. Accessed 

on March 23, 2022. 

72U.S. Food & Drug Administration. 

Establishment Registration & Device Listing. SunScientific Inc. Available at: https://www.accessdata.

fda.gov/scripts/cdrh/cfdocs/cfRL/rl.cfm?rid=

124922. Accessed on March 29, 2022. 

73U.S. Food & Drug Administration. 

Establishment Registration & Device Listing. SunScientific Inc. Available at: https://www.accessdata.

fda.gov/scripts/cdrh/cfdocs/cfRL/rl.cfm?start_

search=1&showList=1&establishmentName=&

regNum=&StateName=&CountryName=&

OwnerOperatorNumber=10034866&

OwnerOperatorName=&ProductCode=&

DeviceName=&ProprietaryName=&

establishmentType=&PAGENUM=10&SortColumn=

EstablishmentName20%25ASC&

RegistrationNumber=3008773774. Accessed on 

March 29, 2022. 

74Food & Drug Administration. Learn if a Medical 

Device Has Been Cleared by FDA for Marketing. 

Available at: https://www.fda.gov/medical-devices/ 

consumers-medical-devices/learn-if-medicaldevice-has-been-cleared-fda-marketing. Accessed 

on March 23, 2022. 

. 

service that is furnished to individuals 

for the treatment of ESRD and essential 

for the delivery of maintenance dialysis, 

and therefore would be considered a 

renal dialysis service under § 413.171. 

(2) Newness Criterion (§ 413.236(b)(2)) 

With respect to the second TPNIES 

eligibility criterion in § 413.236(b)(2), 

that the item is new, meaning within 3 

years beginning on the date of the FDA 

marketing authorization, the applicant 

did not submit an FDA marketing 

authorization date but instead, indicated 

that the SunWrapTM System is 

considered FDA Class I Exempt. We 

note that under FDA regulatory scheme, 

Class I exempt status is determined by 

FDA, which maintains on its website 

the listing of devices exempt from the 

premarket notification (510(k)) 

requirements. As described on the FDA 

website, Class I devices present minimal 

potential for harm to the user and are 

often simpler in design than Class II or 

Class III devices. Examples include 

enema kits and elastic bandages.71

The applicant submitted the following 

information pertaining to Sun Scientific, 

Inc.’s registration and product 

classification: (1) a document labeled 

Class I Exempt Documentation and (2) 

listing, registration, and Firm 

Establishment Identifier (FEI) numbers 

for SunWrap. While the Class I Exempt 

Documentation lacked identifying 

product information such as the 

SunWrapTM System’s product name(s) 

and date of the Class I Exempt status 

determination, we located supplemental 

information online. Sun-Scientific, Inc. 

is identified on the FDA website with 

Registration Number: 3008773774, FEI 

Number: 3008773774, and Owner/ 

Operator Number: 10034866.72 Twelve 

devices were identified with this 

Owner/Operator Number, but only the 

following two devices include the 

regulation number (880.5075) included 

in the application: Dressing, 

Compression—Aerowrap; SunWrap and 

Dressing, Compression—SunWrap.73

After a review of the information 

provided by the applicant, we note the 

following concerns with regard to the 

newness criterion under § 413.236(b)(2). 

Consistent with § 413.236(c), CMS will 

announce its final determination 

regarding whether the SunWrapTM

System meets the newness criterion and 

other eligibility criteria for the TPNIES 

in the CY 2023 ESRD PPS final rule. 

First, the applicant included a 

product brochure and product selection 

listing of 7 SunWrapTM System products 

and did not clearly indicate which of 

the 7 products are the subject of the CY 

2023 TPNIES application. In addition, it 

is not clear whether the listing and 

registration numbers provided apply to 

all 7 products. We request that the 

applicant clarify these points. 

Second, while the applicant stated 

that the Sun WrapTM System is 

considered FDA Class I Exempt, as 

indicated in § 413.236(b)(2), to be 

eligible for the TPNIES, the applicant 

must apply within three years of the 

FDA marketing authorization date. 

While our primary concern is the lack 

of FDA marketing authorization, we also 

note that the applicant did not clearly 

indicate the date of Class I Exempt 

status. Therefore, it is unclear whether 

the SunWrapTM System’s Class I Exempt 

status is within the three-year window. 

We note that manufacturers of devices 

that fall into a category of exempted 

Class I devices are not required to 

submit to FDA a premarket notification 

and obtain FDA clearance before 

marketing the device in the U.S. 

However, the manufacturer is required 

to register its establishment and list its 

device with FDA.74 Devices that receive 

FDA marketing authorization have met 

regulatory standards that provide a 

reasonable assurance of safety and 

efficacy for the devices. For exempt 

devices, FDA has determined that a 

premarket notification is not required to 

provide a reasonable assurance of safety 

and effectiveness for the devices. 

However, exempt devices still must 

comply with certain regulatory controls 

(known as ’’general controls’’) to 

provide a reasonable assurance of safety 

and effectiveness for such devices. Our 

intent in requiring applicants to receive 

FDA marketing authorization was to 

exclude devices that lack FDA 

marketing authorization. However, we 

welcome public comment on these 

issues. 

(3) Commercial Availability Criterion 

(§ 413.236(b)(3)) 

Regarding the third TPNIES eligibility 

criterion in § 413.236(b)(3), that the item 

is commercially available by January 1 

of the particular calendar year, meaning 

the year in which the payment 

adjustment would take effect, the 

applicant stated that the Sun WrapTM

System is currently commercially 

available. 

(4) HCPCS Level II Application 

Criterion (§ 413.236(b)(4)) 

Regarding the fourth TPNIES 

eligibility criterion in § 413.236(b)(4) 

requiring that the applicant submit a 

complete HCPCS Level II code 

application by the HCPCS Level II 

application deadline of July 5, 2022, the 

applicant stated that it submitted that 

application on January 31, 2022. 

(5) Innovation Criteria (§§ 413.236(b)(5) 

and 412.87(b)(1)) 

(a) Substantial Clinical Improvement 

Claims and Sources 

With regard to the fifth TPNIES 

eligibility criterion under 

§ 413.236(b)(5), that the item is 

innovative, meaning it meets the 

substantial clinical improvement 

criteria specified in § 412.87(b)(1), the 

applicant asserted that the use of the 

SunWrapTM System significantly 

improves clinical outcomes relative to 

the current standard of care, which it 

identified as reliance on the patient or 

a skilled caregiver manually applying 

pressure to the puncture site for up to 

15 minutes following HD. 

The applicant presented the following 

six substantial clinical improvement 

claims: (1) a reduction in at least one 

clinically significant adverse event; (2) a 

decreased rate of at least one subsequent 

diagnostic or therapeutic intervention; 

(3) a decreased number of future 

hospitalizations or physician visits; (4) 

a more rapid beneficial resolution of the 

disease process treatment; (5) an 

improvement in one or more activities 

of daily living; and (6) an improved 

quality of life. 

Regarding the first claim, a reduction 

in at least one clinically significant 

adverse event, the applicant stated that 

the SunWrapTM System potentially 

reduces the incidence of hematoma, 

fistula stenosis/thrombosis, and Fatal 

Vascular Access Hemorrhage (FVAH). 

Regarding the second claim, a 

decreased rate of at least one subsequent 

diagnostic or therapeutic intervention, 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
38512 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

75Simon, E. (2016). The dialysis patient: 

managing fistula complications in the emergency 

department. EMDocs. Available at: http://

www.emdocs.net/dialysis-patient-managing-fistulacomplications-emergency-department/. Accessed 

on March 17, 2022. 

76Simon, E. (2016). The dialysis patient: 

managing fistula complications in the emergency 

department. EMDocs. Available at: http://

www.emdocs.net/dialysis-patient-managing-fistulacomplications-emergency-department/. Accessed 

on March 17, 2022. 

77 Ibid. 

78Centers for Disease Control and Prevention. 

Chronic Kidney Disease in the United States, 2021. 

Atlanta, GA: US Department of Health and Human 

Services, Centers for Disease Control and 

Prevention; 2021. Available at: https://

www.cdc.gov/kidneydisease/pdf/Chronic-KidneyDisease-in-the-US-2021-h.pdf. Accessed on March 

17, 2022. 

79 Jose, M., Marshall, M., Read, G., Lioufas, N., 

Ling, J., Snelling, P., Polkinghorne, K. (2017). Fatal 

dialysis vascular access hemorrhage. Am J Kidney 

Dis., 70(4), 570–575. Available at: https://

www.sciencedirect.com/science/article/pii/ 

S0272638617307497. Accessed on March 17, 2022. 

80Simon, E. (2016). The dialysis patient: 

managing fistula complications in the emergency 

department. EMDocs. Available at: http://

www.emdocs.net/dialysis-patient-managing-fistulacomplications-emergency-department/. Accessed 

on March 17, 2022. 

81Centers for Disease Control and Prevention. 

Chronic Kidney Disease in the United States, 2021. 

Atlanta, GA: US Department of Health and Human 

Services, Centers for Disease Control and 

Prevention; 2021. Available at: https://

www.cdc.gov/kidneydisease/pdf/Chronic-KidneyDisease-in-the-US-2021-h.pdf. Accessed on March 

17, 2022. 

82 Gage SM, Reichert H. Determining the 

incidence of needle-related complications in 

hemodialysis access: We need a better system. J 

Vasc Access. 2021 Jul;22(4):521–532. doi: 10.1177/ 

1129729820946917. Epub 2020 Aug 18. PMID: 

32811335. Available at: https://

pubmed.ncbi.nlm.nih.gov/32811335/Accessed on 

March 17, 2022. 

83Summary points included in the application 

identified as: Sun-Wrap A Novel device for 

arteriovenous (AV) access hemostasis, Presented by 

Steven H.S. Tan, M.D. & Sundaram Ravikumar, 

M.D., FACS. 

the applicant stated that the SunWrapTM

System potentially reduces the 

incidence of ER visits, estimated at 

$10,000 per visit, ultrasound 

assessment, or interventions for stenosis 

or thrombosis. The applicant also stated 

that the SunWrapTM System potentially 

reduces the incidence of hospital 

admissions that are estimated at $15,000 

or more per admission. The applicant 

further stated that incident cases of 

ESRD are reaching nearly 21,000 

annually, and that vascular access 

complications account for 16 to 25 

percent of hospital admissions.75

Regarding the third claim, a decreased 

number of future hospitalizations or 

physician visits, the applicant stated 

that the SunWrapTM System reduces ER 

visits due to bleeding and the potential 

for subsequent admission, saving 

approximately $10,000 per visit.76 The 

applicant also stated that the 

SunWrapTM System reduces the need 

for revascularization due to stenosis/ 

thrombosis.77

Regarding the fourth claim, a more 

rapid beneficial resolution of the disease 

process treatment, the applicant stated 

that the SunWrapTM System reduces the 

need for nurses to be tied up with 

manual compression therapy, 

maximizing their efforts around dialysis 

treatment. The applicant also stated that 

the SunWrapTM System adds a layer of 

assurance as patients transfer to home 

therapy, as compression is not reliant on 

patient or caregiver ability to provide 

compression consistent with care that 

occurs in the clinics. Per the applicant, 

the SunWrapTM System provides 

consistent compression to needle sites 

post-dialysis with the ability to 

visualize sites through a transparent 

window potentially reducing the 

incidence of unrecognized bleeding. 

Regarding the fifth claim, an 

improvement in one or more activities 

of daily living, the applicant stated that 

the SunWrapTM System could increase 

comfort levels of patients in the home 

setting and could help reduce fatiguerelated compression interruption, and 

allow some normal activity while 

ensuring post-dialysis compression is 

provided, resulting in potential for 

improved patient satisfaction. 

Regarding the sixth claim, improved 

quality of life, the applicant stated that 

the SunWrapTM System allows the 

patient to become more autonomous 

and that the ability to have their hands 

free while stopping bleeding post-HD is 

beneficial. The applicant also stated that 

the potential reduction in fistula 

complications could improve quality of 

life on a broader scale. 

The applicant did not provide direct 

links to the supporting materials for 

each of the six claims, but rather 

referred more broadly to several sources 

of information as evidence of 

demonstrating substantial clinical 

improvement, including a U.S. Centers 

for Disease Control and Prevention fact 

sheet on Chronic Kidney Disease 

(CKD),78 case studies on fatal 

hemorrhage from HD vascular access 

sites,79 and a case study of managing 

fistula complications in the Emergency 

Department.80 The applicant stated that 

there are 786,000 annual ESRD patients, 

71 percent are on dialysis and 29 

percent have kidney transplants.81

Referring to Gage, et. al., the applicant 

stated that 75 percent of AV fistulae and 

AV grafts required one or more 

interventions; stenosis and thrombosis 

were the most common complications 

diagnosed and treated (41 percent and 

16 percent respectively); and that 

potential needle-related complications 

accounted for 6 percent of this data 

set.82 The applicant also asserted that a 

review of standard and early 

cannulation graft literature reveals that 

HD complications are similar across the 

graft types. The applicant further noted 

that in retrospective review articles, 

infection, hematoma, pseudoaneurysm, 

and bleeding occur at rates of up to 26 

percent, 24 percent, 15 percent, and 14 

percent, respectively. 

The applicant also included a 

summary of what it described as 

evidence from an unpublished pilot 

study involving 54 patients in two 

vascular access laboratory sites, 23 and 

31 patients from each site, respectively 

who required intervention on their AV 

fistula or graft access site.83 The 

applicant provided background 

information stating that patients require 

AV fistula or graft interventions for 

various reasons such as maintenance 

angioplasty, fistulogram, or 

thrombectomy. Per the applicant, the 

physician normally uses sutures to close 

the puncture site and after the 

procedure, the patients are monitored in 

the recovery room for a few hours before 

the sutures are removed or patients 

revisit the clinic for suture removal. The 

applicant stated that this suturing 

technique is frequently used because it 

is quick, straightforward, and has been 

the common practice. The applicant 

further indicated that suture removal 

poses a risk of infection. The applicant 

stated that during the study, the 

SunWrapTM System was applied for 

wound closure in place of suturing with 

an inflation pressure at 20—40 mmHg 

and hold-time at 20 to 30 minutes for 

most of the patients because most 

patients were punctured with a large 

note sheath size of 6—8 F. The 

applicant also stated that in ESRD 

facilities, the needle size is relatively 

smaller and less inflation pressure and 

shorter hold-times are needed to achieve 

hemostasis. As such, the applicant 

asserted that the SunWrapTM System 

could be safely applied in the ESRD 

facility setting without extensive 

training. 

The applicant noted two reported 

cases of immediate post-operative 

bleeding; one reported case (fistula) of 

thrombosis at 48 to 72 hours postoperatively; and three reported cases 

(two fistula and one graft) of thrombosis 

30 days post-operatively. The applicant 

stated that there were no reported cases 

of post-operative bleeding, infection, 

and pseudoaneurysm at 48 to 72 hours. 

Per the applicant, the two cases of 

immediate post-operative bleeding were 

directly due to the SunWrapTM System. 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38513 

84 42 CFR 413.236(a)(2); CMS Provider 

Reimbursement Manual, Chapter 1, Section 104.1. 

Available at: https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Paper-BasedManuals-Items/CMS021929. 

Per the applicant, the first case occurred 

during training in the initial phase of 

the study and there was no repetitive 

event after modification of the 

technique and timing of the application 

of the SunWrapTM System. We note that 

the applicant did not specify the way in 

which the technique or timing of 

applying the SunWrapTM System were 

modified. The applicant stated that the 

second case was due to two distant 

puncture sites that exceeded the 

coverage for the SunWrapTM System. 

Per the applicant, in patients with two 

puncture sites that measure more than 

7.5 cm apart or if there is immediate 

bleeding, suturing is the treatment of 

choice. 

The applicant stated that the 

thrombosis cases identified (one case at 

48 to 72 hours post-operatively and 

three cases 30-days post-operatively) 

were not directly due to the SunWrapTM

System. Per the applicant, the patients 

did not have any complications while 

on the SunWrapTM System and left the 

clinic safely after thorough monitoring 

in the recovery room. The applicant 

further stated that the patients 

underwent dialysis after the removal of 

the SunWrapTM System and asserted 

that the dialysis may have been the 

major contributing factor for the 

thrombosis. 

(b) CMS Preliminary Assessment of 

Substantial Clinical Improvement 

Claims and Sources 

After a review of the information 

provided by the applicant, we note the 

following concerns with regard to the 

substantial clinical improvement 

criteria under § 413.236(b)(5) and 

§ 412.87(b)(1). Consistent with 

§ 413.236(c), CMS will announce its 

final determination regarding whether 

the SunWrapTM System meets the 

substantial clinical improvement 

criteria and other eligibility criteria for 

the TPNIES in the CY 2023 ESRD PPS 

final rule. 

The applicant stated that the 

SunWrapTM System has the potential to 

represent substantial clinical 

improvement. However, it is not clear 

whether or how the evidence submitted 

by the applicant supports the 

applicant’s 6 substantial clinical 

improvement claims. It would be 

helpful for our evaluation if the 

applicant would directly link each 

claim to the relevant supporting 

information. The applicant provided 

summary points of a non-published, 

single pilot study of 54 patients treated 

with the SunWrapTM System at two 

vascular access laboratory sites. While 

the applicant provided a bullet-point 

summary of the study setting, 

complications, and a brief discussion of 

study data, the applicant did not 

provide details pertaining to study type, 

timeframe, patient demographics and 

endpoints. We note that this study 

appears to involve patients treated with 

the SunWrapTM System for the purpose 

of controlling bleeding following 

interventional procedures involving an 

AV fistula or graft and does not involve 

use of the SunWrapTM System following 

HD treatment in the ESRD facility 

setting. We question the extent to which 

this data would be generalizable to the 

ESRD facility setting and would be 

interested in any data pertaining to the 

use the SunWrapTM System for the 

purpose of controlling bleeding in the 

ESRD facility setting; specifically, at the 

needle puncture sites following HD. 

We also note that the applicant stated 

that the SunWrapTM System provides 

static pneumatic compression to the 

forearm and/or upper arm with a gauze 

bandage, following dialysis needle 

removal from the AV fistula access. We 

request clarification as to whether the 

SunWrapTM System’s indication for use 

is limited to patients with AV fistula 

access sites or if it is also indicated for 

use among patients with AV graft access 

sites. 

The applicant identified 6 cases of 

post-operative complications within the 

pilot study, stating that two were 

directly due to the SunWrapTM System 

and that the 4 remaining cases were 

unrelated to the SunWrapTM System, 

but did not offer data to substantiate this 

statement. In addition, the applicant 

stated that the SunWrapTM System has 

met patient satisfaction and safety 

requirements after multiple trials, but 

did not provide specific information in 

support of this statement within the 

application. We would appreciate 

additional information regarding these 

trials, as well as any additional data 

demonstrating that the SunWrapTM

System represents an advance that 

substantially improves, relative to 

technologies previously available, the 

diagnosis or treatment of Medicare 

beneficiaries. For example, it would be 

useful to consider data comparing the 

SunWrapTM System’s outcomes to 

outcomes of patients treated by manual 

compression at the puncture site 

following HD. 

The applicant referred to the 

SunWrapTM Mini, stating that it targets 

single puncture sites and may be useful 

for achieving hemostasis for puncture 

sites which are more than 7.5 cm apart, 

may be easier to use in ESRD facilities, 

and is currently in its initial phase of 

study. As noted previously in this 

section of the proposed rule, the 

applicant provided a listing of 7 

SunWrapTM System products. We 

request clarification as to which of the 

7 SunWrapTM System products were 

included in the primary pilot study of 

54 patients. We welcome public 

comment on these issues. 

(6) Capital-Related Assets Criterion 

(§ 413.236(b)(6)) 

Regarding the sixth TPNIES eligibility 

criterion in § 413.236(b)(6), limiting 

capital-related assets from being eligible 

for the TPNIES, except those that are 

home dialysis machines, the applicant 

did not address this criterion within its 

application. However, because the 

SunWrapTM System is not an asset that 

the ESRD facility has an economic 

interest in through ownership and is 

subject to depreciation, it is not a capital 

related asset.84

c. THERANOVA 400 Dialyzer/ 

THERANOVA 500 Dialyzer 

(THERANOVA) 

Baxter Healthcare Corporation 

(Baxter) submitted an application for the 

TPNIES for the THERANOVA 400 

Dialyzer/THERANOVA 500 Dialyzer, 

collectively referred to as 

‘‘THERANOVA,’’ for CY 2023. 

According to the applicant, 

THERANOVA is a new class of singleuse dialyzer, featuring an innovative 

three-layer membrane structure that 

enables more comprehensive removal of 

certain harmful proteins known as large 

middle molecules (LMMs), while 

selectively maintaining essential 

proteins in the blood during 

hemodialysis (HD), compared to 

conventional low-flux and high-flux 

dialyzers. The applicant noted that the 

‘400’ and ‘500’ denote differences in 

surface area. The applicant stated that 

THERANOVA is used with standard HD 

machines, like most other high-flux 

dialyzers, but has unique membrane 

properties that allow for enhanced 

removal of LMM uremic toxins 

contributing to disease burden 

(cardiovascular disease, development of 

inflammation, and other comorbidities) 

while retaining appropriate levels of 

beneficial molecules such as albumin, 

coagulation factors, and 

immunoglobulins. We note that Baxter 

previously submitted an application for 

the TPNIES for THERANOVA for CY 

2021, as discussed in the CY 2021 ESRD 

PPS proposed rule (85 FR 42167 

through 42177) and the CY 2021 ESRD 


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38514 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

85As noted in the CY 2021 ESRD PPS final rule, 

we did not find the submitted evidence and public 

comments sufficient in meeting the substantial 

clinical improvement ‘‘totality of the 

circumstances’’ criterion at § 412.87(b)(1)(i). 

Therefore, we determined that THERANOVA did 

not qualify for the TPNIES at that time (85 FR 

71457). 

86Baxter. Theranova 400/500 Instructions For 

Use. N50 648 rev 003, 2017–05–29. 

87 Yilmaz MI, Carrero JJ, Axelsson J, Lindholm B, 

Stenvinkel P: Low-grade inflammation in chronic 

kidney disease patients before the start of renal 

replacement therapy: sources and consequences. 

Clin Nephrol 68:1– 9, 2007. 

88Stenvinkel P. Can treating persistent 

inflammation limit protein energy wasting? Semin 

Dial. 2013;26(1):16–19. doi:10.1111/sdi.12020. 

89Akchurin OM, Kaskel Fl. Update on 

inflammation in chronic kidney disease. Blood 

Purif 2015; 39:84–92. 

90Alvarez L, et al. Intradialytic Symptoms and 

Recovery Time in Patients on Thrice-Weekly InCenter Hemodialysis: A Cross-sectional Online 

Survey, Kidney Med. 2020;2(2)125–130. 

91The applicant’s information on the number of 

hospitalizations is based on a Moran Company 

analysis of the following sourced figure: ‘Average 

hospitalization rate’ of hemodialysis patients 

captured from the United States Renal Data System 

(USRDS), 2020 Annual Data Report (ADR), End 

Stage Renal Disease, Chapter 4: Hospitalization, 

Figure 4.1a Adjusted hospitalization rates in 

prevalent Medicare beneficiaries with ESRD by 

treatment modality, 2009–2018. 

92Nissenson AR, Improving Outcomes for ESRD 

Patients: Shifting the Quality Paradigm. CJASN Feb 

2014, 9 (2) 430–434; DOI: 10.2215/CJN.05980613 

https://doi.org/10.2215/CJN.05980613. 

PPS final rule (85 FR 71444 through 

71457).85

The applicant stated that 

THERANOVA is intended to treat 

kidney failure by expanded 

hemodialysis (HDx). The applicant 

noted that previous dialyzers were only 

able to remove toxins up to 25 

kilodaltons (kDa), while HDx, enabled 

by the THERANOVA dialyzer, can 

remove molecules from 25 kDa to 

approximately 45 kDa. The applicant 

explained that patients with CKD have 

increasing difficulty removing these 

solutes as their kidneys fail. The 

applicant further explained that these 

non-protein bound uremic solutes can 

be divided into three main categories: 

(1) small molecules (SMs), <0.5 kDa, 

with effective removal by diffusion, (2) 

small and medium middle molecules 

(SMMMs), 0.5¥<25 kDa, with limited 

removal by diffusion, and (3) large 

middle molecules (LMMs), 25¥60 kDa, 

which requires higher permeability 

membranes for effective and efficient 

removal.86 The applicant noted that 

evidence to date demonstrates a strong 

link between LMMs and the 

development of different outcomerelated morbidities, and that uremia 

related to the retention of SMMMs/ 

LMMs is associated with inflammation 

and cardiovascular events.87 88 89 The 

applicant stated that THERANOVA’s 

innovative hollow fiber, medium cut-off 

(MCO) membrane shows a permeability 

profile close to that of the natural 

kidney and expands the range of uremic 

toxin removal beyond what is achieved 

with current membranes during regular 

HD. 

The applicant asserted that the design 

of THERANOVA allows for use on any 

HD machine, both in-center and home, 

made by Baxter or another 

manufacturer, by merely changing the 

dialyzer. The applicant stated that the 

membrane is compatible with standard 

fluid quality and does not require any 

additional fluid quality control 

measure.90

(1) Renal Dialysis Service Criterion 

(§ 413.236(b)(1)) 

With respect to the first TPNIES 

eligibility criterion under 

§ 413.236(b)(1), whether the item has 

been designated by CMS as a renal 

dialysis service under § 413.171, 

maintenance dialysis treatments and all 

associated services, including 

historically defined dialysis-related 

drugs, laboratory tests, equipment, 

supplies, and staff time, were included 

in the composite rate for renal dialysis 

services as of December 31, 2010 (75 FR 

49036). A dialyzer would be considered 

a supply essential for the delivery of 

maintenance dialysis and, therefore, we 

would consider this a renal dialysis 

service under § 413.171. 

(2) Newness Criterion (§ 413.236(b)(2)) 

With respect to the second TPNIES 

eligibility criterion under 

§ 413.236(b)(2), whether the item is 

new, meaning within 3 years beginning 

on the date of the FDA marketing 

authorization, the applicant stated that 

the THERANOVA received FDA 

marketing authorization for home use 

on August 28, 2020. Therefore, the 

THERANOVA is considered new. 

(3) Commercial Availability Criterion 

(§ 413.236(b)(3)) 

With respect to the third TPNIES 

eligibility criterion under 

§ 413.236(b)(3), whether the item is 

commercially available by January 1 of 

the particular calendar year, meaning 

the year in which the payment 

adjustment would take effect, the 

applicant stated that THERANOVA is 

commercially available in the U.S. 

(4) HCPCS Level II Application 

Criterion (§ 413.236(b)(4)) 

With respect to the fourth TPNIES 

eligibility criterion under 

§ 413.236(b)(4), whether the applicant 

submitted a HCPCS Level II code 

application by the July 5, 2022 deadline, 

the applicant stated a HCPCS 

application was submitted on June 27, 

2020, and it intends to resubmit a 

HCPCS Level II code application by the 

July 5, 2022 deadline. 

(5) Innovation Criteria (§§ 413.236(b)(5) 

and 412.87(b)(1)) 

(a) Substantial Clinical Improvement 

Claims and Sources 

With respect to the fifth TPNIES 

eligibility criterion under 

§ 413.236(b)(5), that the item is 

innovative, meaning it meets the 

substantial clinical improvement 

criteria specified in § 412.87(b)(1), the 

applicant asserted that THERANOVA 

significantly improves clinical outcomes 

relative to the current standard of care 

for dialysis membranes. The applicant 

presented the following substantial 

clinical improvement claims: (1) 

decrease in the number of future 

hospitalization by up to 45 percent; (2) 

improved recovery time by up to 2 

hours; (3) improved quality of life (QoL) 

as indicated by reduced pruritus, 

improvement in two Kidney Disease 

Quality of Life (KDQoL) survey 

domains, and improved London 

Evaluation of Illness (LEVIL) scores; (4) 

reduced restless leg syndrome by 10 

percent or more; and (5) reduced rate of 

subsequent therapeutic interventions 

such as reduced need for and use of 

erythropoietin stimulating agents 

(ESAs), iron, and insulin. The applicant 

supported these claims with seven 

published papers, one paper accepted 

for publication, and one poster. Several 

of the studies were secondary analyses 

of the same trial data. 

With respect to the claim that 

THERANOVA decreases the number of 

future hospitalizations, the applicant 

noted that emergent need for 

hospitalization can be a serious and lifethreatening event, especially for 

medically-fragile populations, and that 

hospitalization is a frequent and costly 

occurrence for the ESRD population. 

The applicant stated that an estimated 

792,643 HD patient hospitalizations 

occur every year,91 with roughly 40 

percent of new dialysis patients 

averaging nearly two hospitalizations 

per year.92 The applicant also asserted 

that ESRD patients often have health 

impairments associated with their 

condition and other comorbidities that 

put them at greater risk for 


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93Saeed F, Adil MM, Malik AA, Schold JD, 

Holley JL, Outcomes of In-Hospital 

Cardiopulmonary Resuscitation in Maintenance 

Dialysis Patients. JASN Dec 2015, 26 (12) 3093– 

3101; DOI: 10.1681/ASN.2014080766 https://

doi.org/10.1681/ASN.2014080766. 

94Weiner D, et al. Efficacy and Safety of 

Expanded Hemodialysis with the Theranova 400 

Dialyzer: A Randomized Controlled Trial, CJASN15: 

1310–1319, 2020. doi: 10.2215/CJN.01210120. 

95Tran H, Falzon L, Bernardo A, Beck W, 

Blackowicz M. Reduction in all-cause 

Hospitalization Events Seen in a Randomized 

Controlled Trial Comparing Expanded 

Hemodialysis vs High-Flux Dialysis. Annual 

Dialysis Conference. Abstract #1070. Published 

2021 Jan 28. 

96Molano AP, Hutchison CA, Sanchez R, Rivera 

AS, Buitrago G, Dazzarola MP, Munevar M, 

Guerrero M, Vesga JI, Sanabria M, Medium Cut-Off 

Versus High-Flux Hemodialysis Membranes and 

Clinical Outcomes: A Cohort Study Using Inverse 

Probability Treatment Weighting, Kidney Medicine 

(2022), doi: https://doi.org/10.1016/ 

j.xkme.2022.100431. 

97Sanabria RM, Hutchison CA, Vesga JI, Ariza JG, 

Sanchez R, Suarez AM. Expanded Hemodialysis 

and Its Effects on Hospitalizations and Medication 

Usage: A Cohort Study. Nephron 2021;145:179–187. 

doi: 10.1159/000513328. 

98 Ibid. 

99Ariza, JG, Walton, SM, Suarez, AM, Sanabria, 

M, Vesga, JI. An initial evaluation of expanded 

hemodialysis on hospitalizations, drug utilization, 

costs, and patient utility in Colombia. Ther Apher 

Dial. 2021; 25: 621– 627. https://doi.org/10.1111/ 

1744-9987.13620. 

hospitalization, and at greater risk for 

adverse outcomes once hospitalized. 

The applicant stated that, for example, 

a recent study found that hospitalized 

ESRD patients on maintenance dialysis 

had higher odds of mortality after 

cardiopulmonary resuscitation (odds 

ratio, 1.24; 95 percent CI, 1.11 to 1.3; p 

< 0.001), compared to the general 

patient population.93 The applicant 

explained that the frequency and 

severity of hospitalizations in the ESRD 

patient population adds urgency to 

adopting innovative technologies that 

can help prevent hospitalization and 

associated morbidity and mortality. 

To support its claim that the use of 

THERANOVA decreases the number of 

future hospitalizations, the applicant 

referred to a poster by Tran et al. (2021), 

which was an abstract of a secondary 

analysis of a prospective, open-label, 

randomized controlled trial 94 of 172 

patients (86 THERANOVA; 85 high-flux 

HD (HF–HD), with 1 patient not 

treated). As a post hoc analysis of a 

randomized controlled trial, the 

applicant stated that the objective of the 

study was to evaluate the association of 

HDx with the THERANOVA dialyzer 

with hospitalization rates, as compared 

to conventional HD. The applicant 

stated that patients were randomized 

and treated with either Theranova 400 

or a conventional high-flux dialyzer in 

21 U.S. study centers. The applicant 

noted that hospitalization was defined 

by the occurrence of any serious adverse 

event containing a hospitalization 

admission date, hospitalization rate was 

defined by treatment as total number of 

hospitalizations divided by total personyears of follow-up, and hospital length 

of stay was defined as number of days 

between admission and discharge. The 

applicant stated that this study found 

that the rate of hospitalizations for 

patients using THERANOVA was 

statistically significantly lower—45 

percent—than those using HF–HD (IRR 

= 0.55; p = 0.0495).95

The applicant also referred to a multicenter, observational retrospective, 

cohort study by Molano-Trivin ̃ o et al. 

(2022) that used propensity score 

matching assignment methods for 1,098 

patients (534 HF–HD; 564 HDx with 

THERANOVA). The applicant stated 

that the objective of the study was to 

evaluate clinical effectiveness of 

THERANOVA versus HF–HD dialyzers, 

in terms of hospitalization rate and 

duration, cardiovascular event rate and 

survival in a HD cohort in Colombia. 

The applicant stated that adult HD 

patients (>90 days in HD) at Baxter 

Renal Care Services Colombia were 

included between September 1, 2017 to 

November 30, 2017, with follow-up 

until 2 years. The applicant noted that 

inverse probability of treatment 

weighting on the propensity score was 

used to balance comparison groups on 

indicators of baseline sociodemographic and clinical 

characteristics, and that the 

investigators compared rates and 

duration of hospitalization and 

cardiovascular events using a negative 

binomial regression to estimate 

weighted incidence rate ratios (IRRs). 

The applicant stated that this study 

found a statistically significant lower 

hospitalization rate in the THERANOVA 

group, compared to the HF–HD group 

(IRR HDx with THERANOVA/HF–HD: 

0.82, 95 percent CI 0.69 to 0.98; p=0.03), 

without differences in hospitalization 

duration or survival.96

The applicant also referred to two 

other papers to further support 

reductions in hospitalization and 

medication utilization. According to the 

applicant, Sanabria et al. (2021) was a 

multi-center, observational prospective 

cohort study of 81 patients (Year 1, HF– 

HD; Year 2, HDx with THERANOVA). In 

this study across 3 clinics, the applicant 

noted that 175 patients with ESRD on 

chronic HD were originally recruited, 

and 23 did not meet the eligibility 

criteria. The applicant stated that 

patients received HF–HD for at least 1 

year and then switched to HDx and 

were followed up for 1 year. The 

applicant stated that patients were 

excluded if they discontinued therapy, 

changed provider, underwent kidney 

transplant, recovered kidney function, 

or changed to PD, another dialyzer, or 

another renal clinic. The applicant 

noted that only 81 patients were eligible 

for analysis because 71 patients were 

lost to follow-up. The applicant asserted 

that the study results demonstrated that 

the rate of hospitalizations per patientyear was lower twelve months after 

switching to HDx, from 0.77 (95 percent 

CI: 0.60–0.98, 61 events) to 0.71 (95 

percent CI: 0.55–0.92, 57 events), 

p=0.6987. The applicant also reported 

that the study results demonstrated 

significantly reduced hospital day rate 

per patient-year, from 5.94 days in the 

year prior to switching compared with 

4.41 days after switching (p=0.0001).97

The applicant also cited Ariza et al. 

(2021), which the applicant noted 

analyzed the same study sample of 81 

patients as Sanabria et al. (2021),98

discussed previously in this section, 

with the stated objective of examining 

new evidence linking HDx using 

THERANOVA with hospitalizations, 

hospital days, medication use, costs, 

and patient utility. The applicant stated 

that this retrospective study utilized 

data from the Renal Care Services 

medical records database in Colombia 

from 2017 to 2019. The applicant noted 

that the study data included years on 

dialysis, hospitalizations, medication 

use, and QoL measured by the KDQoL 

survey at the start of HDx, and 1 year 

after HDx. The applicant stated that 

generalized linear models were run 

comparing patients before and after 

switching to HDx. The applicant 

asserted that the study results 

demonstrated that HDx was also 

significantly associated with lower 

hospital days per year (5.94 on HD vs. 

4.41 on HDx), although not with the 

number of hospitalizations. The 

applicant stated that the results showed 

that HDx was statistically significantly 

associated with reduced hospitalization 

days.99

With respect to the claim that 

THERANOVA is associated with 

improved recovery time by up to 2 

hours, the applicant stated that the 

treatment intensity and recovery time 

for patients on HD is a significant 

burden. The applicant explained that 

patients might receive in-center HD 3 

days a week for 3 to 5 hour sessions, or 

home HD. The applicant noted that 

following treatment, there is often a 

prolonged period before a patient 

recovers to pre-treatment function and 

energy levels, with many patients 

reporting that they feel tired and in need 


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100Bossola M, et al. Fatigue is associated with 

increased risk of mortality in patients on chronic 

hemodialysis. Nephron 2015; 130:113–118. 

101 Koyama H, Fukuda S, Shoji T, Inaba M, 

Tsujimoto Y, Tabata T, Okuno S, Yamakawa T, 

Okada S, Okamura M, Kuratsune H, Fujii H, 

Hirayama Y, Watanabe Y, Nishizawa Y, Fatigue Is 

a Predictor for Cardiovascular Outcomes in Patients 

Undergoing Hemodialysis CJASN Apr 2010, 5 (4) 

659–666; DOI: 10.2215/CJN.08151109. 

102Rayner HC, et al. Recovery time, quality of life, 

and mortality in hemodialysis patients: The 

Dialysis Outcomes and Practice Patterns Study 

(DOPPS). Am J Kidney Dis 2014; 64:86–94. 

103Bolton S, Gair R, Nilsson LG, Matthews M, 

Stewart L, McCullagh N. Clinical Assessment of 

Dialysis Recovery Time and Symptom Burden: 

Impact of Switching Hemodialysis Therapy Mode. 

Patient Relat Outcome Meas. 2021;12:315–321 

https://doi.org/10.2147/PROM.S325016. 

104Mayo Clinic, Itchy skin (pruritus), available at 

https://www.mayoclinic.org/diseases-conditions/ 

itchy-skin/symptoms-causes/syc-20355006. 

105 Ibid. 

106 Ibid. 

107RAND Corporation, Kidney Disease Quality of 

Life Instrument (KDQOL), available at https://

www.rand.org/health-care/surveys_tools/ 

kdqol.html. 

108Pittman Z, et al. Collection of daily patient 

reported outcomes is feasible and demonstrates 

differential patient experience in chronic kidney 

disease. Hemodialysis International, 2017; 21:265– 

273. 

109Lim JH, Park Y, Yook JM, et al. Randomized 

controlled trial of medium cut-off versus high-flux 

dialyzers on quality of life outcomes in 

maintenance hemodialysis patients. Sci Rep. 

2020;10(1):7780. Published 2020 May 8. 

doi:10.1038/s41598–020–64622-z. 

of rest or sleep. The applicant cited an 

estimate that 40 to 80 percent of patients 

receiving chronic HD face post-dialysis 

fatigue.100 The applicant also noted that 

patients who were highly fatigued had 

a significantly higher risk of adverse 

cardiovascular events (hazard ratio: 

2.17; p <0.01).101 The applicant referred 

to the Dialysis Outcomes and Practice 

Patterns Study (DOPPS), which 

analyzed over 6,000 HD patients from 

12 countries in Europe, Japan, Canada, 

and the U.S. The applicant noted that 25 

percent of patients required more than 

6 hours of recovery time, and that 

patient-reported recovery time was 

positively associated with rates of first 

hospitalization (adjusted hazard ratio 

[AHR] per additional hour of recovery 

time [RT], 1.03; 95 percent CI, 1.02– 

1.04) and all-cause mortality (AHR, 

1.05; 95 percent CI, 1.03–1.07).102 The 

applicant stated that improving recovery 

time is not only critical to averting 

hospitalization and increased risk of 

mortality, but also ensures that ESRD 

patients have meaningful QoL 

improvements. 

To support its claim of improved 

recovery time, the applicant referred to 

a single-center, single-arm, 

observational, retrospective, cohort 

study by Bolton et al. (2021) of 58 

patients with HF–HD at baseline who 

switched to THERANOVA. The 

applicant stated that a dialysis unit 

performed regular assessments of 

patient-reported symptom burden, using 

the POS–S Renal Symptom 

questionnaire and the ‘‘Recovery time 

from last dialysis session’’ question as 

part of routine patient focused care. The 

applicant noted that of the 90 people 

who initially agreed to provide patient 

reported outcome measures (PROMs) 

data, the number of participants 

providing data at 3, 6, 9, and 12 months 

were 80, 72, 68, and 59 respectively. 

The applicant concluded that a 

sustained clinically relevant reduction 

in post-dialysis recovery time was 

observed following the therapy switch. 

The applicant stated that the study 

results demonstrated that the percentage 

of patients reporting a recovery time 

greater than 360 minutes decreased from 

36 percent at baseline to 26 percent, 14 

percent, 14 percent, and 9 percent at 3, 

6, 9, and 12 months, respectively. The 

applicant noted that additionally, there 

was a statistically significant 

improvement in median recovery time 

from a baseline of 210 minutes (IQR 

7.5–600) to 60 minutes after 6 months 

(0–210; p = 0.002), 60 minutes after 9 

months (0–225; p < 0.001), and 105 

minutes after 12 months (0–180; p = 

0.001).103

With respect to the claim that 

THERANOVA is associated with 

improved QoL, as indicated by reduced 

pruritus, improvement in two KDQoL 

survey domains, and improved London 

Evaluation of Illness (LEVIL) scores, the 

applicant described the background and 

significance of each indicator. The 

applicant noted that that pruritus can be 

uncomfortable and significantly 

interfere with ESRD patients’ daily 

living activities. The applicant asserted 

that pruritus that is severe or chronic 

can prevent ESRD patients from 

sleeping normally,104 and that in 

addition to causing sleep loss, pruritus 

can also cause anxiety and 

depression.105 The applicant also noted 

that prolonged scratching of itchy skin 

also leads to skin injury, scarring, and 

infection.106

The applicant also explained that one 

of the most commonly used tools to 

assess kidney disease QoL in the U.S. is 

the KDQoL 107 patient survey, which 

assesses patients’ physical and mental 

well-being, the burden of kidney 

disease, treatment-associated symptoms 

and problems, and the effects of kidney 

disease on daily life. The applicant 

noted that the survey assesses a 

patient’s ability to accomplish desired 

tasks, levels of depression and anxiety, 

the ability to participate in social 

activities, and some daily life activities. 

The applicant also referenced the 

LEVIL survey, which measures patientreported outcomes and evaluates wellbeing, energy level, sleep quality, bodily 

pain, appetite, and shortness of breath. 

Per the applicant, the survey is 

validated, and scores are correlated with 

acute hospital admissions, abnormal 

fluid status, and vascular access 

events.108

To support its claim of improved 

pruritus and improvement in two 

KDQoL survey domains, the applicant 

referred to a prospective, open-label, 

randomized control trial by Lim, Park, 

et al. (2020). This study randomized 

patients to either Theranova 400 or a 

high-flux dialyzer. Forty-nine HD 

patients (24 using THERANOVA; 25 

using a high-flux dialyzer) completed 

the study. Per the applicant, QoL was 

assessed at baseline and after 12 weeks 

of treatment using the KDQoL Short 

Form-36, and pruritus was assessed 

using a questionnaire and visual analog 

scale. The applicant stated that the 

study concluded that laboratory 

markers, including serum albumin, did 

not differ between the two groups after 

12 weeks, though removals of kappa and 

lambda free light chains were greater for 

THERANOVA than high-flux dialyzer. 

The applicant noted that the results 

showed that the THERANOVA group 

had lower mean scores for morning 

pruritus distribution (1.29 ± 0.46 vs. 

1.64 ± 0.64, p = 0.034) and frequency of 

scratching during sleep (0.25 ± 0.53 vs. 

1.00 ± 1.47, p = 0.023), compared to the 

high-flux group. The applicant also 

stated that in the same study, the 

THERANOVA group also had 

statistically significant higher scores 

(indicating better QoL) in KDQoL 

domains for physical functioning (75.2 

± 20.8 vs. 59.8 ± 30.1, p = 0.042) and 

physical role (61.5 ± 37.6 vs. 39.0 ± 39.6, 

p = 0.047), compared to the high-flux 

group.109

To support its claim of improved QoL 

scores, the applicant referred to a study 

by Penny et al. (2021). According to the 

applicant, this was a single-center 

interventional pilot study with 28 

patients established on maintenance 

HD. The single-arm study consisted of 

2-week observation (baseline at 

conventional HF–HD) followed by 12 

weeks of HDx. The study also had an 

extension phase; where patients had a 2- 

week baseline period, followed by 24 

weeks of HDx, and then an 8-week 

washout period in which patients 

returned to HF–HD to assess the 

presence of any carryover effect. The 

applicant stated that health-related 

quality of life (HRQoL) was assessed 


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110Penny J., Jarosz P., Salerno F., Lemoine S., 

McIntyre CW. Impact of Expanded Hemodialysis 

Using Medium Cut-off Dialyzer on Quality of Life: 

Application of Dynamic Patient-Reported Outcome 

Measurement Tool. Kidney Medicine. Published 

2021, Jul. 29. https://doi.org/10.1016/ 

j.xkme.2021.05.010. 

111 Kavanagh D., et al. Restless legs syndrome in 

patients on dialysis Am J. Kidney Dis. 2004 

May;43(5):763–71. 

112Winkelman J.W., Chertow G.M., Lazarus J.M.. 

Restless legs syndrome in end-stage renal disease. 

Am J. Kidney 

113 Kavanagh D., et al. Restless legs syndrome in 

patients on dialysis Am J. Kidney Dis. 2004 

May;43(5):763–71. 

114La Manna G., et al. Restless legs syndrome 

enhances cardiovascular risk and mortality in 

patients with end-stage kidney disease undergoing 

long-term haemodialysis treatment. Nephrol Dial 

Transplant.2011;26(6):1976–83. 

115Lin C.H., et al. Restless legs syndrome is 

associated with cardio/cerebrovascular events and 

mortality in end-stage renal disease. Eur J. Neurol. 

2015;22(1):142–9. 

116 Gopaluni S., Sherif M., Ahmadouk N.A. 

Interventions for chronic kidney disease-associated 

restless legs syndrome. Cochrane Database Syst Rev 

2016; 11: CD010690. 

117 Gopaluni S., Sherif M., Ahmadouk N.A. 

Interventions for chronic kidney disease-associated 

restless legs syndrome. Cochrane Database Syst Rev 

2016; 11: CD010690. 

118Alarcon J.C., Bunch A., Ardila F., et al. Impact 

of Medium Cut-Off Dialyzers on Patient-Reported 

Outcomes: COREXH Registry. Blood Purification. 

2021; 50(1):110–118. DOI: 10.1159/000508803. 

PMID: 33176299. 

119Mayo Clinic’s overview of anemia, available at 

https://www.mayoclinic.org/diseases-conditions/ 

anemia/symptoms-causes/syc-20351360. 

120Fishbane S., Maesaka J.K., Iron management in 

end-stage renal disease, American Journal of Kidney 

Diseases, Volume 29, Issue 3, 1997, Pages 319–333, 

ISSN 0272–6386, Accessed at: https://doi.org/ 

10.1016/S0272-6386(97)90192-X. 

121Estimated cost to Medicare based on The 

Moran Company, an HMA Company analysis 

calculated using 2020 ESRD claims with IV iron 

valued at ASP+6%. 

using the dynamic PROM instrument, 

LEVIL, twice weekly. The applicant 

noted that 22 patients completed all 

study procedures to contribute to the 

full 12-week analysis. The applicant 

asserted that the study results 

demonstrated that 73 percent of 

participants who had low overall 

health-related QoL at baseline with HF– 

HD (mean, 51.5 ± 10.2; range, 36.1–69.3) 

had a statistically significant 

improvement at 8 weeks after switching 

to HDx (mean, 64.6 ± 16.2; p=0.001) and 

at 12 weeks (67.2 ± 16.9; p=0.001). The 

applicant stated that the study also 

found that all participants had a 

statistically significant improvement in 

‘feeling washed out/drained’ from 

baseline with HF–HD (mean, 40.3 ± 

20.5; range, 8.7–67.4) to HDx at 8 weeks 

(59.9 ± 22.8; p=0.001) and at 12 weeks 

(64.7 ± 19.6; p < 0.001). The applicant 

noted that likewise, 73 percent of study 

participants assessed on their ‘feeling of 

general well-being’ had a statistically 

significant improvement from baseline 

with HF–HD (mean, 43 ± 14.1; range, 

19.7–69.5) to HDx at 8 weeks (65.2 ± 

21.9; p < 0.001) and at 12 weeks (66.3 

± 17.7; p=0.002). Additionally, the 

applicant stated that 73 percent of study 

participants who experienced poor 

‘sleep quality’ had a statistically 

significant improvement from baseline 

with HF–HD (37.2 ± 20.1; range, 7.2– 

66.2) after 4 weeks with HDx (mean, 

52.8 ± 26.7; p=0.01), and continually 

improved at 8 weeks (57 ± 22.2; 

p=0.002) and 12 weeks (61.7 ± 24.5; p 

<0.001).110

With respect to the claim that 

THERANOVA is associated with 

reducing restless leg syndrome (RLS) by 

10 percent or more, the applicant stated 

that RLS is another common and 

debilitating side effect of long-term 

dialysis. The applicant noted that an 

estimated 6.6 percent to 62 percent of 

patients on long-term dialysis therapy 

suffer from RLS,111 with one study 

suggesting 20 to 25 percent of ESRD 

patients demonstrated overt (moderate 

to severe) RLS.112 The applicant 

asserted that extreme discomfort of RLS 

worsens during periods of physical 

inactivity and at night,113 contributing 

to sleep loss and sleep deprivation in 

ESRD patients, and that loss of sleep 

carries over into the day for many 

patients, leaving them feeling lethargic 

and preventing them from fully 

engaging in daily activities. The 

applicant also noted that a study found 

that RLS among HD patients is 

associated with a significant increase in 

new cardiovascular events, that these 

events increased with the severity of 

RLS, and that HD patients with RLS had 

a higher risk of mortality than their nonRLS peers.114 The applicant also 

described an additional study that 

found RLS was associated with 

significantly higher risk of developing 

cardiovascular events, strokes, and allcause mortality among ESRD 

patients.115 The applicant explained 

that RLS is treated with many 

medications such as dopamine 

antagonists, benzodiazepines, antiepileptics, iron dextran, Vitamin C, and 

intradialytic aerobic exercise—all of 

which produce side effects and only 

provide limited improvement in RLS 

symptoms.116 The applicant stated that 

medical interventions for RLS in 

dialysis populations have not been 

particularly effective, are costly, and 

may contribute to polypharmacy and 

adverse drug reactions in a population 

already at risk.117

To support its claim that 

THERANOVA is associated with 

reducing RLS, the applicant referred to 

a multi-center, observational 

prospective cohort study by Alarcon et 

al. (2021) which assessed 992 

individuals with HF–HD at baseline, 

who switched to THERANOVA and 

were observed over a 12-month period. 

The applicant explained that changes in 

KDQoL 36-Item Short Form Survey 

domains, Dialysis Symptom Index (DSI), 

and RLS 12 months after switching to 

THERANOVA were compared with the 

patient baseline responses on high-flux 

dialyzers. Per the applicant, the study 

found a significant decrease in the 

proportion of patients diagnosed with 

RLS from 22.1 percent at baseline to 

12.5 percent at 6 months, and 10 

percent at 12 months (p < 0.0001). 

Additionally, the applicant stated that a 

post hoc comparison showed 

statistically significant differences 

between each pair of repeated 

observations (baseline vs. 6 months: p 

<0.0001; baseline vs. 12 months: p 

<0.0001; 6 vs. 12 months: p=0.003).118

With respect to the claim that 

THERANOVA reduces the rate of 

subsequent therapeutic interventions, 

such as the use of ESAs, iron, and 

insulin, the applicant stated that almost 

all dialysis patients and those with CKD 

experience anemia as a side effect of 

their treatment, which contributes 

negative clinical outcomes such as 

weakness, irregular heartbeat, shortness 

of breath, dizziness and 

lightheadedness, chest pain, and 

headaches.119 The applicant stated that 

anemia significantly impairs QoL for 

dialysis patients and requires additional 

treatment, and that ESAs are a widely 

used treatment that mitigates anemia by 

enabling the body to produce more red 

blood cells. The applicant asserted that 

reductions in ESA treatment can 

preserve or enhance patient QoL and 

can generate savings to the Medicare 

program. 

With regard to iron supplementation, 

the applicant noted that iron 

supplements are another important 

treatment for patients with renal failure 

and anemia. The applicant explained 

that iron deficiency occurs more 

frequently among patients with ESRD 

because of an increase in external losses 

of iron, a decreased ability to store iron 

in the body, and potential deficits in 

intestinal iron absorption.120 The 

applicant asserted that reductions in 

iron treatment can preserve or enhance 

patient QoL and can generate savings to 

the Medicare program.121

Finally, with regard to insulin use, the 

applicant stated that diabetes is a 

common comorbidity in ESRD 


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38518 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

122Approximately one in three adults with 

diabetes also have CKD. See CDC, Diabetes and 

Chronic Kidney Disease, https://www.cdc.gov/ 

diabetes/managing/diabetes-kidney-disease.html. 

123Average cost per patient for insulin taken from 

KFF report on Part D spending, available at https:// 

www.kff.org/medicare/issue-brief/how-much-doesmedicare-spend-on-insulin/. 

124Lim J.H., Park Y., Yook J.M., et al. Randomized 

controlled trial of medium cut-off versus high-flux 

dialyzers on quality of life outcomes in 

maintenance hemodialysis patients. Sci Rep. 

2020;10(1):7780. Published 2020 May 8. 

doi:10.1038/s41598–020–64622–z. 

125Lim J.H., Jeon Y., Yook J.M., et al. Medium 

cut-off dialyzer improves erythropoiesis stimulating 

agent resistance in a hepcidin-independent manner 

in maintenance hemodialysis patients: results from 

a randomized controlled trial. Sci Rep. 

2020;10(1):16062. Published 2020 Sep 29. 

doi:10.1038/s41598–020–73124–x. 

126Sanabria R.M., Hutchison C.A., Vesga J.I., 

Ariza J.G., Sanchez R., Suarez A.M. Expanded 

Hemodialysis and Its Effects on Hospitalizations 

and Medication Usage: A Cohort Study. Nephron 

2021;145:179–187. doi: 10.1159/000513328. 

127 Ibid. 

128Ariza, J.G., Walton, S.M., Suarez, A.M., 

Sanabria, M., Vesga, J.I. An initial evaluation of 

expanded hemodialysis on hospitalizations, drug 

utilization, costs, and patient utility in Colombia. 

Ther Apher Dial. 2021; 25: 621– 627. https://

doi.org/10.1111/1744-9987.13620. 

129 Ibid. 

130See for example, Dr. Peter Stenvinkel 

(Karolinska University Hospital) at https://

beta.regulations.gov/comment/CMS-2020-0079- 

0038; Dr. Vincenzo Cantaluppi (Novara University 

Hospital) at https://beta.regulations.gov/comment/ 

CMS-2020-0079-0066; Dr. Colin Hutchison (Central 

Hawkes Bay Health Centre) at https://

beta.regulations.gov/comment/CMS-2020-0079- 

0065; Dr. Andrew Davenport (Royal Free Hospital) 

at https://beta.regulations.gov/comment/CMS-2020- 

0079-0037; Dr. Mario Cozzolino (University of 

Milan) at https://beta.regulations.gov/comment/ 

CMS-2020-0079-0062; Dr. Jang-Hee Cho 

(Kyungpook National University Hospital) at 

https://beta.regulations.gov/comment/CMS-2020- 

0079-0061. 

131Molano A.P., Hutchison C.A., Sanchez R., 

Rivera A.S., Buitrago G., Dazzarola M.P., Munevar 

M., Guerrero M., Vesga J.I., Sanabria M., Medium 

Cut-Off Versus High-Flux Hemodialysis Membranes 

and Clinical Outcomes: A Cohort Study Using 

Inverse Probability Treatment Weighting, Kidney 

Medicine (2022), doi: https://doi.org/10.1016/ 

j.xkme.2022.100431. 

