Approximately 64 million people in the United States are Medicare beneficiaries.1 Patients with end-stage kidney disease (ESKD) constitute only 1.7% of the this Medicare population1 but represent a major driver of program costs at almost 9% of all spending in Traditional Medicare (Parts A and B) as of 2018.2 Despite home dialysis and kidney transplantation being associated with greater quality of life and improved health outcomes, in-center hemodialysis remains the leading kidney replacement therapy.3
The Centers for Medicare and Medicaid Services (CMS) Solution
To increase the number of Medicare beneficiaries receiving home dialysis or a kidney transplant in order to preserve or enhance the quality of care while reducing expenditures, CMS launched the End-Stage Renal Disease Treatment Choices (ETC) Mandatory Payment Model in January 2021.4 Both nephrology practices and outpatient dialysis providers—located in approximately 30% of Hospital Referral Regions (HRRs), as defined by the Dartmouth Institute for Health Policy and Clinical Practice—will participate in this six-and-one-half-year model until the middle of 2027. ETC model participants are dialysis providers and nephrologists, independent of relationship with one another.
ETC Participant Performance Evaluation4
Participant performance is evaluated based on achieved performance against historical non-ETC model benchmarks for home dialysis and transplantation (Achievement Score), or improvement on past home dialysis and transplantation performance (Improvement Score). Here’s how both are calculated.
Achievement benchmarks (absolute scale) are set at the 30th, 50th, 75th, and 90th percentiles of performance in non-ETC HRRs and evaluated each corresponding model-measurement year. Participants are reassessed every 6 months and awarded a modality performance score (MPS) between 0 and 6 points. Beginning January 2022, CMS stratified benchmarks of dialysis providers and nephrologists in non-ETC HRRs into two groups based on an ETC participant’s proportion of Dual-Eligible and Low-Income Subsidy beneficiaries, and will inflate the percentiles-of-performance benchmarks by 10% every two measurement years.
Improvement benchmarks (relative scale) are based on past participant performance. Participants are reassessed every 6 months and are awarded a MPS between 0 and 4.5 points. Beginning January 2022, CMS will implement a path for ETC participants to achieve an equitable improvement MPS if participants achieve the highest improvement percentage group and increase dual-eligible (Medicare + Medicaid) and/or low-income subsidy home dialysis and/or transplant beneficiaries by 2.5-percentage points during a measurement year.
- Home dialysis rate
- Includes home dialysis patient-months + half-credit for in-center self-dialysis patient-months; starting measurement year 3, + half-credit for in-center nocturnal patient-months
- Comprises 2/3 of nephrologist’s and dialysis provider’s MPS
- Transplant rate
- Includes living-donor kidney transplant patient months + transplant-waitlisted patient months
- Comprises 1/3 of nephrologist’s and dialysis provider’s MPS
Using MPS measures, CMS allots points to ETC participants for either achievement or improvement—whichever score is higher.
Medicare Payment Adjustments
Payments to dialysis providers and nephrologists in the ETC-mandatory model, adjusted based on home dialysis and transplantation performance, are subject to two adjustors:
- Home Dialysis Payment Adjustment (HDPA)
A small, gradually decreasing bonus on all home dialysis claims during the first three years of the model, designed to incentivize investment in home dialysis infrastructure and provide resources to support broader adoption of home dialysis therapies.
- Performance Payment Adjustment (PPA)
An asymmetric, gradually increasing, two-sided payment adjustment on most dialysis claims beginning on July 1, 2022, based on the nephrologist’s or dialysis provider’s home dialysis and transplant rates.
The PPA operates on a 24-month cycle, preceded by a corresponding benchmark year, and restarts every six months. The PPA cycle starts with the measurement year, when ETC participants’ transplant and home performance is evaluated.
MPS scores are calculated for each nephrologist and dialysis facility, then all nephrologists within an HRR are aggregated by common practice and all dialysis facilities by common ownership. Performance payment adjustments will be levied at the practice or ownership level.
Maximum bonus for practices and dialysis providers starts at 4% in 2022, increasing to 8% in 2027. Maximum penalties for practices start at -5% in 2022 and increase to -9% in 2027. Maximum penalties for dialysis providers start at -5% in 2022, increasing to -10% in 2027.
ETC Medicare Beneficiary Attribution
For the home dialysis rate, Medicare beneficiaries will be attributed to the dialysis provider or nephrologist based on where they had the majority of their dialysis treatments in a given month.
For the transplant rate, CMS attributes preemptive living donor transplant beneficiaries to the nephrologist with whom the beneficiary had the most claims between the start of a given measurement year and the month the beneficiary receives his or her transplant. Living donor transplant months are counted from the beginning of the measurement year to the month of transplantation.
Kidney Disease Education (KDE) Waiver
The ETC waives the requirement that only nephrologists, physician assistants, nurse practitioners, and clinical nurse specialists can provide and bill for KDE. For ETC participants, KDE benefits can be provided by certain clinical staff under the direction of an ETC nephrologist, and KDE beneficiaries are expanded to CKD stage 4, CKD stage 5, and the first six months of ESKD. Licensed social workers and registered dietitians within ETC physician group practices may also provide KDE. The waiver also removes requirements that KDE include managing comorbidities for CKD Stage V and ESKD beneficiaries, unless medically relevant. Also of note, the ETC Telehealth Waiver will continue after the COVID-19 Public Health Emergency (PHE) expires.
Strategies for ETC Participant Success
The ETC began January 2021 and will continue until June 30th, 2027. While HDPA claims will apply from January 1, 2021 through December 31, 2023, performance payment adjustments begin on July 1, 2022 and will continue through the remainder of the ETC model. Higher penetration rates of home dialysis and transplantation will be rewarded in the model, and lower rates will be penalized. Strategies to increase home dialysis, in-center self-dialysis, and in-center nocturnal dialysis utilization, as well as living donor transplantation and transplant waitlisting, will likely make ETC participants more successful in the six-and-a-half-year ETC Mandatory Payment Model.