The Centers for Medicare & Medicaid Services (CMS) released the CY 2027 ESRD Prospective Payment System proposed rule on June 24, 2026. The rule, numbered CMS-1846-P, updates payment rates for dialysis facilities starting January 1, 2027. It also revises the acute kidney injury dialysis payment rate and the ESRD Quality Incentive Program.
CMS proposes to raise the ESRD PPS base rate to $299.55 per treatment. This change increases total Medicare payments to ESRD facilities by an estimated 1.1%. The rule also touches phosphate binder costs, low-volume payment tiers, pediatric adjustments, and training payments.
This article breaks down every proposed change nephrology billing teams need to track. It covers the base rate math, the outlier policy update, the quality program overhaul, and what practices should do before the rule finalizes.
What Is the CY 2027 ESRD PPS Proposed Rule?
The CY 2027 ESRD PPS proposed rule updates Medicare payment policy for renal dialysis services delivered on or after January 1, 2027. CMS-1846-P covers three connected programs. It revises the ESRD Prospective Payment System base rate, the acute kidney injury (AKI) dialysis payment rate, and the ESRD Quality Incentive Program (QIP).
This is a proposed rule, not a final rule. CMS accepted public comments through August 24, 2026. A final rule typically follows before the January 1 effective date, so nephrology practices should treat these figures as directional until CMS publishes the final version.
Correct nephrology billing depends on tracking CMS updates like this one every year. ESRD payment policy changes annually, and missing a rate or measure change creates downstream coding and reimbursement errors.
What Does the ESRD PPS Bundled Payment Cover?
The ESRD PPS pays ESRD facilities a single bundled rate per dialysis treatment. This bundled payment includes renal dialysis drugs, biological products, laboratory tests, equipment, and supplies furnished during outpatient maintenance dialysis.
CMS projects Medicare will pay approximately $6.2 billion to roughly 7,600 ESRD facilities under the CY 2027 proposed rates. The bundled rate adjusts for patient case mix, facility volume, rural location, and area wages.
How Much Is the Proposed CY 2027 ESRD PPS Base Rate?
CMS proposes a CY 2027 ESRD PPS base rate of $299.55, an increase of $17.84 over the CY 2026 base rate of $281.71. The proposed base rate reflects four separate adjustments layered on top of the prior year’s rate.
The table below compares the CY 2026 base rate with the CY 2027 proposal and the factors driving the change.
| Factor | CY 2026 | CY 2027 (Proposed) |
|---|---|---|
| ESRD PPS base rate | $281.71 | $299.55 |
| Phosphate binder adjustment | Included via TDAPA | +$15.96 (permanent) |
| Wage index budget neutrality factor | N/A | 1.00267 |
| ESRD bundled market basket update | N/A | 1.6% |
| Budget neutrality factor (LVPA, pediatric, training) | N/A | 0.98783 |
CMS calculates the proposed rate using this formula: ($281.71 base rate + $15.96 phosphate binder adjustment) multiplied by 1.00267, then by 0.98783, then by 1.016. The result equals $299.55.
Does the Proposed Rule Raise Payments Equally for All Facilities?
No. Hospital-based ESRD facilities would see an estimated 2% increase in total payments. Freestanding ESRD facilities would see an estimated 1.1% increase. Freestanding facilities make up the large majority of the roughly 7,600 total ESRD facilities nationwide.
How Are Phosphate Binders Folded Into the CY 2027 Base Rate?
CMS proposes a permanent $15.96 increase to the ESRD PPS base rate to account for phosphate binder costs. This addition completes a transition that began January 1, 2025, when phosphate binders first moved into the ESRD bundled payment.
CMS based the $15.96 figure on average sales price (ASP) data across six types of phosphate binders. The amount also includes operational costs equal to 6% of ASP, covering handling and dispensing expenses at the facility level.
Practices tracking phosphate binder billing history can compare this proposal against last year’s rate cycle in our CY 2026 ESRD payment update. The phosphate binder transition has moved in phases across two consecutive rulemaking cycles.
What Changes to the Low-Volume Payment Adjustment Are Proposed?
CMS proposes raising the Low-Volume Payment Adjustment (LVPA) treatment threshold from 4,000 to 8,000 treatments annually. This change expands the number of LVPA payment tiers from two to six, creating finer distinctions between low-volume facility sizes.
The proposed tier structure works as follows:
- Facilities with fewer than 3,000 median treatments over three cost reporting years receive the largest payment adjuster.
- Facilities with 7,000 to 7,999 median treatments receive the smallest adjuster in the low-volume range.
