[Federal Register Volume 86, Number 213 (Monday, November 8, 2021)]
[Rules and Regulations]
[Pages 61874-62026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23907]



[[Page 61873]]

Vol. 86

Monday,

No. 213

November 8, 2021

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 412, 413, and 512





Medicare Program; End-Stage Renal Disease Prospective Payment System, 
Payment for Renal Dialysis Services Furnished to Individuals With Acute 
Kidney Injury, End-Stage Renal Disease Quality Incentive Program, and 
End-Stage Renal Disease Treatment Choices Model; Final Rule

  Federal Register / Vol. 86 , No. 213 / Monday, November 8, 2021 / 
Rules and Regulations  

[[Page 61874]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 413, and 512

[CMS-1749-F]
RIN 0938-AU39


Medicare Program; End-Stage Renal Disease Prospective Payment 
System, Payment for Renal Dialysis Services Furnished to Individuals 
With Acute Kidney Injury, End-Stage Renal Disease Quality Incentive 
Program, and End-Stage Renal Disease Treatment Choices Model

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This final rule updates the End-Stage Renal Disease (ESRD) 
Prospective Payment System (PPS) for calendar year (CY) 2022. This rule 
also updates the payment rate for renal dialysis services furnished by 
an ESRD facility to individuals with acute kidney injury (AKI). In 
addition, this rule updates requirements for the ESRD Quality Incentive 
Program (QIP), including a measure suppression policy for the duration 
of the coronavirus disease 2019 (COVID-19) public health emergency 
(PHE) as well as suppression of individual ESRD QIP measures for 
Payment Year (PY) 2022 under the measure suppression policy. This rule 
also finalizes that CMS will not score facilities or reduce payment to 
any facility under the ESRD QIP in PY 2022. Further, this rule 
finalizes changes to the ESRD Treatment Choices (ETC) Model, which is a 
mandatory payment model that is focused on encouraging greater use of 
home dialysis and kidney transplants, to reduce Medicare expenditures 
while preserving or enhancing the quality of care furnished to Medicare 
beneficiaries.

DATES: These regulations are effective on January 1, 2022.

FOR FURTHER INFORMATION CONTACT: 
    [email protected], for issues related to the ESRD PPS and 
coverage and payment for renal dialysis services furnished to 
individuals with AKI.
    [email protected], for issues related to the 
Transitional Add-On Payment Adjustment for New and Innovative Equipment 
and Supplies (TPNIES).
    Delia Houseal, (410) 786-2724, for issues related to the ESRD QIP.
    [email protected], for issues related to the ESRD Treatment 
Choices (ETC) Model.

SUPPLEMENTARY INFORMATION: Current Procedural Terminology (CPT) 
Copyright Notice: Throughout this final rule, we use CPT[supreg] codes 
and descriptions to refer to a variety of services. We note that 
CPT[supreg] codes and descriptions are copyright 2020 American Medical 
Association (AMA). All Rights Reserved. CPT[supreg] is a registered 
trademark of the AMA. Applicable Federal Acquisition Regulations (FAR) 
and Defense Federal Acquisition Regulations (DFAR) apply.

Table of Contents

    To assist readers in referencing sections contained in this 
preamble, we are providing a Table of Contents.

