End-Stage Renal Disease Treatment Choices (ETC) Model Fact Sheet

Overview

The End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model is an innovative payment model that aims to test whether greater use of home dialysis and kidney transplantation for Medicare beneficiaries with ESRD will reduce Medicare expenditures, while preserving or enhancing the quality of care furnished to beneficiaries with ESRD. Both of these modalities have support among health care providers and patients as preferable alternatives to in-center hemodialysis, but utilization in the U.S. has been less than in other developed nations.

The ETC Model is expected to achieve these goals by adjusting certain payments to nephrologists and other clinicians managing beneficiaries with ESRD (Managing Clinicians) and ESRD facilities selected to participate in the Model.  In particular, the Model will apply payment adjustments to the adjusted ESRD Prospective Payment System (PPS) per treatment base rate under the ESRD PPS to ESRD facilities required to participate, as well as the monthly capitation payment (MCP) to Managing Clinicians required to participate. These payment adjustments will offer the incentive to participating ESRD facilities and Managing Clinicians to work with beneficiaries and caregivers in the choice of treatment modality, and to provide additional resources to support greater utilization of home dialysis and kidney transplantation.

This fact sheet discusses major provisions of the ETC Model. The ETC Model is included in the Medicare Program; Specialty Care Models to Improve Quality of Care and Reduce Expenditures Final Rule.  The final rule (CMS 5527-F) can be downloaded at: https://innovation.cms.gov/media/document/specialty-care-models-rule

Why develop a model for home dialysis and transplantation?

Both of these modalities, home dialysis and transplantation, have support among health care providers and patients as preferable alternatives to in-center hemodialysis, but utilization has been less than in other developed nations.  For example, studies have shown that for patients who require dialysis, dialyzing at home is often preferred by patients and physicians.[1] The benefits include increased independence and quality of life. Of all patients treated for ESRD, the percentage of home dialysis in the U.S. – about 12% in 2016 – falls far below that of other developed nations.[2]

In addition, kidney transplantation is widely viewed as the best treatment for most patients with ESRD, generally increasing survival and quality of life while reducing medical expenditures. However, in 2017 only 29.9% of prevalent ESRD patients in the U.S. had a functioning transplant and only 2.9% of incident patients received a preemptive transplant.[3] These rates are below those of other developed nations.  Of 61 countries or areas reporting to the U.S. Renal Data System, the U.S. was ranked 39th in kidney transplants per 1,000 dialysis patients in 2016.[4]

What is the ETC Model timeline?

The payment adjustments for those ESRD facilities and Managing Clinicians selected for participation in the ETC Model will apply to select Medicare claims with dates from January 1, 2021 through June 30, 2027.

The ETC Model was included in the proposed rule entitled Medicare Program; Specialty Care Models to Improve Quality of Care and Reduce Expenditures, CMS-5527-P. This notice of proposed rulemaking (NPRM) was published in the Federal Register on July 18, 2019. The public comment period for the Notice of Proposed Rule Making closed on September 16, 2019.

Will the ETC Model require Medicare payment adjustments for any health care providers?

The ETC Model will adjust payment on certain Medicare claims for the selected ESRD facilities and Managing Clinicians.  For the ETC Model, a Managing Clinician is a Medicare-enrolled physician or non-physician practitioner who furnishes and bills the monthly capitation payment (MCP) for managing one or more adult ESRD beneficiaries.  Medicare payment to ESRD facilities and Managing Clinicians not selected to participate in the Model will not be affected.

Why is CMS requiring participation for selected ESRD facilities and Managing Clinicians?

CMS is requiring participation in order to obtain model participation by a broader set of ESRD care providers than have participated in CMS models to date, and to support CMS’s ability to conduct a robust evaluation of the Model test.  Requiring participation for certain models helps CMS understand the impact on a variety of provider and supplier types so that the resulting data will be more broadly representative.

How will ESRD facilities and Managing Clinicians be selected to participate in the ETC Model?