132Alarcon J.C., Bunch A., Ardila F., et al. Impact 

of Medium Cut-Off Dialyzers on Patient-Reported 

Outcomes: COREXH Registry. Blood Purification. 

2021; 50(1):110–118. DOI: 10.1159/000508803. 

PMID: 33176299. 

133Sanabria R.M., Hutchison C.A., Vesga J.I., 

Ariza J.G., Sanchez R., Suarez A.M. Expanded 

Hemodialysis and Its Effects on Hospitalizations 

and Medication Usage: A Cohort Study. Nephron 

2021;145:179–187. doi: 10.1159/000513328 

134Ariza, J.G., Walton, S.M., Suarez, A.M., 

Sanabria, M., Vesga, J.I. An initial evaluation of 

expanded hemodialysis on hospitalizations, drug 

utilization, costs, and patient utility in Colombia. 

Ther Apher Dial. 2021; 25: 621– 627. https://

doi.org/10.1111/1744-9987.13620. 

patients,122 and many ESRD patients 

require additional insulin 

administration. The applicant asserted 

that through reductions in insulin use, 

Medicare could realize cost savings of 

$3,949 annually per diabetes patient.123

To support its claim of reduced rate 

of subsequent therapeutic interventions 

such as reduced need for and use of 

ESAs, iron, and insulin, the applicant 

referred to three sources. The first 

source, Lim, Jeon, et al. (2020), was a 

secondary analysis of a prospective, 

open-label, randomized controlled trial 

by Lim, Park, et al. (2020).124 Lim, Park, 

et al. (2020) was previously described. 

According to the applicant, the primary 

outcome of the secondary analysis was 

the change in erythropoietin resistance 

index (ERI; U/kg/wk/g/dL) between 

baseline and 12 weeks. The applicant 

stated that the study found statistically 

significant decreases in ESA dose, 

weight-adjusted ESA dose, and 

erythropoiesis resistance index for 

THERANOVA patients, compared to the 

high-flux dialyzer group at 12 weeks (p 

< 0.05). The applicant also stated that 

there was a statistically significant 

higher serum iron level in the 

THERANOVA group at 12 weeks (iron 

[7g/dL]: 72.1 ± 25.4 vs. 55.9 ± 25.0), 

(p=0.029), indicating an improvement in 

iron metabolism as a potential clinical 

marker for the reduced need of iron 

supplementation.125

The applicant also referred to the 

Sanabria et al. (2021) study, previously 

described, of 81 patients (Year 1, HF– 

HD; Year 2, HDx with THERANOVA). 

The applicant stated the study 

concluded that there was a statistically 

significant reduction in the mean dose 

of ESA after switching from HF–HD to 

HDx with THERANOVA (p=0.0361).126

The applicant also stated that the study 

found a statistically significant 

reduction in the mean dose of 

intravenous iron from 73.46 mg/month 

with HF–HD to 66.36 mg/month with 

HDx with THERANOVA (p=0.003).127

Finally, the applicant referred to the 

Ariza et al. (2021) study, described 

previously in this section of the 

proposed rule. The applicant stated that 

study authors found a statistically 

significant reduction in the dosage per 

patient per year of ESA in international 

units from 181,318 with HF–HD (95 

percent CI: 151,647– 210,988) to 

168,124 with HDx with THERANOVA 

(95 percent CI: 138,452–197,794; p 

<0.01) as well as a statistically 

significant reduction in dosage per 

patient per year of iron in milligrams 

from 959 with HF–HD (95% CI: 760– 

1158) to 759 with HDx (95 percent CI: 

560–958; p <0.01).128 The applicant also 

asserted that the study found a 

statistically significant reduction in 

dosage per patient per year of insulin in 

international units from 5383 with HF– 

HD (95 percent CI: 3274–7490) to 3434 

with HDx with THERANOVA (95 

percent CI: 1327–5543; p <0.01).129

The applicant also referred to CMS’ 

final determination and public 

comments regarding its CY 2021 

TPNIES application, as summarized in 

the CY 2021 ESRD PPS final rule (85 FR 

71453 through 71458). The applicant 

stated that stakeholders largely provided 

favorable comments and supported 

TPNIES approval for THERANOVA. The 

applicant noted that in particular, 

physicians who used THERANOVA and 

had direct patient experience with the 

product strongly supported the 

application.130 The applicant also noted 

that some stakeholders, however, 

expressed concerns about 

THERANOVA’s CY 2021 TPNIES 

application. Specifically, the applicant 

stated that commenters noted that the 

supporting studies had small sample 

sizes that did not represent the U.S. 

patient population, and that the 

duration of the studies was too short. 

The applicant also stated that some 

stakeholders expressed a belief that HDx 

with THERANOVA may result in 

decreased albumin levels, potentially 

causing harm to patients. The applicant 

asserted that with the updated and 

additional information provided in its 

CY 2023 application, the applicant has 

addressed these concerns. 

The applicant asserted that all 

substantial clinical improvement claims 

included in its CY 2023 application are 

now supported by at least one study that 

has undergone full peer review and has 

been published, or accepted for 

publication and is being prepared for 

publishing. The applicant explained 

that the application’s supporting studies 

feature statistically significant findings 

and have a range of appropriate sample 

sizes, such as Molano-Trivin ̃ o et al., 

n=1,098,131 and Alarcon et al., 

n=992,132 previously described. The 

applicant explained that additionally, 

many studies evaluated THERANOVA’s 

impacts over an extended period, 

including year-long evaluations after 

patients transitioned from conventional 

therapy to HDx therapy, for example, 

Sanabria et al.133 and Ariza et al.,134

previously described. The applicant 

stated that it considers the studies 

supporting the application and their 

findings to be applicable and 

generalizable to the U.S. Medicare 

population, and that this 

generalizability is bolstered by the 

additional U.S.-specific information and 

findings. The applicant asserted that 

while it does not believe that results in 

sample populations would significantly 

differ from results in the U.S. patient 

population, the application also now 

includes additional evidence that 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38519 

135Patient Preference for a Future Dialyzer Study, 

prepared by Beghou Consulting on behalf of Baxter 

International. Survey results; December 2021. 

136Weiner D., et al. Efficacy and Safety of 

Expanded Hemodialysis with the Theranova 400 

Dialyzer: A Randomized Controlled Trial, CJASN15: 

1310–1319, 2020. doi: 10.2215/CJN.01210120. 

137Alarcon J.C., Bunch A., Ardila F., et al. Impact 

of Medium Cut-Off Dialyzers on Patient-Reported 

Outcomes: COREXH Registry. Blood Purification. 

2021; 50(1):110–118. DOI: 10.1159/000508803. 

PMID: 33176299. 

138Ariza, J.G., Walton, S.M., Suarez, A.M., 

Sanabria, M., Vesga, J.I. An initial evaluation of 

expanded hemodialysis on hospitalizations, drug 

utilization, costs, and patient utility in Colombia. 

Ther Apher Dial. 2021; 25: 621– 627. https://

doi.org/10.1111/1744-9987.13620. 

139Bolton S., Gair R., Nilsson L.G., Matthews M., 

Stewart L., McCullagh N. Clinical Assessment of 

Dialysis Recovery Time and Symptom Burden: 

Impact of Switching Hemodialysis Therapy Mode. 

Patient Relat Outcome Meas.2021;12:315–321 

https://doi.org/10.2147/PROM.S325016. 

140Lim J.H., Jeon Y., Yook J.M., et al. Medium 

cut-off dialyzer improves erythropoiesis stimulating 

agent resistance in a hepcidin-independent manner 

in maintenance hemodialysis patients: results from 

a randomized controlled trial. Sci Rep. 

2020;10(1):16062. Published 2020 Sep 29. 

doi:10.1038/s41598–020–73124–x. 

141Lim J.H., Park Y., Yook J.M., et al. Randomized 

controlled trial of medium cut-off versus high-flux 

dialyzers on quality of life outcomes in 

maintenance hemodialysis patients. Nature Sci Rep. 

2020;10(1):7780. Published 2020 May 8. 

doi:10.1038/s41598–020–64622–z. 

142Sanabria R.M., Hutchison C.A., Vesga J.I., 

Ariza J.G., Sanchez R., Suarez A.M. Expanded 

Hemodialysis and Its Effects on Hospitalizations 

and Medication Usage: A Cohort Study. Nephron 

2021;145:179–187. doi: 10.1159/000513328. 

143Weiner D., et al. Efficacy and Safety of 

Expanded Hemodialysis with the Theranova 400 

Dialyzer: A Randomized Controlled Trial, CJASN15: 

1310–1319, 2020. doi: 10.2215/CJN.01210120. 

144Tran H., Falzon L., Bernardo A., Beck W., 

Blackowicz M. Reduction in all-cause 

Hospitalization Events Seen in a Randomized 

Controlled Trial Comparing Expanded 

Hemodialysis vs High-Flux Dialysis. Annual 

Dialysis Conference. Abstract #1070. Published 

2021 Jan 28. 

145Molano A.P., Hutchison C.A., Sanchez R., 

Rivera A.S., Buitrago G., Dazzarola M.P., Munevar 

M., Guerrero M., Vesga J.I., Sanabria M., Medium 

Cut-Off Versus High-Flux Hemodialysis Membranes 

and Clinical Outcomes: A Cohort Study Using 

Inverse Probability Treatment Weighting, Kidney 

Medicine (2022), doi: https://doi.org/10.1016/ 

j.xkme.2022.100431. 

146Ariza, JG, Walton, SM, Suarez, AM, Sanabria, 

M, Vesga, JI. An initial evaluation of expanded 

hemodialysis on hospitalizations, drug utilization, 

costs, and patient utility in Colombia. Ther Apher 

Dial. 2021; 25: 621– 627. https://doi.org/10.1111/ 

1744-9987.13620. 

147Sanabria RM, Hutchison CA, Vesga JI, Ariza 

JG, Sanchez R., Suarez AM. Expanded 

Hemodialysis and Its Effects on Hospitalizations 

and Medication Usage: A Cohort Study. Nephron 

2021;145:179–187. doi: 10.1159/000513328. 

directly addressed U.S. patients, 

including: a new study on U.S. 

hospitalization rates; new survey data 

from U.S. patients, health care 

providers, and payers, which 

demonstrated THERANOVA’s value, 

clinical improvements, and QoL 

enhancements; 135 and includes new 

testimonials in support of the TPNIES 

application for THERANOVA from U.S. 

kidney care providers: a nephrologist 

with 10 years of experience, dialysis 

nurse with 15 years of experience, and 

a pediatric dialysis nurse practitioner 

with over 10 years of experience. The 

applicant noted that the survey data 

came from three separate doubleblinded surveys presented to each 

respondent group with information 

about THERANOVA’s benefits and then 

assessed reactions—including patients’ 

interest in switching from their current 

HD therapy to THERANOVA’s HDx 

therapy, the likelihood that health care 

providers would recommend 

THERANOVA to patients and 

colleagues, and payers’ evaluations of 

THERANOVA’s potential to generate 

value for their health plans and patient 

enrollees. The applicant noted that 

overall, patients overwhelmingly 

wanted to use THERANOVA, health 

care providers strongly indicated that 

they would recommend THERANOVA 

to patients and peers, and payers 

identified several of THERANOVA’s 

improvements as generating value. The 

applicant asserted that the peervalidated studies, and additional 

evidence that further addresses the U.S. 

patient population, provide the support 

necessary to conclude that 

THERANOVA is a substantial clinical 

improvement over existing technologies. 

The applicant also stated that in 

addition to THERANOVA’s 

demonstrated effectiveness, additional 

evidence demonstrates THERANOVA’s 

safety. The applicant explained that in 

the time since it submitted the CY 2021 

TPNIES application to CMS, FDA 

reviewed THERANOVA’s randomized, 

controlled clinical IDE trial and 

additional evidence supporting 

THERANOVA’s safety and effectiveness, 

and granted marketing authorization. 

The applicant stated that the IDE trial 

demonstrated that THERANOVA’s HDx 

therapy provides superior removal of 

harmful LMMs while maintaining 

adequate serum albumin levels.136 The 

applicant noted that FDA’s 

comprehensive review and subsequent 

approval of THERANOVA establishes 

THERANOVA’s safety and effectiveness 

for its intended use: treatment of 

chronic kidney failure. 

(b) CMS Preliminary Assessment of 

Substantial Clinical Improvement 

Claims and Sources 

After a review of the information 

provided by the applicant, we note that 

the applicant submitted the full, 

published peer-reviewed papers for 

several of the abstracts, posters, and 

incomplete manuscripts that were 

previously submitted with its CY 2021 

TPNIES application,137 138 139 140 141 142

and the remaining evidence submitted 

with the CY 2023 application was new. 

We have identified the following 

concerns regarding THERANOVA and 

the substantial clinical improvement 

eligibility criteria for the TPNIES. We 

note that, consistent with § 413.236(c), 

CMS will announce its final 

determination regarding whether 

THERANOVA meets the substantial 

clinical improvement criteria and other 

eligibility criteria for the TPNIES in the 

CY 2023 ESRD PPS final rule. 

With respect to the applicant’s claim 

that THERANOVA leads to reduced 

hospitalization rates, we note that the 

applicant included studies from the 

previous submission and supplemented 

with newer studies, such as the Tran et. 

al. (2021) poster abstract. We note that 

the poster abstract was a post hoc 

analysis of a previous open-label 

study,143 which had an average followup period of 4.5 months in the 

THERANOVA group. We question 

whether this short time period is 

sufficient to see changes in 

hospitalization from interventions 

aimed at increasing clearance of uremic 

toxins. It may be helpful to see if this 

outcome is sustained in longer term 

follow-up.144

We also note that, although authors in 

the Molano et. al. (2022) study used 

inverse probability treatment weighting 

(IPTW), the study was unblinded and 

could influence treatment decisions in 

the group using the THERANOVA 

dialyzer. Moreover, we note that 

patients seemed healthier in the 

THERANOVA arm, and had more 

fistulas, fewer catheters, and higher 

Karnofsky indices. We also note that the 

THERANOVA arm had more intensive 

dialysis at baseline and throughout the 

duration of the study (Kt/V of 1.7 vs. 

1.6), suggestive of more intensive small 

molecule clearance and more intensive 

dialysis overall. Therefore, it is unclear 

whether the outcome differences 

between the two arms could be due to 

factors other than the dialyzer type. We 

question whether IPTW would be 

sufficient to overcome these biases, 

especially the Kt/V bias, which 

persisted even after the baseline 

period.145

In addition, we note that the studies 

by Ariza et al. (2021) 146 and Sanabria et 

al. (2021),147 using the same study 

sample population, were limited by 

absence of a control group, and had 

non-significant differences in 

hospitalization rate between baseline 

HF–HD and after switching to HDx: 0.77 


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38520 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

148Lim JH, Park Y., Yook JM, et al. Randomized 

controlled trial of medium cut-off versus high-flux 

dialyzers on quality of life outcomes in 

maintenance hemodialysis patients. Nature Sci Rep. 

2020;10(1):7780. Published 2020 May 8. 

doi:10.1038/s41598–020–64622–z. 

149Bolton S., Gair R., Nilsson LG, Matthews M., 

Stewart L., McCullagh N. Clinical Assessment of 

Dialysis Recovery Time and Symptom Burden: 

Impact of Switching Hemodialysis Therapy Mode. 

Patient Relat Outcome Meas.2021;12:315–321 

https://doi.org/10.2147/PROM.S325016. 

150Penny J., Jarosz P., Salerno F., Lemoine S., 

McIntyre CW. Impact of Expanded Hemodialysis 

Using Medium Cut-off Dialyzer on Quality of Life: 

Application of Dynamic Patient-Reported Outcome 

Measurement Tool. Kidney Medicine. Published 

2021, Jul. 29. https://doi.org/10.1016/ 

j.xkme.2021.05.010. 

151Alarcon JC, Bunch A., Ardila F., et al. Impact 

of Medium Cut-Off Dialyzers on Patient-Reported 

Outcomes: COREXH Registry. Blood Purification. 

2021; 50(1):110–118. DOI: 10.1159/000508803. 

PMID: 33176299. 

152Lim JH, Jeon Y., Yook JM, et al. Medium cutoff dialyzer improves erythropoiesis stimulating 

agent resistance in a hepcidin-independent manner 

in maintenance hemodialysis patients: results from 

a randomized controlled trial. Sci Rep. 

2020;10(1):16062. Published 2020 Sep 29. 

doi:10.1038/s41598–020–73124–x. 

153See also: CMS Provider Reimbursement 

Manual, Chapter 1, Section 104.1. Available at: 

https://www.cms.gov/Regulations-and-Guidance/ 

Guidance/Manuals/Paper-Based-Manuals-Items/ 

CMS021929. 

154 86 FR 61889 through 61906. 

155CMS Transmittal 11295 rescinded and 

replaced CMS Transmittal 11278, dated February 

24, 2022. 

(95 percent CI: 0.60–0.98, 61 events) to 

0.71 (95 percent CI: 0.55–0.92, 57 

events), p=0.6987. 

With respect to the applicant’s claim 

that THERANOVA leads to improved 

QoL, we note that in the study by Lim, 

Park, et al. (2020), it is unclear if these 

findings could result from chance alone, 

when considering the many QoL 

outcomes examined, due to multiplehypothesis testing concerns. In 

particular, we note that differences 

associated with use of THERANOVA 

were statistically significant in only 2 

out of 26 QoL outcomes assessed, and 

in both cases the p-value was greater 

than 0.04. We also note that although 

the THERANOVA group had lower 

mean scores for morning pruritus 

distribution (p=0.034), there was a nonsignificant difference in afternoon 

pruritis distribution between the two 

groups (p=0.347).148

Overall, we note that most of studies 

in the updated evidence submitted for 

the CY 2023 application are open-label 

and observational, which may 

potentially bias results. We also note 

that many of the studies are single-arm 

studies that do not employ a control 

group, which may make it difficult to 

determine if observed improvements in 

clinical outcomes are due to the use of 

THERANOVA or if the improvements 

may have also occurred with previously 

available dialysis 

membranes.149 150 151 152

We are inviting public comment as to 

whether THERANOVA meets the 

TPNIES substantial clinical 

improvement criteria. 

(6) Capital-Related Assets Criterion 

(§ 413.236(b)(6)) 

With respect to the sixth TPNIES 

eligibility criterion under 

§ 413.236(b)(6), limiting capital-related 

assets from being eligible for the 

TPNIES, except those that are home 

dialysis machines, the applicant did not 

address this criterion within its 

application. However, THERANOVA 

does not meet the definition of a capitalrelated asset, as defined in 

§ 413.236(a)(2), because it is not an asset 

that the ESRD facility has an economic 

interest in through ownership and is 

subject to depreciation.153 We welcome 

comments on THERANOVA’s status as 

a non-capital related asset. 

d. Continuation of Approved 

Transitional Add-On Payment 

Adjustments for New and Innovative 

Equipment and Supplies for CY 2023 

In this section of the proposed rule, 

we provide a table that identifies the 

one item that was approved for the 

TPNIES for CY 2022 154 and which is 

still in the TPNIES payment period, as 

specified in § 413.236(d)(1), for CY 

2023. CMS will continue paying for this 

item using the TPNIES for CY 2023. 

This table also identifies the item’s 

HCPCS coding information as well as 

the payment adjustment effective date 

and end date. 

e. Continuation of Approved 

Transitional Drug Add-On Payment 

Adjustments for New Renal Dialysis 

Drugs or Biological Products for CY 

2023 

Under § 413.234(c)(1), a new renal 

dialysis drug or biological product that 

is considered included in the ESRD PPS 

base rate is paid the TDAPA for 2 years. 

In December 2021, CMS approved 

KorsuvaTM (difelikafalin) for the TDAPA 

under the ESRD PPS, effective April 1, 

2022. Implementation instructions are 

specified in CMS Transmittal 11295,155

dated March 15, 2022, and available at: 

https://www.cms.gov/files/document/ 

r11295CP.pdf. 

In this section of the proposed rule, 

we provide a table that identifies the 

one new renal dialysis drug that was 

approved for the TDAPA effective in CY 

2022, and for which the TDAPA 

payment period as specified in 

§ 413.234(c)(1) will continue in CY 

2023. This table also identifies the 

product’s HCPCS coding information as 

well as the payment adjustment 

effective date and end date. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2EP28JN22.015</GPH>

TABLE 14: Continuation of Approved Transitional Add-On Payment Adjustments for 

New and Innovative Equipment and Supplies 

HCPCS Long Descriptor Payment Payment Adjustment End Date 

Code Adjustment 

Effective 

Date 

E1629 Tablo hemodialysis system 1/1/2022 12/31/2023 

for the billable dialysis 

service 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38521 

D. Request for Information About 

Addressing Issues of Payment for New 

Renal Dialysis Drugs and Biological 

Products After Transitional Drug AddOn Payment Adjustment (TDAPA) 

Period Ends 

1. Background on the TDAPA 

Section 217(c) of PAMA required the 

Secretary to establish a process for 

including new injectable and 

intravenous (IV) products into the ESRD 

PPS bundled payment as part of the CY 

2016 ESRD PPS rulemaking. Therefore, 

in the CY 2016 ESRD PPS final rule (80 

FR 69013 through 69027), we finalized 

a process based on our longstanding 

drug designation process that allowed 

us to include new injectable and 

intravenous products into the ESRD PPS 

bundled payment and, when 

appropriate, modify the ESRD PPS 

payment amount. We codified this 

process in our regulations at 42 CFR 

413.234. We finalized that the process is 

dependent upon the ESRD PPS 

functional categories, consistent with 

the drug designation process we have 

followed since the implementation of 

the ESRD PPS in 2011. As we explained 

in the CY 2016 ESRD PPS final rule (80 

FR 69014), when we implemented the 

ESRD PPS, drugs and biological 

products were grouped into functional 

categories based on their action. This 

was done for the purpose of adding new 

drugs or biological products with the 

same functions to the ESRD PPS 

bundled payment as expeditiously as 

possible after the drugs are 

commercially available so beneficiaries 

have access to them. As we stated in the 

CY 2011 ESRD PPS final rule, we did 

not specify all of the drugs and 

biological products within these 

categories because we did not want to 

inadvertently exclude drugs that may be 

substitutes for drugs we identified and 

we wanted the ability to reflect new 

drugs and biological products 

developed or changes in standards of 

practice (75 FR 49052). 

In the CY 2016 ESRD PPS final rule, 

we finalized the definition of an ESRD 

PPS functional category in § 413.234(a) 

as a distinct grouping of drugs or 

biologicals, as determined by CMS, 

whose end action effect is the treatment 

or management of a condition or 

conditions associated with ESRD (80 FR 

69077). 

We finalized a policy in the CY 2016 

ESRD PPS final rule that if a new renal 

dialysis injectable or IV product falls 

within an existing functional category, 

the new injectable drug or IV product is 

considered included in the ESRD PPS 

bundled payment and no separate 

payment is available. The new 

injectable or IV product qualifies as an 

outlier service. We noted in that rule 

that the ESRD bundled market basket 

updates the ESRD PPS base rate 

annually and accounts for price changes 

of the drugs and biological products. 

We also finalized in the CY 2016 

ESRD PPS final rule that, if the new 

renal dialysis injectable or IV product 

does not fall within an existing 

functional category, the new injectable 

or IV product is not considered 

included in the ESRD PPS bundled 

payment and the following steps occur. 

First, an existing ESRD PPS functional 

category is revised or a new ESRD PPS 

functional category is added for the 

condition that the new injectable or IV 

product is used to treat or manage. Next, 

the new injectable or IV product is paid 

for using the TDAPA codified in 

§ 413.234(c). Finally, the new injectable 

or IV product is added to the ESRD PPS 

bundled payment following payment of 

the TDAPA. 

In the CY 2016 ESRD PPS final rule, 

we finalized a policy in § 413.234(c) to 

pay the TDAPA until sufficient claims 

data for rate setting analysis for the new 

injectable or IV product are available, 

but not for less than 2 years. The new 

injectable or IV product is not eligible 

as an outlier service during the TDAPA 

period. We established that following 

the TDAPA period, the ESRD PPS base 

rate will be modified, if appropriate, to 

account for the new injectable or IV 

product in the ESRD PPS bundled 

payment. 

In CYs 2019 and 2020 ESRD PPS final 

rules (83 FR 56927 through 56949 and 

84 FR 60653 through 60677, 

respectively), we made several revisions 

to the drug designation process 

regulations at § 413.234. In the CY 2019 

ESRD PPS final rule, we revised 

regulations at § 413.234(a), (b), and (c) to 

reflect that the process applies for all 

new renal dialysis drugs and biological 

products that are FDA approved 

regardless of the form or route of 

administration. In addition, we revised 

§ 413.234(b) and (c) to expand the 

TDAPA to all new renal dialysis drugs 

and biological products, rather than just 

those in new ESRD PPS functional 

categories. In the CY 2020 ESRD PPS 

final rule, we revised § 413.234(b) and 

added paragraph (e) to exclude from 

TDAPA eligibility generic drugs 

approved by FDA under section 505(j) 

of the Federal Food, Drug, and Cosmetic 

Act and drugs for which the new drug 

application is classified by the FDA as 

Type 3, 5, 7 or 8, Type 3 in combination 

with Type 2 or Type 4, or Type 5 in 

combination with Type 2, or Type 9 

when the ‘‘parent NDA’’ is a Type 3, 5, 

7, or 8, effective January 1, 2020. 

Under our current TDAPA policy at 

§ 413.234(c), a new renal dialysis drug 

or biological product that falls within an 

existing ESRD PPS functional category 

is considered included in the ESRD PPS 

base rate and is paid the TDAPA for 2 

years. After the TDAPA period, the base 

rate will not be modified. If the new 

renal dialysis drug or biological product 

does not fall within an existing ESRD 

PPS functional category, it is not 

considered included in the ESRD PPS 

base rate, and it will be paid the TDAPA 

until sufficient claims data for rate 

setting analysis is available, but not for 

less than 2 years. After the TDAPA 

period, the ESRD PPS base rate will be 

modified, if appropriate, to account for 

the new renal dialysis drug or biological 


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TABLE 15: Continuation of Approved Transitional Drug Add-On Payment 

Adjustments for New Renal Dialysis Drugs or Biological Products 

HCPCS Long Descriptor Payment Payment Adjustment End 

Code Adjustment Date 

Effective 

Date 

J0879 Injection, difelikefalin, 0.1 4/1/2022 3/31/2024 

microgram, (for esrd on 

dialvsis) 
38522 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

product in the ESRD PPS bundled 

payment. 

As discussed in the CY 2019 and CY 

2020 ESRD PPS final rules, for new 

renal dialysis drugs and biological 

products that fall into an existing ESRD 

PPS functional category, the TDAPA 

helps ESRD facilities to incorporate new 

drugs and biological products and make 

appropriate changes in their businesses 

to adopt such products, provides 

additional payments for such associated 

costs, and promotes competition among 

the products within the ESRD PPS 

functional categories, while focusing 

Medicare resources on products that are 

innovative (83 FR 56935; 84 FR 60654). 

For new renal dialysis drugs and 

biological products that do not fall 

within an existing ESRD PPS functional 

category, the TDAPA is a pathway 

toward a potential base rate 

modification (83 FR 56935). 

For the complete history of the 

TDAPA policy, including the pricing 

methodology, please see the CY 2016 

ESRD PPS final rule (80 FR 69023 

through 69024), CY 2019 ESRD PPS 

final rule (83 FR 56932 through 56948), 

and CY 2020 ESRD PPS final rule (84 FR 

60653 through 60681). 

2. Current Issues and Concerns of 

Interested Parties 

In the CY 2019 ESRD PPS final rule, 

we discussed that a commenter stated 

concern over beneficiary access issues at 

the end of the TDAPA period. We 

responded by noting the drug or 

biological product will become eligible 

under the outlier policy after the 

TDAPA period if it is not considered to 

be a composite rate drug. We stated that 

we expect that if a beneficiary is 

responding well to a drug or biological 

product paid for using the TDAPA that 

they will continue to have access to that 

therapy after the TDAPA period ends 

(83 FR 56941). Since 2019, dialysis 

associations and pharmaceutical 

representatives have expressed concerns 

to CMS about payment following the 

TDAPA period for new renal dialysis 

drugs and biological products that are 

paid for using the TDAPA. They 

asserted that unless money is added to 

the ESRD PPS base rate for these drugs 

and biological products, similar to what 

occurred with calcimimetics (85 FR 

71406 through 71410), then it is 

unlikely that ESRD facilities would be 

able to sustain the expense of these 

drugs and biological products when the 

TDAPA period ends. Further, they 

cautioned that uncertainty about 

payment could affect ESRD facility 

adoption of these drugs and biological 

products during the TDAPA period. To 

date, calcimimetics are the only renal 

dialysis drugs or biological products 

that have been paid for using the 

TDAPA and incorporated into the ESRD 

PPS bundled payment following the 

TDAPA payment period. There have 

been no other renal dialysis drugs or 

biological products that have completed 

their TDAPA payment period, and as a 

result CMS does not yet have data on 

other drugs or biological products in 

order to evaluate the specific risks and 

access challenges that interested parties 

have raised. 

As mentioned in the CY 2019 (83 FR 

56941) and CY 2020 (84 FR 60672 and 

60693) ESRD PPS final rules, many 

commenters suggested a rate-setting 

exercise at the end of TDAPA for all 

new renal dialysis drugs and biological 

products. We responded by noting that 

we do not believe adding dollars to the 

ESRD PPS base rate would be 

appropriate for new drugs that fall into 

the ESRD PPS functional categories 

given that the purpose of the TDAPA for 

these drugs is to help ESRD facilities 

incorporate new drugs and biological 

products and make appropriate changes 

in their businesses to adopt such 

products, provide additional payments 

for such associated costs, and promote 

competition among the products within 

the ESRD PPS functional categories. In 

addition, we explained that the ESRD 

PPS base rate already includes money 

for renal dialysis drugs and biological 

products that fall within an existing 

ESRD PPS functional category. Under a 

PPS, Medicare makes payments based 

on a predetermined, fixed amount that 

reflects the average patient, and there 

will be patients whose treatment costs at 

an ESRD facility would be more or less 

than the ESRD PPS payment amount. A 

central objective of the ESRD PPS and 

of prospective payment systems in 

general is for facilities to be efficient in 

their resource use. 

We also note that price changes to the 

ESRD bundled payment are updated 

annually by the ESRDB market basket, 

which includes a pharmaceuticals cost 

category weight, as noted in section 

II.B.1.a.(1)(b) of this proposed rule. In 

addition, our analysis of renal dialysis 

drugs and biological products paid for 

under the ESRD PPS has found costs 

and utilization to have decreased over 

time relative to market basket growth for 

some high volume formerly separately 

billable renal dialysis drugs. Therefore, 

we believe that any potential 

methodology for an add-on payment 

adjustment in these circumstances 

should adapt to changes in price and 

utilization over time. 

3. Suggestions for Possible 

Methodologies for an Add-On Payment 

Adjustment for Certain Renal Dialysis 

Drugs and Biological Products Within 

an Existing Functional Category 

Section 1881(b)(14)(D)(iv) of the Act 

provides that the ESRD PPS may 

include such other payment 

adjustments as the Secretary determines 

appropriate, such as a payment 

adjustment—(I) for pediatric providers 

of services and renal dialysis facilities; 

(II) by a geographic index, such as the 

index referred to in paragraph (12)(D), 

as the Secretary determines to be 

appropriate; and (III) for providers of 

services or renal dialysis facilities 

located in rural areas. In response to the 

patient access concerns discussed 

previously in this section of the 

proposed rule, we are considering 

whether it would be appropriate to 

establish an add-on payment adjustment 

for certain renal dialysis drugs and 

biological products in existing ESRD 

PPS functional categories after their 

TDAPA period ends. We note that any 

add-on payment adjustment would be 

subject to the Medicare Part B 

beneficiary co-insurance payment under 

ESRD PPS. We are considering a 

number of methods that could be used 

to develop an add-on payment 

adjustment for these drugs and 

biological products. The methods 

presented below differ in terms of 

which formerly separately billable renal 

dialysis drugs and biological products 

would be considered for a potential addon payment adjustment. We note that 

under these potential options, we would 

apply a reconciliation methodology only 

when an add-on payment adjustment 

would align resource use with payment 

for a renal dialysis drug or biological 

product in an existing ESRD PPS 

functional category. 

• Reconcile the average expenditure 

per treatment of the renal dialysis drug 

or biological product that was paid for 

using the TDAPA with any reduction in 

the expenditure per treatment across all 

other formerly separately billable renal 

dialysis drugs and biological products. 

For example, if the reduction in the cost 

of all formerly separately billable renal 

dialysis drugs and biological products 

per treatment excluding the renal 

dialysis drug or biological product that 

was paid for using the TDAPA is $5 and 

the cost per treatment of the renal 

dialysis drug or biological product that 

was paid for using the TDAPA is $10, 

the add-on payment adjustment per 

treatment would be $10 minus $5, 

which is $5. The reductions in formerly 

separately billable renal dialysis drug 

and biological products expenditures 


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156https://www.cms.gov/pillar/health-equity. 

157 Joynt KE, Orav E., Jha AK. Thirty-Day 

Readmission Rates for Medicare Beneficiaries by 

Race and Site of Care. JAMA. 2011; 305(7):675–681. 

158Lindenauer PK, Lagu T., Rothberg MB, et al. 

Income Inequality and 30-Day Outcomes After 

Acute Myocardial Infarction, Heart Failure, and 

Pneumonia: Retrospective Cohort Study. British 

Medical Journal. 2013; 346. 

159Trivedi AN, Nsa W., Hausmann LRM, et al. 

Quality and Equity of Care in U.S. Hospitals. New 

England Journal of Medicine. 2014; 371(24):2298– 

2308. 

160Polyakova, M., et al. Racial Disparities In 

Excess All-Cause Mortality During The Early 

COVID–19 Pandemic Varied Substantially Across 

States. Health Affairs. 2021; 40(2): 307–316. 

161Rural Health Research Gateway. Rural 

Communities: Age, Income, and Health Status. 

Rural Health Research Recap. November 2018. 

Available at: https://www.ruralhealthresearch.org/ 

assets/2200-8536/rural-communities-age-incomehealth-status-recap.pdf. 

162https://www.minorityhealth.hhs.gov/assets/ 

PDF/Update_HHS_Disparities_Dept-FY2020.pdf. 

163www.cdc.gov/mmwr/volumes/70/wr/ 

mm7005a1.htm. 

164Poteat TC, Reisner SL, Miller M., Wirtz AL. 

COVID–19 Vulnerability of Transgender Women 

With and Without HIV Infection in the Eastern and 

Southern U.S. Preprint. medRxiv. 

2020;2020.07.21.20159327. Published 2020 Jul 24. 

doi:10.1101/2020.07.21.20159327. 

per treatment would be calculated by 

using the difference between these 

expenditures in the most recent year 

with claims data available and these 

expenditures in the current base year for 

the ESRDB market basket, proposed to 

be CY 2020 in this rule. For example, if 

the rule year for which we are 

calculating the add-on payment 

adjustment is CY 2023 and the base year 

for the ESRDB market basket is CY 2020, 

the reduction in formerly separately 

billable renal dialysis drugs and 

biological products expenditures would 

be the difference between these 

expenditures in CY 2021 (the year with 

the most recent claims data) and those 

in CY 2020. 

• Reconcile the average expenditure 

per treatment for the renal dialysis drug 

or biological product that was paid for 

using the TDAPA with any reduction in 

expenditures for other formerly 

separately billable renal dialysis drugs 

or biological products, where such 

reduction can be empirically attributed 

to the renal dialysis drug or biological 

product that was paid for using the 

TDAPA. For example, if the utilization 

of the renal dialysis drug or biological 

product that was paid for using the 

TDAPA was found to be statistically 

associated with reduction in 

expenditure of one drug in an ESRD PPS 

functional category amounting to $1 per 

treatment, and the cost per treatment of 

the renal dialysis drug or biological 

product that was paid for using the 

TDAPA is $10, the add-on payment 

adjustment per treatment would be $10 

minus $1, which is $9. 

• Reconcile the average expenditure 

per treatment for the renal dialysis drug 

or biological product that was paid for 

using the TDAPA with any reduction in 

expenditures for other formerly 

separately billable renal dialysis drugs 

that fall into one or more ESRD PPS 

functional categories, where such 

expenditure reduction is data-driven, 

based on end action effect, to be 

attributable to the renal dialysis drug or 

biological product that was paid for 

using the TDAPA. Such a data-driven 

determination would be made by CMS. 

For example, if the cost per treatment of 

the renal dialysis drug or biological 

product that was paid for using the 

TDAPA is $10 and the reduction in the 

expenditure for other clinically related 

formerly separately billable renal 

dialysis drugs is $0.50 per treatment, the 

add-on payment adjustment would be 

$10 minus $0.50, which is $9.50. 

• Only use the average expenditure 

per treatment of the renal dialysis drug 

or biological product that was paid for 

using the TDAPA. For example, if the 

per treatment cost of the renal dialysis 

drug or biological product that was paid 

for using the TDAPA is $10, this would 

be the amount of the add-on payment 

adjustment. 

4. Request for Information on an AddOn Payment Adjustment After the 

TDAPA Period Ends 

We are considering options regarding 

an add-on payment adjustment for 

certain renal dialysis drugs and 

biological products in existing ESRD 

PPS functional categories after the 

TDAPA period ends. We are issuing a 

request for information to seek feedback 

from the public on the following 

questions. When responding, please 

note the question to which your 

comment is addressing. 

• Is an add-on payment adjustment 

for certain renal dialysis drugs and 

biological products in existing ESRD 

PPS functional categories after the 

TDAPA period ends needed? If so, why? 

What criteria should CMS establish to 

determine which renal dialysis drugs or 

biological products would be included 

in the calculation for an add-on 

payment adjustment after the TDAPA 

period ends? 

• If an add-on payment adjustment 

for certain renal dialysis drugs and 

biological products in existing ESRD 

PPS functional categories after the 

TDAPA period is needed, are the 

methods discussed in section II.D.4 of 

this proposed rule sufficient to address 

the add-on payment adjustment? 

++ Which method would be most 

appropriate? 

++ Are there changes to the 

methodologies that CMS should 

consider to improve our ability to align 

payment for renal dialysis services with 

resource utilization? Please provide as 

much detail as possible. 

++ Are there other methodologies that 

CMS should consider? Please provide as 

much detail as possible. 

While we will not be responding to 

specific comments submitted in 

response to this RFI, we intend to use 

this input to inform future policy 

development. Any potential payment 

policies related to this RFI would be 

proposed through a separate notice and 

comment rulemaking. We look forward 

to receiving feedback on these topics, 

and note that responses to the RFI 

should focus on how the suggestions 

could be applied to the ESRD PPS. Data 

to support any proposed approaches 

will be extremely important, so please 

include any data that supports your 

comments. 

E. Requests for Information on Health 

Equity Issues Within the ESRD PPS With 

a Focus on the Pediatric Payment 

1. Background 

CMS is committed to achieving equity 

in health care for our beneficiaries by 

recognizing and working to redress 

inequities in our policies and programs 

that serve as barriers to access to care 

and quality health outcomes. In this 

proposed rule, ‘‘health equity means the 

attainment of the highest level of health 

for all people, where everyone has a fair 

and just opportunity to attain their 

optimal health regardless of race, 

ethnicity, disability, sexual orientation, 

gender identity, socioeconomic status, 

geography, preferred language, or other 

factors that affect access to care and 

health outcomes.’’ 156

Significant and persistent inequities 

in health care outcomes exist in the 

United States. Belonging to a racial or 

ethnic minority group; living with a 

disability; being a member of the 

LGBTQ+ community; living in a rural 

area; or being near or below the Federal 

Poverty Level, are factors frequently 

associated with worse health 

outcomes.157 158 159 160 161 162 163 164

Numerous studies have shown that 

among Medicare beneficiaries, 

individuals belonging to a racial or 

ethnic minority group often experience 

delays in care, receive lower quality of 

care, report dissatisfactory experiences 

of care, and experience more frequent 

hospital readmissions and procedural 

complications than white patients and 


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38524 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

165Martino, SC, Elliott, MN, Dembosky, JW, 

Hambarsoomian, K, Burkhart, Q, Klein, DJ, Gildner, 

J, and Haviland, AM. Racial, Ethnic, and Gender 

Disparities in Health Care in Medicare Advantage. 

Baltimore, MD: CMS Office of Minority Health. 

2020. 

166 Guide to Reducing Disparities in 

Readmissions. CMS Office of Minority Health. 

Revised August 2018. Available at: https://

www.cms.gov/About-CMS/Agency-Information/ 

OMH/Downloads/OMH_Readmissions_Guide.pdf. 

167Singh JA, Lu X, Rosenthal GE, Ibrahim S., 

Cram P. Racial disparities in knee and hip total 

joint arthroplasty: an 18-year analysis of national 

Medicare data. Ann Rheum Dis. 2014 Dec; 

73(12):2107–15. 

168Rivera-Hernandez M., Rahman M., Mor V., 

Trivedi AN. Racial Disparities in Readmission Rates 

among Patients Discharged to Skilled Nursing 

Facilities. J Am Geriatr Soc. 2019 Aug;67(8):1672– 

1679. 

169 Joynt KE, Orav E., Jha AK. Thirty-Day 

Readmission Rates for Medicare Beneficiaries by 

Race and Site of Care. JAMA. 2011;305(7):675–681. 

170Tsai TC, Orav EJ, Joynt KE. Disparities in 

surgical 30-day readmission rates for Medicare 

beneficiaries by race and site of care. Ann Surg. Jun 

2014;259(6):1086–1090. 

171https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2022.pdf. 

172Sex is derived from the Enrollment Database 

(EDB), and is categorized into male and female. 

https://www.cms.gov/files/document/end-stagerenal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2022.pdf. 

173Beneficiary age (in years) is measured at the 

beginning of each month, and is obtained from the 

Medicare beneficiary birth date variable in the EDB 

Record Identification Code (RIC) A Table. The 

following seven age groups are used for all relevant 

data presentation for this TEP: less than 12, 13–17, 

18–44, 45–59, 60–69, 70–79, and 80. https://

www.cms.gov/files/document/end-stage-renaldisease-prospective-payment-system-technicalexpert-panel-summary-report-april-2022.pdf. 

174Section 226A of the Act; 42 CFR 406.13. 

175ESRD beneficiaries are stratified into four 

mutually exclusive categories based on their 

original Medicare entitlement: (1) less than 65 years 

of age and had both ESRD and disability at time of 

enrollment; (2) less than 65 years of age and had 

ESRD at time of enrollment; (3) less than 65 years 

of age and were disabled at time of enrollment; and 

(4) those who aged into Medicare (and were 

diagnosed with ESRD after turning 65). Placeholder 

for TEP 4 Report. 

176Beneficiary race and ethnicity information is 

derived from the Research Triangle Institute (RTI) 

race algorithm, as obtained from CMS Common 

Medicare Environment (CME) data. This data 

provides seven mutually exclusive categories: NonHispanic White, Black/African American, Asian or 

Pacific Islander, Hispanic, American Indian or 

Alaska Native, and Other/Unknown. Placeholder 

for TEP 4 Report. 

177The Core-Based Statistical Area (CBSA) 

designations are used to determine urban or rural 

residency status. Beneficiaries whose county of 

residence is located within a CBSA are deemed 

urban residents. https://www.cms.gov/files/ 

document/end-stage-renal-disease-prospectivepayment-system-technical-expert-panel-summaryreport-april-2022.pdf. 

178Among Medicare Part D enrollees, Medicare 

benefit status was derived from monthly enrollment 

status and low-income status in EDB. Both the 

beneficiary’s dual eligibility status (whether the 

beneficiary was eligible for both Medicare and 

Medicaid in a given month) and Premium Subsidy 

status (whether the beneficiary was receiving any 

level of premium subsidy in a given month) were 

considered in determining the beneficiary’s 

Medicare benefit status. https://www.cms.gov/files/ 

document/end-stage-renal-disease-prospectivepayment-system-technical-expert-panel-summaryreport-april-2022.pdf. 

179This result is believed to be due to the fact 

non-white beneficiaries are more often dually 

eligible for Medicare and Medicaid compared to 

White beneficiaries. The low-income subsidies 

provided to dually eligible beneficiaries gives them 

the means to enroll in Part D, which is likely why 

this percentage is slightly higher for non-whites. 

180ADI is a measure constructed by the Health 

Resources and Services Administration, and has 

been validated, refined and adapted by researchers 

at the University of Wisconsin, Madison, to rank 

neighborhoods (geographically localized 

communities within a larger cities, towns, suburbs 

or rural areas) by socioeconomic disadvantage, 

specifically factoring in income, education, 

employment, and housing quality. From these 

percentile rankings, six mutually exclusive 

categories of ADI Rankings are constructed with the 

1st to 5th percentile being the least disadvantaged 

and 95th to 100th percentile being most 

disadvantaged. https://www.cms.gov/files/ 

document/end-stage-renal-disease-prospectivepayment-system-technical-expert-panel-summaryreport-april-2022.pdf. 

patients with a higher levels of 

income.165 166 167 168 169 170 When 

compared to FFS beneficiaries not 

receiving renal dialysis services, FFS 

beneficiaries receiving renal dialysis 

services are disproportionately young, 

male, disabled, Black/AfricanAmerican, low income as measured by 

dually eligible Medicare and Medicaid 

status, and reside in an urban setting.171

a. Underserved Communities in the

ESRD Medicare Population

During the TEP held in December 

2021, CMS’s ESRD data contractor 

provided data stratified by the following 

factors to TEP participants in order to 

identify subpopulations for which 

health disparities may exist among the 

ESRD population: sex, age, race/ 

ethnicity, urban/rural residence, 

socioeconomic status proxy (combines 

both dual eligibility and receipt of 

premium subsidy for Part D), original 

reason for Medicare entitlement, and the 

Area Deprivation Index (ADI) for the 

beneficiary’s residence (which also 

serves as a proxy for socioeconomic 

status). Definitions for these categories 

as well as relevant results, based on 

enrollment numbers in January 2020, 

are detailed below. 

• Sex 172—The ESRD PPS population

was 58.7 percent male compared to 46.9 

percent male in the non-ESRD Medicare 

population. 

• Age 173—The ESRD PPS population

was younger than the non-ESRD 

Medicare population, in part because 

ESRD is a qualifying condition for 

Medicare, regardless of age, if the 

individual otherwise meets Social 

Security benefit qualifications.174

Approximately 40 percent of the ESRD 

PPS beneficiary population was younger 

than 60 compared to 10 percent in the 

non-ESRD Medicare population. 

• Original Reason for Medicare

Entitlement—The ESRD Medicare 

population had a higher proportion of 

beneficiaries entitled to Medicare due to 

disability compared to the non-ESRD 

population. Forty-seven percent of the 

ESRD population was originally eligible 

for Medicare due to disability (with or 

without ESRD), compared to 21 percent 

for the non-ESRD Medicare 

population.175

• Race and Ethnicity 176—Members of

racial or ethnic minority groups 

comprised a larger proportion of the 

ESRD Medicare population compared to 

the non-ESRD Medicare population. 

This was especially true among Blacks/ 

African-Americans who comprised 34.5 

percent of the ESRD population, 

compared to 8.9 percent of the nonESRD Medicare population. 

• Urban and Rural Residency 177—

ESRD Medicare beneficiaries were more 

likely to reside in urban areas than the 

non-ESRD Medicare population. 

Approximately 84 percent of ESRD 

beneficiaries lived in urban areas, while 

approximately 79.6 percent of the nonESRD Medicare population lived in 

urban areas. 

• Socioeconomic status proxy 178—

42.5 percent of the ESRD Medicare 

population was dually eligible for 

Medicare and Medicaid as compared to 

15.4 percent of the non-ESRD Medicare 

population. As compared to the nonESRD Medicare population, ESRD 

Medicare beneficiaries were more likely 

to be enrolled in Medicare Part D (73 

percent ESRD PPS as compared to 61 

percent of non-ESRD Medicare 

beneficiaries). Among ESRD Medicare 

beneficiaries, Non-Hispanic White 

beneficiaries are less likely to be 

enrolled in Medicare Part D (70.0 

percent Part D enrollment) compared to 

other groups (ranging from 72.3 to 77.2 

percent enrolled in Part D).179

• ADI 180—ESRD Medicare

beneficiaries were more likely to be 

living in socioeconomically 

disadvantaged neighborhoods compared 

to non-ESRD Medicare beneficiaries, 

approximately 29 percent of the ESRD 

PPS population resided in the most 

disadvantaged ADI percentiles (76th to 

100th percentile) compared to 19.2 

percent of non-ESRD Medicare 

beneficiaries. ESRD beneficiaries who 

were socioeconomically disadvantaged 

were more likely to be enrolled in 

Medicare Part D than those less 

disadvantaged. Based on the 

demographics of the Medicare ESRD 


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181Centers for Medicare & Medicaid Services 

Office of Minority Health. The CMS Framework for 

Health Equity 2022–2032. Available at: https://

www.cms.gov/sites/default/files/2022-04/CMS%20

Framework%20for%20Health%20Equity_2022%20

04%2006.pdf. 

182Centers for Medicare & Medicaid Services 

Office of Minority Health. Framework for Health 

Equity 2022–2032. Available at: https://

www.cms.gov/sites/default/files/2022-04/CMS%20

Framework%20for%20Health%20Equity_

2022%2004%2006.pdf. 

183Centers for Medicare & Medicaid Services. 

CMS Quality Strategy. 2016. Available at: https:// 

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/QualityInitiativesGenInfo/ 

Downloads/CMS-Quality-Strategy.pdf. 

184https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/Quality

InitiativesGenInfo/MMF/General-info-Sub-Page. 

185https://www.cms.gov/About-CMS/AgencyInformation/OMH/OMH-Mapping-MedicareDisparities. 

186Centers for Medicare & Medicaid Services. 

Rural-Urban Disparities in Health Care in Medicare. 

2019. Available at: https://www.cms.gov/AboutCMS/Agency-Information/OMH/Downloads/RuralUrban-Disparities-in-Health-Care-in-MedicareReport.pdf. 

187 Guide to Reducing Disparities in 

Readmissions. CMS Office of Minority Health. 

Revised August 2018. Available at: https://

www.cms.gov/About-CMS/Agency-Information/ 

OMH/Downloads/OMH_Readmissions_Guide.pdf. 

188CMS. Chronic Kidney Disease Disparities: 

Educational Guide for Primary Care. February 2020. 

Available at: https://www.cms.gov/files/document/ 

chronic-kidney-disease-disparities-educationalguide-primary-care.pdf. 

beneficiaries, it is clear that this 

population represents many individuals 

who belong to underserved 

communities, thus there is a need to be 

vigilant to combat any health disparities 

that emerge in the ESRD PPS. 

b. CMS Activities To Advance Health 

Equity 

The CMS Framework for Health 

Equity outlines a path to advance health 

equity that aims to support Quality 

Improvement Network Quality 

Improvement Organizations; federal, 

state, local, and tribal organizations; 

providers; researchers; policymakers; 

beneficiaries and their families; and 

other interested parties in activities to 

advance health equity.181 The CMS 

Framework for Health Equity focuses on 

five core priority areas which inform 

our policies and programs: (1) Expand 

the collection, reporting, and analysis of 

standardized data; (2) Assess causes of 

disparities within CMS programs and 

address inequities in policies and 

operations to close gaps; (3) Build 

capacity of health care organizations 

and the workforce to reduce health and 

health care disparities; (4) Advance 

language access, health literacy, and the 

provision of culturally tailored services 

and, (5) Increase all forms of 

accessibility to health care services and 

coverage.182 The CMS Quality 

Strategy 183 and Meaningful Measures 

Framework 184 also include elimination 

of disparities as central principles. CMS 

also requested information in the CY 

2022 ESRD PPS proposed rule on 

revising several related CMS programs 

to make reporting of health disparities 

based on social risk factors and race and 

ethnicity more comprehensive and 

actionable for ESRD facilities, providers, 

and patients (86 FR 36362 through 

36367). 

CMS’s efforts aimed at advancing 

health equity to date have included 

providing transparency of health 

disparities, supporting health care 

providers and health officials with 

evidence-informed solutions to address 

social determinants of health and 

advance health equity, and reporting to 

providers on gaps in quality. Some of 

those efforts are: 

• The CMS Mapping Medicare 

Disparities Tool, which is an interactive 

map that identifies areas of disparities 

and is a starting point to understand and 

investigate geographic, racial and ethnic 

differences in health outcomes for 

Medicare patients.185

• The Rural-Urban Disparities in 

Health Care in Medicare Report, which 

details rural-urban differences in health 

care experiences and clinical care.186

• The CMS Innovation Center’s 

Accountable Health Communities 

Model, which includes standardized 

collection of health-related social needs 

data. 

• The Guide to Reducing Disparities, 

which provides an overview of key 

issues related to disparities in 

readmissions and reviews set of 

activities that can help hospital leaders 

reduce readmissions in diverse 

populations.187

• The Chronic Kidney Disease 

Disparities: Educational Guide for 

Primary Care, which is intended to 

foster the development of primary care 

practice teams in order to enhance care 

for patients who are medically 

underserved with chronic kidney 

disease and are at risk of progression of 

disease or complications. The guide 

provides information about disparities 

in the care of patients with chronic 

kidney disease, presents potential 

actions that may improve care and 

suggests other available resources that 

may be used by primary care practice 

teams in caring for vulnerable 

patients.188

These efforts are informed by reports 

by the National Academies of Science, 

Engineering and Medicine and the 

Office of the Assistant Secretary for 

Planning and Evaluation, which have 

examined the influence of social risk 

factors on several of our programs. 

2. Technical Expert Panel (TEP) 

Focused on Health Disparities 

Represented in the ESRD PPS 

CMS continues to work with federal 

and private entities to better collect and 

leverage data on social determinants of 

health to improve our understanding of 

how these factors can be better 

measured in order to reduce health 

disparities and advance health equity. 

We continue to work to improve our 

understanding of this important issue 

and to identify policy solutions that 

achieve the goal of attaining health 

equity for all patients. One of the efforts 

demonstrating our ongoing commitment 

to uncover hidden disparities within the 

ESRD PPS includes the recently held 

TEP focused on improving CMS’s ability 

to detect and reduce health disparities 

for our beneficiaries receiving renal 

dialysis services. 

Over the last several years, CMS has 

been working towards a potential 

refinement of the ESRD PPS. This effort 

has included focused data analysis by 

CMS and included input of interested 

parties. Four contractor-led TEPs, each 

with a focus on different aspects of the 

ESRD PPS, have been convened. The 

specific objective for the latest TEP 

(December 2021) was to gather input 

from diverse interested parties on health 

disparities arising among patients who 

are historically medically underserved 

and are represented in the ESRD PPS 

patient populations. The TEP included 

16 panelists representing ESRD 

facilities, nephrologists, patient 

advocates, and representatives from 

professional associations and industry 

groups. The contractor presented results 

of analysis of health disparities that can 

be measured by currently collected data. 

Panelists responded with their 

interpretations of these results and 

provided their insights about what they 

thought were hidden disparities not 

currently measured. Ideas and 

suggestions for potential changes to data 

collection for the ESRD PPS to better 

measure and potentially reduce health 

disparities were offered. 

CMS is using this CY 2023 ESRD PPS 

proposed rule to issue an RFI on the 

topic of health equity issues within the 

ESRD PPS to obtain input from a 

broader spectrum of interested parties 

with a goal of improving CMS’s ability 

to detect and reduce health disparities 

for our beneficiaries receiving renal 

dialysis services. The TEP did not 

provide formal recommendations, but 

provided discussion items and 

suggestions in a subsequent report. TEP 

presentation materials and summary 


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189https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2022.pdf. 