I. Executive Summary
    A. Purpose
    B. Summary of the Major Provisions
    C. Summary of Cost and Benefits
II. Calendar Year (CY) 2022 End-Stage Renal Disease (ESRD) 
Prospective Payment System (PPS)
    A. Background
    B. Provisions of the Proposed Rule, Public Comments, and 
Responses to the Comments on the CY 2022 ESRD PPS
    C. Transitional Add-On Payment Adjustment for New and Innovative 
Equipment and Supplies (TPNIES) for CY 2022 Payment
III. Calendar Year (CY) 2022 Payment for Renal Dialysis Services 
Furnished to Individuals With Acute Kidney Injury (AKI)
    A. Background
    B. Summary of the Proposed Provisions, Public Comments, and 
Responses to Comments on the CY 2022 Payment for Renal Dialysis 
Services Furnished to Individuals With AKI
    C. Annual Payment Rate Update for CY 2022
IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
    A. Background
    B. Extraordinary Circumstances Exception (ECE) Previously 
Granted for the ESRD QIP Including Notification of ECE Due to ESRD 
Quality Reporting System Issues
    C. Flexibilities for the ESRD QIP in Response to the COVID-19 
PHE
    D. Special Scoring Methodology and Payment Policy for the PY 
2022 ESRD QIP
    E. Updates to Requirements Beginning With the PY 2024 ESRD QIP
    F. Updates for the PY 2025 ESRD QIP
    G. Requests for Information (RFIs) on Topics Relevant to ESRD 
QIP
V. End-Stage Renal Disease Treatment Choices (ETC) Model
    A. Background
    B. Summary of the Proposed Provisions, Public Comments, and 
Responses to Comments on the ETC Model
    C. Requests for Information (RFIs) on Topics Relevant to ETC 
Model
VI. Requests for Information
    A. Informing Payment Reform Under the ESRD PPS
    B. Public Input to the ESRD PPS RFI Topics
    C. Response to the Public Input for the CY 2022 ESRD PPS RFIs
VII. Collection of Information Requirements
    A. Legislative Requirement for Solicitation of Comments
    B. Requirements in Regulation Text
    C. Additional Information Collection Requirements
VIII. Regulatory Impact Analysis
    A. Impact Analyses
    B. Overall Impact
    C. Detailed Economic Analysis
    D. Accounting Statement
    E. Regulatory Flexibility Act Analysis (RFA)
    F. Unfunded Mandates Reform Act Analysis (UMRA)
    G. Federalism
    H. Congressional Review Act
IX. Files Available to the Public via the Internet
Regulations Text

I. Executive Summary

A. Purpose

    This rule finalizes changes related to the End-Stage Renal Disease 
(ESRD) Prospective Payment System (PPS), payment for renal dialysis 
services furnished to individuals with acute kidney injury (AKI), the 
ESRD Quality Incentive Program (QIP), and the ESRD Treatment Choices 
(ETC) Model.
1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)
    On January 1, 2011, we implemented the End-Stage Renal Disease 
(ESRD) Prospective Payment System (PPS), a case-mix adjusted, bundled 
PPS for renal dialysis services furnished by ESRD facilities as 
required by section 1881(b)(14) of the Social Security Act (the Act), 
as added by section 153(b) of the Medicare Improvements for Patients 
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275). Section 
1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA, and 
amended by section 3401(h) of the Patient Protection and Affordable 
Care Act (the Affordable Care Act) (Pub. L. 111-148), established that 
beginning calendar year (CY) 2012, and each subsequent year, the 
Secretary of the Department of Health and Human Services (the 
Secretary) shall annually increase payment amounts by an ESRD market 
basket increase factor, reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act. This rule 
updates the ESRD PPS for CY 2022.

