ESRD PPS Outlier Services

Outlier Payment Adjustment

An ESRD facility that treats beneficiaries with unusually high resource requirements, as measured by their use of identified services beyond a specified threshold, are entitled to outlier payments that is, additional payment beyond the otherwise applicable adjusted prospective payment amount.

The ESRD Prospective Payment System (PPS) includes a payment adjustment for high cost outliers when there are unusual variations in the type or amount of medically necessary care, such as an unusual anemia management erythropoiesis stimulating agents (ESAs) utilization.

CMS designed the outlier payment policy to account for the possibility of an ESRD facility facing significant financial losses due to such high cost outliers. The outlier payment is added to the patient and facility-­level adjusted ESRD PPS per treatment payment amount. 

What are considered ESRD Outlier Services?

Other than the exceptions noted below, ESRD outlier services are the following items and services that are included in the ESRD PPS bundled payment:  

• Drugs and biological products used for the treatment of ESRD that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B;
• Laboratory tests used for the treatment of ESRD that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B;
• Medical/surgical supplies used to administer drugs and biologicals used for the treatment of ESRD that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B;
• Drugs and biological products used for the treatment of ESRD that were or would have been, prior to January 1, 2011, covered under Medicare Part D*, including oral-only renal dialysis drugs effective January 1, 2025; and
• Effective January 1, 2025, drugs and biological products that are considered Composite Rate Services  as defined by 42 CFR 413.171. 

What are not considered ESRD Outlier Services?

• Blood and blood processing;
• Preventive vaccines;
• Telehealth services; and
• Items and services reported on claims with the AY modifier.