190Pre-reclassified wage index in ESRD PPS 

means that wages for all hospital registered nurses 

are combined to obtain the CBSA-specific wages for 

RNs in ESRD facilities. 

reports can be found at: https://

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ESRDpayment/ 

Educational_Resources. 

a. TEP Discussion and Comments From 

Interested Parties 

During the 2021 ESRD PPS TEP, 

panelists discussed various topics, 

including the types of direct patient care 

labor used in renal dialysis care, the 

case-mix payment adjustment model, 

subpopulations at risk of health 

disparities and for whom data are not 

currently available, and the special case 

of pediatric patients receiving renal 

dialysis services. The following is a 

synopsis of those discussion topics with 

the exception of pediatric renal dialysis 

services which is discussed in section 

II.E.4 of this proposed rule. For a more 

complete summary, please review the 

TEP Summary Report.189

(1) Direct Patient Care Labor Categories 

in Dialysis Care 

CMS’s contractor explained that 

direct patient care labor categories 

under the ESRD PPS include social 

workers, nutritionists, and other staff, 

but does not include nephrologists, as 

they are paid separately for their 

services to dialysis patients. The ESRD 

facility cost report includes lines for 

administrative and managerial staff. The 

base rate can be broken down into a 

direct patient care labor-related portion 

and a non-direct patient care laborrelated portion, and that the direct 

patient care labor-related portion is 

multiplied by the facilities’ CBSA wage 

index for the included job categories. In 

areas of the country with high wages, 

the wage index value usually exceeds 

one, increasing the labor-related portion 

of the base rate. The current wage index 

for the ESRD PPS is based on a prereclassified acute care hospital wage 

index and is not derived specifically 

from ESRD facility cost reports.190

Panelists and other interested parties 

have commented that actual direct 

patient care labor costs associated with 

providing renal dialysis services are not 

currently being accurately captured and 

additional direct patient care labor 

categories should be explored. 

(2) Case-Mix Model 

The goal of case mix adjustment is to 

ensure payment accuracy, meaning 

payment for a treatment corresponds 

with expected resource use and cost for 

that treatment. As noted in the CY 2011 

ESRD PPS final rule (75 FR 49034), 

resources required to furnish routine 

renal dialysis services such as staff and 

equipment time vary by patient. 

Because of the variation in resources 

required to furnish routine dialysis to 

individuals with varying patient 

characteristics, facilities that treat a 

greater than average proportion of 

resource-intensive patients could be 

economically disadvantaged if they are 

paid a rate based on average resources. 

In addition, patients who are costlier 

than average to dialyze may face 

difficulties gaining access to care 

because a fixed composite payment rate 

could create a disincentive to treat such 

patients. The purpose of a case-mix 

adjustment based on patient 

characteristics is to make higher 

payments to ESRD facilities treating 

more resource-intensive patients, 

according to objective quantifiable 

criteria. To that end, the goal is to 

protect access to care for the least 

healthy and most costly beneficiaries 

and adequately compensate facilities 

with high proportion of those 

beneficiaries. 

The ESRD PPS also includes a facility 

level adjustment designed to align ESRD 

facility resource use with payment. 

Facility level adjustments account for 

additional costs that facilities incur 

resulting from treatment volume, 

location, and proportion of high cost 

treatments (75 FR 49116 through 

49127). At the facility level, panelists 

suggested that ESRD facilities located in 

areas with low physician to patient 

ratios and in disadvantaged areas also 

be considered. 

Patient Characteristics and 

Comorbidities 

Patient characteristics and 

comorbidities that best predicted 

variation in renal dialysis service costs 

were introduced in the CY 2011 ESRD 

PPS final rule (75 FR 49034) and revised 

in the CY 2016 PPS final rule (80 FR 

68974 through 68979). The four casemix adjusters are patient age, body 

surface area (BSA), low body mass 

index (BMI) and comorbidities 

(hereditary hemolytic or sickle cell 

anemia, myelodysplastic syndromes, 

gastrointestinal (GI) tract bleeding with 

hemorrhage, and pericarditis). Panelists 

noted that BSA and BMI are often 

correlated. Panelists stated there were 

other factors they believe were 

important to include in the case mix 

adjustment and suggested replacing the 

current low incidence comorbidities 

with others. One panelist suggested that 

upper GI bleeds be removed from the 

present list of comorbidities in favor of 

coronary artery disease history, diabetes 

history, and hypertension. Another 

panelist offered that respiratory failures 

should be considered, due to the 

frequency of this comorbidity they see 

in their practice. Finally, panelists 

strongly urged that CMS investigate the 

direct use of social determinants of 

health in the case-mix adjustment 

within the ESRD PPS. 

(3) Subpopulations With Observable 

Disparities in Treatment or Outcomes 

Related to ESRD 

Panelists noted the existence of 

patient sub-populations for whom data 

are not currently available that likely 

experience health disparities with 

regard to their treatment of ESRD. These 

include beneficiaries at ESRD facilities 

with low physician to patient ratios, as 

a lack of sufficient physician staffing 

could lead to poor access to care. 

Panelists also suggested that patients 

who are experiencing homelessness, 

undocumented, have limited English 

proficiency, and those that have mental 

health issues, should be considered 

subgroups at risk as well. They noted 

that many patients fit into more than 

one of these high-risk subgroups. Some 

panelists questioned whether the ADI 

was the best measure of neighborhood 

disadvantage as it does not consider 

availability of health resources within 

neighborhood groupings; however, they 

did not offer suggestions for any 

alternative measures. 

(4) Payment Accuracy 

Payment accuracy, for the purposes of 

the TEP discussion, was defined as how 

well ESRD PPS payments are aligned 

with observed costs for providing 

dialysis treatment. Panelists largely 

agreed that there was general alignment 

of costs and payments through the ESRD 

PPS, but they noted that there were 

patient groups and provider types for 

which payments were inadequate. The 

focus of these analyses was to explore 

potential disparities in payment 

accuracy among patient groups and 

provider types that might exacerbate 

health disparities. CMS’s contractor 

presented information on payment 

accuracy across patient demographic 

subgroups (including age, sex, race/ 

ethnicity), and facility types (including 

rural, low volume and geographically 

isolated facilities; and wage index and 

facility ownership type.) The panelists 

discussed at length the relationship 

between geographic isolation, patient 

access to care, and resulting costs. Panel 

members suggested that access to public 

transportation may be a relatively 


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191https://academic.oup.com/ije/article/35/4/ 

1111/686451. A reference for social determinants of 

health can be found at the following website: 

https://health.gov/healthypeople/priority-areas/ 

social-determinants-health. 

192https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-presentation-december2021.pdf; slides 77, 78, 80, and 81. 

accurate marker of geographic isolation 

(defined as the distance between ESRD 

facilities) in urban areas. They also 

noted that geographic isolated 

communities were likely to have few 

primary care facilities and are also more 

likely to be ‘‘food deserts.’’ The 

panelists suggested that beneficiaries 

residing in these areas also experience 

difficulties in obtaining timely care for 

other medical conditions, such as 

diabetes, hypertension, and 

cardiovascular disease. They further 

noted that geographic isolation and 

difficulties in gaining access to care 

often results in a gaining access to care 

often results in a renal dialysis patient 

population with a greater burden of 

disease. Finally, panelists observed that 

patients in geographically isolated areas 

often turned to the renal dialysis facility 

for their unmet medical care needs. The 

panelists urged CMS to consider an 

upward payment adjustment for isolated 

facilities in areas where low income and 

low resources drive up the costs of 

providing care. 

The panel focused much of their 

discussion around patient populations 

that faced special challenges in access to 

renal dialysis services and for whom the 

cost of care was likely higher, but who 

were not accounted for in current data 

collection activities under the ESRD 

PPS. The panel identified some of these 

patient subgroups to include: patients 

with housing insecurity as they are 

ineligible for both organ transplantation 

and home renal dialysis and thus 

dialyze in-center indefinitely; patients 

that are disabled or amputees who may 

require transfer assistance or extensive 

wound care; patients in hospice; 

patients who are not treatment 

compliant because of limited English 

proficiency, low health literacy, or 

behavior or mental health problems. 

(5) Incorporation of ESRD PPS Payment 

Adjustments Based on Social 

Determinants of Health 

Discussions during the December 

2021 TEP discussion on SDOH were 

based on the definition of SDOH 

referring to non-biological factors that 

affect health status in a population.191

The TEP members suggested making 

greater use of SDOH in the case-mix 

payment adjustment to help address 

additional costs associated with caring 

for patients with underlying social and 

economic risk factors (including, for 

example, housing insecurity, language 

barriers, lack of transportation, etc.) that 

make getting to and adhering to renal 

dialysis treatment more difficult and 

costlier for health care providers. 

There are many factors that can 

contribute to increased costs. One 

panelist noted that their ESRD facility 

caseload included patients who were 

undocumented, experiencing 

homelessness, and had mental health 

issues, and these types of issues should 

be considered in payment models. 

Panelists strongly suggested that in 

order to better characterize the factors 

associated with increased treatment 

costs for these medically vulnerable and 

historically underserved patients who 

are at high-risk for adverse health 

outcomes, efforts should be made to 

standardize the collection of SDOH 

among patients enrolled in the ESRD 

PPS. They suggested several means of 

collecting this information including 

making more extensive use of the SDOH 

on the 2728 ESRD Medical Evidence 

Report Form (which is completed at the 

initiation of renal dialysis services); 

using SDOH screening tools and 

embedding them in patient enrollment 

materials; and using validated third 

party patient experience surveys. The 

panelists also suggested that this 

information be collected using Z codes 

in Medicare claims so that it could be 

updated on a regular basis, but 

cautioned that this would increase 

reporting burden on the facilities. The 

panelists also suggested that placing a 

modifier on claims to indicate the need 

for intensive resource utilization during 

renal dialysis services (for example, for 

amputees) may help better identify 

these costly patients. Another panelist 

suggested the focus should be on acting 

on the data already available instead of 

collecting more data. 

Following the presentation on 

differences in treatment patterns among 

subgroups of the ESRD patient 

population, the panelist discussion 

focused on the following topics: home 

renal dialysis services, additional data 

elements that should be collected, 

potential payment changes to address 

disparities, and transportation. Panelists 

discussed potential reasons for 

differential use of home renal dialysis 

modalities and the need to track 

preventive care measures delivered 

through the more advanced stages of 

CKD. They also stated that better data 

on such patient characteristics as health 

literacy, English language proficiency, 

and transportation availability for 

treatment would help policymakers 

better understand treatment choices and 

treatment adherence. 

Panelists also discussed treatment 

frequency and missed treatments in 

response to data presented by the 

contractor. While treatment frequencies 

did not vary significantly across patient 

race/ethnicity or proxies for income 

status, the following difference were 

found for the occurrence of missed 

treatments: American Indian/Alaska 

Native and Black/African American 

beneficiaries, beneficiaries with proxies 

(Medicare and Medicaid benefits, and 

ADI ranking) indicating lower 

socioeconomic status, and beneficiaries 

living in urban areas.192 Some panelists 

suggested that missed treatments be 

incorporated into the case-mix 

adjustment; however, it was noted that 

the overall number of missed treatments 

is very small, across facility types. CMS 

data indicated on average, only one 

tenth of one percent of treatments are 

missed. 

3. Request for Information on 

Advancing Health Equity Under the 

ESRD PPS 

CMS plans to continue working with 

health care providers, the public, and 

other key interested parties on these 

important issues to identify policy 

solutions that achieve the goals of 

attaining health equity for all patients. 

Specifically, we are requesting 

comments on improving CMS’s ability 

to detect and reduce health disparities 

for our beneficiaries receiving renal 

dialysis services. When responding, 

please note the question to which your 

comment is addressing. 

Specifically, we are inviting public 

comment on the following: 

• What kind of refinements to the 

ESRD PPS payment policy could 

mitigate health disparities and promote 

health equity? 

• Are there specific comorbidities 

that should be examined when 

calculating the case-mix adjustment that 

would help better represent the ESRD 

population and help address health 

disparities? Please describe in detail and 

provide specific data or 

recommendations for analytical 

frameworks and data sources that CMS 

should use in evaluating such 

comorbidities. 

• Are there specific subpopulations 

whose needs are not adequately 

accounted for by the current ESRD PPS 

payment policy and should be evaluated 

for potential health disparities? 

• What are the challenges, and 

suggested ways to address, defining and 

collecting accurate and standardized, 

self-identified demographic information 

(including information on race and 


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193ESRD TEP Summary Report of TEP held on 

December 10–11, 2020, p. 18–19. https://

www.cms.gov/files/document/end-stage-renaldisease-prospective-payment-system-technicalexpert-panel-summary-report-april-2021.pdf. 

194As per the 2020 TEP, 1.4 percent of all ESRD 

facilities were designated pediatrics, when defining 

pediatrics as >100 treatments/yr in 2019. See: 

https://www.cms.gov/files/document/end-stagerenal-disease-prospective-payment-systemtechnical-expert-panel-presentation-december2020.pdf. 

195https://www.cms.gov/files/document/endstage-renal-disease-prospective-payment-systemtechnical-expert-panel-summary-report-april2021.pdf. 

ethnicity, disability, sexual orientation, 

gender identity, socioeconomic status, 

geography, and language preference) for 

the purposes of reporting, stratifying 

data by population, and other data 

collection efforts that would refine 

ESRD PPS payment policy. 

++ What impact do SDOHs have on 

resource use and treatment costs for 

patients who are medically 

underserved? 

++ Which SDOHs should data 

collection include? 

++ How should data regarding SDOH 

be collected? How should such data be 

used in the ESRD PPS to help mitigate 

health disparities and promote health 

equity? 

• How can CMS use existing data 

sources to better identify unmet needs 

among specific subpopulations that 

could result in health disparities? 

• How can CMS revise case-mix 

categories in the ESRD PPS to better 

represent underserved populations? 

• Are there actions CMS could 

potentially consider under the ESRD 

PPS to help prevent or mitigate 

potential bias in renal dialysis 

technologies, treatments, or clinical 

tools that rely on clinical algorithms? 

What are the relevant considerations for 

evaluating the effectiveness of such 

actions? 

While we will not be responding to 

specific comments submitted in 

response to this RFI, we intend to use 

this input to inform future policy 

development. We look forward to 

receiving feedback on these topics, and 

we note that responses to the RFI should 

focus on how the suggestions could be 

applied to the ESRD PPS. Data to 

support any proposed revisions will be 

extremely important, so please include 

any data that supports your comments. 

CMS would propose any potential 

changes to payment policies through a 

separate notice and comment 

rulemaking. 

4. Health Disparities Faced by Pediatric 

Patients Receiving Renal Dialysis 

Services Within the ESRD PPS 

a. Background and Pediatric Dialysis 

Overview 193

Compared to the Medicare dialysis 

adult population, the Medicare dialysis 

pediatric population is much smaller, 

comprising approximately 0.14 percent 

of the total ESRD patient population in 

2019. Consequently, only 1.4 percent of 

ESRD facilities that furnish treatment in 

2019 were pediatric facilities,194 where 

‘‘pediatric facilities’’ is defined as those 

providing at least 100 pediatric dialysis 

treatments in 2019. These facilities are 

mostly located in urban areas and 

typically based in a children’s hospital 

or major medical center. Pediatric 

facilities are also either very small 

(furnishing less than 4,000 treatments 

per year) or very large (furnishing at 

least 10,000 treatments per year). 

Pediatric facilities also have higher 

direct patient care labor expenditures 

than adult facilities. The overall median 

person-hours of direct patient care labor 

per treatment in hospital-based facilities 

in 2019 was one hour more for pediatric 

facilities than for those serving adult 

Medicare dialysis patients. Registered 

nurses and licensed practical nurses 

contributed roughly double the personhours toward a pediatric dialysis 

treatment compared to an adult dialysis 

treatment. 

To examine pediatric dialysis 

treatment patterns during the TEP, the 

pediatric dialysis patient population 

was stratified into two age groups: 

patients younger than age 13 years old 

and those ages 13 to 17 years old. 

Pediatric patients younger than age 13 

are more likely to dialyze using home 

peritoneal dialysis when compared to 

patients ages 13 to 17 and adults. Use 

of in-center hemodialysis increases as 

patients get older, and this modality was 

the most frequently used for teenagers 

(aged 13–17) and adults. Lastly, weekly 

treatment frequency tends to be very 

similar between the teenage and adult 

populations. Differences in treatment 

frequency mainly lie in the 99th 

percentile of pediatric patients younger 

than 13 years of age, who receive an 

average of five in-center hemodialysis 

sessions per week, a frequency rarely 

seen in the adult population. 

b. TEP Discussion and Comments From 

Interested Parties 

CMS has continued to hear concerns 

from organizations associated with 

pediatric dialysis about underpayment 

of pediatric renal dialysis services under 

the current ESRD PPS payment model. 

These organizations emphasize that 

pediatric renal dialysis services require 

significantly different staffing and 

supply needs from those of adults. Most 

of these organizations agree there is a 

need for more finely tuned cost data for 

pediatric dialysis. Many organizations 

support CMS efforts to explore ways to 

improve collecting pediatric-specific 

data to better characterize the necessary 

resources and associated costs of 

delivering pediatric ESRD care. During 

the December 2020 TEP, panelists 

provided suggestions for the pediatric 

dialysis payment adjustment.195 Those 

ideas were also discussed in the CY 

2022 ESRD PPS proposed rule (86 FR 

36398; 36402 through 36404). Since 

pediatric dialysis patients represent the 

smallest sub-population in the Medicare 

ESRD PPS, CMS is using this RFI to ask 

interested parties to comment on health 

disparities that may exist for this 

population, and we are requesting input 

through this RFI on how changes to the 

ESRD PPS, including changes to data 

collection procedures, may help reduce 

any such disparities. 

As noted earlier in this RFI, one of the 

efforts demonstrating CMS’ ongoing 

commitment to closing the health equity 

gap includes the recently held TEP 

focused on health disparities 

represented in the ESRD PPS. See 

section II.E.2. of this proposed rule for 

more information about this TEP. The 

specific objective for this TEP 

(December 2021) was to gather input 

from a diverse group of interested 

parties on health disparities arising 

among patient groups represented in the 

ESRD PPS who are historically 

underserved. Issues regarding the 

pediatric population were discussed. 

Comments from interested parties 

regarding the payment model for 

pediatric renal dialysis services have 

mostly focused on the high total cost of 

care for pediatric patients. Interested 

parties also have noted that although 

pediatric patients disproportionately 

receive treatment in hospital-based 

facilities, the hospital cost report (CMS 

Form 2552–10) does not distinguish 

between dialysis costs for pediatric and 

adult populations. 

(1) Labor 

Interested parties have commented 

during the TEPs and in response to prior 

rulemaking that the current collection of 

information does not account for the 

amount of staff time and the specialized 

staffing that is needed to provide care to 

this population. Many noted that costs 

unique to pediatric dialysis, such as 

child life specialists, developmental and 

behavioral psychologists, pediatric 

dieticians, and social workers, are not 

adequately captured in current cost 

reports or claims, and therefore are not 


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196ESRD TEP Summary Report of TEP held on 

December 10–11, 2020, p. 19. https://www.cms.gov/ 

files/document/end-stage-renal-diseaseprospective-payment-system-technical-expertpanel-summary-report-april-2021.pdf. 

accounted for in pediatric adjustments 

(86 FR 36402). Commenters have 

explained that pediatric comorbidities 

require unique specialized care and that 

the cost of specialized direct patient 

care labor and supplies are not captured 

in the ESRD PPS. 

(2) Case Mix 

According to data provided by CMS’s 

data contractor, compared to the 

national average, the ratio of payment 

relative to cost, standardized relative to 

the national average for pediatric 

dialysis treatment was the lowest among 

ESRD beneficiary age groups. Panelists 

asserted that the information that is 

currently collected in the Medicare cost 

report data do not enable CMS to 

estimate the true costs of treating 

pediatric patients. They also assert that 

key comorbidities for pediatric patient 

population are not included in case-mix 

adjustment. Furthermore, there are 

several challenges in the statistical 

analysis of pediatric dialysis costs. CMS 

adjusts the per treatment base rate for 

pediatric patients to account for patient 

age and treatment modality (42 CFR 

413.235(b)). The small number of 

patients in this population reduces the 

precision of statistical models in 

estimating the true cost of treatment for 

pediatric dialysis. Another difficulty is 

disentangling composite rate costs for 

adult versus pediatric patients from the 

hospital-based facility cost report data, 

as these cost reports do not distinguish 

between adult and pediatric costs.196

Commenters have generally supported 

CMS’ efforts to explore ways to improve 

collecting pediatric-specific data to 

better characterize the necessary 

resources and associated costs of 

delivering pediatric ESRD care. In the 

CY 2022 ESRD PPS final rule (86 FR 

61997), commenters suggested CMS 

make refinements to better capture costs 

by examining a breakdown of patient 

age groups, pediatric-specific dialysis 

supplies, additional overhead at 

hospital outpatient ESRD facilities, 

psychosocial support, specialized 

pharmacy needs and other costs unique 

to the pediatric population for home 

dialysis. 

(3) Pediatric Comorbidities 

One TEP panelist also noted that the 

comorbidities currently used in casemix adjustment do not include those 

commonly seen in the pediatric 

population, such as seizure disorders, 

developmental delays, and congenital 

anomalies. The panelist and an 

organization representing pediatric 

nephrologists suggested other pediatric 

comorbidities should be considered 

when calculating the patient level casemix adjuster. Those comorbidities are: 

• Failure to thrive/feeding 

disorders—80 percent of children under 

6 years of age require a G-tube and 

feeding pump for management of oral 

aversion or supplemental enteral 

nutrition to promote growth and ensure 

appropriate cognitive development; 

• Congenital anomalies requiring 

subspecialty intervention (cardiac, 

orthopedic, colorectal); 

• Congenital bladder/urinary tract 

anomalies; 

• Non-kidney solid organ or stem cell 

transplant; 

• Neurocognitive impairment; 

• Global developmental delay; 

• Cerebral palsy; 

• Seizure disorder; 

• Chronic lung disease (including 

dependency on continuous positive 

airway pressure machines and 

ventilators); 

• Inability to ambulate or transfer; 

• Vision impairment; and 

• Feeding tube dependence. 

During the discussion about the 

inability to transfer, inability to 

ambulate, and needs assistance with 

daily activities, one panelist noted some 

centers include these comorbidities for 

their patients, but others don’t because 

they see them as age-related. For 

example, a 10-month old shouldn’t be 

expected to ambulate. Therefore, the 

panel recommend that these conditions 

also have a designation as age-related 

which will probably result in more 

accurate and meaningful data for CMS. 

5. Request for Information Regarding 

Dialysis for Pediatric ESRD Patients 

CMS plans to continue working with 

health care providers, the public, and 

other key interested parties on these 

important issues to identify policy 

solutions that achieve the goals of 

attaining health equity for all patients. 

Specifically, we are requesting 

comments on improving CMS’s ability 

to detect and reduce health disparities 

within the ESRD PPS payment program 

for pediatric patients receiving renal 

dialysis services. When responding, 

please note the question to which your 

comment is addressing. 

Specifically, we are inviting public 

comment on the following: 

• Please provide any information and 

supporting documentation about 

whether there are health disparities in 

this sub-population. 

• How could refinements to the ESRD 

PPS payment policy mitigate health 

disparities in the pediatric population? 

• Should a pediatric dialysis payment 

include a specific payment modifier on 

the claim so that costs for providing 

pediatric dialysis can be further 

delineated with alternative payment 

sub-options (for example, age related or 

comorbidity related)? 

• Are there specific comorbidities 

that should be examined when 

calculating the case-mix adjuster that 

would help better represent the 

pediatric ESRD population and help 

address health inequities? Please 

describe in detail and provide specific 

data or recommendations for analytical 

frameworks and data sources that CMS 

should use in evaluating such 

conditions. 

• Are there other direct patient care 

labor categories that should be 

considered when determining the cost 

to provide renal dialysis services to 

pediatric patients, and if so, which 

ones? 

• How should CMS revise case-mix 

categories in the ESRD PPS to better 

represent the pediatric population? 

• Are there SDOH that are specific to 

the pediatric ESRD population? 

While we will not be responding to 

specific comments submitted in 

response to this RFI, we intend to use 

this input to inform future policy 

development. We look forward to 

receiving feedback on these topics, and 

note that responses to the RFI should 

focus on how the suggestions could be 

applied to the ESRD PPS. Data to 

support any proposed revisions will be 

extremely important, so please include 

any data that supports your comments. 

CMS would propose any potential 

changes to payment policies through a 

separate notice and comment 

rulemaking. 

III. Calendar Year (CY) 2023 Payment 

for Renal Dialysis Services Furnished 

to Individuals With Acute Kidney 

Injury (AKI) 

A. Background 

The Trade Preferences Extension Act 

of 2015 (TPEA) (Pub. L. 114–27) was 

enacted on June 29, 2015, and amended 

the Act to provide coverage and 

payment for dialysis furnished by an 

ESRD facility to an individual with 

acute kidney injury (AKI). Specifically, 

section 808(a) of the TPEA amended 

section 1861(s)(2)(F) of the Act to 

provide coverage for renal dialysis 

services furnished on or after January 1, 

2017, by a renal dialysis facility or a 

provider of services paid under section 

1881(b)(14) of the Act to an individual 

with AKI. Section 808(b) of the TPEA 

amended section 1834 of the Act by 

adding a subsection (r) to provide 


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payment, beginning January 1, 2017, for 

renal dialysis services furnished by 

renal dialysis facilities or providers of 

services paid under section 1881(b)(14) 

of the Act to individuals with AKI at the 

ESRD PPS base rate, as adjusted by any 

applicable geographic adjustment 

applied under section 

1881(b)(14)(D)(iv)(II) of the Act and 

adjusted (on a budget neutral basis for 

payments under section 1834(r) of the 

Act) by any other adjustment factor 

under section 1881(b)(14)(D) of the Act 

that the Secretary elects. 

In the CY 2017 ESRD PPS final rule, 

we finalized several coverage and 

payment policies to implement 

subsection (r) of section 1834 of the Act 

and the amendments to section 

1881(s)(2)(F) of the Act, including the 

payment rate for AKI dialysis (81 FR 

77866 through 77872 and 77965). We 

interpret section 1834(r)(1) of the Act as 

requiring the amount of payment for 

AKI dialysis services to be the base rate 

for renal dialysis services determined 

for a year under the ESRD PPS base rate 

as set forth in § 413.220, updated by the 

ESRD bundled market basket percentage 

increase factor minus a productivity 

adjustment as set forth in 

§ 413.196(d)(1), adjusted for wages as set 

forth in § 413.231, and adjusted by any 

other amounts deemed appropriate by 

the Secretary under § 413.373. We 

codified this policy in § 413.372 (81 FR 

77965). 

B. Proposed Annual Payment Rate 

Update for CY 2023 

1. CY 2023 AKI Dialysis Payment Rate 

The payment rate for AKI dialysis is 

the ESRD PPS base rate determined for 

a year under section 1881(b)(14) of the 

Act, which is the finalized ESRD PPS 

base rate, including the applicable 

annual productivity-adjusted market 

basket payment update, geographic 

wage adjustments, and any other 

discretionary adjustments, for such year. 

We note that ESRD facilities have the 

ability to bill Medicare for non-renal 

dialysis items and services and receive 

separate payment in addition to the 

payment rate for AKI dialysis. 

As discussed in section II.B.1.d of this 

proposed rule, the proposed CY 2023 

ESRD PPS base rate is $264.09, which 

reflects the application of the proposed 

CY 2023 wage index budget-neutrality 

adjustment factor of 0.999992 and the 

CY 2023 proposed ESRDB market basket 

increase of 2.8 percent reduced by the 

productivity adjustment of 0.4 

percentage point, that is, 2.4 percent. 

Accordingly, we are proposing a CY 

2023 per treatment payment rate of 

$264.09 for renal dialysis services 

furnished by ESRD facilities to 

individuals with AKI. This payment rate 

is further adjusted by the wage index, as 

discussed in the next section of this 

proposed rule 

2. Geographic Adjustment Factor 

Under section 1834(r)(1) of the Act 

and regulations at § 413.372, the amount 

of payment for AKI dialysis services is 

the base rate for renal dialysis services 

determined for a year under section 

1881(b)(14) of the Act (updated by the 

ESRD bundled market basket and 

reduced by the productivity 

adjustment), as adjusted by any 

applicable geographic adjustment factor 

applied under section 

1881(b)(14)(D)(iv)(II) of the Act. 

Accordingly, we apply the same wage 

index under § 413.231 that is used 

under the ESRD PPS and discussed in 

section II.B.1.b of this proposed rule. 

The AKI dialysis payment rate is 

adjusted by the wage index for a 

particular ESRD facility in the same way 

that the ESRD PPS base rate is adjusted 

by the wage index for that facility (81 

FR 77868). Specifically, we apply the 

wage index to the labor-related share of 

the ESRD PPS base rate that we utilize 

for AKI dialysis to compute the wage 

adjusted per-treatment AKI dialysis 

payment rate. As stated previously, we 

are proposing a CY 2023 AKI dialysis 

payment rate of $264.09, adjusted by the 

ESRD facility’s wage index. We are also 

proposing that the wage index floor 

increase discussed in section II.B.1.b.(2) 

of this proposed rule and the permanent 

5-percent cap on wage index decreases 

discussed in section II.B.1.b.(3) of this 

proposed rule that we are proposing to 

apply under the ESRD PPS would apply 

in the same way to AKI dialysis 

payments to ESRD facilities. 

IV. End-Stage Renal Disease Quality 

Incentive Program (ESRD QIP) 

A. Background 

For a detailed discussion of the EndStage Renal Disease Quality Incentive 

Program’s (ESRD QIP’s) background and 

history, including a description of the 

Program’s authorizing statute and the 

policies that we have adopted in 

previous final rules, we refer readers to 

the following final rules: 

• CY 2011 ESRD PPS final rule (75 FR 

49030); 

• CY 2012 ESRD PPS final rule (76 FR 

628); 

• CY 2012 ESRD PPS final rule (76 FR 

70228); 

• CY 2013 ESRD PPS final rule (77 FR 

67450); 

• CY 2014 ESRD PPS final rule (78 FR 

72156); 

• CY 2015 ESRD PPS final rule (79 FR 

66120); 

• CY 2016 ESRD PPS final rule (80 FR 

68968); 

• CY 2017 ESRD PPS final rule (81 FR 

77834); 

• CY 2018 ESRD PPS final rule (82 FR 

50738); 

• CY 2019 ESRD PPS final rule (83 FR 

56922); 

• CY 2020 ESRD PPS final rule (84 FR 

60648); 

• CY 2021 ESRD PPS final rule (85 FR 

71398); and 

• CY 2022 ESRD PPS final rule (86 FR 

61874). 

We have also codified many of our 

policies for the ESRD QIP at 42 CFR 

413.177 and § 413.178. 

B. Flexibilities for the ESRD QIP in 

Response to the Public Health 

Emergency (PHE) Due to COVID–19 

1. Measure Suppression Policy for the 

Duration of the COVID–19 PHE 

In the CY 2022 ESRD PPS final rule, 

we finalized a measure suppression 

policy for the duration of the COVID–19 

Public Health Emergency (PHE) (86 FR 

61910 through 61913). We stated that 

we had previously identified the need 

for flexibility in our quality programs to 

account for the impact of changing 

conditions that are beyond participating 

facilities’ control. We identified this 

need because we would like to ensure 

that facilities are not affected negatively 

when their quality performance suffers 

not due to the care provided, but due to 

external factors, such as the COVID–19 

PHE. 

Specifically, we finalized a policy for 

the duration of the PHE for COVID–19 

that enables us to suppress the use of 

measure data for scoring and payment 

adjustments if we determine that 

circumstances caused by the COVID–19 

PHE have affected the measures and the 

resulting Total Performance Scores 

(TPSs) significantly. We also finalized 

the adoption of Measure Suppression 

Factors which will guide our 

determination of whether to suppress an 

ESRD QIP measure for one or more 

program years where the baseline or 

performance period of the measure 

overlaps with the PHE for COVID–19. 

The finalized Measure Suppression 

Factors are as follows: 

• Measure Suppression Factor 1: 

Significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years. 

• Measure Suppression Factor 2: 

Clinical proximity of the measure’s 


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197https://www.cdc.gov/coronavirus/2019-ncov/ 

cases-updates/index.html. 

198Arias E, Tejada-Vera B, Ahmad F, Kochanek 

KD. Provisional life expectancy estimates for 2020. 

Vital Statistics Rapid Release; no 15. Hyattsville, 

MD: National Center for Health Statistics. July 2021. 

DOI: https://dx.doi.org/10.15620/cdc:107201. 

199Andrasfay, T., & Goldman, N. (2021). 

Reductions in 2020 US life expectancy due to 

COVID–19 and the disproportionate impact on the 

Black and Latino populations. Proceedings of the 

National Academy of Sciences of the United States 

of America, 118(5), e2014746118. https://

www.pnas.org/content/118/5/e2014746118. 

200Branswell, Helen. Covid overtakes 1918 

Spanish flu as deadliest disease in U.S. history. 

STAT. September 20, 2021. Available at: https://

www.statnews.com/2021/09/20/covid-19-set-toovertake-1918-spanish-flu-as-deadliest-disease-inamerican-history/. 

201Allen H, Vusirikala A, Flannagan J, et al. 

Increased Household Transmission of COVID–19 

cases associated with SARS–CoV–2 Variant of 

Concern B.1.617.2: a national case-control study. 

Public Health England. 2021. 

202https://www.cdc.gov/nchs/nvss/vsrr/covid19/ 

index.htm. 

focus to the relevant disease, pathogen, 

or health impacts of the COVID–19 PHE. 

• Measure Suppression Factor 3: 

Rapid or unprecedented changes in: 

++ clinical guidelines, care delivery 

or practice, treatments, drugs, or related 

protocols, or equipment or diagnostic 

tools or materials; or 

++ the generally accepted scientific 

understanding of the nature or 

biological pathway of the disease or 

pathogen, particularly for a novel 

disease or pathogen of unknown origin. 

• Measure Suppression Factor 4: 

Significant national shortages or rapid 

or unprecedented changes in: 

++ healthcare personnel; 

++ medical supplies, equipment, or 

diagnostic tools or materials; or 

++ patient case volumes or facilitylevel case mix. 

We also stated that we would still 

provide confidential feedback reports to 

facilities on their measure rates on all 

measures to ensure that they are made 

aware of the changes in performance 

rates that we have observed. We also 

stated that we would publicly report 

suppressed measure data with 

appropriate caveats noting the 

limitations of the data due to the PHE 

for COVID–19. We strongly believe that 

publicly reporting these data would 

balance our responsibility to provide 

transparency to consumers and uphold 

safety while ensuring that hospitals are 

not unfairly scored or penalized through 

payment under the ESRD QIP. 

We are not proposing any changes to 

the measure suppression policy in this 

proposed rule. 

2. Proposals To Suppress Six ESRD QIP 

Measures for PY 2023 

a. Background 

COVID–19 has had significant 

negative health effects—on individuals, 

communities, nations, and globally. 

Consequences for individuals who have 

COVID–19 include morbidity, 

hospitalization, mortality, and postCOVID conditions (also known as long 

COVID). As of early March 2022, over 

78 million COVID–19 cases, 4.5 million 

new COVID–19 related hospitalizations, 

and 900,000 COVID–19 deaths have 

been reported in the U.S.197 Provisional 

life expectancy data for CY 2020 

showed that COVID–19 reduced life 

expectancy by 1.5 years overall, with 

the estimated impact disproportionately 

affecting minority communities.198

According to this analysis, the estimated 

life expectancy reduction for Black and 

Latino populations is three times the 

estimate when comparing to the white 

population.199 With a death toll 

surpassing that of the 1918 influenza 

pandemic, COVID–19 is the deadliest 

disease in American history.200

Additionally, impacts of the 

pandemic continued to accelerate in 

2021 as compared with 2020. The Delta 

variant of COVID–19 (B.1.617.2) 

surfaced in the United States in earlyto-mid 2021. Studies have shown that 

the Delta variant was up to 60 percent 

more transmissible than the previously 

dominant Alpha variant in 2020.201

Further, in November 2021, the number 

of COVID–19 deaths for 2021 surpassed 

the total deaths for 2020. According to 

Center for Disease Control and 

Prevention (CDC) data, the total number 

of deaths involving COVID–19 reached 

385,453 in 2020 and 451,475 in 2021.202

With this increased transmissibility and 

morbidity associated with the Delta 

variant, we remain concerned about 

using measure data that is significantly 

impacted by COVID–19 for scoring and 

payment purposes for the PY 2023 

program year. 

In the CY 2022 ESRD PPS final rule, 

we finalized the suppression of the 

following measures for the PY 2022 

program year: 

• Standardized Hospitalization Ratio 

(SHR) clinical measure 

• Standardized Readmission Ratio 

(SRR) clinical measure 

• Long-Term Catheter Rate clinical 

measure 

• In-Center Hemodialysis Consumer 

Assessment of Healthcare Providers 

and Systems (ICH CAHPS) Survey 

Administration clinical measure 

Since the publication of the CY 2022 

ESRD PPS final rule, we have conducted 

analyses on all ESRD QIP measures to 

determine whether and how COVID–19 

has impacted the validity of the data 

used to calculate these measures for PY 

2023. Our findings from these analyses 

are discussed below. Based on those 

analyses, we are proposing to suppress 

the following measures for PY 2023: 

• SHR clinical measure (under 

Measure Suppression Factor 1, 

Significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years); 

• SRR clinical measure (under 

Measure Suppression Factor 1, 

Significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years); 

• Long-Term Catheter Rate clinical 

measure (under Measure Suppression 

Factor 1, Significant deviation in 

national performance on the measure 

during the COVID–19 PHE, which could 

be significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years); 

• In-Center Hemodialysis Consumer 

Assessment of Healthcare Providers and 

Systems (ICH CAHPS) Survey 

Administration clinical measure (under 

Measure Suppression Factor 1, 

Significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years; and Measure 

Suppression Factor 4, Significant 

national shortages or rapid or 

unprecedented changes in: 

++ healthcare personnel; or 

++ patient case volumes or facilitylevel case mix); 

• Percentage of Prevalent Patients 

Waitlisted (PPPW) clinical measure 

(under Measure Suppression Factor 1, 

Significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years; and Measure 

Suppression Factor 4, Significant 

national shortages or rapid or 

unprecedented changes in: 

++ patient case volumes or facilitylevel case mix); and 

• Kt/V Dialysis Adequacy clinical 

measure (under Measure Suppression 

Factor 1, Significant deviation in 

national performance on the measure 

during the COVID–19 PHE, which could 


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203CMS has also partnered with the CDC in a 

joint Call to Action on safety, which is focused on 

our core goal to keep patients safe. Fleisher et al. 

(2022). New England Journal of Medicine. Article 

available here: https://www.nejm.org/doi/full/ 

10.1056/NEJMp2118285?utm_source=

STAT+Newsletters&utm_campaign=8933b7233eMR_COPY_01&utm_medium=email&utm_term=0_

8cab1d7961-8933b7233e-151759045. 

204Schneider, E. et al. (2022). The 

Commonwealth Fund. Responding to Omicron: 

Aggressively Increasing Booster Vaccinations Now 

Could Prevent Many Hospitalizations and Deaths. 

Available at: https://www.commonwealthfund.org/ 

blog/2022/responding-omicron. 

205 KFF, Update on COVID–19 Vaccination of 

5–11 Year Olds in the U.S., https://www.kff.org/ 

coronavirus-covid-19/issue-brief/update-on-covid19-vaccination-of-5-11-year-olds-in-the-u-s/. 

206https://www.aap.org/en/pages/2019-novelcoronavirus-covid-19-infections/children-andcovid-19-vaccination-trends/. 

207U.S. Food and Drug Administration. (2021). 

Coronavirus (COVID–19) Update: FDA Authorizes 

First Oral Antiviral for Treatment of COVID–19. 

Available at: https://www.fda.gov/news-events/ 

press-announcements/coronavirus-covid-19- 

update-fda-authorizes-first-oral-antiviral-treatmentcovid-19. 

208U.S. Food and Drug Administration. (2021). 

Coronavirus (COVID–19) Update: FDA Authorizes 

Additional Oral Antiviral for Treatment of COVID– 

19 in Certain Adults. Available at: https://

www.fda.gov/news-events/press-announcements/ 

coronavirus-covid-19-update-fda-authorizesadditional-oral-antiviral-treatment-covid-19- 

certain#:∼:text=Today%2C%20the

%20U.S.%20Food%20and,progression%20

to%20severe%20COVID%2D19%2C. 

209The White House. (2022). Fact Sheet: The 

Biden Administration to Begin Distributing AtHome, Rapid COVID-19 Tests to Americans for 

Free. Available at: https://www.whitehouse.gov/ 

briefing-room/statements-releases/2022/01/14/factsheet-the-biden-administration-to-begindistributing-at-home-rapid-covid-19-tests-toamericans-for-free/. 

210Miller, Z. 2021. The Washington Post. Biden 

to give away 400 million N95 masks starting next 

week Available at: https://www.washingtonpost.

com/politics/biden-to-give-away-400-million-n95- 

masks-starting-next-week/2022/01/19/5095c050- 

7915-11ec-9dce-7313579de434_story.html. 

211The White House. (2022). FACT SHEET: 

Biden-Harris Administration Increases COVID-19 

Testing in Schools to Keep Students Safe and 

Schools Open. Available at: https://

www.whitehouse.gov/briefing-room/statementsreleases/2022/01/12/fact-sheet-biden-harrisadministration-increases-covid-19-testing-inschools-to-keep-students-safe-and-schools-open/. 

be significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years). 

In the CY 2021 ESRD PPS final rule, 

we finalized that the mTPS for PY 2023 

would be 57, and also finalized an 

associated payment reduction scale (85 

FR 71471). However, as discussed 

below, we are proposing in this 

proposed rule to update the mTPS and 

payment reduction scale to reflect our 

proposal to suppress six measures for 

PY 2023, which is almost half of the 

current ESRD QIP measure set. We are 

also proposing to amend 413.178(a)(8) 

to state that the definition of the mTPS 

does not apply to PY 2023. The 

measures that we are proposing to score 

for PY 2023 are the Clinical Depression 

Screening and Follow-Up reporting 

measure, the Standardized Fistula Rate 

clinical measure, the Hypercalcemia 

clinical measure, the Standardized 

Transfusion Ratio (STrR) reporting 

measure, the Ultrafiltration Rate 

reporting measure, the Medication 

Reconciliation for Patients Receiving 

Care at Dialysis Facilities (MedRec) 

reporting measure, the National 

Healthcare Safety Network (NHSN) 

Bloodstream Infection (BSI) clinical 

measure, and the NHSN Dialysis Event 

reporting measure. The proposed recalculated mTPS for PY 2023 would be 

80. If one or more of our measure 

suppression proposals is not finalized, 

then we would to revise the mTPS for 

PY 2023 so that it includes all measures 

that we finalize for scoring for PY 2023. 

We are also proposing to codify these 

proposals in our regulations by adding 

a new 413.178(i), which specifies that 

we will calculate a measure rate for each 

of the suppressed measures, but will not 

score facility performance on those 

suppressed measures or include them in 

the facility’s TPS for PY 2023. Proposed 

413.178(i) would also define the mTPS 

for PY 2023 as the total performance 

score that an ESRD facility would 

receive if, during the baseline period, it 

performed at the 50th percentile of 

national ESRD facility performance on 

the measures described in proposed 

413.178(i)(2). As discussed in section 

IV.C of this proposed rule, we are also 

proposing to calculate the performance 

standards for PY 2023 using CY 2019 

data, and are proposing to revise our 

regulations at 413.178(d)(2) to reflect 

this proposal. 

We continue to be concerned about 

the impact of the COVID–19 PHE, but 

we are encouraged by the rollout of 

COVID–19 vaccinations and treatment 

for those diagnosed with COVID–19 and 

we believe that facilities are better 

prepared to treat patients with COVID– 

19. Our measure suppression policy 

focuses on a short-term, equitable 

approach during this unprecedented 

PHE, and was not intended for 

indefinite application. Additionally, we 

want to emphasize the long-term 

importance of incentivizing quality care 

tied to payment. The ESRD QIP is an 

example of our long-standing effort to 

link payments to healthcare quality in 

the dialysis facility setting.203

We understand that the COVID–19 

PHE is ongoing and unpredictable in 

nature, however, we believe that 2022 

has a more promising outlook in the 

fight against COVID–19. As we enter the 

third year of the pandemic, healthcare 

providers have gained experience 

managing the disease, surges of COVID– 

19 infection, and adjusting to supply 

chain fluctuations. In 2022 and the 

upcoming years, we anticipate 

continued availability and increased 

uptake in the use of vaccinations,204

including the availability and use of 

vaccination for young children ages 5 to 

11, who were not eligible for 

vaccination for the majority of 2021 and 

for whom only 32 percent had received 

at least one dose as of February 23, 

2022.205 206 Additionally, FDA has 

expanded availability of at-home 

COVID–19 treatment, having issued the 

first emergency use authorizations 

(EUAs) for two oral antiviral drugs for 

the treatment of COVID–19 in December 

2021.207 208 Finally, the Biden-Harris 

Administration has mobilized efforts to 

distribute home test kits,209 N–95 

masks,210 and increase COVID–19 

testing in schools,211 providing more 

treatment and testing to the American 

people. Therefore, our goal is to 

continue resuming the use of all 

measure data for scoring and payment 

adjustment purposes beginning with the 

PY 2024 ESRD QIP. That is, for PY 2024, 

for each facility, we would plan to 

calculate measure scores for all of the 

measures in the ESRD QIP measure set 

for which the facility reports the 

minimum number of cases. We would 

then calculate a TPS for each eligible 

facility and use the established 

methodology to determine whether the 

facility would receive a payment 

reduction for the given payment year. 

We understand that the PHE for COVID– 

19 is ongoing and unpredictable in 

nature, and we would continue to assess 

the impact of the PHE on measure data 

used for the ESRD QIP. 

b. Proposal To Suppress the SHR 

Clinical Measure for PY 2023 

In this proposed rule, we are 

proposing to suppress the SHR clinical 

measure for PY 2023 program year 

under Measure Suppression Factor 1, 

Significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly better or significantly 

worse as compared to historical 

performance during the immediately 

preceding program years. We refer 

readers to the CY 2022 ESRD PPS final 

rule for previous analysis on the impact 

of the COVID–19 PHE on SHR clinical 

measure performance (86 FR 61914 

through 61915). The SHR clinical 

measure is an all-cause, riskstandardized rate of hospitalizations 

during a 1-year observation window. 

The standardized hospitalization ratio is 


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212Cuadros DF, Miller FD, Awad S, Coule P, 

MacKinnon NJ. Analysis of Vaccination Rates and 

New COVID–19 Infections by US County, July– 

August 2021. JAMA Netw Open. 

2022;5(2):e2147915. doi:10.1001/ 

jamanetworkopen.2021.47915 

213 Iuliano AD, Brunkard JM, Boehmer TK, et al. 

Trends in Disease Severity and Health Care 

Utilization During the Early Omicron Variant 

Period Compared with Previous SARS–CoV–2 High 

Transmission Periods—United States, December 

2020–January 2022. MMWR Morb Mortal Wkly Rep 

2022;71:146–152. DOI: http://dx.doi.org/10.15585/ 

mmwr.mm7104e4external icon. 

214https://www.cms.gov/files/document/ 

medicare-covid-19-data-snapshot-services-through2021-08-21.pdf. 

215Turgutalp, K., Ozturk, S., Arici, M. et al. 

Determinants of mortality in a large group of 

hemodialysis patients hospitalized for COVID–19. 

BMC Nephrol 22, 29 (2021). https://doi.org/ 

10.1186/s12882-021-02233-0. 

defined as the ratio of the number of 

hospital admissions that occur for 

Medicare ESRD dialysis patients treated 

at a particular facility to the number of 

hospitalizations that would be expected 

given the characteristics of the facility’s 

patients and the national norm for 

facilities. This measure is calculated as 

a ratio but can also be expressed as a 

rate. The intent of the SHR clinical 

measure is to improve health care 

delivery and care coordination to help 

reduce unplanned hospitalization 

among ESRD patients. 

Based on our analysis of Medicare 

dialysis patient data from January 2021 

through September 2021, we found that 

hospitalizations involving patients 

diagnosed with COVID–19 resulted in 

higher mortality rates, higher rates of 

discharge to hospice or skilled nursing 

facilities, and lower rates of discharge to 

home than hospitalizations involving 

patients who were not diagnosed with 

COVID–19. Specifically, the 

hospitalization rate for Medicare 

dialysis patients diagnosed with 

COVID–19 was up to three times greater 

than the hospitalization rate during the 

same period for Medicare dialysis 

patients who were not diagnosed with 

COVID–19, which is much greater than 

the relative risk of hospitalization for 

any other comorbidity. Similar to our 

analysis in the CY 2022 ESRD PPS final 

rule (86 FR 61915), we believe that this 

indicates that COVID–19 has had a 

significant impact on the hospitalization 

rate for dialysis patients. Because 

COVID–19 Medicare dialysis patients 

are at significantly greater risk of 

hospitalization, and the SHR clinical 

measure was not developed to account 

for the impact of COVID–19 on this 

patient population, we continue to be 

concerned about the effects of the 

observed COVID–19 hospitalizations on 

the SHR clinical measure. We also note 

that the waves of the Delta and Omicron 

variants during 2021 affected different 

regions of the country at different rates 

depending on factors like time of year, 

geographic density, state and local 

policies, and health care system 

capacity.212 213 Because of the increased 

hospitalization risk associated with 

COVID–19 and the Medicare dialysis 

patient population, we are concerned 

that these regional differences in 

COVID–19 rates have led to distorted 

hospitalization rates such that we could 

not reliably make national, side-by-side 

comparisons of facility performance on 

the SHR clinical measure. 

We also analyzed data from January 

2020 through September 2021, which 

indicates that hospitalization 214 and 

mortality rates 215 were 6 times higher in 

the ESRD population. Although our 

measure suppression analysis focuses 

on CY 2020 and CY 2021 data and we 

only have partial CY 2021 data available 

at this time, we believe that the 

remaining 2021 data will continue to 

show similar trends. Not only are there 

effects on patients diagnosed with 

COVID–19, but our data indicates that 

the presence of the virus continued to 

strongly affect hospital admission 

patterns of dialysis patients through 

September 2021 and we believe that 

similar effects will be seen in October 

through December 2021 data. 

Following emergence of the Delta 

variant in 2021, we have also observed 

disproportionate increases in COVID–19 

cases and related deaths among ESRD 

beneficiaries. Similarly, emergence of 

the Omicron variant in December 2021 

was followed by another mortality 

spike. Because the COVID–19 pandemic 

generally, and the Delta and Omicron 

waves specifically, swept through 

geographic regions of the country 

unevenly, we are additionally 

concerned that facilities in different 

regions of the country would have been 

affected differently throughout 2021, 

thereby skewing measure performance 

and affecting national comparability. 

Based on the impact of COVID–19 on 

SHR results, including the continued 

deviation in measurement, we believe 

that the SHR clinical measure meets our 

criteria for Factor 1 where performance 

data would significantly deviate from 

historical data performance and would 

be considered unreliable. Therefore, we 

believe that the resulting performance 

measurement on the SHR clinical 

measure would not be sufficiently 

reliable or valid for use in the ESRD QIP 

for scoring and payment adjustment 

purposes. 

We believe that the SHR clinical 

measure is an important part of the 

ESRD QIP measure set. However, we are 

concerned that the COVID–19 PHE 

would continue affecting measure 

performance on the current SHR clinical 

measure such that we would not be able 

to score facilities fairly or equitably on 

it for PY 2023. However, we are 

proposing to continue to collect the 

measure’s claims data from participating 

facilities so that we can monitor the 

effect of the circumstances on quality 

measurement and determine the 

appropriate policies in the future. We 

also propose to continue providing 

confidential feedback reports to 

facilities as part of program activities to 

ensure that they are made aware of the 

changes in performance rates that we 

observe. We intend to publicly report 

PY 2023 data where feasible and 

appropriately caveated. 

In the CY 2022 ESRD PPS final rule, 

we stated that we were currently 

exploring ways to adjust effectively for 

the systematic effects of the COVID–19 

PHE on hospital admissions for the SHR 

clinical measure (86 FR 61915). We 

discuss our technical specifications 

update to the SHR clinical measure to 

risk-adjust for patients with a history of 

COVID–19 in section IV.B.3 of this 

proposed rule. 

We welcome public comment on our 

proposal to suppress the SHR clinical 

measure for PY 2023. 

c. Proposal To Suppress the SRR 

Clinical Measure for PY 2023 

In this proposed rule, we are 

proposing to suppress the SRR clinical 

measure for the PY 2023 program year 

under Measure Suppression Factor 1, 

significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly better or significantly 

worse compared to historical 

performance during the immediately 

preceding program years. We refer 

readers to the CY 2022 ESRD PPS final 

rule for previous analysis on the impact 

of the COVID–19 PHE on SRR clinical 

measure performance (86 FR 61915 

through 61916). The SRR clinical 

measure assesses the number of 

readmission events for the patients at a 

facility, relative to the number of 

readmission events that would be 

expected based on overall national rates 

and the characteristics of the patients at 

that facility as well as the number of 

discharges. The intent of the SRR 

clinical measure is to improve care 

coordination between ESRD facilities 

and hospitals to improve 

communication prior to and post 

discharge. 

Based on our analysis, we have found 

that index discharge hospitalizations 

involving dialysis patients diagnosed 


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with COVID–19 resulted in lower 

readmissions and higher mortality rates 

within the first 7 days in 2021. We used 

index hospitalizations occurring from 

January 2020 through August 2021 to 

identify eligible index hospitalizations 

and unplanned hospital readmissions. 

Focusing on the partial year data for 

2021, we found that total hospital 

readmissions, average number of index 

discharges, and average number of 

readmissions were lower than in fullyear data for 2018 and 2019. We note 

that our analysis of 2020 data revealed 

that overall average readmission rates 

were similar to pre-COVID years, but 

that hospitalization in COVID–19 

patients resulted in very different 

outcomes, with increased in-hospital 

and early post-discharge death and 

increased discharge to subacute 

rehabilitation facilities. Although our 

measure suppression focuses on CY 

2021 data and we only have partial CY 

2021 data available at this time, we 

believe that the remaining 2021 data 

will continue to show similar trends. 

Our analysis of partial year data for 

2021 found that average re-admission 

rates were slightly lower overall 

compared to 2018 and 2019. Although 

we are still analyzing the data for 2021, 

we believe that similar to 2020, these 

competing outcomes of index 

hospitalization continue to have a 

significant effect on readmission rates, 

affecting interpretation of 

hospitalization outcomes between 

COVID-associated and non-COVID 

events. Based on this demonstrated 

association between recent COVID–19 

infection and altered patterns of 

hospitalization and readmission 

compared to those for non-infected 

ESRD patients, we remain concerned 

about the effects of these observations 

on the calculations for the SRR clinical 

measure. We note that our preliminary 

analyses only looked at data through 

August 2021, which would not fully 

capture readmission data from the Delta 

or Omicron surges of the COVID–19 

PHE. Based on the impact of COVID–19 

on SRR results, including the continued 

deviation in measurement, we believe 

that the SRR clinical measure meets our 

criteria for Factor 1 where performance 

data would significantly deviate from 

historical data performance and would 

be considered unreliable. Therefore, we 

believe that the resulting performance 

measurement on the SRR clinical 

measure would not be sufficiently 

reliable or valid for use in the PY 2023 

ESRD QIP for scoring and payment 

adjustment purposes. 

We believe that the SRR clinical 

measure is an important part of the 

ESRD QIP Program measure set. 

However, we remain concerned that the 

PHE for the COVID–19 pandemic 

continues to affect measure performance 

on the current SRR clinical measure 

such that we would not be able to score 

facilities fairly or equitably on it for PY 

2023. Additionally, we propose 

continuing to collect the measure’s 

claims data from participating facilities 

so that we can monitor the effect of the 

circumstances on quality measurement 

and determine the appropriate policies 

in the future. We would also continue 

to provide confidential feedback reports 

to facilities as part of program activities 

to ensure that they are made aware of 

the changes in performance rates that 

we observe. We intend to publicly 

report PY 2023 data where feasible and 

appropriately caveated. 

In the CY 2022 ESRD PPS final rule, 

we stated that we were currently 

exploring ways to adjust effectively for 

the systematic effects of the COVID–19 

PHE on hospital admissions for the SRR 

clinical measure (86 FR 61916). We 

discuss our technical specifications 

update to the SRR clinical measure to 

risk-adjust for patients with a history of 

COVID–19 in section IV.B.3 of this 

proposed rule. 