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2. Coverage and Payment for Renal Dialysis Services Furnished to 
Individuals With Acute Kidney Injury (AKI)
    On June 29, 2015, the President signed the Trade Preferences 
Extension Act of 2015 (TPEA) (Pub. L. 114-27). Section 808(a) of the 
TPEA amended section 1861(s)(2)(F) of the Act to provide coverage for 
renal dialysis services furnished on or after January 1, 2017, by a 
renal dialysis facility or a provider of services paid under section 
1881(b)(14) of the Act to an individual with acute kidney injury (AKI). 
Section 808(b) of the TPEA amended section 1834 of the Act by adding a 
new subsection (r) that provides for payment for renal dialysis 
services furnished by renal dialysis facilities or providers of 
services paid under section 1881(b)(14) of the Act to individuals with 
AKI at the ESRD PPS base rate beginning January 1, 2017. This rule 
updates the AKI payment rate for CY 2022.
3. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
    The End-Stage Renal Disease Quality Incentive Program (ESRD QIP) is 
authorized by section 1881(h) of the Act. The Program fosters improved 
patient outcomes by establishing incentives for dialysis facilities to 
meet or exceed performance standards established by the Centers for 
Medicare & Medicaid Services (CMS). This rule finalizes our proposals 
to suppress the use of certain ESRD QIP measure data for scoring and 
payment adjustment purposes in the PY 2022 ESRD QIP because we have 
determined that circumstances caused by the Public Health Emergency 
(PHE) for the coronavirus disease 2019 (COVID-19) pandemic have 
significantly affected the validity and reliability of the measures and 
resulting performance scores, as well as special scoring and payment 
policies for PY 2022. We are also finalizing our proposal to update the 
specifications for the SHR clinical measure beginning with the PY 2024 
ESRD QIP. We are also finalizing our proposal to use CY 2019 data to 
calculate the PY 2024 ESRD QIP performance standards. This final rule 
further describes policies that will apply for PY 2025. Finally, this 
final rule describes several requests for information that also 
appeared in the CY 2022 ESRD PPS proposed rule. These requests for 
information solicited stakeholder feedback on several important topics, 
including strategies that we can use to address the gap in existing 
health inequities, the addition of COVID-19 vaccination measures in 
future rulemaking, and the use of digital quality measurement.
4. End-Stage Renal Disease Treatment Choices (ETC) Model
    This rule finalizes changes to the End-Stage Renal Disease (ESRD) 
Treatment Choices Model (ETC) Model, a mandatory Medicare payment model 
tested under the authority of section 1115A of the Act. The ETC Model 
is operated by the Center for Medicare and Medicaid Innovation 
(Innovation Center), and tests the use of payment adjustments to 
encourage greater utilization of home dialysis and kidney transplants, 
in order to preserve or enhance the quality of care furnished to 
Medicare beneficiaries while reducing Medicare expenditures. The ETC 
Model includes ESRD facilities and certain clinicians caring for 
beneficiaries with ESRD--or Managing Clinicians--located in Selected 
Geographic Areas as participants.
    The ETC Model was finalized as part of a final rule published in 
the Federal Register on September 29, 2020, titled, ``Medicare Program; 
Specialty Care Models to Improve Quality of Care and Reduce 
Expenditures'' (85 FR 61114), referred to herein as the ``Specialty 
Care Models final rule.'' The ETC Model is designed to test the 
effectiveness of adjusting certain Medicare payments to ETC 
Participants (ESRD facilities and Managing Clinicians--clinicians who 
furnish and bill the Monthly Capitation Payment (MCP) for managing ESRD 
Beneficiaries--who have been selected to participate in the ETC Model) 
to encourage greater utilization of home dialysis and kidney 
transplantation, support beneficiary modality choice, reduce Medicare 
expenditures, and preserve or enhance the quality of care. In the 
Specialty Care Models final rule, we established that the ETC Model 
adjusts payments for home dialysis and home dialysis-related claims 
with claim service dates from January 1, 2021 through December 31, 2023 
through the Home Dialysis Payment Adjustment (HDPA). We are assessing 
the rates of home dialysis and of kidney transplant waitlisting and 
living donor transplantation, among beneficiaries attributed to ETC 
Participants during the period beginning January 1, 2021, and ending 
June 30, 2026. Based on those rates, we are applying the Performance 
Payment Adjustment (PPA) to claims for dialysis and dialysis-related 
services with claim service dates beginning July 1, 2022, and ending 
June 30, 2027. We codified these provisions in a new subpart of the 
Code of Federal Regulations (CFR) 42 CFR part 512, subpart C.
    This final rule includes modifications to the ETC Model, including 
changes to the home dialysis rate and transplant rate, the PPA 
achievement benchmarking methodology, and the PPA improvement 
benchmarking and scoring methodology. We are also adding processes and 
requirements for ETC Participants to receive certain data from CMS and 
including certain additional waivers and flexibilities as part of the 
ETC Model test.