CMS will select ESRD facilities and Managing Clinicians to participate in the Model according to their location in randomly-selected geographic areas, stratified by region, so as to account for approximately 30% of adult ESRD beneficiaries in all 50 states and the District of Columbia.  The geographic unit of selection will be the Hospital Referral Region (HRR).  In addition, ESRD facilities and Managing Clinicians in HRRs for which at least 20% of the component zip codes are located in Maryland will be included in the Model’s interventions unless otherwise excluded, so as to be consistent with the ongoing Maryland Total Cost of Care Model being tested in Maryland.  Selected HRRs will be posted on the ETC Model website.  Across the U.S., certain ESRD facilities and Managing Clinicians will be excluded from certain of the Model’s interventions for serving low volumes of adult ESRD beneficiaries.

How will beneficiaries be attributed for the ETC Model?

Beneficiaries will be attributed to selected Managing Clinicians and ESRD facilities on a month-by-month basis for purposes of calculating certain payment adjustments under the Model. A beneficiary will generally be attributed to the ESRD facility accounting for the most dialysis treatments during the month, and to the Managing Clinician billing the first MCP for the month.

How will the Model alter Medicare payment for selected ESRD facilities and Managing Clinicians?

The ETC Model includes two types of payment adjustments. The first will be a positive adjustment on Medicare claims for home dialysis and home dialysis-related services during the initial three years of the Model, providing an additional payment to selected ESRD facilities and Managing Clinicians for supporting beneficiaries dialyzing at home and to incentivize investment in home dialysis. The second adjustment will apply to both home and in-center dialysis and dialysis-related claims, and could be either positive or negative. These adjustments, which are based on the participant’s home dialysis rate and transplant waitlist rate and living donor transplant rate, will be made to the adjusted ESRD PPS per treatment base rate under the ESRD PPS for selected ESRD facilities and to the MCP for selected Managing Clinicians. Greater positive and negative adjustments for Model participants will be phased in over the duration of the Model.

Does the ETC Model include protections for beneficiaries or health care providers?

Yes, there will be safeguards for health care providers participating in the Model, as well as those beneficiaries who receive care from Model participants. In determining the home dialysis rate and the transplant waitlist rate and living donor transplant rate for participating ESRD facilities and Managing Clinicians for purposes of the performance payment adjustments, certain beneficiaries will be excluded, including those under age 18, in hospice, in nursing homes or skilled nursing facilities, diagnosed with dementia, and receiving dialysis for acute kidney injury only. CMS will monitor for potential coercion, steering, and inappropriate referrals to the targeted modalities by model participants, and assess the impacts of the Model on mortality and hospitalizations. Beneficiaries will maintain freedom of choice among health care providers, and all other current protections afforded under Medicare. An ESRD facility or Managing Clinician selected for participation in the Model will be required to post a notification to that effect, and there will be no change in beneficiary cost sharing amounts due to changes in payments under the Model test.

Does the ETC Model include Medicare benefit enhancements?

Yes. Under the Kidney Disease Education (KDE) benefit, Medicare currently covers up to six 1-hour session for beneficiaries with stage 4 CKD furnished by certain types of clinicians. CMS is conditionally waiving certain requirements for the KDE benefit to allow additional types of practitioners to furnish this service under the Model, and to permit this service to be furnished to beneficiaries with stage 5 CKD as well as certain beneficiaries with ESRD.

How will the ETC Model be evaluated?

In accordance with section 1115A of the Social Security Act, CMS will conduct an evaluation to assess the quality of care furnished under the ETC Model and changes in Medicare program spending.  The evaluation will seek to determine whether the payment adjustments for Managing Clinicians and ESRD facilities under the model improves the uptake of home dialysis and transplants and reduces Medicare expenditures, while preserving or enhancing the quality of care for Medicare beneficiaries. 

Model Resources

Model Website: https://innovation.cms.gov/innovation-models/esrd-treatment-choices-model

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