We welcome public comment on our 

proposal to suppress the SRR clinical 

measure for PY 2023. 

d. Proposal To Suppress the Long-Term 

Catheter Rate Clinical Measure for PY 

2023 

In this proposed rule, we are 

proposing to suppress the Long-Term 

Catheter Rate clinical measure for PY 

2023 program year under Measure 

Suppression Factor 1, significant 

deviation in national performance on 

the measure during the COVID–19 PHE, 

which could be significantly better or 

significantly worse as compared to 

historical performance during the 

immediately preceding program years. 

We refer readers to the CY 2022 ESRD 

PPS final rule for previous analysis on 

the impact of the COVID–19 PHE on the 

Long-Term Catheter Rate clinical 

measure for PY 2022 (86 FR 61917). 

In the CY 2018 ESRD PPS final rule, 

we finalized the inclusion of the 

Hemodialysis Vascular Access: LongTerm Catheter Rate clinical measure in 

the ESRD QIP measure set beginning 

with the PY 2021 program (82 FR 

50778). The Long-Term Catheter Rate 

clinical measure is defined as the 

percentage of adult hemodialysis 

patient-months using a catheter 

continuously for three months or longer 

for vascular access. The measure is 

based on vascular access data reported 

in CMS’ ESRD Quality Reporting 

System (EQRS) (previously, 

CROWNWeb) and excludes patientmonths where a patient has a catheter 

in place and has a limited life 

expectancy. The measure evaluates the 

vascular access type used to deliver 

hemodialysis. The intent of the LongTerm Catheter Rate clinical measure is 

to improve health care delivery and 

patient safety. 

Our analysis based on the available 

data indicated that long-term catheter 

use rates increased significantly during 

the COVID–19 PHE. Average long-term 

catheter rates were averaging around 12 

percent during the period CY 2017 

through early CY 2020. As we noted in 

the CY 2022 ESRD PPS final rule, we 

observed an increase in long-term 

catheter rates during the pandemic in 

CY 2020, with rates reaching a peak of 

14.7 percent in June 2020 and declining 

slightly to 14.3 percent in July and 

August 2020 (86 FR 61917). After 

remaining around 12 percent for 3 

consecutive years, in the CY 2022 ESRD 

PPS final rule we stated that we view a 

sudden 2 percent increase in average 

long-term catheter rates as a significant 

deviation compared to historical 

performance during immediately 

preceding years (86 FR 61917). Since 

then, we have observed a steady rate 

increase throughout CY 2021, with 

unadjusted catheter rates reaching a 

peak of 17.9 percent in September 2021. 

By contrast, the unadjusted catheter 

rates in CY 2019 peaked at 12 percent. 

We believe that the steep increase in 

catheter rates during CY 2021 indicates 

a significant deviation in performance 

on the Long-Term Catheter Rate clinical 

measure. We are concerned that the 

COVID–19 PHE continues to impact the 

ability of ESRD patients to seek 

treatment from medical providers 

regarding their catheter use, either due 

to difficulty accessing treatment due to 

COVID–19 precautions at healthcare 

facilities, or due to increased patient 

reluctance to seek medical treatment 

because of risk of COVID–19 

precautions at healthcare facilities, or 

due to increased patient reluctance to 

seek medical treatment because of risk 

of COVID–19 exposure and increased 

associated health risks, and that these 

contributed to the significant increase in 

long-term catheter use rates. 

We believe that the Long-Term 

Catheter Rate clinical measure is an 

important part of the ESRD QIP measure 

set. However, we are concerned that the 

PHE for COVID–19 affected measure 

performance on the current Long-Term 

Catheter Rate clinical measure such that 

we would not be able to score facilities 

fairly or equitably on it for PY 2023. 

Additionally, participating facilities 


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216 Groupings of questions and composite 

measures can be found at https://ichcahps.org/ 

Portals/0/SurveyMaterials/ICH_Composites_

English.pdf. 

217Health Affairs, COVID–19’s Impact on Nursing 

Shortages, The Rise of Travel Nurses, and Price 

Gouging (Jan. 28, 2022), https://www.health

affairs.org/do/10.1377/forefront.20220125.695159/. 

218https://healthdata.gov/Hospital/COVID-19- 

Reported-Patient-Impact-and-Hospital-Capa/g62hsyeh. 

219National Kidney Foundation, COVID–19 and 

its Impact on Kidney Patients Utilizing U.S. Dialysis 

Centers (Jan. 18, 2022), https://www.kidney.org/ 

news/covid-19-and-its-impact-kidney-patientsutilizing-u-s-dialysis-centers. See also, Becker’s 

Hospital Review, Supply shortages disrupt dialysis 

care in Texas (Jan. 28, 2022), https://www.beckesr

hospitalreview.com/supply-chain/supply-shortagesdisrupt-dialysis-care-in-texas.html. WBIW, 

Pandemic causing supply shortages for dialysis 

patients, staffing shortage for providers (Feb. 22, 

2022), https://www.wibw.com/2022/02/22/ 

pandemic-causing-supply-shortages-dialysispatients-staffing-shortage-providers/. Spectrum 

News, Worker shortage sends dialysis patients 

scrambling for treatment (October 4, 2021), https:// 

spectrumlocalnews.com/nys/hudson-valley/news/ 

2021/10/01/worker-shortage-sends-dialysispatients-scrambling-for-treatment. 

220 Kriti Prasad, Colleen McLoughlin, Martin 

Stillman, Sara Poplau, Elizabeth Goelz, Sam Taylor, 

Nancy Nankivil, Roger Brown, Mark Linzer, Kyra 

Cappelucci, Michael Barbouche, Christine A. 

Sinsky. Prevalence and correlates of stress and 

burnout among U.S. healthcare workers during the 

COVID–19 pandemic: A national cross-sectional 

survey study. EClinicalMedicine, Volume 35. 2021. 

100879. ISSN 2589–5370. https://doi.org/10.1016/ 

j.eclinm.2021.100879. 

221 Vizheh, M., Qorbani, M., Arzaghi, S.M. et al. 

The mental health of healthcare workers in the 

COVID–19 pandemic: A systematic review. J 

Diabetes Metab Disord 19, 1967–1978 (2020). 

https://doi.org/10.1007/s40200-020-00643-9. 

222U.S. News, States With the Biggest Hospital 

Staffing Shortages (Jan. 13, 2022), https://

www.usnews.com/news/health-news/articles/2022- 

01-13/states-with-the-biggest-hospital-staffingshortages (citing data from the HHS, CDC, and 

Assistant Secretary for Preparedness and Response 

Community Profile Report, updated frequently and 

available here: https://healthdata.gov/Health/ 

COVID-19-Community-Profile-Report/gqxm-d9w9). 

would continue to report the measure’s 

data to CMS so that we could monitor 

the effect of the circumstances on 

quality measurement and determine the 

appropriate policies in the future. We 

would also continue to provide 

confidential feedback reports to 

facilities as part of program activities to 

ensure that they are made aware of the 

changes in performance rates that we 

observe. We also intend to publicly 

report PY 2023 data where feasible and 

appropriately caveated. 

We welcome public comment on our 

proposal to suppress the Long-Term 

Catheter Rate clinical measure for PY 

2023. 

e. Proposal To Suppress the ICH CAHPS 

Clinical Measure for PY 2023 

We are proposing to suppress the ICH 

CAHPS measure for the PY 2023 

program year under Measure 

Suppression Factor 1, significant 

deviation in national performance on 

the measure during the PHE for COVID– 

19, which could be significantly better 

or significantly worse as compared to 

historical performance during the 

immediately preceding program years 

and Measure Suppression Factor 4, 

significant national shortages or rapid or 

unprecedented changes in healthcare 

personnel and patient case mix. We 

would calculate facilities’ ICH CAHPS 

measure rates, but we would not use 

these measure rates to generate 

achievement or improvement points for 

this measure. Participating facilities 

would continue to report the measure 

data to CMS so that we can monitor the 

effect of the circumstances on quality 

measurement and consider appropriate 

policies in the future. We would 

continue to provide confidential 

feedback reports to facilities as part of 

program activities to allow facilities to 

track the changes in performance rates 

that we observe. We also intend to 

publicly report CY 2021 measure rate 

data where feasible and appropriately 

caveated. As noted in section IV.B.1 of 

this proposed rule, we believe that 

publicly reporting suppressed measure 

data is an important step in providing 

transparency and upholding the quality 

of care and safety for consumers. 

In the CY 2022 ESRD PPS final rule 

(86 FR 61916 through 61917), we 

finalized our proposal to suppress the 

ICH CAHPS clinical measure for the PY 

2022 program year under Measure 

Suppression Factor 1, Significant 

deviation in national performance on 

the measure during the COVID–19 PHE, 

which could be significantly better or 

significantly worse compared to 

historical performance during the 

immediately preceding program years. 

Based on our analysis of CY 2020 ICH 

CAHPS data, we finalized our proposal 

to suppress the ICH CAHPS clinical 

measure for PY 2022 because we found 

a significant decrease in response scores 

as compared to previous years. Our 

most recent analysis that includes 

Spring 2021 ICH CAHPS data shows a 

continued deviation in ICH CAHPS 

scores. 

The ICH CAHPS clinical measure is 

scored based on three composite 

measures and three global ratings.216

Global ratings questions employ a scale 

of 0 to 10, worst to best; each of the 

questions within a composite measure 

use either ‘‘Yes’’ or ‘‘No’’ responses, or 

response categories ranging from 

‘‘Never’’ to ‘‘Always’’ to assess the 

patient’s experience of care at a facility. 

Facility performance on each composite 

measure is determined by the percent of 

patients who choose ‘‘top-box’’ 

responses (that is, most positive or 

‘‘Always’’) to the ICH CAHPS survey 

questions in each domain. The ICH 

CAHPS survey is administered twice 

yearly, once in the spring and once in 

the fall. 

Our most recent data indicates that, 

although the number of participating 

facilities that submitted data has 

increased from pre-COVID–19 levels, 

the number of completed interviews has 

dropped dramatically. For example, in 

Spring and Fall 2019, facilities reported 

98,868 and 96,255 completed 

interviews, respectively. By contrast, in 

Spring and Fall 2021, only 82,987 and 

61,930 completed interviews were 

submitted, respectively. In other words, 

although a larger number of facilities are 

submitting ICH CAHPS data, fewer 

patients within each of those facilities 

are completing interviews and, as a 

result, a fewer number of facilities are 

meeting the survey minimum to be 

included in the measure for ESRD QIP 

scoring purposes because of the 

continuing impact of the PHE. 

We believe that these data may also 

reflect a rapid and unprecedented 

change in healthcare personnel, as 

staffing shortages may have had an 

impact on some of the top box rating 

scores. 

During the course of the PHE, an 

unprecedented number of healthcare 

personnel have left the workforce or 

ended their employment in healthcare 

settings.217 This healthcare personnel 

shortage worsened in 2021, with 

hospitals across the United States 

reporting 296,466 days of critical 

staffing shortages, an increase of 86 

percent from the 159,320 days of critical 

staffing shortages hospitals reported in 

2020.218 Although there is no specific 

data regarding the healthcare personnel 

shortages in facilities, reports indicate 

that facilities have experienced similar 

staffing shortages.219 Healthcare 

workers, especially those in areas with 

higher infection rates, have reported 

serious psychological symptoms, 

including anxiety, depression, and 

burnout.220 221

Additionally, reports of staff shortages 

have varied widely geographically. In 

January 2021, half of the hospitals in 

New Mexico and over 40 percent of the 

hospitals in Vermont, Rhode Island, 

West Virginia, and Arizona reported 

staffing shortages.222 Conversely, in that 

same week, less than 10 percent of 

hospitals in Washington, DC, 

Connecticut, Alaska, Illinois, New York, 

Maine, Montana, Idaho, Texas, South 

Dakota, and Utah reported staffing 

shortages. We believe that these staffing 

shortages reported by hospitals are 


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223Bloomberg, U.S. Hospital Staff Shortages Hit 

Most in a Year on Covid Surge, https://

www.bloomberg.com/news/articles/2022-01-05/onein-five-u-s-hospitals-face-staffing-shortages-most-inyear (citing HHS data). 

224Fresenius Medical Care Press Release, 

Statement regarding COVID–19 related supply and 

staff shortages. Available at: https://fmcna.com/ 

company/covid-19-resource-center/. 

similar to those experienced by 

facilities, and that the shortages 

experienced by ESRD facilities may be 

even worse due to the highly 

specialized nature of nephrology staff. 

Given the wide variance in reported 

staffing shortages, and the impact 

staffing shortages may have on ICH 

CAHPS top box rating scores, we believe 

our proposal to suppress the ICH 

CAHPS measure fairly addresses the 

geographic disparity in the impact of the 

COVID–19 PHE on participating 

facilities. 

Due to the emergence of COVID–19 

variants, such as the Delta and Omicron 

variants that have arisen from COVID– 

19 and our belief that facilities have 

experienced worsening staffing 

shortages in Q3 and Q4 2021,223 224 we 

anticipate that Fall 2021 data would 

continue to demonstrate a deviation in 

national performance such that scoring 

this measure would not allow us to 

reliably make national, side-by-side 

comparisons of facility performance on 

the ICH CAHPS measure. We believe 

that suppressing this measure for the PY 

2023 would address concerns about the 

potential unintended consequences of 

penalizing facilities for deviations in 

measure performance resulting from the 

impact of the COVID–19 PHE. 

Therefore, we are proposing to 

suppress the ICH CAHPS measure for 

the PY 2023 ESRD QIP under Measure 

Suppression Factors 1 and 4. 

We welcome public comment on this 

proposal. 

f. Proposal To Suppress the PPPW 

Clinical Measure for PY 2023 

In this proposed rule, we are 

proposing to suppress the PPPW clinical 

measure for PY 2023 under Measure 

Suppression Factor 1, Significant 

deviation in national performance on 

the measure during the COVID–19 PHE, 

which could be significantly better or 

significantly worse as compared to 

historical performance during the 

immediately preceding program years, 

as well as under Measure Suppression 

Factor 4, significant national shortages 

or rapid or unprecedented changes in 

patient case volumes or facility-level 

case mix. 

The PPPW clinical measure is a 

process measure that assesses the 

percentage of patients at each facility 

who were on the kidney or kidneypancreas transplant waitlist averaged 

across patients prevalent on the last day 

of each month during the performance 

period. Given the importance of kidney 

transplantation to patient survival and 

quality of life, as well as the variability 

in waitlist rates among facilities, we 

adopted the PPPW clinical measure in 

the CY 2019 ESRD PPS final rule to 

encourage facilities to coordinate care 

with transplant centers to waitlist 

patients (83 FR 57003 through 57008). 

In the CY 2022 ESRD PPS final rule 

(86 FR 61914), several commenters 

recommended that CMS suppress the 

PPPW clinical measure, noting that the 

COVID–19 PHE had a significant 

negative impact on transplant surgeries, 

referrals, and waitlists, as well as other 

related areas. A few commenters also 

noted that waitlist additions 

significantly decreased during the 

COVID–19 PHE. At the time, we 

responded that our analysis of the 

relevant data available at the time of the 

proposed rule indicated temporal 

declines in waitlist removal among 

prevalent patients and similarly a 

decline in waitlisting and transplants in 

incident ESRD patients in March 2020 

through May 2020 compared to prior 

years. We also observed that trends 

generally returned to normal starting in 

June and July 2020 and reflected data 

similar to prior years. However, we also 

indicated that we would continue to 

monitor and review the data and would 

consider proposing in a future 

rulemaking to suppress one or more 

individual ESRD QIP measures for a 

future ESRD QIP payment year if we 

conclude that circumstances caused by 

the COVID–19 PHE have affected those 

measures and the resulting TPSs based 

on CY 2021 data. 

After reviewing data for the PPPW 

clinical measure for CY 2021, we 

believe that circumstances caused by 

the COVID–19 PHE have affected our 

ability to make reliable national, sideby-side comparisons of facility 

performance on the PPPW measure. 

Recent analyses indicate that measure 

performance has declined over the 

course of the COVID–19 PHE. Although 

the initial disruptions in care and 

associated effects on the PPPW measure 

at the beginning of the COVID–19 PHE 

initially stabilized, we have since 

observed a continuous decrease in the 

levels of PPPW clinical measure 

performance. We believe this decrease is 

indicative overall of the significant 

impact of the COVID–19 PHE on the 

measure. For example, in January 2019, 

the monthly PPPW rate was 19 percent. 

By contrast, the monthly PPPW rate for 

December 2021 was 16.9 percent, which 

we believe reflects a significant 

deviation in national performance on 

the measure. We have also observed that 

a greater number of facilities would 

receive lower scores in PY 2023 as 

compared to PY 2022, reflecting poorer 

performance overall on the measure. For 

example, our simulations indicate that 

the percentage of facilities receiving 

scores lower than 5 (out of 10; a higher 

score reflects better performance) have 

increased at almost every data point. 

Notably, the percentage of facilities 

estimated to receive a score of 0, 1, or 

2 increased the most between the PY 

2022 and PY 2023, indicating that 

facilities are more likely to receive a 

lower score in PY 2023. Moreover, the 

percentage of facilities receiving scores 

higher than 5 on the PPPW clinical 

measure in PY 2023 have decreased at 

each data point. Given the correlation 

between decreasing scores and the 

pandemic’s impact on care delivery and 

patient ability to access the appropriate 

level of care in light of COVID–19 

precautions, we believe that the COVID– 

19 PHE continues to have a significant 

impact on the PPPW clinical measure 

during CY 2021. 

Our analysis of the available data 

indicates that the COVID–19 PHE has 

had significant effects on the PPPW 

clinical measure and would result in 

significant deviation in national 

performance on the measure during the 

COVID–19 PHE. Not only are there 

effects on patients diagnosed with 

COVID–19, but the presence of the virus 

strongly affected treatment patterns of 

dialysis patients in CY 2020 and 

continued to do so in CY 2021, and we 

are concerned that similar effects would 

be seen in the balance of the 2021 

calendar year as the PHE had continued. 

Because the Delta variant and the 

Omicron variant surged through 

geographic regions of the country 

unevenly, we are concerned that 

facilities in different regions of the 

country would have been affected 

differently throughout the 2021 year, 

thereby skewing measure performance 

and affecting national comparability due 

to significant and unprecedented 

changes in patient case volumes or 

facility-level case mix. Given the 

limitations of the data available to us for 

CY 2021, we believe the resulting 

performance measurement on the PPPW 

clinical measure would not be 

sufficiently reliable or valid for use in 

the ESRD QIP for scoring and payment 

adjustment purposes. 

We believe that the PPPW clinical 

measure is an important part of the 

ESRD QIP measure set. However, we are 

concerned that the ongoing COVID–19 

PHE has affected measure performance 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38537 

225Connerney, M., Sattar, Y., Rauf, H., Mamtani, 

S., Ullah, W., Michaelson, N., Dhamrah, U., Lal, N., 

Latchana, S., & Stern, A.S. (2021). Delayed 

hemodialysis in COVID–19: Case series with 

literature review. Clinical nephrology. Case studies, 

9, 26–32. https://doi.org/10.5414/CNCS110240. 

226National Kidney Foundation, COVID–19 and 

its Impact on Kidney Patients Utilizing U.S. Dialysis 

Centers (Jan. 18, 2022), https://www.kidney.org/ 

news/covid-19-and-its-impact-kidney-patientsutilizing-u-s-dialysis-centers. 

on the current PPPW clinical measure 

such that we would not be able to score 

facilities fairly or equitably on it. 

Additionally, we would continue to 

collect the measure’s data from 

participating facilities so that we could 

monitor the effect of the circumstances 

on quality measurement and determine 

the appropriate policies in the future. 

We would also continue to provide 

confidential feedback reports to 

facilities as part of program activities to 

ensure that they are made aware of the 

changes in performance rates that we 

observe. We also intend to publicly 

report PY 2023 data where feasible and 

appropriately caveated. 

We are currently exploring ways to 

adjust effectively for the systematic 

effects of the COVID–19 PHE on the 

PPPW clinical measure. However, we 

are still working to improve these 

COVID–19 adjustments and verify the 

validity of a potential modified version 

of the PPPW clinical measure as 

additional data become available. As an 

alternative, we considered whether we 

could exclude patients with a diagnosis 

of COVID–19 from the PPPW clinical 

measure cohort, but we determined 

suppression would provide additional 

time and months of data for us to more 

thoroughly evaluate a broader range of 

alternatives. We want to ensure that the 

measure reflects care provided to ESRD 

patients and we are concerned that 

excluding otherwise eligible patients 

may not accurately reflect the care 

provided, particularly given the unequal 

distribution of COVID–19 patients 

across facilities over time. 

We welcome public comment on our 

proposal to suppress the PPPW clinical 

measure for PY 2023. 

g. Proposal To Suppress the Kt/V 

Dialysis Adequacy Clinical Measure for 

PY 2023 

In this proposed rule, we are 

proposing to suppress the Kt/V Dialysis 

Adequacy clinical measure for PY 2023 

program year under Measure 

Suppression Factor 1, Significant 

deviation in national performance on 

the measure during the COVID–19 PHE, 

which could be significantly better or 

significantly worse as compared to 

historical performance during the 

immediately preceding program years. 

We refer readers to the CY 2022 ESRD 

PPS final rule for previous analysis on 

the overall impact of the COVID–19 PHE 

on ESRD quality measure performance 

(86 FR 61910 through 61913). 

The Kt/V Dialysis Adequacy clinical 

measure is the percentage of all patient 

months for patients whose delivered 

dose of dialysis (either hemodialysis or 

peritoneal dialysis) met the specified 

threshold during the reporting period. 

The Kt/V Dialysis Adequacy clinical 

measure is defined as a measure of 

dialysis sufficiency where K is dialyzer 

clearance, t is dialysis time, and V is 

total body water volume. The measure 

evaluates the success of achieving the 

delivered dialysis dose. The intent of 

the Kt/V measure is to improve health 

care delivery by providing facilities 

with evidence-based parameters for 

optimizing ESRD patient outcomes over 

time. 

In the CY 2022 ESRD PPS final rule 

(86 FR 61910), several commenters 

recommended that CMS suppress the 

Kt/V Dialysis Adequacy clinical 

measure, noting that the COVID–19 PHE 

had a significant impact on catheter 

rates, which has a corresponding impact 

on the Kt/V measure, as patients with 

catheters will have lower Kt/V rates. 

One commenter also noted the Kt/V 

Dialysis Adequacy clinical measure 

should be suppressed under 

Suppression Factor 1, due to significant 

deviation in national measure 

performance. At the time, we responded 

there was not sufficient data to 

determine whether suppression was 

appropriate for the Kt/V Dialysis 

Adequacy clinical measure. Although 

performance on the Kt/V Dialysis 

Adequacy clinical measure deviated 

temporarily, our analysis indicated that 

Kt/V rates stabilized shortly thereafter 

and reflected measure performance 

similar to prior years. Based on our 

analysis at the time, Kt/V rates in CY 

2020 were similar to rates in CY 2019 

until April where they dropped by an 

average of 0.4 percent. However, 

beginning in June 2020, Kt/V rates were 

the same as or higher than national 

average rates in March 2020. 

After reviewing data for the Kt/V 

Dialysis Adequacy clinical measure for 

CY 2020 and CY 2021, we believe that 

circumstances caused by the COVID–19 

PHE have affected the measure and the 

resulting TPS. Although the initial 

disruptions of care at the beginning of 

the COVID–19 PHE, associated with 

multiple transient changes to factors 

that contribute to dialysis adequacy (Kt/ 

V), were temporary, we have observed 

continued deviations in Kt/V clinical 

measure performance over the past 2 

years and we believe that this is 

indicative of the significant impact of 

the COVID–19 PHE on the measure. 

Notably, delays in hemodialysis 

treatment, due to COVID–19 infection or 

logistical challenges with care delivery, 

exacerbated ESRD sequelae including 

hyperkalemia, uremic encephalopathy, 

and fluid volume overload.225 The 

confluence of these factors likely 

contributed to declines in Kt/V clinical 

measure performance. 

Our simulations comparing PY 2022 

scoring distributions with estimated PY 

2023 scoring distributions show that the 

percentage of facilities receiving scores 

less than 7 (out of 10; a higher score 

reflects better performance) have 

increased at almost every data point, 

whereas the percentage of facilities 

receiving scores higher than 7 have 

decreased at almost every data point. 

The percentage of facilities receiving a 

score of score of 0, 1, 2, 3, or 4 increased 

the most between the 2 years, indicating 

that facilities are more likely to receive 

a lower score in PY 2023. Given the 

correlation between decreasing scores 

and the pandemic’s impact on care 

delivery and patient ability to access the 

appropriate level of care in light of 

COVID–19 precautions,226 we believe 

that the COVID–19 PHE continued to 

have a significant impact on the Kt/V 

clinical measure during CY 2021. 

Our analysis of the available data 

indicates that the COVID–19 PHE has 

had significant effects on the Kt/V 

Dialysis Adequacy clinical measure for 

ESRD patients and would result in 

significant deviation in national 

performance on the measure during the 

COVID–19 PHE, which could be 

significantly worse as compared to 

historical performance during the 

immediately preceding program years. 

Because the Delta variant and Omicron 

variant surged through geographic 

regions of the country unevenly, we are 

concerned that facilities in different 

regions of the country have been 

affected differently throughout the 2021 

calendar year, resulting in skewing of 

measure performance and affecting 

national comparability due to 

significant and unprecedented changes 

in patient case volumes or facility-level 

case mix. We note that our scoring 

simulations indicate that a high 

percentage of facilities would receive a 

score of zero for PY 2023. Given the 

limitation of the data available to us for 

CY 2021, we believe the resulting 

performance measurement of the Kt/V 

Dialysis Adequacy clinical measure 

would not be sufficiently reliable or 

valid for use in the ESRD QIP for 


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38538 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

227Raveendran, A.V., Jayadevan, R. and 

Sashidharan, S., Long COVID: An overview. 

Available at https://www.ncbi.nlm.nih.gov/pmc/ 

articles/PMC8056514/. Accessed on December 15, 

2021. 

scoring and payment adjustment 

purposes. 

We believe that the Kt/V Dialysis 

Adequacy clinical measure is an 

important part of the ESRD QIP measure 

set. However, we are concerned that the 

ongoing COVID–19 PHE has affected 

measure performance on the current Kt/ 

V Dialysis Adequacy clinical measure 

such that we would not be able to score 

facilities fairly or equitably on it. 

Moreover, we would continue to collect 

the measure’s data from participating 

facilities so that we could monitor the 

effect of the COVID–19 PHE 

circumstances on quality measurement 

and determine the appropriate policies 

in the future. We would also continue 

to provide confidential feedback reports 

to facilities as part of program activities 

to ensure that they are made aware of 

the changes in performance rates that 

we observe. We also intend to publicly 

report PY 2023 data where feasible and 

appropriately caveated. 

We are currently exploring ways to 

adjust effectively for the systematic 

effects of the COVID–19 PHE on the Kt/ 

V Dialysis Adequacy clinical measure. 

However, we are still working to 

improve these COVID–19 adjustments 

and verify the validity of a potential 

modified version of the Kt/V Dialysis 

Adequacy clinical measure as additional 

data become available. 

We welcome public comment on our 

proposal to suppress the Kt/V Dialysis 

Adequacy clinical measure for PY 2023. 

3. Technical Measure Specification 

Updates To Include a Covariate 

Adjustment for COVID–19 for the SHR 

and SRR Measures Beginning With PY 

2025 

In the CY 2013 ESRD PPS final rule, 

we finalized a subregulatory process to 

incorporate technical measure 

specification updates into the measure 

specifications we have adopted for the 

ESRD QIP (77 FR 67475 through 67477). 

As we continue to evaluate the effects 

of COVID–19 on the ESRD QIP measure 

set, we have observed both short-term 

effects on both hospital admissions and 

readmissions. In addition, for some 

patients COVID–19 continues to have 

lasting effects, including but not limited 

to fatigue, cough, palpitations, and 

others potentially related to organ 

damage, post viral syndrome, and postcritical care syndrome.227 These clinical 

conditions could affect a patient’s risk 

of complications following an index 

admission or readmission and, as a 

result, impact a facility’s performance 

on the SHR clinical measure or the SRR 

clinical measure. In order to account for 

case mix among facilities, the current 

risk adjustment approach for these 

measures include covariates for clinical 

comorbidities that are relevant and have 

relationships with the outcome, for 

example patient history of diabetes or 

obesity. Therefore, in order to 

adequately account for patient case mix, 

we are further modifying the technical 

measure specifications for the SHR and 

SRR measures to include a covariate 

adjustment for patient history of 

COVID–19. We believe these changes 

are technical in nature because they do 

not substantively change the measures 

themselves and, therefore, are not 

required to be implemented through 

rulemaking. 

This inclusion of the covariate 

adjustment for patient history of 

COVID–19 would be effective beginning 

with the PY 2025 program year for the 

SHR clinical measure and the SRR 

clinical measure, and we would also 

apply this adjustment for purposes of 

calculating the performance standards 

for that program year. As discussed in 

section IV.E.1.b, we are proposing to 

convert the STrR reporting measure to a 

clinical measure beginning with PY 

2025. We are also considering whether 

it would be appropriate to add a 

covariate adjustment for patient history 

of COVID–19 to the STrR clinical 

measure, beginning with PY 2025, and 

will announce that technical update, if 

appropriate, at a later date. 

For more information on the 

application of covariate adjustments, 

including the technical updates we are 

announcing in this proposed rule, 

please see the Technical Specifications 

for ESRD QIP Measures (available at: 

https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/ESRDQIP/061_

TechnicalSpecifications) and the CMS 

ESRD Measures Manual (available at: 

https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/ESRDQIP/06_

MeasuringQuality). 

C. Proposed Updates to the Performance 

Standards Applicable to the PY 2023 

Clinical Measures 

Our current policy is to automatically 

adopt a performance and baseline 

period for each year that is 1 year 

advanced from those specified for the 

previous payment year (84 FR 60728). 

Under this policy, CY 2021 is currently 

the performance period and CY 2020 is 

the baseline period for the PY 2023 

ESRD QIP. However, under the 

nationwide ECE that we granted in 

response to the COVID–19 PHE, first 

and second quarter data for CY 2020 are 

excluded from scoring for purposes of 

the ESRD QIP (85 FR 54829 through 

54830). Accordingly, in the CY 2022 

ESRD PPS final rule (86 FR 61922 

through 61923), for PY 2024, we 

finalized calculating performance 

standards using CY 2019 data due to 

concerns about using partial year data 

(86 FR 61922 through 61923). Similarly, 

we are concerned that it would be 

difficult to assess performance 

standards for PY 2023 based on partial 

year data. Our preliminary analysis 

indicates that the effect of the excluded 

data could create inflated performance 

standards for PY 2023 and we would 

potentially be required to use these for 

future payment years due to the 

requirement that the prior year’s 

standard cannot be higher than the 

current year’s standard. This may skew 

achievement and improvement 

thresholds for facilities and therefore 

may result in performance standards 

that do not accurately reflect levels of 

achievement and improvement. 

Our current policy substitutes the 

performance standard, achievement 

threshold, and/or benchmark for a 

measure for a performance year if final 

numerical values for the performance 

standard, achievement threshold, and/or 

benchmark are worse than the 

numerical values for that measure in the 

previous year of the ESRD QIP (82 FR 

50764). We adopted this policy because 

we believe that the ESRD QIP should 

not have lower performance standards 

than in previous years and therefore, 

adopted flexibility to substitute the 

performance standard, achievement 

threshold, and benchmark in 

appropriate cases. 

Although the lower performance 

standards would be substituted with 

those from the prior year, the higher 

performance standards would be used to 

set performance standards for certain 

measures, even though they would be 

based on partial year data. We continue 

to be concerned that this may create 

performance standards for certain 

measures that would be difficult for 

facilities to attain with 12 months of 

data. 

Therefore, we are proposing to 

calculate the performance standards for 

PY 2023 using CY 2019 data, which are 

the most recently available full calendar 

year of data we can use to calculate 

those standards. Due to the impact of 

CY 2020 data that are excluded from the 

ESRD QIP for scoring purposes, we 

believe that using CY 2019 data for 

performance standard setting purposes 

is appropriate. We are also proposing to 

amend 413.178(d)(2) to reflect both our 


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proposed updates applicable to the PY 

2023 performance standards, as well as 

our previously finalized update to the 

PY 2024 performance standards. 

We welcome public comments on this 

proposal. 

D. Technical Updates to the SRR and 

SHR Clinical Measures Beginning With 

the PY 2024 ESRD QIP 

In the CY 2017 ESRD PPS final rule, 

we adopted the SHR clinical measure 

under the authority of section 

1881(h)(2)(B)(ii) of the Act (81 FR 77906 

through 77911). The SHR clinical 

measure is a National Quality Forum 

(NQF)-endorsed all-cause, riskstandardized rate of hospitalizations 

during a 1-year observation window. 

The standardized hospitalization ratio is 

defined as the ratio of the number of 

hospital admissions that occur for 

Medicare ESRD dialysis patients treated 

at a particular facility to the number of 

hospitalizations that would be expected 

given the characteristics of the facility’s 

patients and the national mean for 

facilities. In the CY 2015 ESRD PPS 

final rule, we adopted the SRR clinical 

measure under the authority of section 

1881(h)(2)(B)(ii) of the Act (79 FR 66174 

through 66182). The standardized 

readmission ratio is defined as the ratio 

of the number of observed unplanned 

30-day hospital readmissions to the 

number of expected unplanned 30-day 

hospital readmissions. Both the SHR 

clinical measure and the SRR clinical 

measure are calculated as a ratio, but 

can also be expressed as a rate. 

Hospitalization and readmission rates 

vary across facilities even after 

adjustment for patient characteristics, 

suggesting that hospitalizations and 

readmissions might be influenced by 

facility practices. Both an adjusted 

facility-level standardized 

hospitalization ratio and an adjusted 

facility-level standardized readmissions 

ratio, accounting for differences in 

patients’ characteristics, play an 

important role in identifying potential 

quality issues, and help facilities 

provide cost-effective quality health 

care to help reduce admissions or 

readmissions to the hospital for dialysis 

patients as well as limit escalating 

medical costs. We have weighted 

scoring of the SHR clinical measure and 

the SRR clinical measure to reflect the 

importance of the measures on the 

quality of patient care. In the CY 2019 

ESRD PPS final rule, the SHR clinical 

measure and the SRR clinical measure 

each accounted for 14 percent of the 

TPS (83 FR 56992). In CY 2019, with 

average weights of more than 15 percent 

(after reweighting of missing measures), 

the SHR clinical measure and the SRR 

clinical measure were the two measures 

with the largest weight in calculating 

the TPS for each facility. 

In the CY 2013 ESRD PPS final rule, 

we finalized a subregulatory process to 

incorporate technical measure 

specification updates into the measure 

specifications we have adopted for the 

ESRD QIP (77 FR 67475 through 67477). 

We are updating the technical 

specifications to revise how we express 

the results of the SHR clinical measure 

and the SRR clinical measure so that 

those results are expressed as a RiskStandardized Hospitalization Rate 

(RSHR) and a Risk-Standardized 

Readmission Rate (RSRR), respectively. 

Stakeholders have previously expressed 

concern that the SHR clinical measure 

and the SRR clinical measure are 

difficult to interpret and track facility 

performance over time when expressed 

as ratios, and have recommended 

expressing those ratios as rates when 

scoring. Although there are widespread 

national improvements in 

hospitalization rates and readmission 

rates, individual facilities may not their 

own improvement reflected if their 

measure results are reflected as ratios 

because SHR and SRR measures 

effectively standardize the ratios to 1.0 

each calendar year and all facilities’ 

ratios are calculated using national-level 

performance in each calendar year. 

Another concern stakeholders have 

raised is that the ratios are difficult to 

understand and to determine how to use 

these ratios for quality improvement 

efforts. 

In light of these concerns, we are 

updating the technical specifications to 

change the scoring methodology for the 

SRR clinical measure and the SHR 

clinical measure such that a facility’s 

results are expressed as a rate in the 

performance period that is compared 

directly to its rate in the baseline period. 

In response to public comments 

indicating a perception that overall 

facility performance on ESRD QIP 

measures was recently improving as 

payment reductions were increasing, we 

assessed trends in facility performance 

through 2019 to examine facility 

performance on the SHR clinical 

measure and the SRR clinical measure 

over time. We also calculated the RSHR 

and the RSRR. We calculated the RSHR 

by multiplying SHR by the national 

observed hospitalization rate (per 

patient-year at risk) in the calendar year. 

Similarly, we multiplied the SRR by the 

national observed readmission rate (per 

index discharge) in the calendar year to 

determine the RSRR. Both ESRD QIP 

and Dialysis Facility Reports (DFR) data 

were used in these analyses. Data from 

ESRD QIP were available from CYs 2018 

to 2019 for the SRR clinical measure 

and from CYs 2015 to 2019 for the SHR 

clinical measure. Additionally, we used 

data from the publicly available DFRs 

from CYs 2010 to 2018 for the SHR 

clinical measure and from CYs 2014 to 

2018 for the SRR clinical measure to 

compare to the ESRD QIP calculations. 

We believe these changes are 

technical in nature because they do not 

substantively change the measures 

themselves and, therefore, are not 

required to be implemented through 

rulemaking. Our analysis found that 

expressing the measure performance as 

a rate instead of a ratio would 

communicate the same information in a 

clearer way. After the SHR clinical 

measure and the SRR clinical measure 

were added to the ESRD QIP measure 

set, that SHR and SRR distributions 

were similar from year to year. Median 

SHR has consistently remained below 

1.0, while median SRR has remained 

around 1.0 each year. RSHR and RSRR 

have remained stable since then as well. 

These trends show that as ESRD QIP 

payment reductions were increasing 

from PY 2018 to PY 2020 

(corresponding to CY 2016 to CY 2018 

facility performance for most measures), 

we do not find evidence of overall 

declines in risk-adjusted hospitalization 

and readmission rates. Furthermore, in 

recent years, the national readmission or 

hospitalization rates have been 

relatively stable or slightly increasing. 

Therefore, revising how we express SHR 

or SRR measure results to be expressed 

as RSHR or RSRR, respectively, each 

year would not result in higher ESRD 

QIP scores. 

Our analysis found that expressing 

the SHR clinical measure and SRR 

clinical measure results as rates would 

reflect the same level of measure 

performance as expressing those results 

as ratios, and we believe that expressing 

the measure results rates would help 

providers and patients better 

understand a facility’s performance on 

the measures, and would be more 

intuitive for a facility to track its 

performance from year to year. 

Further, this technical update would 

also more closely align with the 

measure result calculation methodology 

for the ESRD QIP with that used in the 

Dialysis Facility Compare Star Ratings 

Program. For star ratings calculations, 

an adjustment factor is applied for the 

standardized ratio measures, accounting 

for differences in population event rates 

between the baseline period and 

evaluation period data, so that an 

adjusted evaluation period ratio (a 

proxy for rate converted from ratio) 

value reflects the same value it would 


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38540 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

228The University of Michigan Kidney 

Epidemiology and Cost Center. (2018). Technical 

Notes on the Dialysis Facility Compare Quality of 

Patient Care Star Rating Methodology for the 

October 2018 Release. Available at: https://dialysis

data.org/sites/default/files/content/Methodology/ 

Updated_DFC_Star_Rating_Methodology_for_

October_2018_Release.pdf. 

229https://www.cms.gov/files/document/esrdmeasures-manual-v70.pdf. 

have in the baseline period.228 We 

provide the currently finalized 

performance standards for the PY 2024 

SHR and SRR clinical measures in Table 

16, and the revised PY 2024 

performances standards for the updated 

SHR and SRR clinical measures in Table 

17. 

BILLING CODE 4120–01–P 

We welcome public comments on this 

technical update. 

E. Proposed Updates to Requirements 

Beginning With the PY 2025 ESRD QIP 

1. PY 2025 ESRD QIP Measure Set 

Under our current policy, we retain 

all ESRD QIP measures from year to year 

unless we propose through rulemaking 

to remove them or otherwise provide 

notification of immediate removal if a 

measure raises potential safety issues 

(77 FR 67475). Accordingly, the PY 

2025 ESRD QIP measure set would 

include the same 14 measures as the PY 

2024 ESRD QIP measure set (85 FR 

71465 through 71466). In section 

IV.E.1.a of this proposed rule, we are 

also proposing to adopt a COVID–19 

Vaccination Coverage among Healthcare 

Personnel (HCP) reporting measure 

beginning in PY 2025. In section 

IV.E.1.b of this proposed rule, we are 

proposing to convert the STrR reporting 

measure to a clinical measure beginning 

in PY 2025, and in section IV.E.1.c, we 

are proposing to convert the 

Hypercalcemia clinical measure to a 

reporting measure beginning in PY 

2025. These measures are described in 

Table 18 in this proposed rule. For the 

most recent information on each 

measure’s technical specifications for 

PY 2025, we refer readers to the CMS 

ESRD Measures Manual for the 2022 

Performance Period.229


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TABLE 16: Current Performance Standards for the PY 2024 ESRD QIP SHR and SRR 

Cl. mica . I M U easures SID~ . t e h M R ost ecent1y I A va1 'I a bl e D ata 

Measure Achievement Median (50th Benchmark (90th 

Threshold (15th Percentile of Percentile of National 

Percentile of National Performance) 

National Performance) 

Performance) 

Standardized Readmission Ratio 1.268* 0.998* 0.629* 

Standardized Hospitalization Ratio 1.230 0.971 0.691 

*Values are also the final performance standards for those measures for PY 2023. In accordance with our 

longstanding policy, we are using those numerical values for those measures for PY 2024 because they are higher 

standards than the PY 2024 numerical values for those measures. 

Data sources: VAT measures: 2019 CROWNWeb; SRR, SHR: 2019 Medicare claims; Kt/V: 2019 CROWNWeb; 

Hypercalcemia: 2019 CROWNWeb; NHSN: 2019 CDC; ICH CARPS: CMS 2019; PPPW: 2019 CROWNWeb and 

2019 OPTN. 

TABLE 17: Numerical Values for the Performance Standards for the Updated PY 2024 

ESRD QIP SHR and SRR Clinical Measures, Expressed as Rates, Using the Most Recently 

Available Data 

Measure Achievement 

Threshold (15th 

Percentile of 

National 

Performance) 

Standardized Readmission Ratio• 34.27 

Standardized Hospitalization Ratiob 187.80 

•Rate calculated as a percentage of hospital discharges 

bRate per 100 patient-years 

Median (50th Benchmark (90th 

Percentile of Percentile of National 

National Performance) 

Performance) 

26.97 17.02 

148.33 105.54 

Data sources: VAT measures: 2019 CROWNWeb; SRR, SHR, STrR: 2019 Medicare claims; Kt/V: 2019 

CROWNWeb; Hypercalcemia: 2019 CROWNWeb; NHSN: 2019 CDC; ICH CARPS: CMS 2019; PPPW: 2019 

CROWNWeb and 2019 OPTN. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38541 

BILLING CODE 4120–01–C We discuss our proposal to adopt the 

COVID–19 Vaccination Coverage among 

Healthcare Personnel (HCP) reporting 

measure, our proposal to convert the 


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TABLE 18: Proposed PY 2025 ESRD QIP Measure Set 

National Measure Title and Description 

Quality 

Forum 

(NQF)# 

0258 In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) Survey 

Administration, a clinical measure 

Measure assesses patients' self-reported e>q>erience of care through percentage of patient responses to 

multiple testing tools. 

2496 Standardized Readmission Ratio (SRR), a clinical measure* 

Ratio of the number of observed unplanned 30-day ho~'Pilal readmissions to the number of expected 

unplanned 30-day readmissions. 

Based on Standardized Transfusion Ratio (STrR), a reporting measure** 

NQF Ratio of the number of observed eligible red blood cell transfusion events occurring in patients dialyzing at 

#2979 a facility to the number of eligible transfusions that would be expected. 

NIA (Kt/V) Dialysis Adequacy Comprehensive, a clinical measure 

A measure of dialysis adequacy where K is dialyzer clearance, t is dialysis time, and V is total body water 

volume. Percentage of all patient months for patients whose delivered dose of dialysis ( either hemodialysis 

or peritoneal dialysis) met the specified threshold during the reporting period. 

2977 Hemodialysis Vascular Access: Standardized Fistula Rate cli11ical measure 

Measures the use ofan arteriovenous (AV) fistula as the sole means of vascular access as of the last 

hemodialysis treatment session of the month. 

2978 Hemodialysis Vascular Access: Long-Term Catheter Rate clinical measure 

Measures the use of a catheter continuously for 3 months or longer as of the last hemodialysis treatment 

session of the month. 

1454 Hypercalcemia, a clinical measure*** 

Proportion of patient-months with 3-month rolling average of total uncorrected serum or plasma calcium 

greater than 10.2 mgldL. 

1463 Standardized Hospitalization Ratio (SHR), a clinical measure* 

Risk-adjusted SHR of the number of observed hospitalizations to the number of expected hospitalizations. 

Based on Clinical Depression Screening and Follow-Up, a reporting measure 

NQF Facility reports in End Stage Renal Disease Quality Reporting System (EQRS) one of six conditions for 

#0418 each qualifying patient treated during performance period. 

NIA Ultrafiltration Rate (UFR), a reporting measure 

Number of patient-months for which a facility reports elements required for ultrafiltration rates for each 

qualifying patient. 

Based on National Healthcare Safety Network (NHSN) Bloodstream Infection (BSI) in Hemodialysis Patients, a 

NQF clinical measure 

#1460 The Standardized Infection Ratio (SIR) ofBSis "'ill be calculated among patients receiving hemodialysis at 

outpatient hemodialysis centers. 

NIA NHSN Dialysis Event reporting measure 

Number of months for which facility reports NHSN Dialysis Event data to the Centers for Disease Control 

and Prevention (CDC). 

NIA Percentage of Prevalent Patients Waitlisted (PPPW), a clinical measure 

Percentage of patients at each facility who were on the kidney or kidney-pancreas transplant waitlist 

averaged across patients prevalent on the last day of each month during the performance period. 

2988 Medication Reconciliation for Patients Receiving Care at Dialysis Facilities (MedRec ), a reporting measure 

Percentage of patient-months for which medication reconciliation was performed and documented by an 

eligible professional. 

NIA COVID-19 Healthcare Personnel ( HCP) Vaccination, a reporting measure**** 

Percentage of HCP who receive a complete COVID-19 vaccination course. 

* We arc updatillg the SHR clillical measure and the SRR clillical measure to be expressed as risk-standardized rates 

begillmllg in PY 2024, as discussed in section IV.D of this proposed rule. 

**We are proposing to convert the STrR reporting measure to a clillical measure begillmllg in PY 2025, as discussed 

in section IV .E. l. b of this proposed rule. 

***We are proposing to convert the Hypercalcemia clillical measure to a reporting measure beginuing in PY 2025, 

as discussed in section IV.E. l .c of this proposed rule. 

****We are proposing to adopt the COVID-19 HCP Vaccination measure beginning in PY 2025, as discussed in 

section TV.E.1.a of this proposed rule. 
38542 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

230U.S. Dept of Health and Human Services, 

Office of the Assistant Secretary for Preparedness 

and Response. (2020). Determination that a Public 

Health Emergency Exists. Available at: https://

www.phe.gov/emergency/news/healthactions/phe/ 

Pages/2019-nCoV.aspx. 

231Centers for Disease Control and Prevention. 

(2020). Your Health: Symptoms of Coronavirus. 

Available at: https://www.cdc.gov/coronavirus/ 

2019-ncov/symptoms-testing/symptoms.html. 

232 Ibid. 

233https://covid.cdc.gov/covid-datatracker#datatracker-home. 

234Centers for Disease Control and Prevention. 

(2021). How COVID–19 Spreads. Accessed on July 

15, 2021 at: https://www.cdc.gov/coronavirus/2019- 

ncov/prevent-getting-sick/how-covid-spreads.html. 

235Centers for Disease Control and Prevention. 

(2021). When to Quarantine. Accessed on April 2, 

2021 at: https://www.cdc.gov/coronavirus/2019- 

ncov/if-you-are-sick/quarantine.html. 

236Centers for Disease Control and Prevention. 

(2021). Interim U.S. Guidance for Risk Assessment 

and Work Restrictions for Healthcare Personnel 

with Potential Exposure to COVID–19. Accessed on 

April 2 at: https://www.cdc.gov/coronavirus/2019- 

ncov/hcp/faq.html#Transmission. 

237 Dooling, K, McClung, M, et al. ‘‘The Advisory 

Committee on Immunization Practices’ Interim 

Recommendations for Allocating Initial Supplies of 

COVID–19 Vaccine—United States, 2020.’’ Morb 

Mortal Wkly Rep. 2020; 69(49): 1857–1859. 

Available at: https://www.cdc.gov/mmwr/volumes/ 

69/wr/mm6949e1.htm. 

238Centers for Disease Control and Prevention. 

(2020). COVID–19 Vaccination Program Interim 

Playbook for Jurisdiction Operations. Accessed on 

April 3, 2021 at: https://www.cdc.gov/vaccines/imzmanagers/downloads/COVID-19-VaccinationProgram-Interim_Playbook.pdf. 

239U.S. Food and Drug Administration. (2020). 

Pfizer-BioNTech COVID–19 Vaccine EUA Letter of 

Authorization. Available at https://www.fda.gov/ 

media/150386/download. (as reissued on 

September 22, 2021). 

240U.S. Food and Drug Administration. (2020). 

Moderna COVID–19 Vaccine EUA Letter of 

Authorization. Available at https://www.fda.gov/ 

media/144636/download (as reissued on August 12, 

2021); U.S. Food and Drug Administration. (2021). 

Janssen COVID–19 Vaccine EUA Letter of 

Authorization. Available at https://www.fda.gov/ 

media/146303/download (as reissued on June 10, 

2021). 

241FDA Approves First COVID–19 Vaccine, 

Available at https://www.fda.gov/news-events/ 

press-announcements/fda-approves-first-covid-19- 

vaccine. Spikevax and Moderna COVID–19 

Vaccine, Available at: https://www.fda.gov/ 

emergency-preparedness-and-response/ 

coronavirus-disease-2019-covid-19/spikevax-andmoderna-covid-19-vaccine. 

242Centers for Disease Control and Prevention. 

Overview of Influenza Vaccination among Health 

Care Personnel. October 2020. (2020) Accessed 

March 16, 2021 at: https://www.cdc.gov/flu/toolkit/ 

long-term-care/why.htm. 

243Measure Applications Partnership 

Coordinating Committee Meeting Presentation. 

March 15, 2021. (2021) Accessed March 16, 2021 

at: http://www.qualityforum.org/Project_Pages/ 

MAP_Coordinating_Committee.aspx. 

STrR reporting measure to a clinical 

measure, and our proposal to convert 

the Hypercalcemia clinical measure to a 

reporting measure in the following 

sections. 

a. Proposal To Adopt the COVID–19 

Vaccination Coverage Among 

Healthcare Personnel (HCP) Reporting 

Measure Beginning With the PY 2025 

ESRD QIP 

(1) Background 

On January 31, 2020, the Secretary 

declared a PHE for the U.S. in response 

to the global outbreak of SARS–CoV–2, 

a novel (new) coronavirus that causes a 

disease named ‘‘coronavirus disease 

2019’’ (COVID–19).230 COVID–19 is a 

contagious respiratory infection 231 that 

can cause serious illness and death. 

Older individuals and those with 

underlying medical conditions are 

considered to be at higher risk for more 

serious complications from COVID– 

19.232

COVID–19 has had significant 

negative health effects—on individuals, 

communities, and the nation as a whole. 

Consequences for individuals who have 

COVID–19 include morbidity, 

hospitalization, mortality, and postCOVID conditions (also known as long 

COVID). As of March 16, 2022, over 79 

million COVID–19 cases, over 4.5 

million new COVID–19 related 

hospitalizations, and almost 965,000 

COVID–19 deaths have been reported in 

the U.S.233

The CDC has confirmed that the three 

main ways that COVID–19 is spread are: 

(1) Breathing in air when close to an 

infected person who is exhaling small 

droplets and particles that contain the 

virus; (2) Having these small droplets 

and particles that contain virus land on 

the eyes, nose, or mouth, especially 

through splashes and sprays like a 

cough or sneeze; and (3) Touching eyes, 

nose, or mouth with hands that have the 

virus on them.234 According to the CDC, 

those at greatest risk of infection are 

persons who have had prolonged, 

unprotected close contact (that is, 

within 6 feet for 15 minutes or longer) 

with an individual with confirmed 

SARS–CoV–2 infection, regardless of 

whether the individual has 

symptoms.235 Although personal 

protective equipment (PPE) and other 

infection-control precautions can reduce 

the likelihood of transmission in health 

care settings, COVID–19 can spread 

between healthcare personnel (HCP) 

and patients, or from patient to patient, 

given the close contact that may occur 

during the provision of care.236 The 

CDC has emphasized that health care 

settings can be high-risk places for 

COVID–19 exposure and 

transmission.237

Vaccination is a critical part of the 

nation’s strategy to effectively counter 

the spread of COVID–19 and ultimately 

help restore societal functioning.238 On 

December 11, 2020, FDA issued the first 

Emergency Use Authorization (EUA) for 

a COVID–19 vaccine in the U.S.239

Subsequently, FDA issued EUAs for 

additional COVID–19 vaccines 240 and, 

after a rigorous review process, granted 

approval to two vaccines.241

We believe that it is important to 

incentivize and track HCP vaccination 

for COVID–19 in facilities through 

quality measurement in order to protect 

health care workers, patients, and 

caregivers, and to help sustain the 

ability of these facilities to continue 

serving their communities throughout 

the PHE and beyond. We recognize the 

importance of COVID–19 vaccination, 

and have finalized proposals to include 

a COVID–19 HCP vaccination measure 

in quality reporting programs for other 

care settings, such as the Inpatient 

Psychiatric Facility Quality Reporting 

Program (86 FR 42633 through 42640), 

the Hospital Inpatient Quality Reporting 

Program (86 FR 45374 through 45382), 

the PPS-Exempt Cancer Hospital 

Quality Reporting (PCHQR) Program (86 

FR 45428 through 45434), the LongTerm Care Hospital Quality Reporting 

Program (LTCH QRP) (86 FR 45438 

through 45446), the Inpatient 

Rehabilitation Facility Quality 

Reporting Program (IRF QRP) (86 FR 

42385 through 42396), and the Skilled 

Nursing Facility Quality Reporting 

Program (86 FR 42480 through 42489). 

HCP are at risk of carrying COVID–19 

infection to patients, experiencing 

illness or death themselves as a result of 

contracting COVID–19, and transmitting 

COVID–19 to their families, friends, and 

the general public. For further 

information regarding the importance of 

vaccination among HCP, we refer 

readers to the ‘‘Omnibus COVID–19 

Health Care Staff Vaccination,’’ an 

interim final rule with comment that 

was issued on November, 11, 2021, 

requiring COVID–19 vaccination of 

eligible staff at health care facilities that 

participate in the Medicare and 

Medicaid programs (such as facilities 

participating in ESRD QIP) (86 FR 61556 

through 615560). We believe that 

facilities should track the level of 

vaccination among their HCP as part of 

their efforts to assess and reduce the risk 

of transmission of COVID–19 within 

their facilities. HCP vaccination can 

potentially reduce illness that leads to 

work absence and limit disruptions to 

care.242 Data from influenza vaccination 

demonstrates that provider uptake of the 

vaccine is associated with that provider 

recommending vaccination to 

patients,243 and we believe that HCP 

COVID–19 vaccination in facilities 

could similarly increase uptake among 

that patient population. We also believe 


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244Cuadros DF, Miller FD, Awad S, Coule P, 

MacKinnon NJ. Analysis of Vaccination Rates and 

New COVID–19 Infections by US County, July– 

August 2021. JAMA Netw Open. 

2022;5(2):e2147915. doi:10.1001/ 

jamanetworkopen.2021.47915. 

245 Iuliano AD, Brunkard JM, Boehmer TK, et al. 

Trends in Disease Severity and Health Care 

Utilization During the Early Omicron Variant 

Period Compared with Previous SARS–CoV–2 High 

Transmission Periods—United States, December 

2020–January 2022. MMWR Morb Mortal Wkly Rep 

2022;71:146–152. DOI: http://dx.doi.org/10.15585/ 

mmwr.mm7104e4external icon. 

