§101.Refining the end-stage renal disease payment system to improve access to innovative treatment options
This section refines the Medicare end-stage renal disease (ESRD) prospective payment system (PPS) to support new renal dialysis drugs, biological products, and devices. (As background, the ESRD PPS, under SSA §1881(b)(14), bundles payments to dialysis facilities for dialysis services furnished to Medicare beneficiaries with ESRD; temporary add-on payments such as the Transitional Drug Add-On Payment Adjustment (TDAPA), under 42 CFR 413.234(c), and Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES), under 42 CFR 413.236, reimburse facilities for certain new drugs, biologicals, equipment, and supplies above the bundled rate during a transition period.)
Specifically, the section (1) requires a TDAPA of not less than three years for any new renal dialysis drug or biological approved by FDA on or after January 1, 2020, under the Federal Food, Drug, and Cosmetic Act or Public Health Service Act, that qualifies for TDAPA and is furnished on or after January 1, 2026; (2) establishes a permanent post-TDAPA add-on adjustment to the ESRD PPS base rate, for claims on or after January 1, 2026, for such drugs or biologicals furnished on or after January 1, 2024 to treat or manage ESRD conditions as defined in 42 CFR 413.234(a)—calculated as 65% of expenditures divided by dialysis services during the relevant period (using the most recent 12-month utilization and average sales price data, or wholesale acquisition cost if sales data are zero/negative, or invoice if unavailable), updated annually for inflation, applied immediately post-TDAPA, and implemented without budget neutrality or patient case-mix adjustments; (3) amends the definition of renal dialysis services under SSA §1881(b)(14)(B) to exclude, effective upon enactment, drugs or biologicals approved after December 31, 2025, for comorbid conditions (e.g., cardiovascular disease, cancer) in ESRD patients that do not substitute for bundled drugs, requiring use of the AY claim modifier (or successor); and (4) extends TPNIES to not less than three years for qualifying new renal dialysis devices furnished on or after January 1, 2026; makes breakthrough devices under FD&C Act §515B eligible for TPNIES beginning January 1, 2026; and includes capital-related assets in TPNIES and any post-TPNIES adjustment beginning January 1, 2026.