- Four additional tiers sit between these two endpoints, scaling the adjustment by treatment volume.
This proposal is budget-neutral. CMS would offset the tier expansion by reducing the ESRD PPS base rate by approximately 1.1%, or roughly $3 per treatment. Small and mid-sized nephrology practices should model both sides of this trade-off before the final rule publishes.
What Payment Adjustments Are Proposed for Pediatric ESRD Patients?
CMS proposes two permanent changes to pediatric ESRD payment adjustments, replacing a temporary adjustment set to expire in 2027. The first change updates the case-mix adjusters for pediatric patients using more recent cost data.
The second change extends the LVPA to pediatric ESRD beneficiaries treated at facilities meeting low-volume criteria. Pediatric dialysis facilities previously excluded from LVPA calculations would become eligible under the proposed rule.
CMS designed both changes to be budget-neutral in aggregate. Total expected spending on pediatric ESRD patients stays roughly the same, but payments shift toward lower-volume facilities with documented higher resource needs.
How Much Would the Home and Self-Dialysis Training Payment Increase?
CMS proposes raising the home and self-dialysis training add-on payment from $95.60 to $138.22 per training session. This is a $42.62 increase, reflecting CMS’s updated estimate of the actual cost to train patients and caregivers on home dialysis.
CMS also proposes a policy change beyond the rate increase. The training add-on would apply during the onset period, the first four months of ESRD dialysis, when the ESRD PPS currently does not pay this adjustment at all.
- Current policy: no training add-on payment during the first four months of dialysis.
- Proposed policy: training add-on payment available starting at ESRD onset.
- Rate change: $95.60 rising to $138.22 per session.
Both changes are proposed on a budget-neutral basis within the overall base rate calculation.
What Technical Changes Are Proposed for TDAPA and Post-TDAPA Payments?
CMS proposes technical fixes to how it calculates the transitional drug add-on payment adjustment (TDAPA) and the post-TDAPA add-on payment. These changes target situations where current average sales price (ASP) data is unreliable or unavailable.
CMS would allow the use of older ASP data when the most recent reported ASP reflects zero or negative sales. CMS also proposes updating the post-TDAPA add-on payment quarterly through change requests, rather than on a slower annual cycle.
Billing teams handling drug-specific add-on codes need current CPT and HCPCS references to apply these adjustments correctly. Our nephrology CPT codes guide covers the dialysis and drug administration codes affected by TDAPA billing.
What Are the Proposed Updates to the Outlier Policy?
CMS proposes routine updates to the fixed dollar loss (FDL) and Medicare allowable payment (MAP) amounts used in the ESRD outlier policy. These amounts determine when a facility qualifies for extra payment on unusually high-cost dialysis patients.
The table below shows the proposed CY 2027 figures against current CY 2026 amounts.
| Patient Group | Amount Type | CY 2026 | CY 2027 (Proposed) |
|---|---|---|---|
| Pediatric | Fixed Dollar Loss (FDL) | $162.43 | $206.43 |
| Pediatric | Medicare Allowable Payment (MAP) | $50.19 | $60.86 |
| Adult | Fixed Dollar Loss (FDL) | $14.80 | $114.98 |
| Adult | Medicare Allowable Payment (MAP) | $23.68 | $41.24 |
CMS attributes most of this increase to projected utilization of drugs currently paid through TDAPA. These drugs transition to ESRD outlier services in CY 2027, raising the cost basis for outlier calculations across both patient groups.
Does the AKI Dialysis Payment Rate Change for CY 2027?
Yes. CMS proposes setting the acute kidney injury (AKI) dialysis payment rate equal to the CY 2027 ESRD PPS base rate of $299.55. CMS calculates AKI payments using the same CY 2027 wage index applied to ESRD PPS payments.
The proposed home and self-dialysis training add-on increase also applies to AKI dialysis training payments. Facilities billing both ESRD and AKI dialysis services should apply the same proposed base figures across both payment categories.
What Changes Are Proposed to the ESRD Quality Incentive Program?
CMS proposes removing three reporting measures and adding one new clinical measure to the ESRD QIP, effective payment year (PY) 2029. These changes affect how CMS scores facility performance and calculates payment reductions for facilities below the minimum total performance score.
| Measure | Proposed Action | Effective |
|---|---|---|
| Hypercalcemia (reporting) | Removed, replaced by Hyperphosphatemia | PY 2029 |
| Hyperphosphatemia (clinical) | Added | PY 2029 |
| Medication Reconciliation (MedRec) | Removed | PY 2029 |
| COVID-19 HCP Vaccination | Removed | PY 2029 |
| NHSN Bloodstream Infection (BSI) | Baseline data and risk model updated | PY 2029 |
What Is the New Hyperphosphatemia Clinical Measure?