246Centers for Disease Control and Prevention. 

Contraindications and precautions. (2021) Accessed 

January 7, 2022 at: https://www.cdc.gov/vaccines/ 

covid-19/info-by-product/clinicalconsiderations.html#Contraindications. 

247Centers for Disease Control and Prevention. 

Measure Specification: NHSN COVID–19 

Vaccination Coverage Updated August 2021. (2021) 

Accessed March 29, 2022 at: https://www.cdc.gov/ 

nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf. 

248Measure Applications Partnership 

Coordinating Committee Meeting Presentation. 

March 15, 2021. (2021) Accessed March 16, 2021 

at: http://www.qualityforum.org/Project_Pages/ 

MAP_Coordinating_Committee.aspx. 

249Centers for Disease Control and Prevention. 

Measure Specification: NHSN COVID–19 

Vaccination Coverage Updated August 2021. (2021) 

Accessed March 29, 2022 at: https://www.cdc.gov/ 

nhsn/pdfs/nqf/covid-vax-hcpcoverage-508.pdf. 

250National Quality Forum. List of Measures 

Under Consideration for December 21, 2020. 

Accessed at: https://www.cms.gov/files/document/ 

measures-under-consideration-list-2020-report.pdf 

on January 29 2021. 

251Measure Applications Partnership. MAP 

Preliminary Recommendations 2020–2021. 

Accessed on January 24, 2021 at: http://

www.qualityforum.org/Project_Pages/MAP_

Hospital_Workgroup.aspx. 

252 Ibid. 

253 Ibid. 254 Ibid. 255Measure Applications Partnership. 2020–2021 

MAP Final Recommendations. Accessed on 

February 23, 2021 at: http://www.qualityforum.org/ 

Project_Pages/MAP_Hospital_Workgroup.aspx. 256Measure Applications Partnership. 2020–2021 

MAP Final Recommendations. Accessed on 

February 23, 2021 at: http://www.qualityforum.org/ 

Project_Pages/MAP_Hospital_Workgroup.aspx. 257For more information on testing results and 

other measure updates, please see the Meeting 

Materials (including Agenda, Recording, 

Presentation Slides, Summary, and Transcript) of 

the March 15, 2021 meeting available at https://

www.qualityforum.org/ 

ProjectMaterials.aspx?projectID=75367. 

that publishing the HCP vaccination 

rates would be helpful to many patients, 

including those who are at high-risk for 

developing serious complications from 

COVID–19 such as dialysis patients, as 

they choose facilities from which to 

seek treatment. Patients undergoing 

hemodialysis face greater risk for 

adverse health outcomes if they contract 

COVID–19 and during the Delta and 

Omicron surges of 2021, increases in 

case rates were directly proportionate to 

vaccination rates at the county level 

across the United States 244 245 Under 

CMS’ Meaningful Measures Framework, 

the COVID–19 HCP Vaccination 

measure would address the quality 

priority of ‘‘Promoting Effective 

Prevention and Treatment of Chronic 

Disease’’ through the Meaningful 

Measures Area of ‘‘Preventive Care.’’ 

(2) Overview of Measure 

The COVID–19 HCP Vaccination 

measure is a process measure developed 

by the CDC to track COVID–19 

vaccination coverage among HCP in 

non-long-term care facilities such as 

ESRD facilities. 

The denominator is the number of 

HCP eligible to work in the ESRD 

facility for at least one day during the 

reporting period (as described in section 

IV.E.1.a.(5)) excluding persons with 

contraindications to COVID–19 

vaccination that are described by the 

CDC.246 247

The numerator is the cumulative 

number of HCP eligible to work in the 

ESRD facility for at least one day during 

the reporting period (as described in 

section IV.E.1.a.(5)) and who received a 

complete vaccination course against 

COVID–19 using an FDA-authorized or 

approved vaccine for COVID–19. A 

complete vaccination course is defined 

under the specific FDA EUA or approval 

and may require multiple doses or 

regular revaccination.248 249 Vaccination 

coverage is defined, for purposes of this 

measure, as the percentage of HCP 

eligible to work at the facility for at least 

1 day who received a complete 

vaccination course against COVID–19. 

The specifications for this measure are 

available at https://www.cdc.gov/nhsn/ 

nqf/index.html. 

(3) Review by the Measure Applications 

Partnership 

The COVID–19 HCP Vaccination 

measure was included on the publicly 

available ‘‘List of Measures under 

Consideration for December 21, 2020’’ 

(MUC List), a list of measures under 

consideration for use in various 

Medicare programs.250 When the 

Measure Applications Partnership 

(MAP) Hospital Workgroup convened 

on January 11, 2021, it reviewed 

measures on the MUC List including the 

COVID–19 HCP Vaccination measure. 

The MAP Hospital Workgroup 

recognized that the proposed measure 

represents a promising effort to advance 

measurement for an ongoing and 

evolving national pandemic and that it 

would bring value to the ESRD QIP 

measure set by providing transparency 

about an important COVID–19 

intervention to help prevent infections 

in HCP and patients.251 The MAP 

Hospital Workgroup also stated that 

collecting information on COVID–19 

vaccination coverage among HCP, and 

providing feedback to facilities, would 

allow facilities to benchmark coverage 

rates and improve coverage in their 

facility. The MAP Hospital Workgroup 

further noted that reducing rates of 

COVID–19 in HCP may reduce 

transmission among a patient 

population that is highly susceptible to 

illness and disease, and also reduce 

instances of staff shortages due to 

illness.252

In its preliminary recommendations, 

the MAP Hospital Workgroup did not 

support this measure for rulemaking, 

subject to potential for mitigation.253 To 

mitigate its concerns, the MAP Hospital 

Workgroup believed that the measure 

needed well-documented evidence, 

finalized specifications, testing, and 

NQF endorsement prior to 

implementation.254 Subsequently, the 

MAP Coordinating Committee reviewed 

the COVID–19 HCP Vaccination 

measure and the preliminary 

recommendation of the Hospital 

Workgroup, and decided to recommend 

conditional support for rulemaking 

contingent on CMS bringing the 

measure back to the MAP once the 

specifications were further refined.255 In 

its final report, the MAP further noted 

that the measure would add value to the 

ESRD QIP measure set by providing 

visibility into an important intervention 

to limit COVID–19 infections in HCP 

and the ESRD patients for whom they 

provide care.256

In response to the MAP’s request that 

CMS return with the measure once the 

specifications are further refined, we 

met with the MAP Coordinating 

Committee accompanied by the CDC on 

March 15, 2021 to address vaccine 

availability, the alignment of the 

COVID–19 HCP Vaccination measure as 

closely as possible with the Influenza 

HCP vaccination measure (NQF #0431) 

specifications, and the definition of HCP 

used in the measure. At this meeting, 

with the CDC, we also presented 

preliminary findings from ongoing 

testing of the numerator of COVID–19 

HCP Vaccination measure, which 

showed that the numerator data should 

be feasible and reliable.257 Testing of the 

numerator, the number of HCP 

vaccinated, involved a comparison of 

vaccination data reported to the CDC by 

long-term care facilities (LTCFs) through 

the CDC’s National Healthcare Safety 

Network (NHSN) with data reported to 

the CDC through the federal pharmacy 

partnership program for delivering 

vaccination to LTC facilities. These two 

data collection systems are independent 

but show high correlation. In initial 

analyses of the first month of 


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258 Ibid. 

259Centers for Disease Control and Prevention. 

Surveillance for Weekly HCP COVID–19 

Vaccination. Accessed at: https://www.cdc.gov/ 

nhsn/hps/weekly-covid-vac/index.html on January 

7, 2022. 

vaccination from December 2020 to 

January 2021, the number of HCP 

vaccinated in approximately 1,200 

facilities was highly correlated between 

these two systems with a correlation 

coefficient of nearly 90 percent in the 

second two weeks of reporting.258

Because of the high correlation across a 

large number of facilities, including 

ESRD facilities, and the high number of 

HCP within those facilities receiving at 

least one dose of the COVID–19 vaccine, 

we believe these data indicate the 

measure is feasible and reliable for use 

in the ESRD QIP. 

(4) NQF Endorsement 

Section 1881(h)(2)(B)(i) of the Act 

states that subject to subparagraph (ii), 

any measure specified by the Secretary 

for the ESRD QIP must have been 

endorsed by the entity with a contract 

under section 1890(a) of the Act. The 

National Quality Forum (NQF) currently 

holds this contract. Under section 

1881(h)(2)(B)(ii) of the Act, in the case 

of a specified area or medical topic 

determined appropriate by the Secretary 

for which a feasible and practical 

measure has not been endorsed by the 

entity with a contract under section 

1890(a) of the Act, the Secretary may 

specify a measure that is not so 

endorsed as long as due consideration is 

given to measures that have been 

endorsed or adopted by a consensus 

organization identified by the Secretary. 

The proposed COVID–19 HCP 

Vaccination measure is not NQF 

endorsed. The CDC, in collaboration 

with CMS, submitted the measure for 

consideration in the NQF Fall 2021 

measure cycle. 

Because this measure is not NQFendorsed, we considered whether there 

are other available measures that assess 

COVID–19 vaccination rates among 

HCP. We found no other feasible and 

practical measures on the topic of 

COVID–19 vaccination among HCP, 

therefore the exception in section 

1881(h)(2)(B)(ii) of the Act applies. We 

believe it is important to propose this 

measure as quickly as feasible to 

address the ongoing COVID–19 

pandemic and to prepare for potential 

future waves of COVID–19 variants, 

including the potential continued 

negative impact of COVID–19 infection 

on the ESRD patient population as well 

as HCP staffing shortages due to 

COVID–19 infection among staff. 

(5) Data Collection, Submission, and 

Reporting 

We are proposing quarterly reporting 

deadlines for the ESRD QIP and a 12- 

month performance period. Facilities 

would report the measure through the 

NHSN web-based surveillance 

system.259 Facilities currently use the 

NHSN web-based system to report two 

ESRD QIP measures, the NHSN 

Bloodstream Infection (BSI) clinical 

measure and the NHSN Dialysis Event 

reporting measure. 

To report this measure, we propose 

that facilities would collect the 

numerator and denominator for the 

COVID–19 HCP vaccination measure for 

at least one self-selected week during 

each month of the reporting quarter and 

submit the data to the NHSN Healthcare 

Personal Safety (HPS) Component 

before the quarterly deadline to meet 

ESRD QIP requirements. While it would 

be ideal to have HCP vaccination data 

for every week of each month, we are 

mindful of the time and resources that 

facilities would need to report the data. 

Thus, in collaboration with the CDC, we 

determined that data from at least one 

week of each month would be sufficient 

to obtain a reliable snapshot of 

vaccination levels among a facility’s 

healthcare personnel while balancing 

the costs of reporting. If a facility 

submits more than one week of data in 

a month, the most recent week’s data 

would be used to calculate the measure, 

as we believe the most recent week’s 

data would provide the most currently 

available information. For example, if 

first and third week data are submitted, 

third week data would be used. If first, 

second, and fourth week data are 

submitted, fourth week data would be 

used. Each quarter, we propose that the 

CDC would calculate a single quarterly 

COVID–19 HCP vaccination coverage 

rate for each facility, which would be 

calculated by taking the average of the 

data from the three weekly rates 

submitted by the facility for that quarter. 

We would publicly report the most 

recent quarterly COVID–19 HCP 

vaccination coverage rate as calculated 

by the CDC. 

As described in section IV.E.1.a.(2) of 

this proposed rule, facilities would 

report the number of HCP eligible to 

have worked at the facility during the 

self-selected week that the facility 

reports data for in NHSN (denominator) 

and the number of those HCP who have 

received a complete course of a COVID– 

19 vaccination (numerator) during the 

same self-selected week. 

We welcome public comment on our 

proposal to add a new measure, COVID– 

19 Vaccination Coverage among HCP, to 

the ESRD QIP measure set beginning 

with PY 2025. 

b. Proposed Updates to the 

Standardized Transfusion Ratio (STrR) 

Reporting Measure Beginning With PY 

2025 

Under section 1881(h)(2)(A)(iv)(I) of 

the Act, the ESRD QIP has a statutory 

requirement to include an anemia 

management measure in the Program’s 

measure set, and the STrR reporting 

measure currently satisfies that statutory 

requirement. In the CY 2015 ESRD PPS 

final rule (79 FR 66192 through 66197), 

we finalized the adoption of the STrR 

clinical measure to address gaps in the 

quality of anemia management, 

beginning with the PY 2018 ESRD QIP. 

The NQF endorsed a revised version of 

the STrR clinical measure in 2016, and 

in the CY 2018 ESRD PPS final rule (82 

FR 50771 through 50774), we adopted 

the revised version of the STrR clinical 

measure beginning with the PY 2021 

ESRD QIP. 

Commenters to the CY 2019 ESRD 

PPS proposed rule raised concerns 

about the validity of the modified STrR 

measure (NQF #2979) finalized for 

adoption beginning with PY 2021 (83 

FR 56993 through 56994). Commenters 

specifically stated that due to the new 

level of coding specificity required 

under the ICD–10–CM/PCS coding 

system, many hospitals were no longer 

accurately coding blood transfusions. 

The commenters further stated that 

because the STrR clinical measure was 

calculated using hospital data, the rise 

of inaccurate blood transfusion coding 

by hospitals had negatively affected the 

validity of the STrR measure (83 FR 

56993 through 56994). 

In the CY 2020 ESRD PPS final rule 

(84 FR 60720 through 60723), we 

finalized our proposal to convert the 

STrR clinical measure to a reporting 

measure while we examined these 

validity concerns. Accordingly, we 

finalized that, beginning with PY 2022, 

we would score the STrR measure so 

that facilities that meet previously 

finalized minimum data and eligibility 

requirements would receive a score on 

the STrR reporting measure based on 

the successful reporting of data, not on 

the values actually reported. We stated 

our desire to ensure that the Program’s 

scoring methodology results in fair and 

reliable STrR measure scores because 

those scores are linked to facilities’ TPS 

and possible payment reductions. We 

also stated our belief that the most 

appropriate way to continue fulfilling 

the statutory requirement to include a 

measure of anemia management in the 

Program while ensuring that facilities 

are not adversely affected during our 


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260CMS ESRD QIP PY 2020 Final Measure 

Technical Specifications. Accessed May 18, 2022 at 

https://www.cms.gov/Medicare/Quality-InitiativesPatient-Assessment-Instruments/ESRDQIP/ 

Downloads/PY-2020-Technical-Specification.pdf. 

continued examination of the measure 

was to convert the STrR clinical 

measure to a reporting measure. 

In November 2020, the NQF renewed 

its endorsement of the STrR clinical 

measure after performing an ad hoc 

review based on updates we made to the 

measure’s specifications to address 

coding and validity concerns. Under the 

revised STrR clinical measure, inpatient 

transfusion events are identified using a 

broader definition that includes revenue 

center codes only, ICD procedure codes 

(alone or with revenue codes), or value 

codes alone or in combination. We 

believe that these updates would result 

in identification of a greater number of 

inpatient transfusion events compared 

to the previously implemented STrR 

clinical measure. In addition, the 

revised STrR clinical measure would 

effectively mitigate a provider coding 

bias that was exacerbated by the 

conversion from ICD–9 to ICD–10 code 

sets in late CY 2015. 

In light of the NQF’s endorsement and 

adoption of the updated STrR clinical 

measure specifications, we are 

proposing to convert the STrR reporting 

measure to the revised STrR clinical 

measure using the revised specifications 

that were endorsed by the NQF. We 

believe that previous validity concerns 

have been adequately examined and 

addressed, that facilities have had 

sufficient time to gain experience with 

the updated measure specifications 

through reporting the updated measure 

for Dialysis Facility Compare, and 

converting back to the STrR clinical 

measure would be consistent with our 

intent to more closely align with NQF 

measure specifications where feasible 

(84 FR 60724). 

In addition to our proposal to convert 

the STrR reporting measure to a clinical 

measure, we are also proposing to 

update the scoring methodology for the 

STrR clinical measure so that facilities 

that meet previously finalized minimum 

data and eligibility requirements would 

receive a score on the STrR clinical 

measure based on the actual clinical 

values reported by the facility, rather 

than the successful reporting of the data. 

We are also proposing to express the 

proposed STrR clinical measure as a 

rate, rather than as a ratio. We believe 

that converting the STrR clinical 

measure to be expressed as a rate would 

help providers and patients better 

understand a facility’s performance on 

the measures, and would be more 

intuitive for a facility to track its 

performance from year to year. To assess 

the impact of expressing STrR measure 

results as rates, we multiplied the 

facility level STrR by the national 

average transfusion rate. Our analysis 

found that the difference between the 

distribution of STrR measure scores 

expressed as a ratio and expressed as a 

rate was generally less than 1 percent. 

Therefore, we believe that expressing 

STrR measure results as a rate would 

not result in different ESRD QIP scores. 

This approach would also align with 

our technical updates to the SHR 

clinical measure and the SRR clinical 

measure, as discussed in section IV.D of 

this proposed rule. 

We welcome public comment on our 

proposals. 

c. Proposal To Convert the 

Hypercalcemia Clinical Measure to a 

Reporting Measure Beginning With PY 

2025 

Section 1881(h)(2)(A)(iv)(II) of the Act 

states that the measures specified for the 

ESRD QIP must include, to the extent 

feasible, measures of bone mineral 

metabolism. Abnormalities of bone 

mineral metabolism are exceedingly 

common and contribute significantly to 

morbidity and mortality in patients with 

advanced Chronic Kidney Disease 

(CKD). Many studies have associated 

disorders of mineral metabolism with 

mortality, fractures, cardiovascular 

disease, and other morbidities. 

Therefore, in the CY 2014 ESRD PPS 

final rule (78 FR 72200 through 72203), 

we adopted the Hypercalcemia clinical 

measure as part of the ESRD QIP 

measure set, which we believed would 

encourage adequate management of 

bone mineral metabolism and disease in 

patients with ESRD. 

In recent years, we have received 

numerous public comments expressing 

concern about the role and weight of the 

Hypercalcemia clinical measure in the 

ESRD QIP. Many stakeholders have 

indicated that they believe the measure 

is topped out, pointing out that the NQF 

has placed the measure in Reserve 

Status because of high facility 

performance and minimal room for 

improvement. As a result, the ability to 

distinguish meaningful differences in 

performance between facilities is 

substantially reduced because small 

random variations in measure rates can 

result in different scores. Others have 

expressed concern about whether the 

Hypercalcemia clinical measure is the 

best measure in the bone mineral 

metabolism domain to impact patient 

outcomes. 

Taking into account these persistent 

concerns expressed by stakeholders, we 

are currently examining the continued 

viability of the Hypercalcemia clinical 

measure as part of the ESRD QIP 

measure set. We also acknowledge that 

there may be other measures of bone 

mineral metabolism that are more 

informative or effective than the 

Hypercalcemia clinical measure, such as 

the serum phosphorus measure.260

Although recent annual measure 

analyses have indicated that the 

Hypercalcemia clinical measure may 

not be fully topped out based on the 

statistical criteria that we adopted in the 

CY 2015 ESRD PPS final rule (79 FR 

66174), they also indicate that the 

measure is very close to being topped 

out. Under our previously adopted 

methodology, a clinical measure is 

considered to be topped out if national 

measure data show (1) statistically 

indistinguishable performance levels at 

the 75th and 90th percentiles; and (2) a 

truncated coefficient of variation (TCV) 

of less than or equal to 0.1. To 

determine whether a clinical measure is 

topped out, we initially focus on the top 

distribution of facility performance on 

each measure and note if their 75th and 

90th percentiles are statistically 

indistinguishable. Then, to ensure that 

we properly account for the entire 

distribution of scores, we analyze the 

truncated coefficient of variation (TCV) 

for the measure. Based on a 2017 

analysis using CY 2015 CROWNWeb 

measure data, the Hypercalcemia 

clinical measure did not meet both 

conditions. Although the TCV was less 

than 1 percent, the difference between 

the 75th percentile (0.91) was 

statistically distinguishable from the 

90th percentile (0.32). However, given 

that the TCV was so low and was 

calculated by removing the lower and 

upper 5th percentiles, we believe it is 

possible that certain outliers in the 90th 

percentile could have skewed the 

statistically distinguishable part of the 

topped out analysis. In other words, 

although the Hypercalcemia clinical 

measure is not considered topped out 

based on our previously adopted 

methodology, we believe that it is very 

close to being topped out based on the 

available data and are concerned that 

small differences in measure 

performance may disproportionately 

impact a facility’s score on the measure. 

Therefore, we are proposing to 

convert the Hypercalcemia clinical 

measure to a reporting measure 

beginning in PY 2025 while we explore 

possible replacement measures that 

would be more clinically meaningful for 

purposes of quality improvement. We 

are also proposing to update the scoring 

methodology so that facilities that meet 

previously finalized minimum data and 

eligibility requirements would receive a 


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38546 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

261CMS website, Meaningful Measures 

Framework. Available at: https://www.cms.gov/ 

Medicare/Quality-Initiatives-Patient-AssessmentInstruments/QualityInitiativesGenInfo/CMSQuality-Strategy. 

score on the Hypercalcemia reporting 

measure based on the successful 

reporting of the data, rather than the 

actual clinical values reported by the 

facility. Facilities would be scored using 

the following equation, beginning in PY 

2025: 

If finalized, the Hypercalcemia reporting 

measure would be in our proposed 

Reporting Measure Domain, which we 

discuss in section IV.E.2. 

We welcome public comments on our 

proposal to convert the Hypercalcemia 

clinical measure to a reporting measure, 

beginning in PY 2025. 

2. Proposed Revisions To Measure 

Domains and to the Domain and 

Measure Weights Used To Calculate the 

Total Performance Score (TPS) 

Beginning With the PY 2025 ESRD QIP 

In the CY 2019 ESRD PPS final rule 

(83 FR 56991 through 56992), we 

finalized revisions to the ESRD QIP 

measure domains. Specifically, we 

eliminated the Reporting Domain and 

reorganized the Clinical Domain into 

three distinct domains: Patient & Family 

Engagement Domain, Care Coordination 

Domain, and Clinical Care Domain. We 

stated that adopting these topics as 

separate domains would result in a 

measure set that is more closely aligned 

with the priority areas in the 

Meaningful Measures Framework.261

We also continued use of the Patient 

Safety Domain, which aligns with the 

Meaningful Measures Framework 

priority to make care safer by reducing 

harm caused in the delivery of care. In 

that rule, we finalized our proposal to 

eliminate the Reporting Measure 

Domain from the ESRD QIP scoring 

methodology, beginning in PY 2021, 

because there would no longer be any 

measures in that domain as a result of 

our finalized proposals to reassign the 

Ultrafiltration Rate and Clinical 

Depression Screening and Follow-Up 

Reporting measures to the Clinical Care 

Measure Domain and the Care 

Coordination Measure Domain, 

respectively (83 FR 56991 through 

56997). 

In the CY 2019 ESRD PPS final rule, 

we also stated our intent to reassess how 

the finalized ESRD QIP measure 

domains and domain weights affect 

TPSs awarded under the Program in the 

future (83 FR 56995). We take numerous 

factors into account when determining 

appropriate domain and measure 

weights, including clinical evidence, 

opportunity for improvement, clinical 

significance, and patient and provider 

burden. We also consider criteria 

previously used to determine 

appropriate domain and measures 

weights, including: (1) The number of 

measures and measure topics in a 

proposed domain; (2) how much 

experience facilities have had with the 

measures and measure topics in a 

proposed domain; and (3) how well the 

measures align with CMS’s highest 

priorities for quality improvement for 

patients with ESRD (79 FR 66214) (that 

is, the Meaningful Measures Framework 

priorities, which includes our preferred 

emphasis on patient outcomes). 

Currently, ESRD QIP measures are 

weighted and distributed across four 

measure domains: Patient & Family 

Engagement, Care Coordination, Clinical 

Care, and Safety. Based on changes to 

the measure set since PY 2021, 

including adoption of the Medication 

Reconciliation (MedRec) reporting 

measure, the PPPW clinical measure, 

and the measure-related proposals in 

this proposed rule, we have reassessed 

the impact of the ESRD QIP measure 

domains and domain weights on TPSs, 

and we believe it is necessary to 

increase incentives for improving 

performance by increasing the weights 

on measures where there is the most 

room for improvement, especially on 

patient clinical outcomes. Therefore, we 

are proposing to create a new Reporting 

Measure Domain which would include 

the four current reporting measures in 

the ESRD QIP measure set, as well as the 

proposed COVID–19 HCP Vaccination 

reporting measure and the proposed 

Hypercalcemia reporting measure. We 

note that we are proposing to convert 

the STrR reporting measure to a clinical 

measure, as discussed in section 

IV.E.1.b of this proposed rule, and as a 

result, we are proposing that the 

proposed STrR clinical measure would 

be placed in the Clinical Care Measure 

Domain. 

We are also proposing to update the 

domain weights and individual measure 

weights in the Care Coordination 

Domain, Clinical Care Domain, and 

Safety Domain accordingly to 

accommodate the new Reporting 

Measure Domain and individual 

reporting measures therein. As the 

ESRD QIP measure set has evolved over 

the years, we believe this would help to 

address concerns regarding the impact 

of individual measure performance on a 

facility’s TPS, while also further 

incentivizing improvement on clinical 

measures. For a comparison of current 

and proposed measure domains and 

weighting, please see Table 19 and 

Table 20. 

BILLING CODE 4120–01–P 


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(____________________ 

number of patient-months successfully reporting data ) x12 - 2 

number of eligible patient-months 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38547 

We welcome public comment on our 

proposal to create a new Reporting 

Domain and to update the existing 

domains and measure weights used to 

calculate the TPS, beginning with PY 

2025. 

3. Estimated Performance Standards for 

the PY 2025 ESRD QIP 

Section 1881(h)(4)(A) of the Act 

requires the Secretary to establish 

performance standards with respect to 

the measures selected for the ESRD QIP 

for a performance period with respect to 

a year. The performance standards must 

include levels of achievement and 

improvement, as required by section 

1881(h)(4)(B) of the Act, and must be 

established prior to the beginning of the 

performance period for the year 

involved, as required by section 

1881(h)(4)(C) of the Act. We refer 


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TABLE 19: Current ESRD QIP Measure Domains and Weights 

SHR clinical measure 

SRR clinical measure 

PPPW measure 

Clinical 

Kt/V Dialysis Adequacy Comprehensive Measure 

Vascular Access Type Measure Topic 

STrR measure 

Hypercalcemia measure 

NHSN BSI clinical measure 

MedRec measure 

NHSN Dialysis Event reporting measure 

9.00 

12.00 

10.00 

3.00 

8.00 

4.00 

3.00 

TABLE 20: Proposed ESRD QIP Measure Domains and Weights 

SHR clinical measure 

SRR clinical measure 

PPPW measure 

Kt/V Dialysis Adequacy Comprehensive Measure 

Vascular Access Type Measure Topic 

STrR clinical measure* 

12.00 

12.00 

6.00 

11.00 

12.00 

12.00 

Clinical Depression and Follow-Up reporting measure 1.67 

Hypercalcemia reporting measure** 1.67 

Ultrafiltration Rate reporting measure 1.67 

MedRec reporting measure 1.67 

NHSN Dialysis Event reporting measure 1.67 

COVID-19 HCP Vaccination reporting measure*** 1.67 

*Weare proposing to convert the STrR reporting measure to a clinical measure beginning in PY 2025, as discussed 

in section IV.E.l.b of this proposed rule. 

**We are proposing to convert the Hypercalcernia clinical measure to a reporting measure beginning in PY 2025, as 

discussed in section IV.E. l .c of this proposed rule. 

***We are proposing to adopt the COVID-19 HCP Vaccination measure beginning in PY 2025, as discussed in 

section IV.E.l.a of this proposed rule. 
38548 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

readers to the CY 2013 ESRD PPS final 

rule (76 FR 70277) for a discussion of 

the achievement and improvement 

standards that we have established for 

clinical measures used in the ESRD QIP. 

We define the terms ‘‘achievement 

threshold,’’ ‘‘benchmark,’’ 

‘‘improvement threshold,’’ and 

‘‘performance standard’’ in our 

regulations at 42 CFR 413.178(a)(1), (3), 

(7), and (12), respectively. 

In the CY 2022 ESRD PPS final rule 

(86 FR 61927), we set the performance 

period for the PY 2025 ESRD QIP as CY 

2023 and the baseline period as CY 

2021. We note that, for the six measures 

we are proposing to suppress in section 

IV.B.2 of this proposed rule, we would 

continue to use CY 2019 data as the 

baseline period for those measures. We 

believe that this is consistent with our 

established policy to use the prior year’s 

numerical values for the performance 

standards if the most recent full CY’s 

final numerical values are worse. For 

the measures that we are proposing to 

suppress for PY 2023, this would result 

in no measure data that could be used 

for CY 2021 baseline period. Therefore, 

this would result in worse performance 

standards for those suppressed 

measures in PY 2025. In this proposed 

rule, we are estimating the performance 

standards for the PY 2025 clinical 

measures in Table 21 using data from 

CY 2019, which is the most recent data 

available. We intend to update these 

standards for the non-suppressed 

measures, using CY 2021 data, in the CY 

2023 ESRD PPS final rule. 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38549 

In addition, we summarize in Table 

22 existing requirements for successful 

reporting on reporting measures in the 

PY 2025 ESRD QIP. 


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TABLE 21: Estimated Performance Standards for the PY 2025 ESRD QIP Clinical 

Measures Using the Most Recently Available Data 

Measure Achievement Median (50th Benchmark (90th 

Threshold (15th Percentile of Percentile of National 

Percentile of National Performance) 

National Performance) 

Performance) 

Vascular Access Type (VAT) 1,••<, ...• >,···.;;< ··•.•···::\!'\ . i\ .•· •".• •• .•,\• <. c<•?:t: ,,;; ....... : .r .l <' ··•.·•·• ··'>\··· ., : > \ ·\ it'• \ ., , •.. 

Standardized Fistula Rate 53.29% 64.36% 76.77% 

Catheter Rate 18.35% 11.04% 4.69% 

Kt/V Comprehensive 94.33% 97.61% 99.42% 

Hypercalcemia** 1.54% 0.49% 0.00% 

Risk-Standardized Readmission Rate" 34.27 26.97 17.02 

NHSNBSI 1.193 0.516 0 

Risk-Standardized Hospitalization Rateb 187.80 148.33 105.54 

Risk-Standardized Transfusion Rateb 47.45 27.01 10.56 

PPPW 8.12%* 16.73%* 33.90%* 

ICH CARPS: Nephrologists' 58.20% 67.90% 79.15% 

Communication and Caring 

ICH CARPS: Quality of Dialysis Center 54.64% 63.08% 72.66% 

Care and Operations 

ICH CARPS: Providing Information to 74.49% 81.09% 87.80% 

Patients 

ICH CARPS: Overall Rating of 49.33% 62.22% 76.57% 

Nephrologists 

ICH CARPS: Overall Rating of Dialysis 50.02% 63.37% 78.30% 

Center Staff 

ICH CARPS: Overall Rating of the 54.51% 69.04% 83.72% 

Dialysis Facility 

*Values are the same final performance standards for those measures for PY 2024. In accordance with our 

longstanding policy, we are using those numerical values for those measures for PY 2025 because they are higher 

standards than the PY 2025 numerical values for those measures. 

**We are proposing to convert the Hypercalcemia clinical measure to a reporting measure beginning in PY 2025, 

as discussed in section IV.E. 1.c of this proposed rule. If this proposal is finalized, we would update the table 

accordingly in the final rule. 

"Rate calculated as a percentage of hospital discharges 

bRate per 100 patient-years 

Data sources: VAT measures: 2019 CROWNWeb; SRR, SHR: 2019 Medicare claims; Kt/V: 2019 CROWNWeb; 

Hypercalcemia: 2019 CROWNWeb; NHSN: 2019 CDC; ICH CARPS: CMS 2019; PPPW: 2019 CROWNWeb and 

2019 Organ Procurement and Transplantation Network (OPTN). 
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TABLE 22: Requirements for Successful Reporting on the PY 2025 ESRD QIP Reporting 

Measures 

Measure Reporting Frequency Data Elements 

Ullrafillralion 4 data elements are reported for • In-Center Hemodialysis (ICHD) KI/V Date 

every hemodialysis (HD) Kt/V • Post-Dialysis Weight 

session during the week of the • Pre-Dialysis Weight 

monthly Kt/V draw, and the • Delivered Minutes of blood urea nitrogen (BUN) 

number of sessions of dialysis Hcmodialysis 

is reported monthly • Number of sessions of dialysis delivered by the 

dialysis unit to the patient in the reporting 

Month 

MedRec Monthly • Date of the medication reconciliation. 

• Type of eligible professional who completed the 

medication reconciliation: 

o physician, 

o nurse, 

o advanced registered nurse practitioner (ARNP), 

o physician assistant (PA), 

o pharmacist, or 

o pharmacy technician personnel 

• Name of eligible professional 

Clinical l of 6 conditions reported • Screening for clinical depression is documented as 

Depression annually being positive and a follow-up plan is documented. 

Screening and • Screening for clinical depression documented as 

Follow-Up positive, a follow-up plan 

is not documented, and the facility possesses 

documentation that the patient is not 

eligible. 

• Screening for clinical depression documented as 

positive, the facility 

possesses no documentation of a follow-up plan, and no 

reason is given. 

• Screening for clinical depression documented as 

negative and no follow-up plan required. 

• Screening for clinical depression not documented, but 

the facility possesses 

documentation staling the patient is not eligible. 

• Clinical depression screening not documented, and no 

reason is given. 

NHSN Dialysis Monthly Three types of dialysis events reported: 

Event • IV antimicrobial start; 

• positive blood culture; and 

• pus, redness, or increased swelling at the vascular 

access site. 

STrR* At least 10 patient-years at risk during the performance 

period. 

Hypercalcemia** Monthly Total uncorrected serum or plasma calcium lab values 

COVTD-19 HCP At least one week of data each Cumulative number of HCP eligible to work in the 

Vaccination*** month, submitted quarterly facility for at least one day during the reporting period 

and who received a complete vaccination course against 

SARS-CoV-2. 

*We are proposing to convert the STrR reporting measure to a clinical measure beginning in PY 2025, as discussed 

in section IV.E. l .b of this proposed rule. If finalized, we would update this table in the final rule. 

**We are proposing to convert the Hypercalcemia clinical measure to a reporting measure beginning in PY 2025, as 

discussed in section IV.E. l .c of this proposed rule. 

***We are proposing to adopt the COVlD-19 HCP Vaccination measure beginning in PY 2025, as discussed in 

section lV.E. l.a of this proposed rule. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38551 

4. Eligibility Requirements for the PY 

2025 ESRD QIP 

Our current minimum eligibility 

requirements for scoring the ESRD QIP 

measures are described in Table 23. We 

are not proposing any changes to these 

eligibility requirements for the PY 2025 

ESRD QIP in this proposed rule. 

5. Payment Reduction Scale for the PY 

2025 ESRD QIP 

Under our current policy, a facility 

does not receive a payment reduction 

for a payment year in connection with 

its performance under the ESRD QIP if 

it achieves a TPS that is at or above the 

minimum TPS (mTPS) that we establish 

for the payment year. We have defined 

the mTPS in our regulations at 42 CFR 

413.178(a)(8) as, with respect to a 

payment year, the TPS that an ESRD 


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TABLE 23: Eligibility Requirements for Scoring on ESRD QIP Measures 

Measure Minimum data requirements CCN open date Small facility adjuster 

Kt/V Comprehensive 11 qualifying patients NIA 11-25 qualifying patients 

(Clinical) 

VAT: Long-term 11 qualifying patients NIA 11-25 qualifying patients 

Catheter Rate (Clinical) 

VAT: Standardized 11 qualifying patients NIA 11-25 qualifying patients 

Fistula Rate (Clinical) 

Hypercalcemia 11 qualifying patients NIA 11-25 qualifying patients 

(Clinical)* 

NHSN BSI (Clinical) 11 qualifying patients Before October 1 prior 11-25 qualifying patients 

to the performance 

period that applies to 

the program year. 

NHSN Dialysis Event 11 qualifying patients NIA NIA 

(Reporting) 

SRR (Clinical) 11 index discharges NIA 11-41 index discharges 

STrR (Reporting)** 10 patient-years at risk NIA NIA 

SHR (Clinical) 5 patient-years at risk NIA 5-14 patient-years at risk 

ICH CARPS (Clinical) Facilities with 30 or more survey-eligible Before October 1 prior NIA 

patients during the calendar year to the performance 

preceding the performance period must period that applies to 

submit survey results. Facilities would the program year. 

not receive a score if they do not obtain a 

total of at least 30 completed surveys 

during the performance period 

Depression Screening 11 qualifying patients Before April 1 of the NIA 

and Follow-Up performance 

(Reporting) period that applies to 

the program year. 

Ultrafiltration 11 qualifying patients Before April 1 of the NIA 

(Reporting) performance 

period that applies to 

the program year. 

MedRec (Reporting) 11 qualifying patients Before October 1 prior NIA 

to the performance 

period that applies to 

the program year. 

PPPW (Clinical) 11 qualifying patients NIA 11-25 qualifying patients 

COVID-19 HCP 11 qualifying healthcare personnel NIA NIA 

Vaccination 

(Reporting)*** 

*Weare proposing to convert the Hypercalcemia clinical measure to a reporting measure beginning in PY 2025, as 

discussed in section IV.E. l .c of this proposed rule. 

**We are proposing to convert the STrR reporting measure to a clinical measure beginning in PY 2025, as discussed 

in section IV.E. l .b of this proposed rule. If finalized, we would update this table in the final rule. 

***We are proposing to adopt the COVID-19 HCP Vaccination measure beginning in PY 2025, as discussed in 

section IV.E.l.a of this proposed rule. 
38552 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

facility would receive if, during the 

baseline period it performed at the 50th 

percentile of national performance on 

all clinical measures and the median of 

national ESRD facility performance on 

all reporting measures. 

Our current policy, which is codified 

at 42 CFR 413.177 of our regulations, 

also implements the payment 

reductions on a sliding scale using 

ranges that reflect payment reduction 

differentials of 0.5 percent for each 10 

points that the facility’s TPS falls below 

the mTPS (76 FR 634 through 635). 

For PY 2025, based on available data, 

a facility must meet or exceed a mTPS 

of 55 in order to avoid a payment 

reduction. We note that the mTPS 

estimated in this proposed rule is based 

on data from CY 2019 instead of the PY 

2025 baseline period (CY 2021) because 

CY 2021 data are not yet available. 

We refer readers to Table 19 of this 

proposed rule for the estimated values 

of the 50th percentile of national 

performance for each clinical measure. 

Under our current policy, a facility that 

achieves a TPS below 55 would receive 

a payment reduction based on the TPS 

ranges indicated in Table 24. 

BILLING CODE 4120–01–C 

We intend to update the mTPS for PY 

2025, as well as the payment reduction 

ranges for that payment year, in the CY 

2023 ESRD PPS final rule. 

F. Updates for the PY 2026 ESRD QIP 

1. Continuing Measures for the PY 2026 

ESRD QIP 

Under our previously adopted policy, 

the PY 2025 ESRD QIP measure set 

would also be used for PY 2026. We are 

not proposing to adopt any new 

measures beginning with the PY 2026 

ESRD QIP. 

2. Performance Period for the PY 2026 

ESRD QIP 

We continue to believe that 12-month 

performance and baseline periods 

provide us sufficiently reliable quality 

measure data for the ESRD QIP. Under 

this policy, we would adopt CY 2024 as 

the performance period and CY 2022 as 

the baseline period for the PY 2026 

ESRD QIP. 

We are not proposing any changes to 

this policy. 

3. Performance Standards for the PY 

2026 ESRD QIP 

Section 1881(h)(4)(A) of the Act 

requires the Secretary to establish 

performance standards with respect to 

the measures selected for the ESRD QIP 

for a performance period with respect to 

a year. The performance standards must 

include levels of achievement and 

improvement, as required by section 

1881(h)(4)(B) of the Act, and must be 

established prior to the beginning of the 

performance period for the year 

involved, as required by section 

1881(h)(4)(C) of the Act. We refer 

readers to the CY 2012 ESRD PPS final 

rule (76 FR 70277) for a discussion of 

the achievement and improvement 

standards that we have established for 

clinical measures used in the ESRD QIP. 

We define the terms ‘‘achievement 

threshold,’’ ‘‘benchmark,’’ 

‘‘improvement threshold,’’ and 

‘‘performance standard’’ in our 

regulations at 42 CFR 413.178(a)(1), (3), 

(7), and (12), respectively. 

a. Performance Standards for Clinical 

Measures in the PY 2026 ESRD QIP 

At this time, we do not have the 

necessary data to assign numerical 

values to the achievement thresholds, 

benchmarks, and 50th percentiles of 

national performance for the clinical 

measures because we do not have CY 

2021 data. We intend to publish these 

numerical values, using CY 2021 data, 

in the CY 2023 ESRD PPS final rule. 

b. Performance Standards for the 

Reporting Measures in the PY 2026 

ESRD QIP 

In the CY 2019 ESRD PPS final rule, 

we finalized the continued use of 

existing performance standards for the 

Screening for Clinical Depression and 

Follow-Up reporting measure, the 

Ultrafiltration Rate reporting measure, 

the NHSN Dialysis Event reporting 

measure, and the MedRec reporting 

measure (83 FR 57010 through 57011). 

We would continue use of these 

performance standards in PY 2026. In 

sections IV.E.1.c and IV.E.1.a of this 

proposed rule, we are proposing to 

convert the Hypercalcemia clinical 

measure to a reporting measure and to 

add the COVID–19 Vaccination 

Coverage among HCP reporting measure 

to the ESRD QIP measure set beginning 

with PY 2025, and would include these 

in the performance standards for 

reporting measures in the PY 2026 

ESRD QIP if this proposal is finalized. 

4. Scoring the PY 2026 ESRD QIP 

a. Scoring Facility Performance on 

Clinical Measures 

In the CY 2014 ESRD PPS final rule, 

we finalized policies for scoring 

performance on clinical measures based 

on achievement and improvement (78 

FR 72215 through 72216). In the CY 

2019 ESRD PPS final rule, we finalized 

a policy to continue use of this 

methodology for future payment years 

(83 FR 57011) and we codified these 

scoring policies at 42 CFR 413.178(e). In 

section IV.E.1.b of this proposed rule, 


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TABLE 24: Estimated Payment Reduction Scale for PY 2025 Based on the Most Recently 

Available Data 

Total J!erformance score Reduction (%) 

100-55 0% 

54-45 0.5% 

44-35 1.0% 

34-25 1.5% 

24--0 2.0% 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38553 

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264Miskulin DC, et al. Comorbidity and Other 

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266United States Government Accountability 

Office. End Stage Renal Disease: Medicare Payment 

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267United States Renal Data System, Annual Data 

Report, 2018. Volume 2. Chapter 1: Incidence, 

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269National Kidney Foundation. https://

www.kidney.org/news/newsroom/fsindex. Accessed 

11/15/2021. 

we are proposing to update our scoring 

methodology beginning with PY 2025. 

b. Scoring Facility Performance on 

Reporting Measures 

Our policy for scoring performance on 

reporting measures is codified at 42 CFR 

413.178(e), and more information on our 

scoring policy for reporting measures 

can be found in the CY 2020 ESRD PPS 

final rule (84 FR 60728). We previously 

finalized policies for scoring 

performance on the NHSN Dialysis 

Event reporting measure in the CY 2018 

ESRD PPS final rule (82 FR 50780 

through 50781), as well as policies for 

scoring the MedRec reporting measure 

and Clinical Depression Screening and 

Follow-up reporting measure in the CY 

2019 ESRD PPS final rule (83 FR 57011). 

We also previously finalized the scoring 

policy for the STrR reporting measure in 

the CY 2020 ESRD PPS final rule (84 FR 

60721 through 60723). In the CY 2021 

ESRD PPS final rule, we finalized our 

updated scoring methodology for the 

Ultrafiltration Rate reporting measure 

(85 FR 71468 through 71470). In section 

IV.E.1.c of this proposed rule, we are 

proposing to update our scoring 

methodology as part of our proposal to 

convert the Hypercalcemia clinical 

measure to a reporting measure 

beginning with PY 2025. We are also 

proposing to adopt a scoring 

methodology as part of our proposal to 

add the COVID–19 Vaccination 

Coverage among HCP reporting measure 

to the ESRD QIP measure set beginning 

with PY 2025, as discussed in section 

IV.E.1.a of this proposed rule. 

5. Weighting the Measure Domains and 

the TPS for PY 2026 

Under our current policy, we assign 

the Patient & Family Engagement 

Measure Domain a weight of 15 percent 

of the TPS, the Care Coordination 

Measure Domain a weight of 30 percent 

of the TPS, the Clinical Care Measure 

Domain a weight of 40 percent of the 

TPS, and the Safety Measure domain a 

weight of 15 percent of the TPS. 

In the CY 2019 ESRD PPS final rule, 

we finalized a policy to assign weights 

to individual measures and a policy to 

redistribute the weight of unscored 

measures (83 FR 57011 through 57012). 

In the CY 2020 ESRD PPS final rule, we 

finalized a policy to use the measure 

weights we finalized for PY 2022 for the 

PY 2023 ESRD QIP and subsequent 

payment years, and also to use the PY 

2022 measure weight redistribution 

policy for the PY 2023 ESRD QIP and 

subsequent payment years (84 FR 60728 

through 60729). 

In section IV.E.2 of this proposed rule, 

we are proposing the addition of a new 

Reporting Measure Domain, and we are 

proposing new weights for the four 

existing measure domains, beginning in 

PY 2025. If finalized, we would update 

the measure weights and domains and 

the TPS for PY 2026 accordingly in the 

final rule. 

G. Requests for Information (RFI) on 

Topics Relevant to ESRD QIP 

1. Request for Information on Quality 

Indicators for Home Dialysis Patients 

In this proposed rule, we are seeking 

public comments on potential indicators 

of quality for patients who receive 

dialysis at home in order to support the 

use of home dialysis for ESRD patients 

where it is appropriate. While homebased dialysis may not meet the needs 

of every patient, home dialysis has clear 

benefits for those who are suitable 

candidates. Often, it may be more 

convenient for many ESRD patients, and 

survivability rates for home dialysis are 

comparable to those of transplant 

recipients and in-center 

hemodialysis.262

There are two general types of 

dialysis: hemodialysis (HD), in which 

an artificial filter outside of the body is 

used to clean the blood; and peritoneal 

dialysis (PD), in which the patient’s 

peritoneum, covering the abdominal 

organs, is used as the dialysis 

membrane. HD is conducted at an ESRD 

facility, usually three times a week, or 

at a patient’s home, often at a greater 

frequency. PD most commonly occurs at 

the patient’s home. (Although PD can be 

furnished within an ESRD facility, it is 

very rare. For purposes of this RFI, we 

consider PD to be exclusively a home 

modality.) Assuming that either 

modality would be clinically 

appropriate, whether a patient selects 

HD or PD may depend on a number of 

factors, such as patient education before 

dialysis initiation, social and care 

partner support, socioeconomic factors, 

and patient perceptions and 

preference.263 264

When Medicare began coverage for 

individuals with ESRD in 1973, more 

than 40 percent of dialysis patients in 

the U.S. were on home hemodialysis 

(HHD). More favorable reimbursement 

for outpatient dialysis and the 

introduction in the 1970s of continuous 

ambulatory peritoneal dialysis, which 

required less intensive training, 

contributed to a relative decline in HHD 

utilization.265 Overall, the proportion of 

home dialysis patients in the U.S. 

declined from 1988 to 2012, with the 

number of home dialysis patients 

increasing at a slower rate relative to the 

total number of all dialysis patients. As 

cited in a U.S. Government 

Accountability Office (GAO) report, 

according to U.S. Renal Data System 

(USRDS) data, approximately 16 percent 

of the 104,000 dialysis patients in the 

U.S. received home dialysis in 1988; 

however, by 2012, the rates of HHD and 

PD utilization were 2 and 9 percent, 

respectively.266

Currently, the majority of ESRD 

patients receiving dialysis receive HD in 

an ESRD facility. At the end of 2016, 

63.1 percent of all prevalent ESRD 

patients—meaning patients already 

diagnosed with ESRD—in the U.S. were 

receiving HD, 7.0 percent were being 

treated with PD, and 29.6 percent had 

a functioning kidney transplant.267

Among HD cases, 98.0 percent used incenter HD, and 2.0 percent used 

HHD.268 We note that once they are 

stable on a specific modality, patients 

are infrequently aware that they are able 

to change modalities. In 2018, 72 

percent of Black ESRD patients received 

in-center hemodialysis versus only 57 

percent of White patients. This data 

point may indicate that a greater 

number of white ESRD patients receive 

home dialysis than Black patients.269

Research suggests that dialyzing at 

home is associated with lower overall 

medical expenditures than dialyzing incenter. Key factors that may be related 

to lower expenditures include 

potentially lower rates of infection 

associated with dialysis treatment, 

fewer hospitalizations, cost differentials 

between PD and HD services and 

supplies, and lower operating costs for 


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38554 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

270Walker R, Marshall MR, Morton RL, 

McFarlane P, Howard K. The cost-effectiveness of 

contemporary home hemodialysis modalities 

compared with facility hemodialysis: A systematic 

review of full economic evaluations. Nephrology. 

2014; 19: 459–470 doi: 10.1111/nep.12269. 

271Walker R, Howard K, Morton R. Home 

hemodialysis: A comprehensive review of patientcentered and economic considerations. 

ClinicoEconomics and Outcomes Research. 2017; 9: 

149–161. 

272Howard K, Salkeld G, White S, McDonald S, 

Chadban S, Craig J, Cass A. The cost effectiveness 

of increasing kidney transplantation and homebased dialysis. Nephrology. 2009; 14: 123–132 doi: 

10.1111/j.1440–1797.2008.01073.x. 

273Quinn R, Ravani P, Zhang X, Garg A, Blake P, 

Austin P, Zacharias JM, Johnson JF, Padeya S, 

Verreli M, Oliver M. Impact of Modality Choice on 

Rates of Hospitalization in Patients Eligible for Both 

Peritoneal Dialysis and Hemodialysis. Peritoneal 

Dialysis International. 2014; 34(1): 41–48 doi: 

10.3447/pdi.2012.00257. 

274Sinnakirouchenan R, Holley, J. Peritoneal 

Dialysis Versus Hemodialysis: Risks, Benefits, and 

Access Issues. Advances in Chronic Kidney 

Disease. 2011; 18(6): 428–432. doi: 10.1053/ 

j.ackd.2011.09.001. 

275Rivara MB, Mehrotra R. The Changing 

Landscape of Home Dialysis in the United States. 

Current Opinion in Nephrology and 

Hypertension.2014; 23(6):586–591.doi:10.1097/ 

MNH0000000000000066. 

276Mehrotra R, Chiu YW, Kalantar-Zadeh K, 

Bargman J, Vonesh E. Similar Outcomes With 

Hemodialysis and Peritoneal Dialysis in Patients 

With End-Stage Renal Disease. Archives of Internal 

Medicine. 2011; 171(2): 110–118. Doi:10.1001/ 

archinternmed.2010.352. 

277 Ghaffarri A, Kalantar-Zadeh K, Lee J, Maddux 

F, Moran J, Nissenson A. PD First: Peritoneal 

Dialysis as the Default Transition to Dialysis 

Therapy. Seminars in Dialysis. 2013; 26(6): 706– 

713. doi: 10.1111/sdi.12125. 

278Ledebo I, Ronco C. The best dialysis therapy? 

Results from an international survey among 

nephrology professionals. Nephrology Dialysis 

Transplantation.2008;6:403–408.doi:10.1093/ 

ndtplus/sfn148. 

279Schiller B, Neitzer A, Doss S. Perceptions 

about renal replacement therapy among nephrology 

professionals. Nephrology News & Issues. 

September 2010; 36–44. 

280United States Renal Data System, 2018 Annual 

Data Report. Available at https://www.usrds.org/ 

2018/view/v2_01.aspx. 

281Centers for Medicare & Medicaid Services. 

(2021). A Guide to Using the Accountable Health 

Communities Health-Related Social Needs 

Screening Tool: Promising Practices and Key 

Insights. June 2021. Available at: https://

innovation.cms.gov/media/document/ahcmscreeningtool-companion. Accessed: November 23, 

2021. 

282American Hospital Association. (2020). Health 

Equity, Diversity & Inclusion Measures for 

Hospitals and Health System Dashboards. December 

2020. Accessed: January 18, 2022. Available at: 

https://ifdhe.aha.org/system/files/media/file/2020/ 

12/ifdhe_inclusion_dashboard.pdf. 

283Additional information about the Accountable 

Health Communities Model is available at: https:// 

innovation.cms.gov/innovation-models/ahcm. 

284RTI International. (2020). Accountable Health 

Communities (AHC) Model Evaluation. Available 

at: https://innovation.cms.gov/data-and-reports/ 

2020/ahc-first-eval-rpt. 

285Billioux, A., Verlander, K., Anthony, S., & 

Alley, D. (2017). Standardized Screening for HealthRelated Social Needs in Clinical Settings: The 

Accountable Health Communities Screening Tool. 

NAM Perspectives, 7(5). Available at: https://

doi.org/10.31478/201705b. 

286Alley, D. E., C. N. Asomugha, P. H. Conway, 

and D. M. Sanghavi. 2016. Accountable Health 

Communities—Addressing Social Needs through 

Medicare and Medicaid. The New England Journal 

of Medicine 374(1):8–11. Available at: https://

doi.org/10.1056/NEJMp1512532. 

287Office of the Assistant Secretary for Planning 

and Evaluation (ASPE) (2020). Report to Congress: 

Social Risk Factors and Performance Under 

Medicare’s Value-Based Purchasing Program 

(Second of Two Reports). Available at: https://

aspe.hhs.gov/pdf-report/second-impact-report-tocongress. 

288Hill-Briggs, F. (2021, January 1). Social 

Determinants of Health and Diabetes: A Scientific 

Review. Diabetes Care. Available at: https://

care.diabetesjournals.org/lookup/doi/10.2337/ 

dci20-0053. 

289Laraia, B.A. (2013). Food Insecurity and 

Chronic Disease. Advances in Nutrition, 4: 203– 

212, doi: 10.3945/an.112.003277. 

dialysis providers for providing home 

dialysis.270 271 272 273 274

We believe that increasing rates of 

home dialysis has the potential to not 

only reduce Medicare expenditures, but 

also to preserve or enhance the quality 

of care for ESRD beneficiaries. In fact, 

recent studies show substantial support 

among nephrologists and patients for 

dialysis treatment at 

home.275 276 277 278 279 Although some 

measures in the ESRD QIP apply to 

home dialysis facilities, certain 

measures do not apply to facilities that 

have high rates of home dialysis. For 

example, home dialysis facilities are 

generally not eligible for scoring on the 

ICH–CAHPS measure, the Long-Term 

Catheter Rate clinical measure, the 

Standardized Fistula Rate measure, and 

the NHSN BSI clinical measure. 

Therefore, many of these facilities are 

eligible for fewer measures than 

facilities that provide in-center 

hemodialysis only. As increasing 

numbers of ESRD patients use home 

dialysis therapies,280 we are interested 

in learning more about potential 

indicators of quality of care for home 

dialysis patients that are not currently 

being captured by the ESRD QIP. 

Therefore, we are seeking comments on 

strategies to monitor and assess the 

quality of care delivered to patients who 

receive dialysis at home. We are also 

seeking comments on how to support 

more equitable access to home dialysis 

across different ESRD patient 

populations. 

We welcome comments on these 

issues. 