B. Summary of the Major Provisions

1. ESRD PPS
     Update to the ESRD PPS base rate for CY 2022: The final CY 
2022 ESRD PPS base rate is $257.90. This amount reflects the 
application of the wage index budget-neutrality adjustment factor 
(0.99985) and a productivity-adjusted market basket increase of 1.9 
percent as required by section 1881(b)(14)(F)(i)(I) of the Act, 
equaling $257.90 (($253.13 x 0.99985) x 1.019 = $257.90).
     Annual update to the wage index: We adjust wage indices on 
an annual basis using the most current hospital wage data and the 
latest core-based statistical area (CBSA) delineations to account for 
differing wage levels in areas in which ESRD facilities are located. 
For CY 2022, we are updating the wage index values based on the latest 
available data and continuing the 2-year transition to the Office of 
Management and Budget (OMB) delineations as described in the September 
14, 2018 OMB Bulletin No. 18-04.
     Update to the outlier policy: We are updating the outlier 
policy using the most current data, as well as updating the outlier 
services fixed-dollar loss (FDL) amounts for adult and pediatric 
patients and Medicare allowable payment (MAP) amounts for adult and 
pediatric patients for CY 2022 using CY 2020 claims data. Based on the 
use of the latest available data, the final FDL amount for pediatric 
beneficiaries will decrease from $44.78 to $26.02, and the MAP amount 
will decrease from $30.88 to $27.15, as compared to CY 2021 values. For 
adult beneficiaries, the final FDL amount will decrease from $122.49 to 
$75.39, and the MAP amount will decrease from $50.92 to $42.75. The 1.0 
percent target for outlier payments was not achieved in CY 2020. 
Outlier payments represented approximately 0.6 percent of total 
payments rather than 1.0 percent.
     Update to the offset amount for the transitional add-on 
payment adjustment for new and innovative equipment and supplies 
(TPNIES) for CY 2022: The