The Facility-Level Percentage of Chronic Hyperphosphatemia in Dialysis Patients measure replaces the Hypercalcemia reporting measure. CMS designed this measure to assess patient outcomes directly, rather than simply tracking whether facilities report data.
This clinical measure targets reductions in cardiovascular complications and hospitalizations linked to phosphorus imbalance. It incentivizes nutritional counseling, phosphate binder management, and dialysis prescription adjustments at the facility level.
Which Reporting Measures Would Be Removed?
CMS proposes removing two reporting measures beyond the Hypercalcemia swap:
- Medication Reconciliation (MedRec): consistently high performance across facilities makes the measure low-value relative to its reporting burden.
- COVID-19 HCP Vaccination: CDC clinical guidance has changed since the Public Health Emergency ended, so the measure no longer matches current recommendations.
Because these removals eliminate every measure in the Reporting Measure Domain, CMS also proposes removing that domain entirely. Domain and measure weights would shift into the Care Coordination Domain and the Clinical Care Domain.
How Would the NHSN Bloodstream Infection Measure Data Update?
CMS proposes updating the NHSN Bloodstream Infection (BSI) clinical measure to use 2023 national baseline data. The update also revises the risk adjustment model to include patient access type, hospital affiliation, and number of dialysis stations as new predictors.
The underlying Standardized Infection Ratio (SIR) formula stays the same. Only the denominator inputs and baseline comparison change, aligning national benchmarks with more current surveillance data.
Is the D-PaLS Patient Life Goals Measure Finalized?
No. CMS is only requesting public comment on the Dialysis Facility Discussion of Patient Life Goals Patient-Reported Outcome Performance measure (D-PaLS PRO-PM). This measure is not part of the current proposed rule and would require separate future rulemaking before adoption.
How Should Nephrology Practices Prepare for the CY 2027 ESRD PPS Proposed Rule?
Nephrology practices and dialysis facilities gain the most by acting before the final rule publishes, not after. The proposed rule signals where CMS is heading on rates, outlier thresholds, and quality measures for 2027.
- Model both LVPA scenarios (current 4,000 threshold and proposed 8,000 threshold) against your facility’s actual treatment volume.
- Flag TDAPA and post-TDAPA drug codes for quarterly rate review once the post-TDAPA update cadence changes.
- Update phosphate binder billing workflows to reflect the proposed permanent base rate inclusion.
- Review pediatric case-mix documentation ahead of the proposed adjuster update.
- Track the ESRD QIP measure set changes now, since PY 2029 performance periods start collecting data sooner than the payment year name suggests.
Nephrology billing carries more regulatory complexity than most specialties, between ESRD PPS rules, monthly capitation payments, and QIP scoring. Practices that outsource to specialized nephrology billing services avoid the burden of tracking every CMS rate cycle manually while keeping claims aligned with the current rules.
Frequently Asked Questions
When Does the CY 2027 ESRD PPS Proposed Rule Take Effect?
The proposed payment rates and policies would take effect January 1, 2027, pending a final rule from CMS. The QIP measure changes carry a later effective date of payment year 2029.
Is the CY 2027 ESRD PPS Base Rate of $299.55 Final?
No. The $299.55 figure is a proposed rate. CMS accepted public comments on the proposed rule through August 24, 2026, and typically adjusts figures between the proposed and final rule based on comments and updated data.
Does the Proposed Rule Change ICD-10 Coding Requirements for ESRD?
No. The CY 2027 proposed rule addresses payment rates and quality measures, not diagnosis coding requirements. ESRD coding still follows existing ICD-10-CM guidelines, covered in our ESRD ICD-10 code guide.
What Is the Difference Between the ESRD PPS Base Rate and the AKI Dialysis Payment Rate?
Under the CY 2027 proposal, both rates are identical at $299.55 per treatment. CMS sets the AKI dialysis payment rate equal to the ESRD PPS base rate each year, then applies the same wage index to both.
How Many ESRD Facilities Does the Proposed Rule Affect?
CMS projects the proposed rule affects approximately 7,600 ESRD facilities nationwide, covering an estimated $6.2 billion in Medicare payments for CY 2027.
The CY 2027 ESRD PPS proposed rule reshapes payment rates, outlier thresholds, and quality measures across the dialysis care continuum. Nephrology practices that build these proposed changes into their billing workflows now enter the final rule period with fewer surprises and cleaner claims.
