Last week, CMS announced the finalized End-Stage Renal Disease (ESRD) Treatment Choices Model (ETC Model), which will test whether incentivizing home dialysis and kidney transplantation will reduce Medicare expenditures while maintaining or improving the quality of care furnished to beneficiaries with ESRD. The goal is to encourage participating providers to invest in and build out their home dialysis programs. Incentives will also be paid based on utilization of home dialysis, transplant waitlist rate, and living-donor transplant rate. The ETC Model, which will kick-off at the beginning of 2021, will affect up to thirty percent of all kidney care providers for an estimated $23 million in savings over five and a half years. 

This post summarizes how participants are selected, the specific payment changes, and the overall timeline. 

Required Participants

Participation in the ETC Model is required for those ESRD facilities and Managing Clinicians selected by CMS. For purposes of the ETC Model, a Managing Clinician is a Medicare-enrolled physician or other practitioner who furnishes services and bills the monthly capitation payment for managing adult ESRD beneficiaries. Participants have been selected according to location in randomly selected geographic areas, stratified by region, so as to cover approximately thirty percent of all adult ESRD beneficiaries in the United States. With some exceptions, the geographic unit of selection is the Hospital Referral Region (HRR), and selected HRRs have been posted on the ETC Model website. Beneficiaries will be attributed to the ESRD facility that accounts for the most dialysis treatments during any given month and to the Managing Clinician billing the first monthly capitation payment for the beneficiaries each month.     

Payment Model and Incentives

The ETC Model will shift Medicare payments to incentivize and encourage utilization of home dialysis and kidney transplants. Specifically, the ETC Model includes two different payment adjustments: the Home Dialysis Payment Adjustment (HDPA) and the Performance Payment Adjustment (PPA).  

The HDPA will apply to claims for home dialysis and related services during the first three years of the ETC Model. As a result of this adjustment, participating ESRD facilities and Managing Clinicians will receive additional payments on their home dialysis and related claims with claim service dates from January 1, 2021 through December 31, 2023. The HDPA will be reflected in the ESRD Prospective Payment System on home dialysis claims and the monthly capitation payment paid for home dialysis-related claims. These payments are aimed at increasing investment in, and utilization of, home dialysis services prior to the commencement of the PPA periods, discussed below. 

The PPA applies to both home and in-center dialysis and dialysis-related Medicare payments. The adjustments will be positive or negative based on the rates of home dialysis, kidney transplant waitlisting, and living donor transplantation among the beneficiaries attributed to participating ESRD facilities and Managing Clinicians. Rates of home dialysis, transplant waitlisting, and living donor transplantation will be measured using Medicare claims data, Medicare administrative data including enrollment data, and the Scientific Registry of Transplant Recipients data. More specifically, transplant rates will be calculated based on the number of attributed beneficiary years during the ETC Model for which the attributed beneficiaries were on the kidney transplant waitlist, and the number of attributed beneficiary years during the Model for which attributed beneficiaries received living donor transplants. The PPA will apply to claims for dialysis and related services with claim service dates beginning July 1, 2022 and ending June 30, 2027. 

Timeline

As discussed above, the ETC Model will begin on January 1, 2021 with the HDPA for participating ESRD facilities and Managing Clinicians. The HDPA will apply to claims for service dates during the first three years of the model. During each ETC Model year, participating ESRD facilities’ and Managing Clinicians’ rates of home dialysis, transplant waitlisting, and living donor transplantation will be assessed for purposes of determining the Performance Payment Adjustment. Each ETC Model year will have a corresponding six-month long PPA period during which the positive or negative PPA will apply. Each PPA period will begin six months after the conclusion of the model year, with the PPA period for the first model year beginning July 1, 2022. 

CMS hopes that the ETC Model will increase patient choice and lead to better outcomes for patients with ESRD while reducing Medicare costs. Additionally, in its announcement, CMS highlighted the increased risk of hospitalization for people with ESRD who contract COVID-19 and the role home dialysis could play in reducing the risk of contracting the virus. We will continue to track the ETC Model as it is rolled out, so check back here for periodic updates.