2. Request for Information on Potential 

Future Inclusion of Two Social Drivers 

of Health Measures 

(1) Background 

Our commitment to supporting 

facilities in building equity into their 

healthcare delivery practices centers on 

empowering their workforce to 

recognize and eliminate health 

disparities that disproportionately 

impact people with ESRD, such as, 

individuals who are members of racial 

and ethnic minority groups, have low 

incomes, and/or reside in rural areas. In 

the CY 2022 ESRD PPS final rule, we 

noted our intention to initiate additional 

request(s) for information (RFIs) on 

closing the health equity gap, including 

identification of the most relevant social 

risk factors for people with ESRD (86 FR 

61930). Health-related social needs 

(HRSNs), defined as individual-level, 

adverse social conditions that negatively 

impact a person’s health or healthcare, 

are significant risk factors associated 

with worse health outcomes as well as 

increased healthcare utilization.281 We 

believe that consistently pursuing 

identification of HRSNs would have two 

significant benefits. First, because social 

risk factors disproportionately impact 

underserved communities, promoting 

screening for these factors could serve 

as evidence-based building blocks for 

supporting facilities and health systems 

in actualizing commitment to address 

disparities, improve health equity, and 

implement associated equity measures 

to track progress.282 Second, these 

measures could support ongoing quality 

improvement initiatives by providing 

data with which dialysis providers 

would be able to stratify patient risk and 

organizational performance. 

We are investigating potential 

integration of screening for healthrelated social needs into the ESRD QIP 

measure set. This type of screening was 

the subject of the recently ended 

Accountable Health Communities 

(AHC) Model, which was implemented 

by the CMS Innovation Center.283 The 

Innovation Center developed the AHC 

Model based on evidence that 

addressing health-related social needs 

(HRSNs) through enhanced linkages 

between health systems and 

community-based organizations can 

improve health outcomes and reduce 

costs.284 HRSNs, defined as individuallevel social conditions that negatively 

impact a person’s health, are significant 

risk factors associated with adverse 

health outcomes and increased 

healthcare utilization, including 

excessive emergency department (ED) 

visits and avoidable 

hospitalizations.285 286 Unmet HRSNs, 

such as food insecurity, inadequate or 

unstable housing, and inadequate 

transportation may increase risk for 

onset of chronic conditions, such as 

ESRD, and accelerate exacerbation of 

related adverse health 

outcomes.287 288 289


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38555 

290National Academies of Sciences, Engineering, 

and Medicine.2017. Accounting for social risk 

factors in Medicare payment. Washington, DC: The 

National Academies Press. doi: 10.17226/23635. 

291Office of the Assistant Secretary for Planning 

and Evaluation (ASPE) (2020). Report to Congress: 

Social Risk Factors and Performance Under 

Medicare’s Value-Based Purchasing Program 

(Second of Two Reports). Available at: https://

aspe.hhs.gov/pdf-report/second-impact-report-tocongress. 

292Centers for Medicare & Medicaid Services. 

(2021) CMS’ Quality Strategy. Available at: https:// 

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/Value-Based-Programs/ 

CMS-Quality-Strategy. 

293Brooks-LaSure, C. (2021). My First 100 Days 

and Where We Go From Here: A Strategic Vision 

for CMS. Centers for Medicare & Medicaid. 

Available at: https://www.cms.gov/blog/my-first100-days-and-where-we-go-here-strategic-visioncms. 

294United States Renal Data System. 2021 USRDS 

Annual Data Report: Epidemiology of kidney 

disease in the United States. National Institutes of 

Health, National Institute of Diabetes and Digestive 

and Kidney Diseases, Bethesda, MD, 2021. 

295Weinhandl, E.D., Wetmore, J.B., Peng, Y., Liu, 

J., Gilbertson, D.T., et al., (2021). Initial Effects of 

COVID–19 on Patient with ESKD. Journal of the 

American Society of Nephrology 32: 1444–1453. 

doi: https://doi.org/10.1681/ASN.2021010009. 

296Centers for Disease Control. CDC COVID–19 

Response Health Equity Strategy: Accelerating 

Progress Towards Reducing COVID–19 Disparities 

and Achieving Health Equity. July 2020. Available 

at: https://www.cdc.gov/coronavirus/2019-ncov/ 

community/health-equity/cdc-strategy.html. 

Accessed November 17, 2021. 

297Weinhandl, E.D., Wetmore, J.B., Peng, Y., Liu, 

J., Gilbertson, D.T., et al., (2021). Initial Effects of 

COVID–19 on Patient with ESKD. Journal of the 

American Society of Nephrology 32: 1444–1453. 

doi: https://doi.org/10.1681/ASN.2021010009. 

298United States Renal Data System. 2021 USRDS 

Annual Data Report: Epidemiology of kidney 

disease in the United States. National Institutes of 

Health, National Institute of Diabetes and Digestive 

and Kidney Diseases, Bethesda, MD, 2021. 

299Benjamin O, Lappin SL. End-Stage Renal 

Disease. [Updated 2021 Sep 16]. In: Stat Pearls 

[internet]. Treasure Island (FL): StatPearls 

Publishing; 2022. Available from: https://www.ncbi.

nlm.nih.gov/books/NBK499861/. 

300Norris, K.C., Williams, S.F., Rhee, C.M., 

Nicholas, S.B., Kovesdy, C.P., et al. (2017). 

Hemodialysis Disparities in African Americans: The 

Deeply Integrated Concept of Race in the Social 

Fabric of Our Society. Seminars in Dialysis 

30(3):213–223. doi:10.1111/sdi.12589. 

301CMS (2021). Chronic Kidney Disease 

Disparities: Educational Guide for Primary Care. 

Available at: https://www.cms.gov/files/document/ 

chronic-kidney-disease-disparities-educationalguide-primary-care.pdf. 

302Norton, J.M., Moxey-Mims, M.M., Eggers, 

P.W., Narva, A.S., Star, R.A., Kimmel, P.L., & 

Rodgers, G.P. (2016). Social Determinants of Racial 

Disparities in CKD. Journal of the American Society 

of Nephrology: JASN, 27(9), 2576–2595. https://

doi.org/10.1681/ASN.2016010027. 

303CMS (2014). Health Disparities Among Aged 

ESRD Beneficiaries, 2014. Available at: https://

www.cms.gov/About-CMS/Agency-Information/ 

OMH/Downloads/ESRD-Infographic.pdf. 

304Hill-Briggs, F. (2021, January 1). Social 

Determinants of Health and Diabetes: A Scientific 

Review. Diabetes Care. Available at: https://

care.diabetesjournals.org/lookup/doi/10.2337/ 

dci20-0053. 

305 Dean, E.B., French, M.T., Mortensen, K. 

(2020). Health Services Research 55 (Supplement 

2): 883–893. doi: 10.1111/1475–6773.13283. 

306Berkowitz, S.A., Kalkhoran, S., Edwards, S.T., 

Essien, U.R., Baggett, T.P. (2018). Unstable Housing 

and Diabetes-Related Emergency Department Visits 

and Hospitalization: A Nationally Representative 

Study of Safety-Net Clinic Patients. Diabetes Care 

41: 933–939. https://doi.org/10.2337/dc17-1812. 

307National Academies of Sciences, Engineering, 

and Medicine 2019. Dialysis Transportation: The 

Intersection of Transportation and Healthcare. 

Washington, DC: The National Academies Press. 

https://doi.org/10.17226/25385. 

308 Ibid. 

309CMS (2021). Chronic Kidney Disease 

Disparities: Educational Guide for Primary Care. 

Available at: https://www.cms.gov/files/document/ 

chronic-kidney-disease-disparities-educationalguide-primary-care.pdf. 

We believe consistent identification of 

HRSNs among people with ESRD would 

have two significant benefits that would 

contribute to reduction in health 

disparities and improvements in quality 

and efficiency of dialysis care delivery. 

First, due to the association between 

chronic condition risk and HRSNs, 

screening for these needs could serve as 

evidence-based building blocks for 

supporting ESRD facilities and health 

systems in addressing persistent 

disparities and tracking progress 

towards closing the health equity gap in 

the ESRD population. Second, these 

measures would support ongoing 

quality improvement initiatives, 

specifically, care coordination for ESRD 

patients, by providing data with which 

to potentially stratify quality 

performance in dialysis providers. This 

is especially relevant in settings where 

a disproportionate number of patients 

have HRSNs and adverse healthcare 

outcomes, including hospital 

readmissions, that result in higher 

penalties related to diminished quality 

performance.290 291 We believe these 

measures align with The CMS Quality 

Strategy Goals around effective care 

coordination and prevention and 

treatment of chronic conditions.292 We 

note that advancing health equity by 

addressing the health disparities that 

underlie the country’s health system is 

one of our strategic pillars and a BidenHarris Administration priority.293 In 

this proposed rule, we seek public 

comment on the potential future 

inclusion of two related measures 

discussed later in this section. 

(2) Screening for Social Drivers of 

Health Measure 

Significant and persistent health 

disparities in the United States result in 

adverse health outcomes for people with 

ESRD.294 295 The COVID–19 pandemic 

has illuminated the detrimental 

interaction between HRSNs, adverse 

health outcomes, and healthcare 

utilization in the United States.296 297

Individuals from racial and ethnic 

minority groups and with lower 

incomes are less likely to receive 

recommended care for CKD risk factors 

and are also less likely to reduce CKD 

risk through recommended treatment 

goals.298 299 300 301 Consequently, some 

groups are more likely to progress from 

CKD to ESRD and less likely to be under 

the care of a nephrologist before starting 

dialysis.302 Individuals from racial and 

ethnic minority groups with ESRD are 

more likely to have 30-day hospital 

readmissions when compared to nonHispanic White patients.303 Emerging 

evidence has shown that specific social 

risk factors are directly associated with 

health outcomes and healthcare 

utilization and costs.304 305 306 307 Of 

particular concern among people with 

ESRD are barriers to treatment prior to 

and after diagnosis, including 

inadequate access to healthy foods, 

unstable housing, limited 

transportation, and community safety 

concerns.308 309

We believe improvement in care 

coordination between ESRD facilities, 

hospitals, and community-based 

organizations would yield better health 

outcomes for people with ESRD and 

quality performance for dialysis and 

other healthcare providers. Recognizing 

the importance of social drivers of 

health, this year we have proposed to 

include social drivers of health 

screening measures in the Hospital 

Inpatient Quality Reporting Program (87 

FR 28497 through 28506). We believe 

that screening for social drivers of 

health would similarly help inform 

facilities and other healthcare providers 

of the impact of HRSNs in people with 

ESRD, including their health outcomes 

and healthcare utilization. The measure 

would assess the proportion of adult 

patients who are screened for social 

drivers of health in five core domains, 

including food insecurity, housing 

instability, transportation needs, utility 

difficulties, and interpersonal safety. 

The goal is to lay the groundwork for 

potential future measures that focus on 

the development of an action plan to 

address these HRSNs, including 

efficiently navigating patients to 

available resources and strengthening 

the system of community-based 

supports where resources are lacking. 

Collecting baseline data via this 

measure would be crucial in informing 

design of future measures that could 

enable us to set appropriate 

performance targets. While widespread 

interest in addressing HRSNs exists, 

action is inconsistent, specifically in 

ESRD facilities. We are exploring 

potential future inclusion of social 


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38556 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

310 Ibid. 

311United States Renal Data System. 2021 USRDS 

Annual Data Report: Epidemiology of kidney 

disease in the United States. National Institutes of 

Health, National Institute of Diabetes and Digestive 

and Kidney Diseases, Bethesda, MD, 2021. 

312Benjamin O, Lappin SL. End-Stage Renal 

Disease. [Updated 2021 Sep 16]. In: Stat Pearls 

[internet]. Treasure Island (FL): StatPearls 

Publishing; 2022. Available from: https://www.ncbi.

nlm.nih.gov/books/NBK499861/. 313Norris, K.C., Williams, S.F., Rhee, C.M., 

Nicholas, S.B., Kovesdy, C.P., et al. (2017). 

Hemodialysis Disparities in African Americans: The 

Deeply Integrated Concept of Race in the Social 

Fabric of Our Society. Seminars in Dialysis 

30(3):213–223. doi:10.1111/sdi.12589. 314Laraia, B.A. (2013). Food Insecurity and 

Chronic Disease. Advances in Nutrition, 4: 203– 

212, doi: 10.3945/an.112.003277. 315United States Renal Data System. 2021 USRDS 

Annual Data Report: Epidemiology of kidney 

disease in the United States. National Institutes of 

Health, National Institute of Diabetes and Digestive 

and Kidney Diseases, Bethesda, MD, 2021. 316National Academies of Sciences, Engineering, 

and Medicine 2019. Dialysis Transportation: The 

Intersection of Transportation and Healthcare. 

Washington, DC: The National Academies Press. 

https://doi.org/10.17226/25385. 317Centers for Disease Control. CDC COVID–19 

Response Health Equity Strategy: Accelerating 

Progress Towards Reducing COVID–19 Disparities 

and Achieving Health Equity. July 2020. Available 

at: https://www.cdc.gov/coronavirus/2019-ncov/ 

community/health-equity/cdc-strategy.html. 

Accessed November 17, 2021. 

318Weinhandl, E.D., Wetmore, J.B., Peng, Y., Liu, 

J., Gilbertson, D.T., et al., (2021). Initial Effects of 

COVID–19 on Patient with ESKD. Journal of the 

American Society of Nephrology 32: 1444–1453. 

doi: https://doi.org/10.1681/ASN.2021010009. 

319 Joynt KE, Orav E, Jha AK. (2011). Thirty-day 

readmission rates for Medicare beneficiaries by race 

and site of care. JAMA, 305(7):675–681. 

320Milkie Vu et al. Predictors of Delayed 

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58; S.B. Nadimpalli, et al., The Association between 

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321Lindenauer PK, Lagu T, Rothberg MB, et al. 

(2013). Income inequality and thirty-day outcomes 

after acute myocardial infarction, heart failure, and 

pneumonia: Retrospective cohort study. British 

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322Trivedi AN, Nsa W, Hausmann LRM, et al. 

(2014). Quality and equity of care in U.S. hospitals. 

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323Polyakova, M., et al. (2021). Racial disparities 

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states. Health Affairs, 40(2): 307–316. 

324Rural Health Research Gateway. (2018). Rural 

communities: age, income, and health status. Rural 

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325HHS Office of Minority Health. (2020). 

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Action Plan to Reduce Racial and Ethnic Health 

Disparities. Available at: https://www.minority

health.hhs.gov/assets/PDF/Update_HHS_

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326Heslin, KC, Hall, JE. (2021). Sexual 

Orientation Disparities in Risk Factors for Adverse 

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Behavioral Risk Factor Surveillance System, United 

States, 2017–2019. MMWR Morb Mortal Wkly Rep 

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327Poteat TC, Reisner SL, Miller M, Wirtz AL. 

(2020). COVID–19 vulnerability of transgender 

women with and without HIV infection in the 

Eastern and Southern U.S. preprint. medRxiv. 

2020;2020.07.21. 20159327. doi:10.1101/ 

2020.07.21.20159327. 

drivers of health screening measures to 

the ESRD QIP. Therefore, we are seeking 

public comment on adding a new 

measure, Screening for Social Drivers of 

Health, to the ESRD QIP measure set in 

the next rulemaking cycle. The measure 

would assess the proportion of a 

facility’s patients that are screened for 

one or more social drivers of health in 

the five core domains. 

We believe facilities should screen for 

HRSNs among their patients to assess 

and increase the effectiveness of care 

coordination. Referral to communitybased organizations can potentially 

reduce avoidable hospitalizations and 

disruptions to dialysis care. Data 

demonstrate that an overwhelming 

majority of people with ESRD travel 

outside their homes for dialysis three 

times per week, round trip, and that 

transportation challenges contribute to 

shortened treatment episodes and 

adverse health outcomes.310 311 We 

believe screening for HRSNs like 

transportation in people with ESRD and 

targeted care coordination that links 

them to community-based services 

could improve health outcomes in this 

population. We also believe that 

publishing social drivers of health 

screening rates would be helpful to 

many patients who need additional care 

coordination but may experience 

reluctance in seeking assistance due to 

concerns for personal stigmatization. 

Under our Meaningful Measures 

Framework, the Screening for Social 

Drivers of Health measure would 

address the quality priority ‘‘Promoting 

Effective Prevention and Treatment of 

Chronic Disease’’ through the 

Meaningful Measures Area 

‘‘Management of Chronic Conditions.’’ 

(3) Screen Positive Rate for Social 

Drivers of Health Measure 

We believe it is important to screen 

patients with ESRD for HRSNs that can 

negatively impact health outcomes and 

contribute to avoidable hospitalizations. 

Unmet HRSNs can interrupt dialysis 

treatment and other routine care, 

including preventive health screenings, 

that is essential for ESRD-related 

conditions. Many patients treated in 

ESRD facilities have other chronic 

conditions that require consistent, 

multidisciplinary care to maintain their 

health.312 313 Household food insecurity 

has been associated with reliance on 

energy-dense foods which increase risks 

for onset of diabetes and hypertension, 

the leading causes of ESRD.314 Housing 

instability and transportation 

difficulties both contribute to 

interruptions in dialysis care which 

leads to avoidable hospitalizations.315 316

Additionally, the COVID–19 pandemic 

has highlighted associations between 

disproportionate health risk, 

hospitalization, and adverse health 

outcomes.317 318 Capturing HRSN data 

may facilitate strengthening of linkages 

between facilities, medical providers 

(inpatient and outpatient), and 

community-based organizations which 

potentially could enhance care 

coordination for this group. Therefore, 

we are seeking public comment on the 

possible addition of a new measure, 

Screen Positive Rate for Social Drivers 

of Health, to the ESRD QIP measure set 

in future rulemaking. The measure 

would assess the proportion of patients 

who screen positive for HRSNs in five 

core domains, including food insecurity, 

housing instability, transportation 

needs, utility difficulties, and 

interpersonal safety. We also believe 

that publishing screen positive rates for 

social drivers of health would be helpful 

to many patients who need additional 

care coordination but may experience 

reluctance in seeking assistance due to 

concerns for personal stigmatization. 

Under our Meaningful Measures 

Framework, the Screening for Social 

Drivers of Health measure would 

address the quality priority ‘‘Promoting 

Effective Prevention and Treatment of 

Chronic Disease’’ through the 

Meaningful Measures Area 

‘‘Management of Chronic Conditions.’’ 

We welcome public comment on 

potentially adding these two related 

Social Drivers of Health measures to the 

ESRD QIP measure set. We also 

welcome public comment on data 

collection, submission, and reporting for 

these two measures. 

3. Request for Information on 

Overarching Principles for Measuring 

Healthcare Quality Disparities Across 

CMS Quality Programs 

a. Background 

Significant and persistent inequities 

in healthcare outcomes exist in the 

United States. Belonging to a racial or 

ethnic minority group; being a member 

of a religious minority; living with a 

disability; being a member of the 

LGBTQ+ community; living in a rural 

area; or being near or below the poverty 

level, are often associated with worse 

health 

outcomes.319 320 321 322 323 324 325 326 327 We 

are committed to achieving equity in 

healthcare outcomes for our 


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328Centers for Medicare and Medicaid Services. 

(2016). CMS Quality Strategy. Available at: https:// 

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/Qualityinitiativesgeninfo/ 

downloads/cms-quality-strategy.pdf. 

329https://www.federalregister.gov/documents/ 

2021/01/25/2021-01753/advancing-racial-equityand-support-for-underserved-communities-throughthe-federal-government. 

330Centers for Medicare & Medicaid Services. 

(2022). Health Equity. Available at: https://

www.cms.gov/pillar/health-equity. 

331Centers for Medicare and Medicaid Services. 

(2016). CMS Quality Strategy. Available at: https:// 

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/Qualityinitiativesgeninfo/ 

downloads/cms-quality-strategy.pdf. 332Centers for Medicare and Medicaid Services. 

(2021). CMS Office of Minority Health. Available at: 

https://www.cms.gov/About-CMS/AgencyInformation/OMH/OMH-Mapping-MedicareDisparities. 333Centers for Medicare and Medicaid Services. 

Disparity Methods Confidential Reporting. 

Available at: https://qualitynet.cms.gov/inpatient/ 

measures/disparity-methods. 334https://www.federalregister.gov/documents/ 

2013/09/24/2013-23164/national-standards-forculturally-and-linguistically-appropriate-servicesclas-in-health-and-health. 335Centers for Medicare and Medicaid Services. 

(2021). Accountable Health Communities Model. 

Available at: https://innovation.cms.gov/ 

innovation-models/ahcm. 

336https://innovation.cms.gov/files/worksheets/ 

ahcm-screeningtool.pdf. 

337Centers for Medicare and Medicaid Services. 

(2021). IMPACT Act Standardized Patient 

Assessment Data Elements. Available at: https://

www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/-IMPACT-ActStandardized-Patient-Assessment-Data-Elements. 

338Centers for Medicare & Medicaid Services. 

(2021). Building an Organizational Response to 

Health Disparities [Fact Sheet]. U.S. Department of 

Health and Human Services. Available at: https:// 

www.cms.gov/About-CMS/Agency-Information/ 

OMH/Downloads/Health-Disparities-Guide.pdf. 

339 Improving Health Equity Through Data 

Collection and Use: A Guide for Hospital Leaders. 

(2011). Available at: http://www.hpoe.org/ReportsHPOE/improvinghealthequity3.2011.pdf. 

beneficiaries by supporting healthcare 

providers’ quality improvement 

activities to reduce health disparities, 

enabling beneficiaries to make more 

informed decisions, and promoting 

healthcare provider accountability for 

healthcare disparities.328

Health equity is an important 

component of an equitable society. 

Equity, as defined in Executive Order 

13985, is ‘‘the consistent and systematic 

fair, just, and impartial treatment of all 

individuals, including individuals who 

belong to underserved communities that 

have been denied such treatment, such 

as Black, Latino, and Indigenous and 

Native American persons, Asian 

Americans and Pacific Islanders and 

other persons of color; members of 

religious minorities; lesbian, gay, 

bisexual, transgender, and queer 

(LGBTQ+) persons; persons with 

disabilities; persons who live in rural 

areas; and persons otherwise adversely 

affected by persistent poverty or 

inequality.’’ 329

We define health equity as the 

attainment of the highest level of health 

for all people, where everyone has a fair 

and just opportunity to attain their 

optimal health regardless of race, 

ethnicity, disability, sexual orientation, 

gender identity, religion, socioeconomic 

status, geography, preferred language, or 

other factors that affect access to care 

and health outcomes. We are working to 

advance health equity by designing, 

implementing, and operationalizing 

policies and programs that support 

health for all the people served by our 

programs, eliminating avoidable 

differences in health outcomes 

experienced by people who are 

disadvantaged or underserved, and 

providing the care and support that our 

beneficiaries need to thrive.330

Such disparities in health outcomes 

and healthcare access are the result of 

multiple factors including differences in 

access to routine dialysis and primary 

care which contribute to health 

disparities among patients with ESRD. 

We discussed the impact of these 

disparities on patients with ESRD in our 

request for information on closing the 

health equity gap in the CY 2022 ESRD 

PPS proposed rule (86 FR 36362). 

Because we are working toward the goal 

of all ESRD patients receiving high 

quality dialysis treatment and other 

healthcare, irrespective of individual 

characteristics, we are committed to 

supporting dialysis providers and health 

systems in building a culture of equity 

that focuses on educating and 

empowering the healthcare workforce to 

recognize and eliminate health 

disparities in ESRD patients.331

Closing the health equity gap would 

require multipronged approaches that 

effectively address the many drivers of 

health disparities. As summarized in the 

CY 2022 ESRD PPS final rule request for 

information, we noted our intention to 

initiate additional request(s) for 

information (RFIs) on closing the health 

equity gap, including identification of 

the most relevant social risk factors for 

people with ESRD (86 FR 61930). 

Advancing health equity would require 

a variety of efforts across the healthcare 

system. The reduction in healthcare 

disparities is one aspect of improving 

equity that we have prioritized. In the 

CY 2022 ESRD PPS final rule request for 

information, ‘‘Closing the Health Equity 

Gap in CMS Hospital Quality Programs’’ 

(86 FR 61928 through 61937), we 

described programs and policies we 

have implemented over the past decade 

with the aim of identifying and reducing 

healthcare disparities, including: the 

CMS Mapping Medicare Disparities 

Tool 332 and the CMS Disparity Methods 

stratified reporting.333 CMS has also 

begun efforts supporting 

implementation of the National 

Standards for Culturally and 

Linguistically Appropriate Services 

(CLAS) in Health and Health Care (78 

FR 58539); 334 as well as improvement 

of the collection of social determinants 

of health in standardized patient 

assessment data in four post-acute care 

settings and the collection of healthrelated social need data by model 

participants in the CMMI Accountable 

Health Communities Model.335 336 337

Measuring healthcare disparities and 

reporting these results to healthcare 

providers is a cornerstone of our 

approach to advancing healthcare 

equity. It is important to consistently 

measure differences in care received by 

different groups of our beneficiaries, 

and this can be achieved by methods to 

stratify quality measures. Measure 

stratification is defined for this purpose 

as calculating measure results for 

specific groups or subpopulations of 

patients. Assessing healthcare 

disparities through stratification is only 

one method for using healthcare quality 

measurement to address health equity, 

but it is an important approach that 

allows healthcare providers to tailor 

quality improvement initiatives, 

decrease disparity, track improvement 

over time, and identify opportunities to 

evaluate upstream drivers of health. The 

use of measure stratification to assess 

disparities has been identified by CMS 

Office of Minority Health (CMS OMH) 

as well as by external organizations 

such as the American Hospital 

Association as a critical component of 

an organized response to health 

disparities.338 339 To date, we have 

performed analyses of disparities in our 

quality programs by using a series of 

stratification methodologies identifying 

quality of care for patients with 

heightened social risk or with 

demographic characteristics with 

associations to poorer outcomes. 

As efforts to improve methods and 

sources of social determinant and 

demographic data collection mentioned 

previously are ongoing, we would 

continue to evaluate opportunities to 

expand these current measure 

stratification reporting initiatives with 

existing sources of data. We aim to 

provide comprehensive and actionable 

information on health disparities to 

healthcare providers participating in our 

quality programs, in part, by starting 

with confidential reporting of stratified 

measure results that highlight potential 

gaps in care between groups of patients 


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340CMS (2021). Chronic Kidney Disease 

Disparities: Educational Guide for Primary Care. 

Available at: https://www.cms.gov/files/document/ 

chronic-kidney-disease-disparities-educationalguide-primary-care.pdf. 

341CMS (2021). ESRD Treatment Choices (ETC) 

Model. Available at: https://innovation.cms.gov/ 

innovation-models/esrd-treatment-choices-model. 

342https://www.cms.gov/About-CMS/AgencyInformation/OMH/Downloads/Health-DisparitiesGuide.pdf. 

343http://www.hpoe.org/Reports-HPOE/ 

improvinghealthequity3.2011.pdf. 

using existing data sources. This 

includes examining and reporting 

disparities in care across additional 

social risk factors and demographic 

variables associated with historic 

disadvantage in the healthcare system, 

and examining disparities across 

additional healthcare quality measures, 

and in new care settings. As disparity 

measurement initiatives expand through 

the use of measure stratification, it is 

important to model efforts off of existing 

best practices by continuing to gather 

stakeholder feedback and to make use of 

lessons learned in the development of 

existing disparity reporting efforts. 

Specific efforts aimed at closing the 

health equity gap in ESRD patients 

include the Chronic Kidney Disease 

Disparities: Educational Guide for 

Primary Care, which is intended to 

foster the development of primary care 

practice teams in order to enhance care 

for medically underserved patients with 

CKD and are at risk of progression of 

disease or complications,340 and the 

CMS ETC Model, which aims to test the 

effectiveness of adjusting certain 

Medicare payments to encourage more 

home dialysis and kidney transplants, 

support beneficiary modality choice, 

and preserve or improve quality of care 

provided to ESRD beneficiaries while 

reducing Medicare expenditures.341

Measuring healthcare disparities and 

reporting the results to dialysis 

providers is under consideration as a 

central component of our approach to 

closing the health equity gap in patients 

with ESRD. Stratification of quality 

measures would facilitate consistent 

measurement of differences in care 

received and subsequent outcomes by 

different groups of patients. 

Stratification is one of several 

methodological approaches to 

estimating health disparities that would 

support facilities in tailoring quality 

improvement initiatives to reduce 

disparities and track improvement over 

time. We have identified stratification as 

a critical component of an organized 

response to health disparities.342 343 To 

date, we have employed stratification 

techniques in a few programs to 

evaluate quality of care for patients with 

disproportionate social risk burden and 

demographic characteristics associated 

with adverse health outcomes. For 

example, in the FY 2018 IPPS/LTCH 

PPS final rule, the Hospital Inpatient 

Quality Reporting Program introduced 

confidential reporting of hospital 

quality measure data stratified by dual 

eligibility (82 FR 38403 through 38409). 

As efforts to improve methods and 

sources of social determinant and 

demographic data collection are 

ongoing, we intend to continue to 

evaluate opportunities to expand these 

current measure stratification reporting 

initiatives with existing sources of data. 

We anticipate expanding our efforts to 

provide comprehensive and actionable 

information on health disparities to 

dialysis providers participating in the 

ESRD QIP by providing measure 

stratification results to highlight 

potential gaps in care among patient 

groups. This includes examining and 

reporting disparities in care across 

specific social risk factors and 

demographic variables associated with 

historic disadvantage in ESRD care in 

particular and examining disparities 

across ESRD QIP measures. We aim to 

gather feedback from technical experts 

and dialysis providers as we evaluate 

existing best practices for measure 

stratification methods and reporting 

approaches applied to health disparity 

evaluation. As disparity measurement 

initiatives expand through the use of 

measure stratification, it is important to 

model efforts off of existing best 

practices by continuing to gather 

stakeholder feedback and to make use of 

lessons learned in the development of 

existing disparity reporting efforts. 

There are several key considerations 

that we intend to consider when 

advancing the use of measurement and 

stratification as tools to address 

healthcare disparities and advance 

healthcare equity. We seek input on key 

considerations in five specific areas that 

could inform our approach. Each is 

described in more detail later in this 

section: 

• Identification of Goals and 

Approaches for Measuring Healthcare 

Disparities and Using Measure 

Stratification in ESRD QIP—This 

section identifies the approaches for 

measuring healthcare disparities 

through measure stratification in CMS 

quality reporting programs. 

• Guiding Principles for Selecting and 

Prioritizing Measures for Disparity 

Reporting—This section describes 

considerations that could inform the 

selection of ESRD QIP measures to 

prioritize for stratification. 

• Principles for Social Risk Factor 

and Demographic Data Selection and 

Use—This section describes social risk 

factor and demographic data that we 

would consider investigating for use in 

stratifying ESRD QIP measures for 

healthcare disparity measurement. 

Dialysis and other healthcare providers 

would use their own demographic data 

to address disparities affecting their 

patients. 

• Identification of Meaningful 

Performance Differences—This section 

reviews several strategies for identifying 

meaningful differences in performance 

when ESRD QIP measures apply 

stratification or disparity reporting that 

are easily understood but remain 

useable by dialysis providers. 

• Guiding Principles for Reporting 

Disparity Results—This final section 

reviews considerations we would take 

into account in determining how ESRD 

QIP would report disparity results to 

dialysis providers, as well as the ways 

different reporting strategies would hold 

providers accountable. 

We would then solicit public input on 

these topics. 

b. Identification of Goals and 

Approaches for Measuring Healthcare 

Disparities and Using Measure 

Stratification in ESRD QIP 

Our goal in developing methods to 

measure disparities in care is to provide 

actionable and useful results to dialysis 

providers. By quantifying healthcare 

disparities (that is, through quality 

measure stratification), we aim to 

provide useful tools for dialysis 

providers and facilities to drive 

improvements. We believe these results 

would support dialysis providers and 

facilities efforts in examining the 

underlying drivers of disparities in their 

patients’ care and to develop their own 

innovative and targeted quality 

improvement interventions. With 

stratified disparity information 

available, it may be possible to drive 

system-wide advancement through 

incremental, provider-level 

improvement. 

There are multiple conceptual 

approaches to stratifying measures for 

reporting health disparities. In recent 

years, we have focused on identifying 

healthcare disparities by reporting 

stratified results for acute care hospitals 

in two complementary ways. First, 

stratification by a given social risk factor 

or demographic variable has generated 

measure results for subgroups of 

patients cared for by individual 

providers that can be directly compared. 

This type of comparison identifies 

important disparities, such as gaps in 

care and outcomes between patient 

groups. This approach is sometimes 

referred to as ‘‘within-provider’’ 

disparity. This can be done for most 


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344Centers for Medicare & Medicaid Services. 

(2015). Risk Adjustment Fact Sheet. Available at: 

https://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/PhysicianFeedbackProgram/ 

Downloads/Risk-Adjustment-Fact-Sheet.pdf. 

345ASPE. (2020). Social Risk Factors and 

Performance in Medicare’s Value-Based Purchasing 

Program: The Second of Two Reports Required by 

the Improving Medicare Post-Acute Care 

Transformation (IMPACT) Act of 2014. Available at: 

https://aspe.hhs.gov/sites/default/files/migrated_

legacy_files//195191/Second-IMPACT-SES-Reportto-Congress.pdf. 

346Obermeyer Z., Powers B., Vogeli C., 

Mullainathan S. Dissecting racial bias in an 

algorithm used to manage the health of populations. 

Science. 2019;366(6464):447–53. 

347Centers for Medicare and Medicaid Services. 

(2020). CMS Measures Management System 

Blueprint (Blueprint v 16.0).Available at: https://

www.cms.gov/Medicare/QualityInitiatives-PatientAssessment-Instruments/MMS/Downloads/ 

Blueprint.pdf. 

measures that include patient-level data 

and can be helpful to quantitatively 

express a provider’s disparity in care. 

However, similar to the measure itself, 

the approach to perform this type of 

comparison would differ based on the 

measure’s complexity. For example, 

when risk adjustment is used in the 

measure, the stratification approach 

would have to be adapted to address 

clinical risk adjustment.344 Second, a 

provider’s performance on a measure for 

only the subgroup of patients with that 

social risk factor can be compared to 

other providers’ performance for that 

same subgroup of patients (sometimes 

referred to as ‘‘across-provider’’ 

disparities measurement). This type of 

comparison illuminates the healthcare 

provider’s performance for only the 

population with a given social risk 

factor, allowing comparisons for specific 

performance to be better understood and 

compared to peers or state and national 

benchmarks. These approaches are 

reviewed and recommended by The 

Assistant Secretary of Planning and 

Evaluation (ASPE) as ways to measure 

health equity in their 2020 Report to 

Congress.345

Alone, each approach may provide an 

incomplete picture of disparities in care 

for a particular measure, but when 

reported together with overall quality 

performance can give detailed 

information about where differences in 

care exist. For example, a dialysis 

provider may underperform when 

compared to national averages for 

patients with a given risk factor, but if 

they also underperform for patients 

without that risk factor, the measured 

difference, or disparity in care, could be 

negligible even though performance for 

the group historically underserved 

group remains poor. In this case, simply 

stratifying the measure results could 

show little difference in care between 

patient groups within the facility, 

comparing results for only the group 

that has been historically marginalized 

would signal the need to improve care 

for this population. 

We are especially sensitive to the 

need to ensure all disparity reporting 

avoids measurement bias. Stratified 

results must be carefully examined for 

potential measurement or algorithmic 

bias that is introduced through stratified 

reporting.346 Furthermore, results of 

stratified reporting must be evaluated 

for any type of selection bias that fails 

to capture disparity due inadequate 

representation of subgroups of patients 

in measure cohorts. During measure reevaluation, we would aim to carefully 

examine stratified results and methods 

to mitigate the potential for drawing 

incorrect conclusion from results. 

c. Guiding Principles for Selecting and 

Prioritizing Measures for Disparity 

Reporting 

We intend to begin our efforts to 

provide stratified reporting for ESRD 

QIP measures, provided they offer 

meaningful and valid feedback to 

dialysis and other healthcare providers 

on their care for ESRD patients that may 

face social disadvantage or other forms 

of discrimination or bias. Further 

development of stratified reporting of 

ESRD QIP measures can provide 

dialysis and other healthcare providers 

with more granular results that support 

targeting resources and initiatives to 

improve health equity. We are mindful 

that it may not be possible to calculate 

stratified results for all ESRD QIP 

measures, or there may be situations 

where stratified reporting may not be 

desired. To help inform prioritization of 

the candidate ESRD QIP measures for 

stratified reporting, we aim to receive 

feedback on several systematic 

principles under consideration that we 

believe would help us prioritize 

measures for disparity reporting across 

programs. 

These considerations, when assessed 

within the context of specific programs, 

like the ESRD QIP, help gauge the utility 

and potential uses of stratified measure 

results to provide usable and impactful 

information on disparity broadly across 

our programs. While we aim to 

standardize approaches where possible, 

we also recognize that the variety of 

measures and care settings involved and 

the contextual nature of stratified 

reporting would require decisions to be 

made at the program level. 

We have developed the following 

guiding principles for prioritizing ESRD 

QIP measures for disparity reporting: 

• Prioritize validated clinical quality 

measures—When considering disparity 

reporting of stratified quality measures, 

there are several advantages to focusing 

on recognized measures which have met 

industry standards for measure 

reliability and validity. First, existing 

measures highlight agreed upon priority 

areas for quality measurement specific 

to the program setting, which have been 

developed under adherence to the CMS 

Measures Management System 

Blueprint 347 and have been reviewed 

for their clinical and population 

relevance by experts knowledgeable 

about the nuances of care delivered in 

these settings. Furthermore, these 

measures have been reviewed for 

clinical significance, applicability, and 

scientific rigor by additional 

organizations, such as the National 

Quality Forum (NQF), and have been 

selected for inclusion in programs with 

their recommendations in mind. 

Adapting these existing tools to measure 

disparity through stratification 

maintains adherence to predefined 

measurement priorities and utilizes a 

great deal of extant expert and 

methodological validation. The 

application of stratified reporting to 

validated clinical quality measures 

which are used across the healthcare 

sector also aim to mitigate any potential 

additional administrative burden on 

healthcare providers, hospitals, and 

facilities. 

• Prioritizing Measures with 

Identified Disparity in Treatment or 

Outcomes Among Participating 

Facilities for Selected Social or 

Demographic Factors—Candidate ESRD 

QIP measures for stratification should 

be supported by evidence of underlying 

healthcare disparities in the procedure, 

condition, or outcome being measured. 

A review of peer-reviewed research 

studies should be conducted to identify 

disparities related to treatment or 

procedure the measure evaluates, or 

outcome used to score the measure, and 

should carefully consider both social 

risk factors and patient demographics. 

Disparity related to the measure could 

be based on the outcome or procedures 

and practices assessed by the measure. 

In addition, analysis of Medicarespecific data should be done in order to 

demonstrate evidence of disparity in 

care for some or most healthcare 

providers that treat Medicare patients. 

In addition to disparities in outcomes 

and quality, consideration should also 

be given to conditions that have highly 

disproportionate prevalence in certain 

populations. 

• Prioritize Measures with Sufficient 

Sample Size to Allow for Reliable and 

Representative Comparisons—Sample 


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31688554; PMCID: PMC6904433. 

size holds specific significance for 

statistical calculations; however, it 

holds additional importance in the 

context of disparity reporting. Candidate 

measures for stratification would need 

to have sufficient sample size of 

enrollees to ensure that reported results 

of the disparity calculation are reliable 

and representative. This may be 

challenging if cohorts with a given 

social risk factor are small. 

ESRD QIP may further consider 

measures for disparity reporting based 

on the utility of the stratified 

information, namely, prioritizing 

measures for stratification that show 

large differences in care between patient 

groups. Large differences in care for 

patients along social or demographic 

lines may indicate high potential that 

targeted initiatives could be effective. 

This is only one consideration in 

identifying the most meaningful 

differences in care, however, as 

initiatives designed for measures that 

show small disparities, but have very 

large cohorts, may have very large 

aggregate impacts on the national scale. 

• Prioritize Outcome Measures and 

Measures of Access and 

Appropriateness of Care—Quality 

measurement in CMS programs often 

focus on outcomes of care, such as 

mortality or readmission, as high 

priority quality measures. For example, 

two key ESRD QIP outcome measures 

are the SHR clinical measure and the 

SRR clinical measure, which we are 

updating so that the measure results are 

expressed as rates. Such outcome 

measures remain a priority in the 

context of disparities measurement. 

However, measures that focus on access, 

when available, are also critical tools for 

addressing healthcare disparities. 

Measures that address healthcare access 

can counterbalance the risk of creating 

perverse incentives, for example, 

whereby a facility may improve its 

performance on existing quality 

measures by limiting access to care for 

populations who are historically 

underserved. 

To complement measure stratification 

focused on clinical outcomes, the ESRD 

QIP would consider prioritizing 

measures with a focus on access to or 

appropriateness of care. These 

measures, when reported in tandem 

with clinical outcomes, would provide 

a broader picture of care provided at a 

facility, illuminate potential 

performance drivers, and identify 

organizations that fail to address access 

to care barriers for patient sub-groups. 

We acknowledge that the measurement 

of access and appropriateness of care is 

a growing field, and quality measures in 

these areas are limited. However, as our 

ability to measure these facets of 

healthcare improve, they would be high 

priority for measure stratification. 

d. Principles for Social Risk Factor and 

Demographic Data Selection and Use 

There are numerous non-clinical 

drivers of health associated with patient 

outcomes, including social risk factors 

such as socioeconomic status, housing 

availability, and nutrition, as well as 

marked inequity in outcomes based on 

patient demographics such as race and 

ethnicity, being a member of a minority 

religious group, geographic location, 

sexual orientation and gender identity, 

religion, and disability 

status.348 349 350 351 352 353 354 355 The World 

Health Organization (WHO) defines 

social risk factors as ‘‘non-medical 

factors that influence health outcomes. 

They are the conditions in which people 

are born, grow, work, live, and age, and 

the wider set of forces and systems 

shaping the conditions of daily life.’’ 356

These include factors such as income, 

education, job insecurity, food 

insecurity, housing, social inclusion and 

non-discrimination, access to affordable 

health services, and any others. 

Research has indicated that these social 

factors may have as much or more 

impact on health outcomes as clinical 

care itself.357 358 Additionally, 

differences in outcomes based on 

patient race and ethnicity have been 

identified as significant, persistent, and 

of high priority for CMS and other 

federal agencies.359

In prioritizing among social risk 

factors and demographic variables, 

disability, and other markers of 

disadvantage for stratified reporting, the 

ESRD QIP would develop approaches 

that have the most relevance for the 

existing measure set. Patient reported 

data are considered to be the gold 

standard for evaluating care for patients 

with social risk factors or who belong to 

certain demographic groups as this is 

the most accurate way to attribute social 

risk.360 Although some of this 

information is currently reported on 

Form 2728—ESRD Medical Evidence 

Report Medicare Entitlement And/Or 

Patient Registration (OMB control 

number 0938–0046), we believe that 

additional development of patientreported social risk factor and 

demographic variable data sources may 

be necessary to collect data that is 

complete enough to consider for 

disparity reporting. Currently, there are 

many efforts underway to further 

develop data collection for self-reported 

patient social risk and demographic 

variables. Yet, given that data sources 

are small, they may only have the ability 

to provide statistically significant 

disparity results for a small proportion 

of care facilities. 

We would continue to evaluate 

patient-reported sources of social risk 

and demographic information. Until 

validated data are available, we are 

considering three sources of social risk 

and demographic data that would allow 

us to report stratified measure results: 


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361 Jarrı ́n OF, Nyandege AN, Grafova IB., Dong X., 

Lin H. (2020). Validity of race and ethnicity codes 

in Medicare administrative data compared with 

gold-standard self-reported race collected during 

routine home health care visits. Med Care, 58(1):e1– 

e8. doi: 10.1097/MLR.0000000000001216. PMID: 

31688554; PMCID: PMC6904433. 362Centers for Medicare & Medicaid Services, 

Office of Minority Health. (2021). Utilization of Z 

codes for social determinants of health among 

Medicare fee-for-service beneficiaries, 2019. 

Available at: https://www.cms.gov/files/document/ 

z-codes-data-highlight.pdf. 

363Office of the Assistant Secretary for Planning 

and Evaluation. (2016). Social risk factors and 

performance under Medicare’s value-based 

purchasing programs. Available at: https://

aspe.hhs.gov/reports/report-congress-social-riskfactors-performance-under-medicares-value-basedpurchasing-programs. 

364Office of the Assistant Secretary For Planning 

and Evaluation. (2020). Report to Congress: Social 

Risk Factors and Performance Under Medicare’s 

Value-Based Purchasing Programs. Available at: 

https://aspe.hhs.gov/reports/second-reportcongress-social-risk-medicares-value-basedpurchasing-programs. 

365Bonito A., Bann C., Eicheldinger C., Carpenter 

L. (2008). Creation of New Race-Ethnicity Codes 

and Socioeconomic Status (SES) Indicators for 

Medicare Beneficiaries. Final Report, Sub-Task 2. 

(Prepared by RTI International for the Centers for 

Medicare & Medicaid Services through an 

interagency agreement with the Agency for 

Healthcare Research and Policy, under Contract No. 

500–00–0024, Task No. 21) AHRQ Publication No. 

08–0029–EF. Rockville, MD, Agency for Healthcare 

Research and Quality. 

366Flanagan, B.E., Gregory, E.W., Hallisey, E.J., 

Heitgerd, J.L., Lewis, B. (2011). A social 

vulnerability index for disaster management. 

Journal of Homeland Security and Emergency 

Management, 8(1). Available at: https://www.atsdr.

cdc.gov/placeandhealth/svi/img/pdf/Flanagan_

2011_SVIforDisasterManagement-508.pdf. 

367Center for Health Disparities Research. About 

the Neighborhood Atlas. Available at: https://

www.neighborhoodatlas.medicine.wisc.edu/. 

368Haas A., Elliott M.N., Dembosky J.W., Adams 

J.L., Wilson-Frederick S.M., Mallett J.S. et al. (2019). 

Imputation of race/ethnicity to enable measurement 

of HEDIS performance by race/ethnicity. Health 

Serv Res, 54(1):13–23. doi: 10.1111/1475– 

6773.13099. Epub 2018 Dec 3. PMID: 30506674; 

PMCID: PMC6338295. Available at: https://pubmed.

ncbi.nlm.nih.gov/30506674/. 

369Agniel D., Martino S.C., Burkhart Q., 

Hambarsoomian K., Orr N., Beckett M.K, et al. 

(2021). Incentivizing excellent care to at-risk groups 

with a health equity summary score. J Gen Intern 

Med, 36(7):1847–1857. doi: 10.1007/s11606–019– 

05473–x. Epub 2019 Nov 11. PMID: 31713030; 

PMCID: PMC8298664. Available at: https://

pubmed.ncbi.nlm.nih.gov/31713030/. 

• Billing and Administrative Data— 

The majority of quality measurement 

tools used in our quality programs focus 

on utilizing existing enrollment and 

claims data for Medicare beneficiaries. 

Using these existing data to assess 

disparity, for example by the use of dual 

enrollment for Medicare and Medicaid, 

allows for high impact analyses with 

negligible facility burden. There are, 

however, limitations in these data’s 

usability for stratification analysis. Our 

current administrative race and 

ethnicity data have been shown to have 

historical inaccuracies due to limited 

collection classifications and attribution 

techniques, and are generally 

considered not to be accurate enough for 

stratification and disparity analyses.361

International Classification of 

Diseases,10th Revision (ICD–10) codes 

for socioeconomic and psychosocial 

circumstances (‘‘Z codes’’ Z55 to Z65) 

represent an important opportunity to 

document patient-level social risk 

factors in Medicare beneficiaries, 

however, they are rarely used in clinical 

practice, limiting their usability in 

disparities measurement.362 If the 

collection of social risk factor data 

improves in administrative data, we 

would continue to evaluate its 

applicability for stratified reporting in 

the future. 

Dual eligibility is a widely used proxy 

for low socioeconomic status and is an 

exception to the previously discussed 

limitations, making it an effective 

indicator for worse outcomes due to low 

socioeconomic status. The use of dual 

eligibility in social risk factor analyses 

was supported by ASPE’s First and 

Second Reports to Congress.363 364 These 

reports found that in the context of VBP 

programs, dual eligibility, as an 

indicator of social risk, was among the 

most powerful predictors of poor health 

outcomes among those social risk 

factors that ASPE examined and tested. 

• Area-based Indicators of Social 

Risk Information and Patient 

Demographics—Area-based indicators 

pool area-level information to create 

approximations of patient risk or 

describe the neighborhood or context 

that a patient resides in. Popular among 

them are the use of the American 

Community Survey (ACS), which is 

commonly used to attribute social risk 

to populations at the ZIP code or 

Federal Information Processing 

Standards (FIPS) county level. Several 

indices, such as the Agency for 

Healthcare Research and Quality 

(AHRQ) Socioeconomic Status (SES) 

Index,365 Centers for Disease Control 

and Prevention/Agency for Toxic 

Substances and Disease Registry Social 

Vulnerability Index (CDC/ATSDR 

SVI),366 and Health Resources and 

Services Administration Area 

Deprivation Index,367 combine multiple 

indicators of social risk into a single 

score which can be used to provide 

multifaceted contextual information 

about an area and may be considered as 

an efficient way to stratify measures that 

include many social risk factors. 

• Imputed Sources of Social Risk 

Information and Patient 

Demographics—Imputed data sources 

use statistical techniques to estimate 

patient-reported factors, including race 

and ethnicity. In the case of race and 

ethnicity, indirect estimation improves 

upon imperfect and incomplete data by 

drawing on information about a person’s 

name and address and the linkage of 

those variables to race and ethnicity. 

One such tool is the Medicare Bayesian 

Improved Surname Geocoding (MBISG) 

method (currently in version 2.1), which 

combines information from 

administrative data, surname, and 

residential location to estimate patient 

race and ethnicity.368 This tool was 

originally developed by the RAND 

Corporation, and further customized for 

the Medicare population to improve 

existing CMS administrative data on 

race and ethnicity. 

The MBISG 2.1 method does not 

assign a single race and ethnicity to an 

individual; instead, it generates a set of 

six probabilities, each estimating what 

the individual would self-identify as 

given a set of racial and ethnic groups 

to choose from including: American 

Indian or Alaska Native, Asian or 

Pacific Islander, Black, Hispanic, 

Multiracial, and White. In no case 

would the estimated probability be used 

for making inferences about a 

beneficiary; only self-reported data on 

race and ethnicity should be used for 

that purpose. However, in aggregate, 

these results can provide insight and 

accurate information at the population 

level, such as the patients of a given 

facility, or the members of a given plan. 

MBISG 2.1 is currently used by CMS’ 

OMH to undertake various analyses, 

such as comparing scores on clinical 

quality of care measures from the 

Healthcare Effectiveness Database and 

Information Set (HEDIS) by race and 

ethnicity for Medicare Part C/D health 

plans, and in developing a Health 

Equity Summary Score (HESS) for 

Medicare Advantage (MA) health 

plans.369

While the use of area-based indicators 

and imputed data sources are not meant 

to replace efforts to improve patientlevel data collection, we are considering 

how they might be used to quickly begin 

population-level disparity reporting of 

stratified measure results while being 

conscientious about data limitations. 

Imputed data sources, particularly 

when used to identify patient 

populations for measurement, must be 

carefully evaluated for their potential to 

negatively affect the populations being 

studied. For this reason, imputed data 

sources should only be considered after 

significant validation study has been 

completed, including evaluation by key 

stakeholders for face validity, and any 

calculations that incorporate these 


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370Bi, Q., He, F., Konty, K., Gould, L.H., 

Immerwahr, S., & Levanon Seligson, A. (2020). ZIP 

code-level estimates from a local health survey: 

Added value and limitations. Journal of Urban 

Health: Bulletin of the New York Academy of 

Medicine, 97(4), 561–567. 

methods should be continuously 

evaluated for the accuracy of their 

results and the necessity of their use. 

While neither imputed nor area-level 

geographic data should be considered a 

replacement for improved data 

collection, researchers have found their 

use to be a simple and cost-efficient way 

to make general estimations of social 

risk at a community level.370 Even more 

potent, when patient-level information 

is not available, are the combination of 

several sources of imputed or area-level 

data to provide diverse perspectives on 

social risk of a population. 

e. Identification of Meaningful 

Performance Differences 

In examining potential ways to report 

disparity data in the ESRD QIP, 

including the results of quality measure 

stratification, we would consider 

different approaches to identifying 

meaningful differences in performance. 

Stratified results can be presented in a 

number of ways to describe to providers 

how well or poorly they are performing, 

or how they perform when compared to 

other care facilities. For this reason, it 

is important to identify how best to 

present meaningful differences in 

performance for measures of disparity 

reporting. We aim to provide 

information that offers meaningful 

information to dialysis providers. While 

we aim to use standardized approaches 

where possible, identifying differences 

in performance on stratified results 

would be made at the program level due 

to contextual variations across programs 

and settings. We look forward to 

feedback on the benefits and limitations 

of the possible reporting approaches we 

have described in this Request for 

Information. 

• Statistical Differences—When 

aiming to examine differences in 

disparities results among facilities, the 

use of statistical testing can be helpful. 

There are many statistical approaches 

that can be used to reliably group 

results, such as using confidence 

intervals, creating cut points based on 

standard deviations, or using a 

clustering algorithm. Importantly, these 

approaches may result in groupings that 

are statistically different, but not 

meaningfully different depending on the 

distribution of results. 

• Rank Ordering and Percentiles— 

Ordering healthcare providers in a 

ranked system is another option for 

reporting disparity results in a 

meaningful way. In this system, 

facilities could be ranked based on their 

performance on disparity measures to 

quickly allow them to compare their 

performance to other similar healthcare 

providers. This approach works well as 

a way for facilities to easily compare 

their own performance against others; 

however, a potential drawback is that it 

does not identify the overall magnitude 

of disparity. For example, if a measure 

shows large disparity in care for patients 

based on a given factor, and that degree 

of disparity has very little variation 

between healthcare providers, the 

difference between the top and bottom 

ranked facilities would be very small 

even if the overall disparity is large. 

• Threshold Approach—A 

categorization system could also be 

considered for reporting disparity 

results. In this system, facilities could 

be grouped based on their performance 

using defined metrics, such as fixed 

intervals of results of disparity 

measures, indicating different levels of 

performance. Using a categorized 

system may be more easily understood 

by stakeholders by giving a clear 

indication that outcomes are not 

considered equal. However, this method 

does not convey the degree of disparity 

between facilities or the potential for 

improvement based on the performance 

of other facilities. Furthermore, it 

requires a determination of what is 

deemed ‘acceptable disparity’ when 

developing categories. 

• Benchmarking—Benchmarking, or 

comparing individual results to, for 

example, state or national averages, is 

another potential reporting strategy. 

This type of approach could be done, 

especially in combination with a ranked 

or threshold approach, to give facilities 

more information about how they 

compare to the average care for a patient 

group. 

Another consideration for each of 

these approaches is grouping similar 

care settings together for comparison 

through a peer grouping step, especially 

if a ranked system is used to compare 

facilities. Stakeholders have argued that 

comparisons between facilities have 

limited meaning if the facilities are not 

similar, and that peer grouping would 

improve their ability to interpret results. 

Overall, the value of peer grouping must 

be weighed against the potential to set 

different standards of meaningful 

disparity among different care settings. 

f. Guiding Principles for Reporting 

Disparity Results 

There are several options for reporting 

of disparity results to drive 

improvements in quality. Confidential 

reporting, or reporting results privately 

to providers, is an approach we have 

used for new newly adopted measures 

in a CMS quality program to give 

providers an opportunity to become 

more familiar with calculation methods 

and to begin improvement activities 

before other forms of reporting. 

Providing early results to facilities is an 

important way to provide facilities the 

information they need to design 

impactful strategies to reduce disparity. 

Public reporting, or reporting results 

publicly, is a second reporting option. 

This method could provide ESRD QIP 

participants and ESRD patients with 

important information on facility 

quality, and by turn relies on market 

forces to incentivize healthcare 

providers to improve and become more 

competitive in their markets without 

directly influencing payment from CMS. 

Payment accountability could 

potentially offer a direct line for us to 

reward healthcare providers for having 

low disparity rates, or for performing 

well for medically underserved 

population groups. 

We are exploring the most optimal 

methods of reporting disparity results. 

Initially, confidential reporting may be 

prudent for facilities and healthcare 

providers to understand stratification 

methodology and the presentation of 

stratified results, and to begin to 

implement programs to reduce 

disparities at their facilities. We are 

considering this approach to begin 

having an impact on disparity, while 

allowing providers time to interpret 

results and set up processes to address 

disparities. 

It would be important to carefully 

consider the context of reporting, 

including measure specifications, data 

sources, care setting, and dialysis 

providers’ and patients’ perspectives 

before implementing a reporting 

strategy. Earlier in this RFI, we 

identified risks to applying stratification 

to all measures using all available social 

risk factor and demographic variables, 

such as the chance that unexpected 

results may exacerbate disparity. We 

intend to consider these risks compared 

to the benefits of different reporting 

strategies when developing 

implementation plans. 

Regardless of the methods used to 

report results, it is important to report 

stratified measure data alongside overall 

measure results. Review of both 

measure results along with stratified 

results can illuminate greater levels of 

detail about quality of care for 

subgroups of patients, providing 

important information to drive quality 

improvement. Unstratified quality 

measure results address general 

differences in quality of care between 


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371ZIP codeTM is a trademark of the United States 

Postal Service. 

healthcare providers and promote 

improvement for all patients, but unless 

stratified results are available, it is 

unclear if there are subgroups of 

patients that benefit most from 

initiatives. Notably, even if overall 

quality measure scores improve, 

without identifying and measuring 

differences in outcomes between groups 

of patients, it is impossible to track 

progress in reducing disparity for 

patients with heightened risk of poor 

outcomes. 

g. Solicitation of Public Comments 

The goal of this request for 

information is to describe key 

considerations that we would 

acknowledge when advancing the use of 

measure stratification as one quality 

measurement tool to address healthcare 

disparities and advance health equity in 

the ESRD QIP. This is important as a 

means of setting priorities and 

expectations for the use of stratified 

measures. We specifically note that 

several important factors may limit the 

use of stratification or may need to be 

taken into consideration. 

We invite general comments on the 

principles and approaches listed 

previously, or additional thoughts about 

disparity measurement or stratification 

guidelines suitable for overarching 

consideration across our programs. 

Specifically, we invite comment on: 

• Overarching goals for measuring 

disparity that should be considered 

across CMS quality programs, including: 

the importance of pairing stratified 

results to evaluate gaps in care among 

groups of patients attributed to a given 

facility and comparison of care for a 

subgroup of patients across facilities, 

and the goal that these stratified results 

are reported alongside overall measure 

results to have a comprehensive view of 

disparities. 

• Principles to consider for 

prioritization of measures for disparity 

reporting, including prioritizing 

stratification for: valid clinical quality 

measures; measures with established 

disparities in care; measures that have 

adequate sample size and representation 

among facilities; and, measures that 

consider access and appropriateness of 

care. 

• Principles to be considered for the 

selection of social risk factors and 

demographic data for use measuring 

disparities, including the importance of 

identifying new social risk factor and 

demographic variables to use to stratify 

measures. We also seek comment on the 

use of imputed and area based social 

risk and demographic indicators for 

measure stratification when patient 

reported data are unavailable. 

• Preferred ways that meaningful 

differences in disparity results can be 

identified or should be considered. 

• Guiding principles for the use and 

application of the results of disparity 

measurement, such as providing 

confidential reporting initially versus 

public reporting. 

V. End-Stage Renal Disease Treatment 

Choices (ETC) Model 

A. Background 

Section 1115A of the Act authorizes 

the Innovation Center to test innovative 

payment and service delivery models 

expected to reduce Medicare, Medicaid, 

and CHIP expenditures while preserving 

or enhancing the quality of care 

furnished to such programs’ 

beneficiaries. The purpose of the ETC 

Model is to test the effectiveness of 

adjusting certain Medicare payments to 

ESRD facilities and Managing Clinicians 

to encourage greater utilization of home 

dialysis and kidney transplantation, 

support beneficiary modality choice, 

reduce Medicare expenditures, and 

preserve or enhance the quality of care. 

As described in the Specialty Care 

Models final rule (85 FR 61114), 

beneficiaries with ESRD are among the 

most medically fragile and high-cost 

populations served by the Medicare 

program. ESRD Beneficiaries require 

dialysis or kidney transplantation to 

survive, and the majority of ESRD 

beneficiaries receiving dialysis receive 

hemodialysis in an ESRD facility. 

However, as described in the Specialty 

Care Models final rule, alternative renal 

replacement modalities to in-center 

hemodialysis, including home dialysis 

and kidney transplantation, are 

associated with improved clinical 

outcomes, better quality of life, and 

lower costs than in-center hemodialysis 

(85 FR 61264). 

The ETC Model is a mandatory 

payment model. ESRD facilities and 

Managing Clinicians are selected as ETC 

Participants based on their location in 

Selected Geographic Areas—a set of 30 

percent of Hospital Referral Regions 

(HRRs) that have been randomly 

selected to be included in the ETC 

Model, as well as HRRs with at least 20 

percent of ZIP codesTM located in 

Maryland.371 CMS excludes all U.S. 

Territories from the Selected Geographic 

Areas. 

Under the ETC Model, ETC 

Participants are subject to two payment 

adjustments. The first is the Home 

Dialysis Payment Adjustment (HDPA), 

which is an upward adjustment on 

certain payments made to participating 

ESRD facilities under the ESRD 

Prospective Payment System (PPS) on 

home dialysis claims, and an upward 

adjustment to the Monthly Capitation 

Payment (MCP) paid to participating 

Managing Clinicians on home dialysisrelated claims. The HDPA applies to 

claims with claim service dates 

beginning January 1, 2021, and ending 

December 31, 2023. 

The second payment adjustment 

under the ETC Model is the PPA. For 

the PPA, we assess ETC Participants’ 

home dialysis rates and transplant rates 

during a Measurement Year (MY), 

which includes 12 months of 

performance data. Each MY has a 

corresponding PPA Period—a 6-month 

period that begins 6 months after the 

conclusion of the MY. We adjust certain 

payments for ETC Participants during 

the PPA Period based on the ETC 

Participant’s home dialysis rate and 

transplant rate, calculated as the sum of 

the transplant waitlist rate and the 

living donor transplant rate, during the 

corresponding MY. 

Based on an ETC Participant’s 

achievement in relation to benchmarks 

based on the home dialysis rate and 

transplant rate observed in Comparison 

Geographic Areas during the Benchmark 

Year, and the ETC Participant’s 

improvement in relation to their own 

home dialysis rate and transplant rate 

during the Benchmark Year, we will 

make an upward or downward 

adjustment to certain payments to the 

ETC participant. The magnitude of the 

positive and negative PPAs for ETC 

Participants increases over the course of 

the Model. These PPAs apply to claims 

with claim service dates beginning July 

1, 2022, and ending June 30, 2027. 

In the CY 2022 ESRD PPS final rule, 

we finalized a number of changes to the 

ETC Model. We made adjustments to 

the calculation of the home dialysis rate 

(86 FR 61951 through 61955) and the 

transplant rate (86 FR 61955 through 

61959), and updated the methodology 

for attributing Pre-emptive Living Donor 

Transplant (LDT) Beneficiaries (86 FR 

61950 through 61951). We modified the 

achievement benchmarking and scoring 

methodology (86 FR 61959 through 

61968), as well as the improvement 

benchmarking and scoring methodology 

(86 FR 61968 through 61971). We 

specified the method and requirements 

for sharing performance data with ETC 

Participants (86 FR 61971 through 

61984). We also made a number of 

updates and clarifications to the kidney 

disease patient education services 

waivers and made certain related 

flexibilities available to ETC 

Participants (86 FR 61984 through 

61994). 


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B. Proposed Updates to the ETC Model 

1. Performance Payment Adjustment 

Achievement Scoring Methodology 

Under the ETC Model, the PPA is a 

positive or negative adjustment on 

dialysis and dialysis-related Medicare 

payments for both home dialysis and incenter dialysis. To calculate an ETC 

Participant’s PPA, we assess the ETC 

Participant’s performance on the home 

dialysis rate and the transplant rate in 

relation to achievement and 

improvement benchmarks, as described 

in 42 CFR 512.370(b) and (c), 

respectively. 

An ETC Participant’s achievement is 

scored at the aggregation group level in 

relation to achievement benchmarks, 

which are constructed based on the 

home dialysis rate and transplant rate 

observed among aggregation groups 

located in Comparison Geographic 

Areas during corresponding Benchmark 

Years. Achievement benchmarks are 

percentile based, and set at the <30th, 

≥30th, ≥50th, ≥75th, and ≥90th 

percentile of rates for Comparison 

Geographic Areas during the Benchmark 

Year. An ETC Participant receives the 

achievement points that that correspond 

with its performance, at the aggregation 

group level, on the home dialysis rate 

and transplant rate in relation to the 

achievement benchmarks, as described 

in § 512.370(b)(1). 

In the CY 2022 ESRD PPS final rule, 

we modified the achievement 

benchmarking methodology such that, 

beginning MY3, achievement 

benchmarks are stratified based on the 

proportion of beneficiary years 

attributed to the ETC Participant’s 

aggregation group for which attributed 

beneficiaries are dually eligible for 

Medicare and Medicaid or receive the 

Low Income Subsidy (LIS). Beginning 

MY3, we create two strata, with the 

cutpoint set at 50 percent of attributed 

beneficiary years being for attributed 

beneficiaries who were dual-eligible or 

received the LIS, as described in 

§ 512.370(b)(2). 

Based on subsequent analysis, we 

have found that stratifying achievement 

benchmarks in this way has increased 

the likelihood that the lowest 

benchmark—set at the 30th percentile— 

could be set at a home dialysis rate or 

transplant rate of zero. This change 

occurred because dividing the set of 

attributable beneficiaries in Comparison 

Geographic Areas into two strata means 

that there are fewer observations per 

strata, changing the underlying 

distributions. 

Awarding achievement points for a 

home dialysis rate or transplant rate of 

zero is inconsistent with the design and 

goals of the ETC Model. The purpose of 

the ETC Model is to test the use of 

certain payment adjustments to increase 

rates of home dialysis and 

transplantation, thereby improving or 

maintaining quality and reducing 

Medicare expenditures. Awarding 

achievement points, which are used to 

determine the magnitude and direction 

of an ETC Participant’s PPA, for a home 

dialysis rate or a transplant rate of zero 

is antithetical to the ETC Model’s 

design. 

To address this issue, we propose to 

further modify the achievement scoring 

methodology for the ETC Model. 

Specifically, we propose to add a 

requirement, to be codified in a new 

provision at § 512.370(b)(3), to specify 

that, beginning MY5, an ETC 

Participant’s aggregation group must 

have a home dialysis rate or a transplant 

rate greater than zero to receive an 

achievement score for that rate. We seek 

comment on this proposal. 

2. Kidney Disease Patient Education 

Services 

Under section 1861(ggg)(1) of the Act 

and § 410.48 of our regulations, 

Medicare Part B covers outpatient, faceto-face kidney disease patient education 

services provided by certain qualified 

persons to beneficiaries with Stage IV 

chronic kidney disease. As noted in the 

Specialty Care Models final rule, kidney 

disease patient education services play 

an important role in educating patients 

about their kidney disease and helping 

them make informed decisions on the 

appropriate type of care and/or dialysis 

needed for them (85 FR 61337). In 

addition, as we noted in the Specialty 

Care Models final rule, kidney disease 

patient education services are designed 

to educate and inform beneficiaries 

about the effects of kidney disease, their 

options for transplantation, dialysis 

modalities, and vascular access (85 FR 

61337). 

Because kidney disease patient 

education services have been 

infrequently billed, we found it 

necessary for purposes of testing the 

ETC Model to waive select requirements 

of kidney disease patient education 

services as authorized in section 

1861(ggg)(1) of the Act and in the 

implementing regulation at 42 CFR 

410.48. Specifically, to broaden the 

availability of kidney disease patient 

education services under the ETC 

Model, we used our authority under 

section 1115A(d) of the Act to waive 

certain requirements for individuals and 

entities that furnish and bill for kidney 

disease patient education services. We 

codified these waivers at § 512.397(b). 

These include waivers to allow a 

broader scope of beneficiaries to have 

access to kidney disease patient 

education services, as well as greater 

flexibility in how the kidney disease 

patient education services are 

performed. CMS also waived the 

requirement that only doctors, 

physician assistants, nurse practitioners, 

and clinical nurse specialists can 

furnish kidney disease patient 

education services to allow kidney 

disease patient education services to be 

provided by clinical staff under the 

direction of and incident to the services 

of the Managing Clinician who is an 

ETC Participant. 

Specifically, under § 512.397(b)(1), 

kidney disease patient education 

services may be provided by ‘‘qualified 

staff,’’ which includes any qualified 

person (as defined at § 410.48(a)) as well 

as clinical staff. In the CY 2022 ESRD 

PPS final rule (86 FR 61988), we defined 

‘‘clinical staff’’ under 42 CFR 512.310 of 

our regulations to mean a licensed 

social worker or registered dietician/ 

nutrition professional who furnishes 

services for which payment may be 

made under the physician fee schedule 

under the direction of and incident to 

the services of the Managing Clinician 

who is an ETC Participant. 

In addition, in the CY 2022 ESRD PPS 

final rule, we added a new provision at 

§ 512.397(c) permitting an ETC 

Participant to reduce or waive the 20 

percent coinsurance requirement for 

kidney disease patient education 

services furnished on or after January 1, 

2022, if several conditions are satisfied, 

including a requirement that the 

individual or entity that furnished the 

services is qualified staff and was not 

leased from or otherwise provided by an 

ESRD facility or related entity. We 

finalized this cost-sharing reduction 

policy because we believed this patient 

incentive would advance the ETC 

Model’s goal of increasing access to 

kidney disease patient education 

services and make beneficiaries more 

aware of their choices in kidney 

treatment, including the choice of 

receiving home dialysis, self-dialysis, or 

nocturnal in-center dialysis, rather than 

traditional in-center dialysis. We also 

determined that under § 512.397(c)(3), 

the federal anti-kickback statute safe 

harbor for CMS-sponsored model 

patient incentives (42 CFR 

1001.952(ii)(2)) is available to protect 

the kidney disease patient education 

coinsurance waivers that satisfy the 

requirements of such safe harbor and 

§ 512.397(c)(1). 

We recognized in the CY 2022 ESRD 

PPS final rule that ESRD facilities and 

other entities sometimes enter into 

arrangements with clinicians or other 


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parties to provide certain services (86 

FR 61991). We also recognized that 

some ETC Participants may wish to 

furnish kidney disease patient 

education services using staff or other 

resources furnished under a contractual 

arrangement with an ESRD facility or 

other entity. We were concerned, 

however, that even if such arrangements 

were structured to comply with all 

applicable fraud and abuse laws, they 

could nevertheless result in program 

abuse. Specifically, such arrangements 

could operate to circumvent the 

statutory prohibition against ESRD 

facilities furnishing kidney disease 

patient education services. For example, 

the staff or resources furnished to the 

ETC Participant from an ESRD facility 

or related entity could be used to market 

a specific ESRD facility or chain of 

ESRD facilities to beneficiaries who may 

need to choose an ESRD facility in the 

future. We stated that we did not believe 

that ETC Participants should obtain safe 

harbor protection for the reduction or 

waiver of cost-sharing on kidney disease 

patient education services if such 

services were furnished by personnel 

leased from an ESRD facility or related 

entity. We explained that a ‘‘related 

entity’’ would include any entity that is 

directly or indirectly owned in whole or 

in part by an ESRD facility and that this 

policy aligns with the statutory 

provision that excludes ESRD facilities 

from the individuals and entities that 

can furnish kidney disease patient 

education services. 

Currently, the prohibition against the 

furnishing of kidney disease patient 

education services by qualified staff 

who are leased from or otherwise 

provided by an ESRD facility or related 

entity does not apply unless an ETC 

Participant reduces or waives the 

beneficiary’s coinsurance obligation for 

kidney disease patient education 

services. We propose that a similar 

prohibition would apply with respect to 

‘‘clinical staff’’ regardless of whether the 

ETC Participant is reducing or waiving 

the kidney disease patient education 

coinsurance obligation. Specifically, we 

are proposing to add a sentence to 

§ 512.397(b)(1) stating that, for purposes 

of the waiver under § 512.397(b)(1) of 

our regulations, beginning for MY5, 

‘‘clinical staff’’ may not be leased from 

or otherwise provided to the ETC 

Participant by an ESRD facility or 

related entity. Applying this prohibition 

on ‘‘clinical staff’’ could also protect 

beneficiaries and their care choices, and 

limit the likelihood that the ‘‘clinical 

staff’’ furnished to the ETC Participant 

from an ESRD facility or related entity 

would result in steering a beneficiary to 

a specific ESRD facility or chain of 

ESRD facilities. 

To further ensure that beneficiaries 

are not unduly influenced to choose a 

particular ESRD facility, we are also 

considering whether the final rule 

should include a requirement that, for 

purposes of the waiver 

under§ 512.397(b)(1), the content of the 

kidney disease patient education 

furnished by clinical staff cannot market 

a specific ESRD facility or chain of 

ESRD facilities to beneficiaries. 

However, we recognize that some forms 

of marketing can be quite subtle. For 

example, a beneficiary’s treatment 

choices could be unduly biased if the 

beneficiary is made aware of the leased 

staff person’s employment by an ESRD 

facility (for example, by the trainer’s 

responses to beneficiary questions or 

discussion of personal experience, or 

even by a logo on the trainer’s clothing 

or educational materials). Because it 

would be difficult for us to enforce this 

content restriction in many cases of 

subtle marketing, we do not think this 

restriction would sufficiently protect 

against improper influence of 

beneficiary choice with respect to the 

selection of an ESRD facility unless we 

also finalize our proposal to prohibit 

qualified staff from furnishing kidney 

disease patient education services if 

they are leased from or otherwise 

provided by an ESRD facility. 

We solicit public comments on these 

proposed changes to § 512.397(b)(1). 

3. Publication of Participant 

Performance 

In the Specialty Care Models final 

rule, CMS established certain general 

provisions in subpart A of 42 CFR part 

512 that apply to the ETC Model. One 

such general provision pertains to rights 

in data. Specifically, in the Specialty 

Care Models final rule, we stated that in 

order to enable CMS to evaluate the 

Innovation Center models (defined to 

include the ETC Model and Radiation 

Oncology Model) as required by section 

1115A(b)(4) of the Act and to monitor 

the Innovation Center models pursuant 

to § 512.150, in § 512.140(a) we would 

use any data obtained in accordance 

with §§ 512.130 and 512.135 to evaluate 

and monitor the Innovation Center 

models (85 FR 61124). We also stated 

that, consistent with section 

1115A(b)(4)(B) of the Act, CMS would 

disseminate quantitative and qualitative 

results and successful care management 

techniques, including factors associated 

with performance, to other providers 

and suppliers and to the public. We 

stated that the data to be disseminated 

would include, but would not be 

limited to, patient de-identified results 

of patient experience of care and quality 

of life surveys, as well as patient deidentified measure results calculated 

based upon claims, medical records, 

and other data sources. We finalized 

these policies in 42 CFR 512.140(a). 

Consistent with these provisions, we 

intend to publish patient de-identified 

results from all MYs of the ETC Model, 

including results from MYs that have 

already been completed. Specifically, 

for each MY, we intend to post the 

aggregate results for the home dialysis 

rate and the transplant rate for each 

aggregation group, as well as the 

individual components of each rate for 

the aggregation group as a whole. This 

would include the number of 

beneficiary months in home dialysis, 

self-dialysis, or nocturnal dialysis and 

the number of beneficiary months on 

the transplant waitlist, as well as the 

number of living donor transplants and, 

if applicable, pre-emptive living donor 

transplants performed. We would also 

identify all of the ESRD facilities or 

Managing Clinicians in the aggregation 

group for the MY. The results would be 

published on the ETC Model website. 

Given that the ETC Model includes a 

process for ETC Participants to request 

a targeted review of the calculation of 

the modality performance score (MPS)— 

which is calculated based on the various 

rates we intend to publish—CMS 

intends to publish these rates only after 

they have been finalized and CMS has 

resolved any targeted review requests 

timely received from ETC Participants 

under 42 CFR 512.390(c). We believe 

that the release of this information 

would inform the public about the cost 

and quality of care and about ETC 

Participants’ performance in the ETC 

Model. This would supplement the 

annual evaluation reports that CMS is 

required to conduct and release to the 

public under section 1115A(b)(4) of the 

Act. 

We seek comment on our intent to 

post this information to our website, as 

well as the information we intend to 

post and the manner and timing of the 

posting. 

VI. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 


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372https://www.bls.gov/oes/current/ 

oes292098.htm. Accessed on June 7, 2021. 

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment on 

each of these issues for the following 

sections of this document that contain 

information collection requirements 

(ICRs): 

1. ESRD QIP—Wage Estimates (OMB 

Control Numbers 0938–1289 and 0938– 

1340) 

To derive wages estimates, we used 

data from the U.S. Bureau of Labor 

Statistics’ May 2020 National 

Occupational Employment and Wage 

Estimates. In the CY 2016 ESRD PPS 

final rule (80 FR 69069), we stated that 

it was reasonable to assume that 

Medical Records and Health 

Information Technicians, who are 

responsible for organizing and managing 

health information data, are the 

individuals tasked with submitting 

measure data to CROWNWeb (now 

EQRS) and NHSN, as well as compiling 

and submitting patient records for the 

purpose of data validation studies. The 

most recently available median hourly 

wage of a Medical Records and Health 

Information Technician is $21.20 per 

hour.372 We also calculate fringe benefit 

and overhead at 100 percent. We 

adjusted these employee hourly wage 

estimates by a factor of 100 percent to 

reflect current HHS department-wide 

guidance on estimating the cost of fringe 

benefits and overhead. We stated that 

these are necessarily rough adjustments, 

both because fringe benefits and 

overhead costs vary significantly from 

employer to employer and because 

methods of estimating these costs vary 

widely from study to study. 

Nonetheless, we stated that there is no 

practical alternative and we believe that 

these are reasonable estimation 

methods. Therefore, using these 

assumptions, we estimated an hourly 

labor cost of $42.40 as the basis of the 

wage estimates for all collections of 

information calculations in the ESRD 

QIP. 

We used this updated wage estimate, 

along with updated facility and patient 

counts to re-estimate the total 

information collection burden in the 

ESRD QIP for PY 2025 that we 

discussed in the CY 2022 ESRD QIP 

final rule (86 FR 61998 through 61999) 

and to estimate the total information 

collection burden in the ESRD QIP for 

PY 2026. We provide the re-estimated 

information collection burden 

associated with the PY 2025 ESRD QIP 

and the newly estimated information 

collection burden associated with the 

PY 2026 ESRD QIP in section VII.C.3 of 

this proposed rule. Although we are also 

proposing updates for PY 2023 and PY 

2024, these proposals would not affect 

our estimates of the annual burden 

associated with the program’s 

information collection requirements, 

and therefore we are not updating our 

previously finalized information 

collection burdens associated with the 

PY 2023 or PY 2024 ESRD QIP in this 

proposed rule. 

2. Estimated Burden Associated With 

the Data Validation Requirements for 

PY 2025 and PY 2026 (OMB Control 

Numbers 0938–1289 and 0938–1340) 

In the CY 2020 ESRD PPS final rule, 

we finalized a policy to adopt the 

CROWNWeb data validation 

methodology that we previously 

adopted for the PY 2016 ESRD QIP as 

the methodology we would use to 

validate CROWNWeb data for all 

payment years, beginning with PY 2021 

(83 FR 57001 through 57002). Although 

we are now using EQRS to report data 

that was previously reported in 

CROWNWeb, the data validation 

methodology remains the same. Under 

this methodology, 300 facilities are 

selected each year to submit 10 records 

to CMS, and we reimburse these 

facilities for the costs associated with 

copying and mailing the requested 

records. The burden associated with 

these validation requirements is the 

time and effort necessary to submit the 

requested records to a CMS contractor. 

In this proposed rule, we are not 

proposing any changes to the EQRS data 

validation process, however, we are 

updating these burden estimates using a 

newly available wage estimate of a 

Medical Records and Health 

Information Technician. In the CY 2020 

ESRD PPS final rule, we estimated that 

it would take each facility 

approximately 2.5 hours to comply with 

this requirement (84 FR 60787). If 300 

facilities are requested to submit 

records, we estimated that the total 

combined annual burden for these 

facilities would be 750 hours (300 

facilities × 2.5 hours). Since we 

anticipate that Medical Records and 

Health Information Technicians or 

similar administrative staff would 

submit these data, we estimate that the 

aggregate cost of the EQRS data 

validation each year would be 

approximately $31,800 (750 hours × 

$42.40), or an annual total of 

approximately $106.00 ($31,800/300 

facilities) per facility in the sample. The 

burden cost increase associated with 

these requirements would be revised in 

the information collection request (OMB 

control number 0938–1289). 

In the CY 2021 ESRD PPS final rule, 

we finalized our policy to reduce the 

number of records that a facility 

selected to participate in the NHSN data 

validation must submit to a CMS 

contractor, beginning with PY 2023 (85 

FR 71471 through 71472). Under this 

finalized policy, a facility is required to 

submit records for 20 patients across 

any two quarters of the year, instead of 

20 records for each of the first two 

quarters of the year. The burden 

associated with this policy is the time 

and effort necessary to submit the 

requested records to a CMS contractor. 

In this proposed rule, we are not 

proposing any changes to the NHSN 

data validation process, however, we are 

updating these burden estimates using a 

newly available wage estimate of a 

Medical Records and Health 

Information Technician. Applying our 

policy to reduce the number of records 

required from each facility participating 

in the NHSN validation, we estimated 

that it would take each facility 

approximately 5 hours to comply with 

this requirement. If 300 facilities are 

requested to submit records each year, 

we estimated that the total combined 

annual burden hours for these facilities 

per year would be 1,500 hours (300 

facilities × 5 hours). Since we anticipate 

that Medical Records and Health 

Information Technicians or similar staff 

would submit these data, using the 

newly available wage estimate of a 

Medical Records and Health 

Information Technician, we estimate 

that the aggregate cost of the NHSN data 

validation each year would be 

approximately $63,600 (1,500 hours × 

$42.40), or a total of approximately $212 

($63,600/300 facilities) per facility in 

the sample. While the burden hours 

estimate would not change, the burden 

cost updates associated with these 

requirements would be revised in the 

information collection request (OMB 

control number 0938–1340). 

3. EQRS Reporting Requirements for PY 

2023 and PY 2024 (OMB Control 

Number 0938–1289) 

To determine the burden associated 

with the EQRS reporting requirements 

(previously known as the CROWNWeb 

reporting requirements), we look at the 


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373Section 321 of the National Childhood 

Vaccine Injury Act (NCVIA) provides the PRA 

waiver for activities that come under the NCVIA, 

including those in the NCVIA at section 2102 of the 

Public Health Service Act (42 U.S.C. 300aa–2). 

Section 321 is not codified in the U.S. Code, but 

can be found in a note at 42 U.S.C. 300aa–1. 

total number of patients nationally, the 

number of data elements per patientyear that the facility would be required 

to submit to EQRS for each measure, the 

amount of time required for data entry, 

the estimated wage plus benefits 

applicable to the individuals within 

facilities who are most likely to be 

entering data into EQRS, and the 

number of facilities submitting data to 

EQRS. In the CY 2021 ESRD PPS final 

rule, we estimated that the burden 

associated with EQRS reporting 

requirements for the PY 2023 ESRD QIP 

was approximately $208 million (85 FR 

71475). 

As discussed in section IV.B.2 of this 

proposed rule, we are proposing six 

measure suppressions that would apply 

for PY 2023. However, we believe that 

these proposals would not affect our 

estimates of the annual burden 

associated with the Program’s 

information collection requirements, as 

facilities are still expected to continue 

to collect measure data during this time 

period. Although we are updating the 

SHR and SRR clinical measure results to 

be expressed as rates beginning in PY 

2024 in section IV.D of this proposed 

rule, these technical updates would not 

affect our estimates of the annual 

burden associated with the Program’s 

information collection requirements. 

4. EQRS Reporting Requirements for PY 

2025 and PY 2026 (OMB Control 

Number 0938–1289) 

To determine the burden associated 

with the EQRS reporting requirements 

(previously known as the CROWNWeb 

reporting requirements), we look at the 

total number of patients nationally, the 

number of data elements per patientyear that the facility would be required 

to submit to EQRS for each measure, the 

amount of time required for data entry, 

the estimated wage plus benefits 

applicable to the individuals within 

facilities who are most likely to be 

entering data into EQRS, and the 

number of facilities submitting data to 

EQRS. In the CY 2022 ESRD PPS final 

rule, we estimated that the burden 

associated with EQRS reporting 

requirements for the PY 2025 ESRD QIP 

was approximately $215 million for 

approximately 5,085,050 total burden 

hours (86 FR 61999). 

We are not proposing any changes in 

this proposed rule that would affect the 

burden associated with EQRS reporting 

requirements for PY 2025 or PY 2026. 

However, we have re-calculated the 

burden estimate for PY 2025 using 

updated estimates of the total number of 

ESRD facilities, the total number of 

patients nationally, and wages for 

Medical Records and Health 

Information Technicians or similar staff 

as well as a refined estimate of the 

number of hours needed to complete 

data entry for EQRS reporting. 

Consistent with our approach in the CY 

2022 ESRD PPS final rule (86 FR 61999), 

in this proposed rule we are estimating 

that the amount of time required to 

submit measure data to EQRS is 2.5 

minutes per element and are not using 

a rounded estimate of the time needed 

to complete data entry for EQRS 

reporting. There are 229 data elements 

for 532,931 patients across 7,717 

facilities. At 2.5 minutes per element, 

this yields approximately 658.94 hours 

per facility. Therefore, the PY 2025 

burden is 5,085,050 hours (658.94 hours 

× 7,717 facilities). Using the wage 

estimate of a Medical Records and 

Health Information Technician, we 

estimate that the PY 2025 total burden 

cost is approximately $215 million 

(5,085,050 hours × $42.40). Although 

the burden hours and associated burden 

cost in this proposed rule are the same 

as we previously finalized in the CY 

2022 ESRD PPS final rule (86 FR 61999), 

we will update these numbers in the 

final rule if necessary. There is no net 

incremental burden change from PY 

2025 to PY 2026 because we are not 

changing the reporting requirements for 

PY 2026. 

5. Additional Reporting Requirements 

Beginning With PY 2025 

In section IV.E.1.a of the preamble of 

this proposed rule, we are proposing to 

adopt a COVID–19 HCP Vaccination 

reporting measure beginning with the 

PY 2025 ESRD QIP. Facilities would 

submit data through the CDC NHSN. 

The NHSN is a secure, internet-based 

system maintained by the CDC and 

provided free. Currently, the CDC does 

not estimate burden for COVID–19 

vaccination reporting under the CDC 

information collection requirement 

(ICR) approved under OMB control 

number 0920–1317 because the agency 

has been granted a waiver under section 

321 of the National Childhood Vaccine 

Injury Act (NCVIA).373 Although the 

burden associated with the COVID–19 

HCP Vaccination reporting measure is 

not accounted for under the CDC ICR 

0920–1317 or 0920–0666 due to the 

NCVIA waiver, the estimated cost and 

burden information are included in 

section VII.D.2.b and would be 

accounted for by the CDC under OMB 

control number 0920–1317. 

If you comment on these information 

collection, that is, reporting, 

recordkeeping, or third-party disclosure 

requirements, please submit your 

comments electronically as specified in 

the ADDRESSES section of this proposed 

rule. 

Comments must be received on/by 

August 29, 2022. 

VII. Regulatory Impact Analysis 

A. Statement of Need 

1. ESRD PPS 

On January 1, 2011, we implemented 

the ESRD PPS, a case-mix adjusted, 

bundled PPS for renal dialysis services 

furnished by ESRD facilities as required 

by section 1881(b)(14) of the Social 

Security Act (the Act), as added by 

section 153(b) of the Medicare 

Improvements for Patients and 

Providers Act of 2008 (MIPPA) (Pub. L. 

110–275). Section 1881(b)(14)(F) of the 

Act, as added by section 153(b) of 

MIPPA, and amended by section 

3401(h) of the Patient Protection and 

Affordable Care Act (the Affordable Care 

Act) (Pub. L. 111–148), established that 

beginning calendar year (CY) 2012, and 

each subsequent year, the Secretary of 

the Department of Health and Human 

Services (the Secretary) shall annually 

increase payment amounts by an ESRD 

market basket increase factor, reduced 

by the productivity adjustment 

described in section 1886(b)(3)(B)(xi)(II) 

of the Act. This rule proposes several 

routine updates and policy changes to 

the ESRD PPS for CY 2023. The 

proposed routine updates include the 

CY 2023 wage index values, the wage 

index budget-neutrality adjustment 

factor, the outlier payment threshold 

amounts, and the TPNIES offset amount. 

Failure to publish this proposed rule 

would result in ESRD facilities not 

receiving appropriate payments in CY 

2023 for renal dialysis services 

furnished to ESRD beneficiaries. 

This rule also proposes a number of 

changes to improve payment stability 

and adequacy under the ESRD PPS. As 

discussed in section II.B.1.a.(1) of this 

proposed rule, we are proposing to 

rebase and revise the ESRDB market 

basket to reflect a CY 2020 base year. 

We are also proposing to increase the 

ESRD PPS wage index floor as discussed 

in section II.B.1.b.(3) of this proposed 

rule, and to apply a permanent 5- 

percent cap on wage index decreases for 

CY 2023 and subsequent years, as 

discussed in section II.B.1.b.(2) of this 

proposed rule. Lastly, as discussed in 

section II.B.1.c.(4) of this proposed rule, 

we are proposing to change our 


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methodology for calculating the FDL 

amount for adults in order to target 

more effectively ESRD PPS outlier 

payments that equal 1 percent of total 

ESRD PPS payments. We believe that 

each of these proposed changes would 

improve payment stability and 

adequacy under the ESRD PPS. 

Furthermore, as discussed in section 

II.B.1.f. of this proposed rule, we are 

proposing to modify the definition of 

‘‘oral-only drug’’ at § 413.234(a) to 

specify that equivalence refers to 

functional equivalence, in line with our 

current drug designation process and 

reliance on the ESRD PPS functional 

categories. We believe this proposal 

would improve beneficiaries’ access to 

renal dialysis drugs, promote health 

equity, and advance other goals as 

discussed in the proposal. Lastly, we are 

proposing to clarify the descriptions of 

several existing ESRD PPS functional 

categories to ensure our descriptions are 

as clear as possible for potential TDAPA 

applicants and the public. We believe 

this proposed clarification would 

improve public understanding of the 

ESRD PPS functional categories and 

drug designation process. 

2. AKI 

This rule proposes routine updates to 

the payment for renal dialysis services 

furnished by ESRD facilities to 

individuals with AKI. As discussed in 

section III.B.2 of this proposed rule, we 

are also proposing to apply to all AKI 

dialysis payments in an ESRD facility 

the same wage index floor and 

permanent 5-percent cap on wage index 

decreases that we are proposing to apply 

under the ESRD PPS. We believe that 

these proposed changes would improve 

payment stability and adequacy for AKI 

dialysis in ESRD facilities. Failure to 

publish this proposed rule would result 

in ESRD facilities not receiving 

appropriate payments in CY 2023 for 

renal dialysis services furnished to 

patients with AKI in accordance with 

section 1834(r) of the Act. 

3. ESRD QIP 

Section 1881(h)(1) of the Act requires 

a payment reduction of up to 2 percent 

for eligible facilities that do not meet or 

exceed the mTPS established with 

respect to performance standards for the 

ESRD QIP each year. This proposed rule 

proposes updates for the ESRD QIP, 

including the proposed suppression of 

several ESRD QIP measures for PY 2023 

under our previously finalized measure 

suppression policy, a proposed update 

to the PY 2023 performance standards, 

updates regarding the SHR clinical 

measure and the SRR clinical measure 

for PY 2024, and proposed updates 

regarding the STrR and Hypercalcemia 

measures, the proposed adoption of the 

COVID–19 HCP Vaccination reporting 

measure, as well as a proposal to create 

a new reporting measure domain and to 

re-weight current measure domains, 

beginning in PY 2025. 

4. ETC Model 

As described in detail in section V of 

this proposed rule, we believe it is 

necessary to propose certain changes to 

the ETC Model. Under the proposed 

changes to the ETC Model, ETC 

Participants would continue to receive 

adjusted payments but beginning MY5, 

certain aspects of the ETC Model used 

to determine those payment adjustments 

would change. The proposed change to 

the PPA achievement scoring 

methodology is necessary to increase 

fairness and accuracy of the PPA. The 

proposed change to the kidney disease 

patient education services waiver and 

the discussion of our intent to 

disseminate participant-level model 

performance information to the public 

are necessary to support ETC 

Participants operating in the ETC 

Model. 

B. Overall Impact 

We have examined the impacts of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999), and the Congressional 

Review Act (5 U.S.C. 804(2)) 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Section 3(f) of Executive Order 

12866 defines a ‘‘significant regulatory 

action’’ as an action that is likely to 

result in a rule: (1) having an annual 

effect on the economy of $100 million 

or more in any 1 year, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating a serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

significant regulatory action/s and/or 

with economically significant effects 

($100 million or more in any 1 year). 

Based on our estimates, OMB’s Office of 

Information and Regulatory Affairs has 

determined this rulemaking is 

‘‘economically significant’’ as measured 

by the $100 million threshold. 

Accordingly, we have prepared a 

Regulatory Impact Analysis that to the 

best of our ability presents the costs and 

benefits of the rulemaking. We solicit 

comments on the regulatory impact 

analysis provided. 

C. Impact Analysis 

1. ESRD PPS 

We estimate that the proposed 

revisions to the ESRD PPS would result 

in an increase of approximately $320 

million in payments to ESRD facilities 

in CY 2023, which includes the amount 

associated with proposed updates to the 

outlier thresholds, proposed payment 

rate update, proposed updates to the 

wage index, and continuation of the 

approved TPNIES from CY 2022. 

2. AKI 

We estimate that the proposed 

updates to the AKI payment rate would 

result in an increase of approximately 

$2 million in payments to ESRD 

facilities in CY 2023. 

3. ESRD QIP 

We estimate that the proposed 

updates to the ESRD QIP will result in 

an additional $37 million in estimated 

payment reductions across all facilities 

for PY 2025. 

4. ETC Model 

We estimate that the proposed 

changes to the ETC Model would not 

impact the Model’s projected direct 

savings from payment adjustments 

alone. We estimate that the Model 

would generate $28 million in direct 

savings related to payment adjustments 

over 6.5 years. 

D. Detailed Economic Analysis 

In this section, we discuss the 

anticipated benefits, costs, and transfers 

associated with the changes proposed in 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38569 

374Section 321 of the National Childhood 

Vaccine Injury Act (NCVIA) provides the PRA 

waiver for activities that come under the NCVIA, 

including those in the NCVIA at section 2102 of the 

Public Health Service Act (42 U.S.C. 300aa–2). 

Section 321 is not codified in the U.S. Code, but 

can be found in a note at 42 U.S.C. 300aa–1. 

375https://www.bls.gov/oes/current/ 

oes436013.htm (accessed on March 29, 2022). The 

adjusted hourly wage rate of $36.62/hour includes 

an adjustment of 100 percent of the median hourly 

wage to account for the cost of overhead, including 

fringe benefits. 

this proposed rule. Additionally, we 

estimate the total regulatory review 

costs associated with reading and 

interpreting this proposed rule. 

1. Benefits 

Under the proposed CY 2023 ESRD 

PPS and AKI payment, ESRD facilities 

would continue to receive payment for 

renal dialysis services furnished to 

Medicare beneficiaries under a case-mix 

adjusted PPS. We continue to expect 

that making prospective payments to 

ESRD facilities would enhance the 

efficiency of the Medicare program. 

Additionally, we expect that updating 

ESRD PPS and AKI payments by 2.4 

percent based on the proposed CY 2023 

ESRD PPS market basket update less the 

proposed CY 2023 productivity 

adjustment would improve or maintain 

beneficiary access to high quality care 

by ensuring that payment rates reflect 

the best available data on the resources 

involved in delivering renal dialysis 

services. 

2. Costs 

a. ESRD PPS and AKI 

We do not anticipate the provisions of 

this proposed rule regarding ESRD PPS 

and AKI rates-setting would create 

additional cost or burden to ESRD 

facilities. 

b. ESRD QIP 

As discussed in section IV.B.2 of this 

proposed rule, we are proposing 

measure suppressions that would apply 

for PY 2023. However, we believe that 

none of the policies that we are 

proposing in this proposed rule would 

affect our estimates of the annual 

burden associated with the Program’s 

information collection requirements, as 

facilities are still expected to continue 

to collect measure data during this time 

period. For PY 2025 and PY 2026, we 

have re-estimated the costs associated 

with the information collection 

requirements under the ESRD QIP with 

updated estimates of the total number of 

ESRD facilities, the total number of 

patients nationally, wages for Medical 

Records and Health Information 

Technicians or similar staff, and a 

refined estimate of the number of hours 

needed to complete data entry for EQRS 

reporting. We have made no changes to 

our methodology for calculating the 

annual burden associated with the 

information collection requirements for 

the EQRS validation study (previously 

known as the CROWNWeb validation 

study), the NHSN validation study, and 

EQRS reporting. 

In section IV.E.1.a of the preamble of 

this proposed rule, we are proposing to 

adopt a COVID–19 HCP Vaccination 

reporting measure beginning in PY 

2025. Facilities would submit data 

through the CDC NHSN. The NHSN is 

a secure, internet-based system 

maintained by the CDC and provided 

free. Currently, the CDC does not 

estimate burden for COVID–19 

vaccination reporting under the CDC 

PRA package approved under OMB 

control number 0920–1317 because the 

agency has been granted a waiver under 

section 321 of the National Childhood 

Vaccine Injury Act (NCVIA).374

We estimate that it would take each 

facility, on average, approximately 1 

hour per month to collect data for the 

COVID–19 HCP Vaccination reporting 

measure and enter it into NHSN. We 

have estimated the time to complete this 

entire activity, since it could vary based 

on provider systems and staff 

availability. This burden is comprised of 

administrative hours and wages. We 

believe it would take an Administrative 

Assistant 375 between 45 minutes and 1 

hour and 15 minutes to enter this data 

into NHSN. For PY 2025 and 

subsequent years, facilities would incur 

an additional annual burden between 9 

hours (0.75 hours/month × 12 months) 

and 15 hours (1.25 hours/month × 12 

months) per facility and between 69,453 

hours (9 hours/facility × 7,717 facilities) 

and 115,755 hours (15 hours/facility × 

7,717 facilities) for all facilities. Each 

facility would incur an estimated cost of 

between $329.58 (9 hours × $36.62/ 

hour) and $549.30 annually (15 hours × 

$36.62/hour). The estimated cost across 

all facilities would be between 

$2,543,368.86 ($329.58/facility × 7,717 

facilities) and $4,238,948 ($549.30/ 

facility × 7,717 facilities) annually. We 

recognize that many healthcare facilities 

are also reporting other COVID–19 data 

to HHS. We believe the benefits of 

reporting data on the COVID–19 HCP 

Vaccination reporting measure to 

monitor, track, and provide 

transparency for the public on this 

important tool to combat COVID–19 

outweigh the costs of reporting. We 

welcome comments on the estimated 

time to collect data and enter it into the 

NHSN. 

We also updated the payment 

reduction scale using more recent data 

for the measures in the ESRD QIP 

measure set. We estimate approximately 

$215 million in information collection 

burden, which includes the cost of 

complying with this rule, and an 

additional $37 million in estimated 

payment reductions across all facilities 

for PY 2025, for an impact of $252 

million as a result of the policies we 

have previously finalized and the 

policies we have proposed in this 

proposed rule. 

For PY 2026, we estimate that the 

proposed revisions to the ESRD QIP 

would result in $215 million in 

information collection burden, and $37 

million in estimated payment 

reductions across all facilities, for an 

impact of $252 million as a result of the 

policies we have previously finalized 

and the policies we have proposed in 

this proposed rule. 

3. Transfers 

We estimate that the proposed 

updates to the ESRD PPS and AKI 

payment rate would result in a total in 

increase of approximately $260 million 

in payments to ESRD facilities in CY 

2023, which includes the amount 

associated with updates to the outlier 

thresholds, and updates to the wage 

index. This estimate includes an 

increase of approximately $2 million in 

payments to ESRD facilities in CY 2023 

due to the proposed updates to the AKI 

payment rate, of which approximately 

20 percent is increased beneficiary coinsurance payments. We estimate 

approximately $260 million in transfers 

from the federal government to ESRD 

facilities due to increased Medicare 

program payments and approximately 

$60 million in transfers from 

beneficiaries to ESRD facilities due to 

increased beneficiary co-insurance 

payments as a result of this proposed 

rule. 

4. Regulatory Review Cost Estimation 

If regulations impose administrative 

costs on private entities, such as the 

time needed to read and interpret this 

proposed rule, we should estimate the 

cost associated with regulatory review. 

Due to the uncertainty involved with 

accurately quantifying the number of 

entities that will review the rule, we 

assume that the total number of unique 

commenters on last year’s proposed rule 

will be the number of reviewers of this 

proposed rule. We acknowledge that 

this assumption may understate or 

overstate the costs of reviewing this 

rule. It is possible that not all 

commenters reviewed last year’s rule in 

detail, and it is also possible that some 

reviewers chose not to comment on the 

proposed rule. For these reasons we 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
38570 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

thought that the number of past 

commenters would be a fair estimate of 

the number of reviewers of this rule. We 

welcome any comments on the 

approach in estimating the number of 

entities which will review this proposed 

rule. We also recognize that different 

types of entities are in many cases 

affected by mutually exclusive sections 

of this proposed rule, and therefore for 

the purposes of our estimate we assume 

that each reviewer reads approximately 

50 percent of the rule. We seek 

comments on this assumption. 

Using the wage information from the 

BLS for medical and health service 

managers (Code 11–9111), we estimate 

that the cost of reviewing this rule is 

$115.22 per hour, including overhead 

and fringe benefits https://www.bls.gov/ 

oes/current/oes_nat.htm. Assuming an 

average reading speed, we estimate that 

it would take approximately 214 

minutes (3.6 hours) for the staff to 

review half of this proposed rule, which 

is approximately 53,500 words. For each 

entity that reviews the rule, the 

estimated cost is $414.79 (3.6 hours × 

$115.22). Therefore, we estimate that 

the total cost of reviewing this 

regulation is $118,629.94 ($414.79 × 

286). 

5. Impact Statement and Table 

a. CY 2023 End-Stage Renal Disease 

Prospective Payment System 

(1) Effects on ESRD Facilities 

To understand the impact of the 

changes affecting payments to different 

categories of ESRD facilities, it is 

necessary to compare estimated 

payments in CY 2022 to estimated 

payments in CY 2023. To estimate the 

impact among various types of ESRD 

facilities, it is imperative that the 

estimates of payments in CY 2022 and 

CY 2023 contain similar inputs. 

Therefore, we simulated payments only 

for those ESRD facilities for which we 

are able to calculate both current 

payments and new payments. 

For this proposed rule, we used CY 

2021 data from the Part A and Part B 

Common Working Files as of February 

18, 2022, as a basis for Medicare dialysis 

treatments and payments under the 

ESRD PPS. We updated the 2021 claims 

to 2022 and 2023 using various updates. 

The proposed updates to the ESRD PPS 

base rate are described in section 

II.B.1.d of this proposed rule. Table 25 

shows the impact of the estimated CY 

2023 ESRD PPS payments compared to 

estimated payments to ESRD facilities in 

CY 2022. 

BILLING CODE 4120–01–P 


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TABLE 25: Impacts of the Proposed Changes in Payments to ESRD Facilities for CY 2023 

Large dialysis 

organization 

Regional chain 

Independent 

Hospital based 

Unknown 

East North Central 

East South Central 

5,964 

904 

466 

376 

137 

1,222 

618 

27.1 

4.3 

2.1 

1.4 

0.1 

4.7 

2.4 

0.7% 

0.6% 

0.7% 

1.4% 

0.5% 

0.7% 

0.7% 

0.0% 

0.2% 

0.3% 

0.0% 

0.1% 

-0.2% 

-0.7% 

0.0% 

0.1% 

-0.1% 

-0.1% 

0.3% 

-0.3% 

-0.3% 

3.0% 

3.3% 

3.2% 

3.7% 

3.3% 

2.7% 

2.1% 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38571 

BILLING CODE 4120–01–C 

Column A of the impact table 

indicates the number of ESRD facilities 

for each impact category and column B 

indicates the number of dialysis 

treatments (in millions). The overall 

effect of the proposed changes to the 

outlier payment policy described in 

section II.B.1.c of this proposed rule is 

shown in column C. For CY 2023, the 

impact on all ESRD facilities as a result 

of the proposed changes to the outlier 

payment policy would be a 0.7 percent 

increase in estimated payments. All 

ESRD facilities are anticipated to 

experience a positive effect in their 

estimated CY 2023 payments as a result 

of the proposed outlier policy changes. 

Column D shows the effect of the 

proposed update to the LRS for CY 2023 

of 55.2 percent. This proposed update is 

implemented in a budget neutral 

manner, so the total impact of this 

proposed change is 0.0 percent; 

however, there are distributional effects 

of the change among different categories 

of ESRD facilities. Facilities located in 

rural areas are estimated to experience 

a 0.6 percent decrease in payments, and 

those located in urban areas are 

estimated to experience a 0.1 percent 

increase in payments. 

Column E shows the effect of the 

proposed updates to the wage index, as 

described in section II.B.1.b of this 

proposed rule. That is, this column 

reflects the update from the CY 2022 

ESRD PPS wage index continuing to use 

the 2018 OMB delineations as finalized 

in the CY 2021 ESRD PPS final rule, 

with a basis of the FY 2023 pre-floor, 

pre-reclassified IPPS hospital wage 

index data in a budget neutral manner. 

This column also includes the proposed 

increase of the wage index floor to 

0.6000 and the proposed permanent 5- 

percent cap on wage index decreases. 

The total impact of this change is 0.0 

percent; however, there are 

distributional effects of the change 

among different categories of ESRD 

facilities. The largest estimated increase 

would be 7.1 percent for facilities 

located in Puerto Rico and the Virgin 

Islands, and the largest estimated 

decrease would be 0.6 percent for 

facilities in New England. 

Column F reflects the overall impact, 

that is, the effects of the proposed 

outlier policy changes, the updated 

wage index, and the proposed payment 

rate update as described in section 

II.B.1.d of this proposed rule. The 

proposed ESRD PPS payment rate 

update is 2.4 percent, which reflects the 

proposed ESRDB market basket 

percentage increase factor for CY 2023 

of 2.8 percent and the proposed 

productivity adjustment of 0.4 percent. 

We expect that overall ESRD facilities 

would experience a 3.1 percent increase 

in estimated payments in CY 2023. The 

categories of types of facilities in the 

impact table show impacts ranging from 

a 1.6 percent increase to an 8.1 percent 


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Middle Atlantic 

Mountain 

New England 

Pacific2 

Puerto Rico 

and Virgin Islands 

South Atlantic 

West North Central 

West South Central 

Less than 4,000 

treatments 

4,000 to 9,999 

treatments 

10,000 or more 

treatments 

Unknown 

Less than2% 

Between 2% and 19% 

Between 20% and 49% 

886 

436 

201 

966 

52 

1,827 

514 

1,125 

1,229 

3,095 

3,358 

165 

7,735 

44 

12 

4.3 

1.9 

1.2 

5.6 

0.1 

8.0 

1.9 

4.8 

1.9 

10.1 

22.9 

0.2 

34.8 

0.2 

0.0 

0.8% 

0.5% 

0.6% 

0.5% 

0.4% 

0.8% 

0.8% 

0.7% 

0.6% 

0.7% 

0.7% 

0.6% 

0.7% 

0.7% 

0.1% 

0.3% 

-0.1% 

0.2% 

0.9% 

-1.9% 

-0.3% 

-0.3% 

-0.4% 

-0.1% 

-0.2% 

0.1% 

0.1% 

0.0% 

-0.2% 

-0.3% 

-0.2% 

-0.1% 

-0.6% 

0.6% 

7.1% 

-0.1% 

-0.4% 

0.2% 

-0.1% 

-0.1% 

0.1% 

0.3% 

0.0% 

0.1% 

-0.6% 

3.4% 

2.7% 

2.6% 

4.4% 

8.1% 

2.7% 

2.5% 

2.9% 

2.8% 

2.8% 

3.3% 

3.4% 

3.1% 

2.9% 

1.6% 

More than 50% 56 0.0 0.2% 0.0% -0.3% 2.3% 

1 This column includes the impact of the proposed updates in columns (C) through (E) in Table 23, and of the 

proposed ESRD market basket increase factor for CY 2023 (2.8 percent), reduced by 0.4 percentage point for the 

productivity adjustment as required by section 188l(b)(l4)(F)(i)(II) of the Act. Note, the products of these impacts 

may be different from the percentage changes shown here due to rounding effects. 2 Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands. 
38572 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

increase in their CY 2023 estimated 

payments. 

(2) Effects on Other Providers 

Under the ESRD PPS, Medicare pays 

ESRD facilities a single bundled 

payment for renal dialysis services, 

which may have been separately paid to 

other providers (for example, 

laboratories, durable medical equipment 

suppliers, and pharmacies) by Medicare 

prior to the implementation of the ESRD 

PPS. Therefore, in CY 2023, we estimate 

that the ESRD PPS will have zero 

impact on these other providers. 

(3) Effects on the Medicare Program 

We estimate that Medicare spending 

(total Medicare program payments) for 

ESRD facilities in CY 2023 would be 

approximately $8.2 billion. This 

estimate considers a projected decrease 

in fee-for-service Medicare ESRD 

beneficiary enrollment of 2.0 percent in 

CY 2023. 

(4) Effects on Medicare Beneficiaries 

Under the ESRD PPS, beneficiaries are 

responsible for paying 20 percent of the 

ESRD PPS payment amount. As a result 

of the projected 3.1 percent overall 

increase in the CY 2023 ESRD PPS 

payment amounts, we estimate that 

there would be an increase in 

beneficiary co-insurance payments of 

3.1 percent in CY 2023, which translates 

to approximately $60 million. 

(5) Alternatives Considered 

(i) CY 2023 Impacts: 2019–2020 Versus 

2021 Claims Data 

Each year CMS uses the latest 

available ESRD claims to update the 

outlier threshold, budget neutrality 

factor, and payment rates. Due to the 

COVID–19 PHE, we compared the 

impact of using CY 2019 or CY 2020 

claims against CY 2021 claims to 

determine if there was any substantial 

difference in the results that would 

justify potentially deviating from our 

longstanding policy to use the latest 

available data. Analysis suggested that 

ESRD utilization did not change 

substantially during the pandemic, 

likely due to the patients’ vulnerability 

and need for these services. 

Consequently, we are proposing to use 

the CY 2021 data because it does not 

negatively impact ESRD facilities and 

keeps with our longstanding policy to 

make updates using the latest available 

ESRD claims data. 

(ii) Proposed Outlier Methodology 

Alternatives 

As discussed in section II.B.1.c.(4) of 

this proposed rule, we are proposing a 

change to the methodology used to 

determine the outlier FDL amounts for 

adult beneficiaries. We also considered 

but did not propose maintaining the 

current outlier methodology or 

decreasing the 1.0 percent outlier target. 

In addition, we considered but did not 

propose a reconciliation process for the 

outlier methodology. 

b. Payment for Renal Dialysis Services 

Furnished to Individuals With AKI 

(1) Effects on ESRD Facilities 

To understand the impact of the 

changes affecting payments to different 

categories of ESRD facilities for renal 

dialysis services furnished to 

individuals with AKI, it is necessary to 

compare estimated payments in CY 

2022 to estimated payments in CY 2023. 

To estimate the impact among various 

types of ESRD facilities for renal 

dialysis services furnished to 

individuals with AKI, it is imperative 

that the estimates of payments in CY 

2022 and CY 2023 contain similar 

inputs. Therefore, we simulated 

payments only for those ESRD facilities 

for which we are able to calculate both 

current payments and new payments. 

For this proposed rule, we used CY 

2021 data from the Part A and Part B 

Common Working Files as of February 

18, 2022, as a basis for Medicare for 

renal dialysis services furnished to 

individuals with AKI. We updated the 

2021 claims to 2022 and 2023 using 

various updates. The updates to the AKI 

payment amount are described in 

section III.B of this proposed rule. Table 

26 shows the impact of the estimated 

CY 2023 payments for renal dialysis 

services furnished to individuals with 

AKI compared to estimated payments 

for renal dialysis services furnished to 

individuals with AKI in CY 2022. 

BILLING CODE 4120–01–P 


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TABLE 26: Impacts of the Proposed Changes in Payments for Renal Dialysis Services 

Furnished to Individuals with AKI for CY 2023 

Large dialysis 

organization 

Regional chain 

Independent 

Hospital bascd2 

Unknown 

East North Central 

East South Centntl 

Middle Atlantic 

Mountain 

New England 

Pacific3 

Puerto Rico 

and Virgin Islands 

South AUantic 

West North Central 

West South Central 

Less than 4,000 

treatments 

4,000 to 9,999 

treatments 

10,000 or more 

treatments 

Unknown 

Less than2% 

Between 2% and 19% 

Between 20% and 49% 

More than 50% 

4,355 

584 

198 

120 

51 

882 

414 

551 

304 

137 

673 

1 

1,290 

340 

716 

611 

2,124 

2,514 

59 

5,308 

0 

0 

0 

249.8 

31.6 

11.7 

5.3 

2.6 

53.l 

22.5 

32.3 

18.4 

7.3 

46.l 

0.0 

71.9 

15.1 

34.3 

24.9 

108.7 

163.8 

3.5 

300.9 

0.0 

0.0 

0.0 

0.0% 

0.1% 

0.2% 

-0.3% 

0.1% 

-0.2% 

-0.7% 

0.2% 

0.0% 

0.2% 

0.8% 

-1.9% 

-0.3% 

-0.3% 

-0.4% 

-0.1% 

-0.2% 

0.1% 

0.1% 

0.0% 

0.0% 

0.0% 

0.0% 

0.0% 

0.0% 

-0.3% 

0.0% 

0.1% 

-0.3% 

-0.4% 

-0.1% 

0.1% 

-0.6% 

0.6% 

7.6% 

-0.2% 

-0.3% 

0.1% 

-0.1% 

-0.2% 

0.1% 

-0.1% 

0.0% 

0.0% 

0.0% 

0.0% 

2.3% 

2.4% 

2.4% 

2.1% 

2.6% 

1.8% 

1.3% 

2.6% 

2.5% 

2.0% 

3.9% 

8.0% 

1.9% 

1.8% 

2.1% 

2.2% 

2.0% 

2.6% 

2.4% 

2.4% 

0.0% 

0.0% 

0.0% 
38574 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

BILLING CODE 4120–01–C 

Column A of the impact table 

indicates the number of ESRD facilities 

for each impact category and column B 

indicates the number of AKI dialysis 

treatments (in thousands). Column C 

shows the effect of the proposed update 

to the LRS for CY 2023 of 55.2 percent. 

Column D shows the effect of the 

proposed CY 2023 wage indices, 

including the proposed increase to the 

wage index floor and the proposed 5- 

percent cap on wage index decreases. 

Column E shows the overall impact, 

that is, the effects of the proposed LRS, 

proposed wage index updates, and the 

proposed payment rate update of 2.4 

percent, which reflects the proposed 

ESRDB market basket percentage 

increase factor for CY 2023 of 2.8 

percent and the proposed productivity 

adjustment of 0.4 percent. We expect 

that overall ESRD facilities would 

experience a 2.4 percent increase in 

estimated payments in CY 2023. The 

categories of types of facilities in the 

impact table show impacts ranging from 

an increase of 0.0 percent to 8.0 percent 

in their CY 2023 estimated payments. 

(2) Effects on Other Providers 

Under section 1834(r) of the Act, as 

added by section 808(b) of TPEA, we are 

proposing to update the payment rate 

for renal dialysis services furnished by 

ESRD facilities to beneficiaries with 

AKI. The only two Medicare providers 

and suppliers authorized to provide 

these outpatient renal dialysis services 

are hospital outpatient departments and 

ESRD facilities. The patient and his or 

her physician make the decision about 

where the renal dialysis services are 

furnished. Therefore, this proposed 

change would have zero impact on other 

Medicare providers. 

(3) Effects on the Medicare Program 

We estimate approximately $80 

million would be paid to ESRD facilities 

in CY 2023 as a result of patients with 

AKI receiving renal dialysis services in 

the ESRD facility at the lower ESRD PPS 

base rate versus receiving those services 

only in the hospital outpatient setting 

and paid under the outpatient 

prospective payment system, where 

services were required to be 

administered prior to the TPEA. 

(4) Effects on Medicare Beneficiaries 

Currently, beneficiaries have a 20 

percent co-insurance obligation when 

they receive AKI dialysis in the hospital 

outpatient setting. When these services 

are furnished in an ESRD facility, the 

patients will continue to be responsible 

for a 20 percent coinsurance. Because 

the AKI dialysis payment rate paid to 

ESRD facilities is lower than the 

outpatient hospital PPS’s payment 

amount, we expect beneficiaries to pay 

less co-insurance when AKI dialysis is 

furnished by ESRD facilities. 

(5) Alternatives Considered 

As we discussed in the CY 2017 ESRD 

PPS proposed rule (81 FR 42870), we 

considered adjusting the AKI payment 

rate by including the ESRD PPS casemix adjustments, and other adjustments 

at section 1881(b)(14)(D) of the Act, as 

well as not paying separately for AKI 

specific drugs and laboratory tests. We 

ultimately determined that treatment for 

AKI is substantially different from 

treatment for ESRD and the case-mix 

adjustments applied to ESRD patients 

may not be applicable to AKI patients 

and as such, including those policies 

and adjustment is inappropriate. We 

continue to monitor utilization and 

trends of items and services furnished to 

individuals with AKI for purposes of 

refining the payment rate in the future. 

This monitoring will assist us in 

developing knowledgeable, data-driven 

proposals. 

c. ESRD QIP 

(1) Effects of the PY 2023 and PY 2024 

ESRD QIP on ESRD Facilities 

The ESRD QIP is intended to prevent 

reductions in the quality of ESRD 

facility services provided to 

beneficiaries. The general methodology 

that we use to determine a facility’s TPS 

is described in our regulations at 42 CFR 

413.178(e). 

Any reductions in the ESRD PPS 

payments as a result of a facility’s 

performance under the PY 2023 and PY 

2024 ESRD QIP will apply to the ESRD 

PPS payments made to the facility for 

services furnished in CY 2023 and CY 

2024, respectively, as codified in our 

regulations at 42 CFR 413.177. 

Any reductions in the ESRD PPS 

payments as a result of a facility’s 

performance under the PY 2025 ESRD 

QIP will apply to the ESRD PPS 

payments made to the facility for 

services furnished in CY 2025, as 

codified in our regulations at 42 CFR 

413.177. 

For the PY 2023 ESRD QIP, we 

estimate that, of the 7,768 facilities 

(including those not receiving a TPS) 

enrolled in Medicare, approximately 

11.27 percent or 875 of the facilities that 

have sufficient data to calculate a TPS 

would receive a payment reduction for 

PY 2023. We are presenting an estimate 

for the PY 2023 ESRD QIP to update the 

estimated impact that was provided in 

the CY 2021 ESRD PPS final rule (85 FR 

71479 through 71481). If our proposals 

are finalized as proposed, the total 

estimated payment reductions for all the 

875 facilities expected to receive a 

payment reduction in PY 2023 would be 

approximately $9,853,321.90. Facilities 

that do not receive a TPS do not receive 

a payment reduction. 

Table 27 shows the overall estimated 

distribution of payment reductions 

resulting from the PY 2023 ESRD QIP. 


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1 This column includes the impact of the updates in columns (C) through (E) in Table 24, and of the proposed ESRD 

market basket increase factor for CY 2023 (2.8 percent), reduced by 0.4 percentage point for the productivity 

adjustment as required by section 188l(b)(l4)(F)(i)(II) of the Act. Note, the products of these impacts may be 

different from the percentage changes shown here due to rounding effects. 

2 Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain 

ownership. 

3 Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38575 

To estimate whether a facility would 

receive a payment reduction for PY 

2023, we scored each facility on 

achievement and improvement on 

several clinical measures we have 

previously finalized and for which there 

were available data from EQRS and 

Medicare claims, excluding the 

measures that we are proposing to 

suppress for PY 2023 as discussed in 

section IV.B.2 of this proposed rule. 

Payment reduction estimates are 

calculated using the most recent data 

available (specified in Table 28) in 

accordance with the policies finalized 

in this final rule. Measures used for the 

simulation are shown in Table 28. 

For all measures except the six 

measures we are proposing to suppress 

in IV.B.2 of this proposed rule, as well 

as the STrR measure, measures with less 

than 11 patients for a facility were not 

included in that facility’s TPS. For the 

STrR reporting measure, facilities were 

required to have at least 10 patient-years 

at risk in order to be included in the 

facility’s TPS. Each facility’s TPS was 

compared to an estimated mTPS and an 

estimated payment reduction table that 

were consistent with the proposed 

polices outlined in sections IV.B and 

IV.C of this proposed rule. Facility 

reporting measure scores were estimated 

using available data from CY 2019 and 

CY 2020 for MedRec. Facilities were 

required to have at least one measure in 

at least two domains to receive a TPS. 

To estimate the total payment 

reductions in PY 2023 for each facility 

resulting from this proposed rule, we 

multiplied the total Medicare payments 

to the facility during the 1-year period 

between January 2019 and December 

2019 by the facility’s estimated payment 

reduction percentage expected under 

the ESRD QIP, yielding a total payment 

reduction amount for each facility. 

(2) Effects of the PY 2025 ESRD QIP on 

ESRD Facilities 

For the PY 2025 ESRD QIP, we 

estimate that, of the 7,717 facilities 

(including those not receiving a TPS) 

enrolled in Medicare, approximately 41 

percent or 3,171 of the facilities that 

have sufficient data to calculate a TPS 

would receive a payment reduction for 

PY 2025. We are presenting an estimate 

for the PY 2025 ESRD QIP to update the 

estimated impact that was provided in 

the CY 2022 ESRD PPS final rule (86 FR 

62008 through 62011). If our proposals 

are finalized as proposed, the total 

estimated payment reductions for all the 

3,171 facilities expected to receive a 


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TABLE 27: Estimated Distribution of PY 2023 ESRD QIP Payment Reductions 

Percent of 

Payment Reduction Number of Facilities Facilities* 

0.0% 6,622 85.25% 

0.5% 267 3.44% 

1.0% 208 2.68% 

1.5% 222 2.86% 

2.0% 178 2.29% 

*271 facilities not scored due to insufficient data 

TABLE 28: Data Used to Estimate PY 2023 ESRD QIP Payment Reductions 

Period of time used to calculate 

achievement thresholds, 50th 

Measure percentiles of the national performance, Performance period 

benchmarks, and improvement 

thresholds 

ICH CARPS Survey* NIA NIA 

SRR* NIA NIA 

SHR* NIA NIA 

PPPW* NIA NIA 

Kt/V Dialysis Adequacy NIA NIA 

Comprehensive* 

VAT 

Standardized Fistula Ratio Jan 2018-Dec 2018 Jan 2019-Dec 2019 

% Catheter* NIA NIA 

STrR Jan 2018-Dec 2018 Jan 2019-Dec 2019 

*Note: We are proposing to suppress the ICH CARPS measure, the SRR clinical measure, the SHR clinical 

measure, the PPPW clinical measure, the Kt/V Dialysis Adequacy Comprehensive measure, and the Long-Term 

Catheter Rate measure for PY 2023, as discussed in section IV.B.2 of this proposed rule. 
38576 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

payment reduction in PY 2025 would be 

approximately $37,167,805.51. Facilities 

that do not receive a TPS do not receive 

a payment reduction. 

Table 29 shows the overall estimated 

distribution of payment reductions 

resulting from the PY 2025 ESRD QIP. 

To estimate whether a facility would 

receive a payment reduction for PY 

2025, we scored each facility on 

achievement and improvement on 

several clinical measures we have 

previously finalized and for which there 

were available data from EQRS and 

Medicare claims. Payment reduction 

estimates are calculated using the most 

recent data available (specified in Table 

28) in accordance with the policies 

proposed in this proposed rule. 

Measures used for the simulation are 

shown in Table 30. 

For all measures except the SHR 

clinical measure, the SRR clinical 

measure, and the STrR measure, 

measures with less than 11 patients for 

a facility were not included in that 

facility’s TPS. For the SHR clinical 

measure and the SRR clinical measure, 

facilities were required to have at least 

5 patient-years at risk and 11 index 

discharges, respectively, in order to be 

included in the facility’s TPS. For the 

STrR reporting measure, which we are 

proposing to convert to a clinical 

measure beginning in PY 2025 in 

section IV.E.1.b of this proposed rule, 

facilities were required to have at least 

10 patient-years at risk in order to be 

included in the facility’s TPS. Each 

facility’s TPS was compared to an 

estimated mTPS and an estimated 

payment reduction table that were 

consistent with the proposed polices 

outlined in section IV.E of this proposed 

rule. Facility reporting measure scores 

were estimated using available data 

from CY 2019 and CY 2020 for MedRec. 

Facilities were required to have at least 

one measure in at least two domains to 

receive a TPS. 

To estimate the total payment 

reductions in PY 2025 for each facility 

resulting from this proposed rule, we 

multiplied the total Medicare payments 

to the facility during the 1-year period 

between January 2019 and December 

2019 by the facility’s estimated payment 

reduction percentage expected under 

the ESRD QIP, yielding a total payment 

reduction amount for each facility. 

Table 31 shows the estimated impact 

of the finalized ESRD QIP payment 

reductions to all ESRD facilities for PY 

2025. The table also details the 

distribution of ESRD facilities by size 

(both among facilities considered to be 

small entities and by number of 

treatments per facility), geography (both 

rural and urban and by region), and 


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TABLE 29: Estimated Distribution of PY 2025 ESRD QIP Payment Reductions 

Percent of 

Payment Reduction Number of Facilities Facilities* 

0.0% 4,214 57.06% 

0.5% 1,769 23.95% 

1.0% 999 13.53% 

1.5% 332 4.50% 

2.0% 71 0.96% 

*332 facilities not scored due to insufficient data 

TABLE 30: Data Used to Estimate PY 2025 ESRD QIP Payment Reductions 

Period of time used to calculate 

achievement thresholds, 50th 

Measure percentiles of the national performance, Performance period 

benchmarks, and improvement 

thresholds 

ICH CARPS Survey Jan 2018-Dec 2018 Jan 2019-Dec 2019 

SRR Jan 2018-Dec 2018 Jan 2019-Dec 2019 

SHR Jan 2018-Dec 2018 Jan 2019-Dec 2019 

PPPW* NIA Jan 2019-Dec 2019 

Kt/V Dialysis Adequacy Jan 2018-Dec 2018 Jan 2019-Dec 2019 

Comprehensive 

VAT 

Standardized Fistula Ratio Jan 2018-Dec 2018 Jan 2019-Dec 2019 

% Catheter Jan 2018-Dec 2018 Jan 2019-Dec 2019 

STrR Jan 2018-Dec 2018 Jan 2019-Dec 2019 

*Note: PPPW score is based on achievement score only. 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38577 

facility type (hospital based and 

freestanding facilities). Given that the 

performance period used for these 

calculations differs from the 

performance period we are using for the 

PY 2025 ESRD QIP, the actual impact of 

the PY 2025 ESRD QIP may vary 

significantly from the values provided 

here. 

BILLING CODE 4120–01–P 

BILLING CODE 4120–01–C 

(3) Effects of the PY 2026 ESRD QIP on 

ESRD Facilities 

For the PY 2026 ESRD QIP, we 

estimate that, of the 7,717 facilities 

(including those not receiving a TPS) 

enrolled in Medicare, approximately 41 

percent or 3,171 of the facilities that 

have sufficient data to calculate a TPS 

would receive a payment reduction for 

PY 2026. The total payment reductions 

for all the 3,171 facilities expected to 

receive a payment reduction is 

approximately $37,167,805.51. Facilities 

that do not receive a TPS do not receive 

a payment reduction. 

Table 32 shows the overall estimated 

distribution of payment reductions 

resulting from the PY 2026 ESRD QIP. 


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TABLE 31: Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY 2025 

Number of Payment 

Facilities Reduction 

Number of Number of Expected to (percent 

Treatments Facilities Receive a change in 

Number of 2019 (in with QIP Payment total ESRD 

Facilities millions2 Score Reduction ea~ments2 

All Facilities 7,717 43.4 7,385 3,171 -0.34% 

Facility Type: 

Freestanding 7,339 41.7 7,039 3,007 -0.33% 

Hospital-based 378 1.7 346 164 -0.43% 

Ownership Type: 

Large Dialysis 5,886 33.6 5,718 2,304 -0.30% 

Regional Chain 887 5.3 852 407 -0.41 % 

Independent 515 2.8 467 296 -0.62% 

Hospital-based (non-chain) 378 1.7 346 164 -0.43% 

Unknown 51 0.0 2 0 -0.00% 

Facility Size: 

Large Entities 

6,773 38.9 6,570 2,711 -0.31 % 

Small Entities 1 893 4.5 813 460 -0.54% 

Unknown 51 0.0 2 0 -0.00% 

Rural Status: 

I) Yes 

1,268 6.3 1,242 421 -0.26% 

2)No 6,449 37.1 6,143 2,750 -0.35% 

Census Region: 

Northeast 

1,060 6.4 1,001 426 -0.33% 

Midwest 1,716 7.9 1,666 751 -0.36% 

South 3,506 20.1 3,368 1,623 -0.38% 

West 1,374 8.5 1,291 327 -0.17% 

US Territories2 61 0.4 59 44 -0.68% 

Census Division: 

Unknown 

9 0.1 8 4 -0.43% 

East North Central 1,213 5.6 1,172 583 -0.41 % 

East South Central 609 3.2 593 272 -0.35% 

Middle Atlantic 859 5.1 808 366 -0.35% 

Mountain 428 2.3 405 96 -0.17% 

New England 201 1.3 193 60 -0.23% 

Pacific 946 6.2 886 231 -0.17% 

South Atlantic 1,794 10.4 1,707 821 -0.39% 

West North Central 503 2.3 494 168 -0.23% 

West South Central 1,103 6.5 1,068 530 -0.40% 

US Territories2 52 0.3 51 40 -0.72% 

Facility Size(# oftotal treatments) 

Less than 4,000 treatments 1,248 2.4 1,096 338 -0.26% 

4, 000-9 ,999 treatments 2,905 11.9 2,904 1,147 -0.31 % 

Over 10,000 treatments 3,384 28.9 3,383 1,684 -0.38% 

Unknown 180 0.2 2 2 -0.75% 

1Small Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-reported status. 

2Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands. 
38578 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

To estimate whether a facility would 

receive a payment reduction in PY 2026, 

we scored each facility on achievement 

and improvement on several clinical 

measures we have previously finalized 

and for which there were available data 

from EQRS and Medicare claims. 

Payment reduction estimates were 

calculated using the most recent data 

available (specified in Table 32) in 

accordance with the policies proposed 

in this proposed rule. Measures used for 

the simulation are shown in Table 33. 

For all measures except the SHR 

clinical measure, the SRR clinical 

measure, and the STrR measure, 

measures with less than 11 patients for 

a facility were not included in that 

facility’s TPS. For SHR and SRR, 

facilities were required to have at least 

5 patient-years at risk and 11 index 

discharges, respectively, in order to be 

included in the facility’s TPS. For the 

STrR reporting measure, which we are 

proposing to convert to a clinical 

measure beginning in PY 2025 in 

section IV.E.1.b of this proposed rule, 

facilities were required to have at least 

10 patient-years at risk in order to be 

included in the facility’s TPS. Each 

facility’s TPS was compared to an 

estimated mTPS and an estimated 

payment reduction table that 

incorporates the policies outlined in 

section IV.F of this proposed rule. 

Facility reporting measure scores were 

estimated using available data from CY 

2019 and CY 2020 for MedRec. 

Facilities were required to have at least 

one measure in at least two domains to 

receive a TPS. 

To estimate the total payment 

reductions in PY 2026 for each facility 

resulting from this proposed rule, we 

multiplied the total Medicare payments 

to the facility during the 1-year period 

between January 2019 and December 

2019 by the facility’s estimated payment 

reduction percentage expected under 

the ESRD QIP, yielding a total payment 

reduction amount for each facility. 

Table 34 shows the estimated impact 

of the finalized ESRD QIP payment 

reductions to all ESRD facilities for PY 

2026. The table details the distribution 

of ESRD facilities by size (both among 

facilities considered to be small entities 

and by number of treatments per 

facility), geography (both rural and 

urban and by region), and facility type 

(hospital based and freestanding 

facilities). Given that the performance 

period used for these calculations 

differs from the performance period we 

are using for the PY 2026 ESRD QIP, the 

actual impact of the PY 2026 ESRD QIP 

may vary significantly from the values 

provided here. 

BILLING CODE 4120–01–P 


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TABLE 32: Estimated Distribution of PY 2026 ESRD QIP Payment Reductions 

Percent of 

Payment Reduction Number of Facilities Facilities* 

0.0% 4,214 57.06% 

0.5% 1,769 23.95% 

1.0% 999 13.53% 

1.5% 332 4.50% 

2.0% 71 0.96% 

*Note: 332 facilities not scored due to insufficient data 

TABLE 33: Data Used to Estimate PY 2026 ESRD QIP Payment Reductions 

Period of time used to calculate 

achievement thresholds, 50th 

Measure percentiles of the national Performance Period 

performance, benchmarks, and 

improvement thresholds 

ICH CAHPS Survey Jan 2018-Dec 2018 Jan 2019-Dec 2019 

SRR Jan 2018-Dec 2018 Jan 2019-Dec 2019 

SHR Jan 2018-Dec 2018 Jan 2019-Dec 2019 

PPPW* NIA Jan 2019-Dec 2019 

Kt/V Dialysis Adequacy Jan 2018-Dec 2018 Jan 2019-Dec 2019 

Comprehensive 

VAT 

Standardized Fistula Ratio Jan 2018-Dec 2018 Jan 2019-Dec 2019 

% Catheter Jan 2018-Dec 2018 Jan 2019-Dec 2019 

STrR Jan 2018-Dec 2018 Jan 2019-Dec 2019 

*Note: PPPW score is based on achievement score only 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38579 

BILLING CODE 4120–01–C 

(4) Effects on Other Providers 

The ESRD QIP is applicable to ESRD 

facilities. We are aware that several of 

our measures impact other providers. 

For example, with the introduction of 

the SRR clinical measure in PY 2017 

and the SHR clinical measure in PY 

2020, we anticipate that hospitals may 

experience financial savings as facilities 

work to reduce the number of 

unplanned readmissions and 

hospitalizations. We are exploring 

various methods to assess the impact 

these measures have on hospitals and 

other facilities, such as through the 

impacts of the Hospital Readmissions 

Reduction Program and the HospitalAcquired Condition Reduction Program, 

and we intend to continue examining 

the interactions between our quality 

programs to the greatest extent feasible. 

(5) Effects on the Medicare Program 

For PY 2026, we estimate that the 

ESRD QIP would contribute 

approximately $37,167,805.51 in 

Medicare savings. For comparison, 

Table 35 shows the payment reductions 

that we estimate will be applied by the 

ESRD QIP from PY 2018 through PY 

2026. 


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TABLE 34: Estimated Impact of ESRD QIP Payment Reductions to ESRD Facilities for 

PY 2026 

Number of 

Facilities 

Number of Number of Expected to 

Treatments Facilities Receive a 

Number of 2019 (in with QIP Payment 

Facilities millions) Score Reduction 

All Facilities 7,717 43.4 7,385 3,171 

Facility Type: 

Freestanding 7,339 41.7 7,039 3,007 

Hospital-based 378 1.7 346 164 

Ownership Type: 

Large Dialysis 5,886 33.6 5,718 2,304 

Regional Chain 887 5.3 852 407 

Independent 515 2.8 467 296 

Hospital-based (non-chain) 378 1.7 346 164 

Unknown 51 0.0 2 0 

Facility Size: 

Large Entities 

6,773 38.9 6,570 2,711 

Small Entities' 893 4.5 813 460 

Unknown 51 0.0 2 0 

Rural Status: 

I) Yes 

1,268 6.3 1,242 421 

2)No 6,449 37.1 6,143 2,750 

Census Region: 

Northeast 

1,060 6.4 1,001 426 

Midwest 1,716 7.9 1,666 751 

South 3,506 20.1 3,368 1,623 

West 1,374 8.5 1,291 327 

US Territories2 61 0.4 59 44 

Census Division: 

Unknown 

9 0.1 8 4 

East North Central 1,213 5.6 1,172 583 

East South Central 609 3.2 593 272 

Middle Atlantic 859 5.1 808 366 

Mountain 428 2.3 405 96 

New England 201 1.3 193 60 

Pacific 946 6.2 886 231 

South Atlantic 1,794 10.4 1,707 821 

West North Central 503 2.3 494 168 

West South Central 1,103 6.5 1,068 530 

US Territories2 52 0.3 51 40 

Facility Size(# of total treatments) 

Less than 4,000 treatments 1,248 2.4 1,096 338 

4,000-9,999 treatments 2,905 11.9 2,904 1,147 

Over I 0,000 treatments 3,384 28.9 3,383 1,684 

Unknown 180 0.2 2 2 

'Small Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-reported status. 

2Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands. 

Payment 

Reduction 

(percent 

change in 

total ESRD 

payments) 

-0.34% 

-0.33% 

-0.43% 

-0.30% 

-0.41% 

-0.62% 

-0.43% 

-0.00% 

-0.31 % 

-0.54% 

-0.00% 

-0.26% 

-0.35% 

-0.33% 

-0.36% 

-0.38% 

-0.17% 

-0.68% 

-0.43% 

-0.41% 

-0.35% 

-0.35% 

-0.17% 

-0.23% 

-0.17% 

-0.39% 

-0.23% 

-0.40% 

-0.72% 

-0.26% 

-0.31 % 

-0.38% 

-0.75% 
38580 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

376 In the CY 2022 ESRD PPS final rule, we 

finalized our proposed special scoring methodology 

and payment policy for PY 2022 (86 FR 61918 

through 61919). Under this policy, we will not 

apply any payment reductions to ESRD facilities for 

PY 2022. 

(6) Effects on Medicare Beneficiaries 

The ESRD QIP is applicable to ESRD 

facilities. Since the Program’s inception, 

there is evidence on improved 

performance on ESRD QIP measures. As 

we stated in the CY 2018 ESRD PPS 

final rule, one objective measure we can 

examine to demonstrate the improved 

quality of care over time is the 

improvement of performance standards 

(82 FR 50795). As the ESRD QIP has 

refined its measure set and as facilities 

have gained experience with the 

measures included in the Program, 

performance standards have generally 

continued to rise. We view this as 

evidence that facility performance (and 

therefore the quality of care provided to 

Medicare beneficiaries) is objectively 

improving. We are in the process of 

monitoring and evaluating trends in the 

quality and cost of care for patients 

under the ESRD QIP, incorporating both 

existing measures and new measures as 

they are implemented in the Program. 

We would provide additional 

information about the impact of the 

ESRD QIP on beneficiaries as we learn 

more. However, in future years we are 

interested in examining these impacts 

through the analysis of available data 

from our existing measures. 

(7) Alternatives Considered 

In section IV.B.2 of this proposed 

rule, we are proposing to suppress six 

measures for PY 2023 due to the 

impacts of the COVID–19 PHE on CY 

2021 data. We considered not 

suppressing these six measures for PY 

2023. However, we concluded that 

measure suppression was appropriate 

under our previously finalized measure 

suppression policy due to the impact of 

the COVID–19 PHE on these PY 2023 

ESRD QIP measures. This approach 

would help to ensure that a facility 

would not be penalized for performance 

on measures which have been impacted 

by extraordinary circumstances beyond 

the facility’s control. 

d. ETC Model 

(1) Overview 

The ETC Model is a mandatory 

payment model designed to test 

payment adjustments to certain dialysis 

and dialysis-related payments, as 

discussed in the Specialty Care Models 

final rule (85 FR 61114) and the CY 

2022 ESRD PPS final rule (86 FR 61874), 

for ESRD facilities and for Managing 

Clinicians for claims with dates of 

service from January 1, 2021 to June 30, 

2027. The requirements for the ETC 

Model are set forth in 42 CFR part 512, 

subpart C. 

The changes proposed in this 

proposed rule (discussed in detail in 

section V.B of this proposed rule) would 

impact model payment adjustments for 

PPA Period 5, starting July 1, 2024. The 

proposed change that is most likely to 

affect the impact estimate for the ETC 

Model is the proposal to add a 

parameter to the PPA achievement 

scoring methodology such that an ETC 

Participant’s aggregation group must 

have a positive home dialysis rate or 

transplant rate to receive an 

achievement score for that rate, as 

described in section V.B.1 of this 

proposed rule. We do not anticipate that 

the proposal to clarify the requirements 

for qualified staff to furnish and bill 

kidney disease patient education 

services under the ETC Model’s 

Medicare program waivers, described in 

section V.B.2 of this proposed rule, 

would affect the impact estimate for the 

ETC Model. 

The ETC Model is not a total cost of 

care model. ETC Participants will still 

bill FFS Medicare, and items and 

services not subject to the ETC Model’s 

payment adjustments will continue to 

be paid as they would in the absence of 

the ETC Model. 

(2) Data and Methods 

A stochastic simulation was created to 

estimate the financial impacts of the 

proposed changes to the ETC Model 

relative to baseline expenditures, where 

baseline expenditures were defined as 

data from CYs 2018 and 2019 without 

the proposed changes applied. The 

simulation relied upon statistical 

assumptions derived from 

retrospectively constructed ESRD 

facilities’ and Managing Clinicians’ 

Medicare dialysis claims, transplant 

claims, and transplant waitlist data 

reported during 2018 and 2019, the 

most recent years of complete data 

available before the start of the ETC 

Model. Both datasets and the riskadjustment methodologies for the ETC 

Model were developed by the CMS 

Office of the Actuary (OACT). 

For the modeling exercise used to 

estimate changes in payment to 

providers and suppliers and the 

resulting savings to Medicare, OACT 

maintained the previous method to 

simulate identification of ETC 

Participants (including aggregation 

group construction), beneficiary 

attribution (and exclusions), calculation 


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TABLE 35: Estimated ESRD QIP Aggregate Payment Reductions for Payment Years 2018 

through 2026 

Payment Year Estimated Payment Reductions 

PY 2026 $37,167,805.51 

PY 2025 $37,167,805.51 

PY 2024 $17,104,030.59 (86 FR 62011) 

PY 2023 $9,853,321.90 

PY 2022 $0376 (86 FR 62011) 

PY 2021 $32,196,724 (83 FR 57062) 

PY 2020 $31,581,441 (81 FR 77960) 

PY 2019 $15,470,309 (80 FR 69074) 

PY 2018 $11,576,214 (79 FR 66257) 
Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38581 

of home dialysis rates and transplant 

rates, calculation of achievement 

benchmarks, and calculation of 

improvement scores. For a detailed 

description of this methodology, see the 

detailed economic analysis included in 

the CY 2022 ESRD PPS final rule (86 FR 

62012 through 62014). 

Beginning for MY5 and beyond, the 

PPA achievement scoring methodology 

included one modification. Specifically, 

achievement scores were only awarded 

for the home dialysis rate or the 

transplant rate to ETC Participants in 

aggregation groups with a home dialysis 

rate or transplant rate greater than zero, 

respectively, in accordance with the 

proposed change described in section 

V.B.1 of this proposed rule. To clarify, 

no changes to the achievement scoring 

methodology were made to MY1 

through MY4. For a detailed description 

of the methodology for simulating 

achievement scoring methodology, see 

the CY 2022 ESRD PPS final rule (86 FR 

60213 through 60214). 

No changes were made to the 

payment structure for the HDPA 

calculation, as no changes were 

proposed. Similarly, no changes were 

made to the kidney disease patient 

education services utilization and cost 

calculations, as the proposed change 

does not impact expected utilization. 

For a detailed description of this 

methodology, see the detailed economic 

analysis included in the CY 2022 ESRD 

PPS final rule (86 FR 62014). 

(3) Medicare Estimate—Primary 

Specification, Assume Proposed 

Achievement Scoring Update 

BILLING CODE 4120–01–P 

BILLING CODE 4120–01–C 

Table 36 summarizes the estimated 

impact of the ETC Model when the 

achievement benchmarks for each year 

are set using the average of the home 

dialysis rates for year t-1 and year t-2 for 

the HRRs randomly selected for 

participation in the ETC Model. We 

estimate that the Medicare program will 

save a net total of $43 million from the 

PPA and HDPA between January 1, 2021 

and June 30, 2027 less $15 million in 

increased training and education 

expenditures. Therefore, the net impact 

to Medicare spending is estimated to be 

$28 million in savings. This is 

consistent with the net impact to 

Medicare spending estimated for the CY 

2022 ESRD PPS final rule, in which the 

net impact to Medicare spending was 


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TABLE 36: Estimates of Medicare Program Savings (Rounded $M) for ESRD Treatment 

Choices (ETC) Model 

Year of Model 

2021 2022 2023 2024 2025 2026 2027 6.5 Year 

Total* 

Net Impact to Medicare Spending 15 9 -1 -9 -12 -19 -9 -28 

Overall PPA Net & HDPA 14 7 -3 -11 -15 -22 -12 -43 

Clinician PPA Downward 

Adjustment -1 -2 -2 -3 -3 -2 -13 

Clinician PP A Upward Adjustment 0 1 1 1 1 1 6 

Clinician PP A Net 0 -1 -1 -2 -2 -1 -7 

Clinician HDPA 0 0 0 0 

Facility Downward Adjustment -9 -20 -25 -31 -39 -21 -145 

Facility Doward Adjustment 5 12 15 18 19 10 79 

Facility PPA Net -3 -8 -10 -14 -20 -11 -66 

Facility HDPA 14 10 6 29 

Total PP A Downward Adjustment -9 -22 -27 -34 -43 -23 -158 

Total PPA Doward Adjustment 6 13 16 19 21 11 84 

Total PPA Net -4 -9 -11 -15 -22 -12 -73 

TotalHDPA 14 10 6 30 

Kidney Disease Patient Education 

Services Costs 0 1 1 1 1 1 1 5 

HD Training Costs 1 1 1 1 2 2 2 10 

*Totals may not sum due to rounding and from beneficiaries that have dialysis treatment spanning multiple years. 

Negative spending reflects a reduction in Medicare spending. The kidney disease patient education services benefit 

costs are less than $1M each year, but are rounded up to $1M to show what years they apply to. Similarly, the HD 

Training Costs are less than $1M for years 2021-2024, but are rounded up to $1M to indicate that costs were applied 

those years. 
38582 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

also estimated to be $28 million in 

savings (86 FR 62014 through 62016). 

In Table 36, negative spending reflects 

a reduction in Medicare spending, while 

positive spending reflects an increase. 

The results for this table were generated 

from an average of 400 simulations 

under the assumption that benchmarks 

are rolled forward with a 1.5-year lag. 

For a detailed description of the key 

assumptions underlying the impact 

estimate, see the CY 2022 ESRD PPS 

final rule (86 FR 60214 through 60216). 

As was the case in the Specialty Care 

Models final rule (85 FR 61353) and the 

CY 2022 ESRD PPS final rule (86 FR 

61874), the projections do not include 

the Part B premium revenue offset 

because the payment adjustments under 

the ETC Model will not affect 

beneficiary cost-sharing. Any potential 

effects on Medicare Advantage 

capitation payments were also excluded 

from the projections. This approach is 

consistent with how CMS has 

previously conveyed the primary FFS 

effects anticipated for an uncertain 

model without also assessing the 

potential impact on Medicare 

Advantage rates. 

(4) Effects on the Home Dialysis Rate, 

the Transplant Rate, and Kidney 

Transplantation 

The changes proposed in this 

proposed rule would not impact the 

findings reported for the effects of the 

ETC Model on the home dialysis rate or 

the transplant rate described in the CY 

2022 ESRD PPS final rule (86 FR 62017). 

(5) Effects on Kidney Disease Patient 

Education Services and HD Training 

Add-Ons 

The changes proposed in this 

proposed rule would not impact the 

findings reported for the effects of the 

ETC Model on kidney disease patient 

education services and HD training addons described in the Specialty Care 

Models final rule (85 FR 61355) or the 

CY 2022 ESRD PPS final rule (85 FR 

62017). 

(6) Effects on Medicare Beneficiaries 

The changes proposed in this 

proposed rule would not impact the 

findings reported for the effects of ETC 

Model on Medicare beneficiaries 

regarding the ETC Model’s likelihood of 

incentivizing ESRD facilities and 

Managing Clinicians to improve access 

to home dialysis and transplantation for 

Medicare beneficiaries. 

As previously noted in the Specialty 

Care Models final rule (85 FR 61357) 

and the CY 2022 ESRD PPS final rule 

(86 FR 62017), we continue to anticipate 

that the ETC Model will have a 

negligible impact on the cost to 

beneficiaries receiving dialysis. Under 

current policy, Medicare FFS 

beneficiaries are generally responsible 

for 20 percent of the allowed charge for 

services furnished by providers and 

suppliers. This policy will remain the 

same for most beneficiaries under the 

ETC Model. However, we will waive 

certain requirements of title XVIII of the 

Act as necessary to test the PPA and 

HDPA under the ETC Model and hold 

beneficiaries harmless from any effect of 

these payment adjustments on cost 

sharing. 

In addition, the Medicare 

beneficiary’s quality of life has the 

potential to improve if the beneficiary 

elects to have home dialysis, or 

nocturnal in-center dialysis, as opposed 

to in-center dialysis. As discussed in the 

Specialty Care Models final rule, studies 

have found that home dialysis patients 

experienced improved quality of life as 

a result of their ability to continue 

regular work schedules or life plans; as 

well as better overall, physical, and 

psychological health in comparison to 

other dialysis options (85 FR 61264 

through 61270). 

(7) Alternatives Considered 

Throughout this proposed rule, we 

have identified our policies and 

alternatives that we have considered, 

and provided information as to the 

likely effects of these alternatives and 

rationale for each of our policies 

This proposed rule addresses a model 

specific to ESRD. It provides 

descriptions of the requirements that we 

would waive, identifies the performance 

metrics and payment adjustments 

proposed to be tested, and presents 

rationales for our proposals, and where 

relevant, alternatives considered. We 

carefully considered the alternatives to 

this proposed rule. For context related 

to alternatives previously considered 

when establishing and modifying the 

ETC Model we refer readers to the 

Specialty Care Models final rule (85 FR 

61114) and the CY 2022 ESRD PPS final 

rule (86 FR 61874), respectively, for 

more information on policy-related 

stakeholder comments, our responses to 

those comments, and statements of final 

policy preceding the limited 

modifications proposed here. 

E. Accounting Statement 

As required by OMB Circular A–4 

(available at https://

www.whitehouse.gov/wp-content/ 

uploads/legacy_drupal_files/omb/ 

circulars/A4/a-4.pdf), we have prepared 

an accounting statement in Table 37 

showing the classification of the impact 

associated with the provisions of this 

proposed rule. 

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377More information available at http://

www.sba.gov/content/small-business-size-standards 

(Kidney Dialysis Centers are listed as North 

American Industry Classification System (NAICS) 

code 621492 with a size standard of $41.5 million). 

BILLING CODE 4120–01–C 

F. Regulatory Flexibility Act Analysis 

(RFA) 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities, if a rule has a significant impact 

on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. We do not 

believe ESRD facilities are operated by 

small government entities such as 

counties or towns with populations of 

50,000 or less, and therefore, they are 

not enumerated or included in this 

estimated RFA analysis. Individuals and 

states are not included in the definition 

of a small entity. Therefore, the number 

of small entities estimated in this RFA 

analysis includes the number of ESRD 

facilities that are either considered 

small businesses or nonprofit 

organizations. 

According to the Small Business 

Administration’s (SBA) size 

standards 377, an ESRD facility is 

classified as a small business if it has 

total revenues of less than $41.5 million 

in any 1 year. For the purposes of this 

analysis, we exclude the ESRD facilities 

that are owned and operated by LDOs 

and regional chains, which would have 

total revenues of more than $9.3 billion 

in any year when the total revenues for 

all locations are combined for each 

business (LDO or regional chain), and 

are not, therefore, considered small 

businesses. Because we lack data on 

individual ESRD facilities’ receipts, we 

cannot determine the number of small 

proprietary ESRD facilities or the 

proportion of ESRD facilities’ revenue 

derived from Medicare payments. 

Therefore, we assume that all ESRD 

facilities that are not owned by LDOs or 

regional chains are considered small 

businesses. Accordingly, we consider 

the 466 facilities that are independent 

and 376 facilities that are hospitalbased, as shown in the ownership 

category in Table 25, to be small 

businesses. These facilities represent 

approximately 11 percent of all ESRD 

facilities in our data set. 

Additionally, we identified in our 

analytic file that there are 817 facilities 

that are considered nonprofit 

organizations, which is approximately 

10 percent of all ESRD facilities in our 

data set. In total, accounting for the 376 

nonprofit ESRD facilities that are also 

considered small businesses, there are 

1,283 ESRD facilities that are either 

small businesses or nonprofit 

organizations, which is approximately 

16 percent of all ESRD facilities in our 

data set. 

For the ESRD PPS updates proposed 

in this rule, a hospital-based ESRD 

facility (as defined by type of 

ownership, not by type of ESRD facility) 

is estimated to receive a 3.7 percent 

increase in payments for CY 2023. An 

independent facility (as defined by 

ownership type) is estimated to receive 

a 3.2 percent increase in payments for 

CY 2023. As shown in Table 25, we 

estimate that the overall revenue impact 

of this proposed rule on all ESRD 

facilities is a positive increase to 

Medicare payments by approximately 

3.1 percent. 

For AKI dialysis, we are unable to 

estimate whether patients would go to 

ESRD facilities, however, we have 

estimated there is a potential for $80 

million in payment for AKI dialysis 

treatments that could potentially be 

furnished in ESRD facilities. 

For the ESRD QIP, we estimate that of 

the 3,171 ESRD facilities expected to 

receive a payment reduction as a result 


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TABLE 37: Accounting Statement: Classification of Estimated 

Transfers and Costs/Savin2:s 

ESRD PPS and AKI (CY 2023) 

Cate2:orv Transfers 

Annualized Monetized Transfers $260 million 

From Whom to Whom Federal government to ESRD oroviders 

Cate2:orv Transfers 

Increased Beneficiarv Co-insurance Pavments $60 million 

From Whom to Whom Beneficiaries to ESRD oroviders 

ESRD OIP for PY 2023 

Categorv Transfers 

Annualized Monetized Transfers -$9 million 

From Whom to Whom Federal government to ESRD providers. 

ESRD QIP for PY 2025 

Category Transfers 

Annualized Monetized Transfers -$37 million 

From Whom to Whom Federal government to ESRD providers. 

ESRD QIP for PY 2026 

Category Transfers 

Annualized Monetized Transfers -$37 million 

From Whom to Whom Federal government to ESRD providers 

ETC Model for July 1, 2022 through June 30, 2027 

Category Transfers 

Annualized Monetized Transfers $0.03 million 

From Whom to Whom Federal government to ESRD facilities and 

Managing Clinicians 
38584 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

of their performance on the PY 2025 

ESRD QIP, 460 are ESRD small entity 

facilities. We present these findings in 

Table 29 (‘‘Estimated Distribution of PY 

2025 ESRD QIP Payment Reductions’’) 

and Table 31 (‘‘Estimated Impact of QIP 

Payment Reductions to ESRD Facilities 

for PY 2025’’). 

For the ETC Model, this proposed rule 

includes as ETC Participants Managing 

Clinicians and ESRD facilities required 

to participate in the Model, pursuant to 

§ 512.325(a). We assume for the 

purposes of the regulatory impact 

analysis that the great majority of 

Managing Clinicians are small entities 

by meeting the SBA definition of a small 

business. The greater majority of ESRD 

facilities are not small entities, as they 

are owned, partially or entirely, by 

entities that do not meet the SBA 

definition of small entities. Under the 

ETC Model, the HDPA is a positive 

adjustment on payments for specified 

home dialysis and home dialysis-related 

services. The PPA, which includes both 

positive and negative adjustments on 

payments for dialysis and dialysisrelated services, excludes aggregation 

groups with fewer than 132 attributed 

beneficiary-months during the relevant 

year. The aggregation methodology 

groups ESRD facilities owned in whole 

or in part by the same dialysis 

organization within a Selected 

Geographic Area and Managing 

Clinicians billing under the same Tax 

Identification Number (TIN) within a 

Selected Geographic Area. Taken 

together, the low volume threshold 

exclusions and aggregation policies, 

coupled with the fact that the ETC 

Model affects Medicare payment only 

for select services furnished to Medicare 

FFS beneficiaires; we have determined 

that the provisions of the proposed rule 

for the ETC Model would not have a 

significant impact on spending for a 

substantial number of small entities. 

The HDPA is a positive adjustment on 

payments for specified home dialysis 

and home dialysis-related services. The 

PPA, which includes both positive and 

negative adjustments on payments for 

dialysis and dialysis-related services, 

excludes aggregation groups with fewer 

than 132 attributed beneficiary-months 

during the relevant year. The 

aggregation methodology groups ESRD 

facilities owned in whole or in part by 

the same dialysis organization within a 

Selected Geographic Area and Managing 

Clinicians billing under the same Tax 

Identification Number (TIN) within a 

Selected Geographic Area, which 

increases the statistical liability of the 

home dialysis rate and the transplant 

rate for ETC Participants in the 

aggregation group. Taken together, the 

low volume threshold exclusions and 

aggregation policies, coupled with the 

fact that the ETC Model affects Medicare 

payment only for select services 

furnished to Medicare FFS beneficiaires; 

we have determined that the provisions 

of the proposed rule would not have a 

significant impact on spending for a 

substantial number of small entities. 

The economic impact assessment is 

based on estimated Medicare payments 

(revenues) and HHS’s practice in 

interpreting the RFA is to consider 

effects economically ‘‘significant’’ only 

if greater than 5 percent of providers 

reach a threshold of 3 to 5 percent or 

more of total revenue or total costs. As 

a result, since the overall estimated 

impact of these proposed updates is a 

net increase of greater than 3 percent in 

revenue across almost all categories of 

ESRD facility, the Secretary has 

determined that this proposed rule will 

have a significant positive revenue 

impact on a substantial number of ESRD 

facilities identified as small entities. 

In addition, section 1102(b) of the 

Social Security Act requires us to 

prepare a regulatory impact analysis if 

a rule may have a significant impact on 

the operations of a substantial number 

of small rural hospitals. This analysis 

must conform to the provisions of 

section 603 of the RFA. For purposes of 

section 1102(b) of the Act, we define a 

small rural hospital as a hospital that is 

located outside of a metropolitan 

statistical area and has fewer than 100 

beds. We do not believe this proposed 

rule will have a significant impact on 

operations of a substantial number of 

small rural hospitals because most 

dialysis facilities are freestanding. 

While there are 121 rural hospital-based 

ESRD facilities, we do not know how 

many of them are based at hospitals 

with fewer than 100 beds. However, 

overall, the 121 rural hospital-based 

ESRD facilities will experience an 

estimated 2.8 percent increase in 

payments. Therefore, the Secretary has 

certified that this proposed rule will not 

have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

G. Unfunded Mandates Reform Act 

Analysis (UMRA) 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 

anticipated costs and benefits before 

issuing any rule whose mandates 

require spending in any 1 year of $100 

million in 1995 dollars, updated 

annually for inflation. In 2022, that 

threshold is approximately $165 

million. This proposed rule does not 

mandate any requirements for state, 

local, or tribal governments, in the 

aggregate, or by the private sector of 

more than $165 million in any 1 year. 

Moreover, HHS interprets UMRA as 

applying only to unfunded mandates. 

We do not interpret Medicare payment 

rules as being unfunded mandates, but 

simply as conditions for the receipt of 

payments from the federal government 

for providing services that meet federal 

standards. This interpretation applies 

whether the facilities or providers are 

private, state, local, or tribal. 

H. Federalism 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on state and local 

governments, preempts state law, or 

otherwise has Federalism implications. 

We have reviewed this proposed rule 

under the threshold criteria of Executive 

Order 13132, Federalism, and have 

determined that it will not have 

substantial direct effects on the rights, 

roles, and responsibilities of states, local 

or Tribal governments. 

VIII. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

IX. Files Available to the Public via the 

Internet 

The Addenda for the annual ESRD 

PPS proposed and final rule will no 

longer appear in the Federal Register. 

Instead, the Addenda will be available 

only through the internet and will be 

posted on the CMS website under the 

regulation number, CMS–1768–P at 

https://www.cms.gov/Medicare/ 

Medicare-Fee-for-Service-Payment/ 

ESRDpayment/End-Stage-RenalDisease-ESRD-Payment-Regulationsand-Notices. In addition to the 

Addenda, limited data set files are 

available for purchase at https://

www.cms.gov/Research-Statistics-Dataand-Systems/Files-for-Order/Limited

DataSets/EndStageRenalDisease

SystemFile. Readers who experience any 

problems accessing the Addenda or LDS 

files, should contact CMS by sending an 

email to CMS at the following mailbox: 

ESRDPayment@cms.hhs.gov. 


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Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 38585 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on June 13, 

2022. 

List of Subjects 

42 CFR Part 413 

Diseases, Health facilities, Medicare, 

Puerto Rico, Reporting and 

recordkeeping requirements. 

42 CFR Part 512 

Administrative practice and 

procedure, Health facilities, Medicare, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR chapter IV as set forth below: 

PART 413—PRINCIPLES OF 

REASONABLE COST 

REIMBURSEMENT; PAYMENT FOR 

END-STAGE RENAL DISEASE 

SERVICES; PROSPECTIVELY 

DETERMINED PAYMENT RATES FOR 

SKILLED NURSING FACILITIES; 

PAYMENT FOR ACUTE KIDNEY 

INJURY DIALYSIS 

■ 1. The authority citation for part 413 

continues to read as follows: 

Authority: 42 U.S.C. 1302, 1395d(d), 

1395f(b), 1395g, 1395l(a), (i), and (n), 

1395x(v), 1395hh, 1395rr, 1395tt, and 

1395ww. 

■ 2. Section 413.178 is amended by 

revising paragraphs (a)(8) and (d)(2) and 

adding paragraph (i) to read as follows: 

§ 413.178 ESRD quality incentive program. 

(a) * * * 

(8) Minimum total performance score 

(mTPS) means, with respect to a 

payment year except payment year 

2023, the total performance score that 

an ESRD facility would receive if, 

during the baseline period, it performed 

at the 50th percentile of national ESRD 

facility performance on all clinical 

measures and the median of national 

ESRD facility performance on all 

reporting measures. 

* * * * * 

(d) * * * 

(2) For purposes of paragraph (d)(1) of 

this section, the baseline period that 

applies to each of payment year 2023 

and payment year 2024 is calendar year 

2019 for purposes of calculating the 

achievement threshold, benchmark and 

minimum total performance score, and 

calendar year 2019 for purposes of 

calculating the improvement threshold. 

The baseline period that applies to 

payment year 2025 is calendar year 

2021 for purposes of calculating the 

achievement threshold, benchmark and 

minimum total performance score, and 

calendar year 2022 for purposes of 

calculating the improvement threshold, 

and the performance period that applies 

to payment year 2025 is calendar year 

2023. Beginning with payment year 

2026, the performance period and 

corresponding baseline periods are each 

advanced 1 year for each successive 

payment year. 

* * * * * 

(i) Special Rules for Payment Year 

2023. (1) CMS will calculate a measure 

rate for, but will not score facility 

performance on or include in the TPS 

for any facility under paragraph (e) of 

this section, the following measures: 

Standardized Hospitalization Ratio 

(SHR) clinical measure, Standardized 

Readmission Ratio (SRR) clinical 

measure, Long-Term Catheter Rate 

clinical measure, ICH CAHPS clinical 

measure, Percentage of Prevalent 

Patients Waitlisted (PPPW) clinical 

measure, and Kt/V Dialysis Adequacy 

clinical measure. 

(2) The mTPS for payment year 2023 

is the total performance score that an 

ESRD facility would receive if, during 

the calendar year 2019 baseline period, 

it performed at the 50th percentile of 

national ESRD facility performance on 

Standardized Fistula Rate clinical 

measure, Hypercalcemia clinical 

measure, NHSN Blood Stream Infection 

(BSI) clinical measure, and the median 

of national ESRD facility performance 

on Clinical Depression Screening and 

Follow-Up reporting measure, 

Standardized Transfusion Ratio (STrR) 

reporting measure, Ultrafiltration Rate 

reporting measure, NHSN Dialysis Event 

reporting measure, and Medication 

Reconciliation (MedRec) reporting 

measure. 

■ 3. Section 413.231 is amended by 

adding paragraphs (c) and (d) to read as 

follows: 

§ 413.231 Adjustment for wages. 

* * * * * 

(c) Beginning January 1, 2023, CMS 

applies a cap on decreases to the wage 

index, such that the wage index applied 

to an ESRD facility is not less than 95 

percent of the wage index applied to 

that ESRD facility in the prior calendar 

year. 

(d) Beginning January 1, 2023, CMS 

applies a floor of 0.6000 to the wage 

index, such that the wage index applied 

to an ESRD facility is not less than 

0.6000. 

§ 413.234 [Amended] 

■ 4. In § 413.234, amend paragraph (a) 

by adding the word ‘‘functional’’ before 

the word ‘‘equivalent’’ in the definition 

of ‘‘Oral-only drug’’. 

PART 512—RADIATION ONCOLOGY 

MODEL AND END STAGE RENAL 

DISEASE TREATMENT CHOICES 

MODEL 

■ 5. The authority citation for part 512 

continues to read as follows: 

Authority: 42 U.S.C. 1302, 1315a, and 

1395hh. 

■ 6. Section 512.370 is amended by 

revising paragraph (b) introductory text 

and adding paragraph (b)(3) to read as 

follows: 

§ 512.370 Benchmarking and scoring. 

* * * * * 

(b) Achievement Scoring. CMS 

assesses ETC Participant performance at 

the aggregation group level on the home 

dialysis rate and transplant rate against 

achievement benchmarks constructed 

based on the home dialysis rate and 

transplant rate among aggregation 

groups of ESRD facilities and Managing 

Clinicians located in Comparison 

Geographic Areas during the Benchmark 

Year. Achievement benchmarks are 

calculated as described in paragraph 

(b)(1) of this section and, for MY3 

through MY10, are stratified as 

described in paragraph (b)(2) of this 

section. For MY5 through MY10, the 

ETC Participant’s achievement score is 

subject to the restriction described in 

paragraph (b)(3) of this section. 

* * * * * 

(3) For MY5 through MY10, CMS will 

assign an achievement score to an ETC 

Participant for the home dialysis rate or 

the transplant rate only if the ETC 

Participant’s aggregation group has a 

home dialysis rate or a transplant rate 

greater than zero for the MY. 

* * * * * 

■ 7. Section 512.397 is amended by 

revising paragraph (b)(1) to read as 

follows: 

§ 512.397 ETC Model Medicare program 

waivers and additional flexibilities. 

* * * * * 

(b) * * * 

(1) CMS waives the requirement 

under section 1861(ggg)(2)(A)(i) of the 

Act and § 410.48(a) of this chapter that 

only doctors, physician assistants, nurse 

practitioners, and clinical nurse 

specialists can furnish kidney disease 

patient education services to allow 

kidney disease patient education 

services to be provided by clinical staff 

(as defined at § 512.310) under the 

direction of and incident to the services 

of the Managing Clinician who is an 

ETC Participant. The kidney disease 

patient education services may be 


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38586 Federal Register / Vol. 87, No. 123 / Tuesday, June 28, 2022 / Proposed Rules 

furnished only by qualified staff (as 

defined at § 512.310). Beginning MY5, 

only clinical staff that are not leased 

from or otherwise provided by an ESRD 

facility or related entity may furnish 

kidney disease patient education 

services pursuant to the waiver 

described in this section. 

* * * * * 

Dated: June 17, 2022. 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2022–13449 Filed 6–21–22; 4:15 pm] 

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