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final CY 2022 average per treatment offset amount for the transitional 
add-on payment adjustment for new and innovative equipment and supplies 
(TPNIES) for capital-related assets that are home dialysis machines is 
$9.50. This offset amount reflects the application of the productivity-
adjusted market basket increase of 1.9 percent ($9.32 x 1.019 = $9.50).
     TPNIES applications received for CY 2022: In this final 
rule, we announce our determination on the one TPNIES application under 
consideration for the TPNIES for CY 2022 payment.
2. Payment for Renal Dialysis Services Furnished to Individuals With 
AKI
    We are updating the AKI payment rate for CY 2022. The final CY 2022 
payment rate is $257.90, which is the same as the base rate finalized 
under the ESRD PPS for CY 2022.
3. ESRD QIP
    We are adopting a measure suppression policy for the duration of 
the COVID-19 PHE that enables us to suppress the use of one or more 
measures in the ESRD QIP for scoring and payment adjustment purposes if 
we determine that circumstances caused by the COVID-19 PHE have 
significantly affected the measures and resulting performance scores. 
We are also finalizing our proposal to suppress the Standardized 
Hospitalization Ratio (SHR) clinical measure, the Standardized 
Readmission Ratio (SRR) clinical measure, the In-Center Hemodialysis 
Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) 
clinical measure, and the Long-Term Catheter Rate clinical measure for 
PY 2022 under the measure suppression policy. We are also finalizing 
our proposal to not score or reduce payment to any facility in PY 2022. 
We are finalizing our proposal to update the specifications for the SHR 
clinical measure beginning with the PY 2024 ESRD QIP. We are also 
finalizing our proposal for the PY 2024 ESRD QIP to use CY 2019 data to 
calculate the performance standards for that payment year. This final 
rule also announces the performance standards and estimated payment 
reductions that will apply for PY 2024. This final rule describes 
several policies continuing for PY 2025, but does not include any new 
requirements beginning with the PY 2025 ESRD QIP.
    This final rule includes public comments received in response to 
requests for information that appeared in the CY 2022 ESRD PPS proposed 
rule. In those requests for information, we solicited stakeholder 
feedback on several important topics, including closing the gap in 
health equity, adding a COVID-19 vaccination measure for health care 
personnel (HCP) to the ESRD QIP measure set in future rulemaking, 
adding a COVID-19 vaccination measure for ESRD patients to the ESRD QIP 
measure set in future rulemaking, and potential actions and priority 
areas that would enable us to continue moving toward a greater digital 
capture of data and use of the Fast Healthcare Interoperability 
Resources (FHIR[supreg]) standard in quality measurement.
4. ETC Model
    We are implementing the following changes to the ETC Model 
beginning for the third Measurement Year (MY3) of the Model, which 
begins January 1, 2022.
     Beneficiary Attribution for Living Kidney Donor 
Transplants: To better reflect the care relationship between 
beneficiaries who receive pre-emptive living donor transplants (LDT) 
and the Managing Clinicians who provide their care, we are modifying 
the methodology for attributing Pre-emptive LDT Beneficiaries to 
Managing Clinicians, such that a Pre-emptive LDT Beneficiary will be 
attributed to the Managing Clinician who submitted the most claims for 
services furnished to the beneficiary during the 365 days prior to the 
transplant date.
     Home Dialysis Rate Calculation: To incentivize additional 
alternative renal replacement modalities under the ETC Model, we are 
adding nocturnal in-center dialysis to the calculation of the home 
dialysis rate for ESRD facilities and Managing Clinicians.
     Transplant Rate Beneficiary Exclusion: To better align 
with common reasons transplant centers do not place patients on the 
transplant waitlist, we are excluding beneficiaries with a diagnosis 
of, and who are receiving treatment with chemotherapy or radiation for, 
vital solid organ cancers from the calculation of the transplant rate.
     Performance Payment Adjustment Achievement Benchmarking 
Methodology: When we originally finalized the ETC Model, we stated our 
intent to increase achievement benchmarks above rates observed in 
Comparison Geographic Areas for future model years. As such, we will 
increase achievement benchmarks by 10 percent over rates observed in 
Comparison Geographic Areas every two MYs, beginning in MY3 (2022). We 
also will stratify achievement benchmarks based on the proportion of 
attributed beneficiaries who are dually-eligible for Medicare and 
Medicaid or receive the Low Income Subsidy (LIS) during the MY, in 
recognition that beneficiaries with lower socioeconomic status have 
lower rates of home dialysis and transplant than those with higher 
socioeconomic status.
     Performance Payment Adjustment Improvement Benchmarking 
and Scoring: In conjunction with the stratification of the achievement 
benchmarks based on the proportion of beneficiaries who are dual-
eligible or LIS recipients, we will introduce the Health Equity 
Incentive to the improvement scoring methodology used in calculating 
the PPA. CMS expects that the Health Equity Incentive will encourage 
ETC Participants to decrease disparities in renal replacement modality 
choice among beneficiaries with lower socioeconomic status by rewarding 
ETC Participants that demonstrate significant improvement in the home 
dialysis rate or transplant rate among their attributed beneficiaries 
who are dual-eligible or LIS recipients. We also will adjust the 
improvement scoring calculation to avoid the scenario where an ETC 
Participant cannot receive an improvement score because its home 
dialysis rate or transplant rate was zero during the Benchmark Year.
     Performance Payment Adjustment Reports and Related Data 
Sharing: To ensure that ETC Participants have timely access to ETC 
Model reports, we are establishing a process under which CMS will share 
certain model data with ETC Participants.
     Medicare Waivers: We are including an additional 
programmatic waiver to provide Managing Clinicians who are ETC 
Participants additional flexibility in furnishing the kidney disease 
patient education services described in Sec.  410.48, namely a waiver 
of certain telehealth requirements as necessary solely for purposes of 
allowing ETC Participants to furnish kidney disease patient education 
services via telehealth under the ETC Model to take effect at the end 
of the COVID-19 PHE.
     Kidney Disease Patient Education Services Coinsurance 
Waivers: We will permit Managing Clinicians who are ETC Participants to 
reduce or waive the beneficiary coinsurance for kidney disease patient 
education services, subject to certain requirements. We have made the 
determination that the anti-kickback statute safe harbor for CMS-
sponsored model patient incentives (42 CFR 1001.952(ii)(2)), will be 
available to protect the reduction or elimination of coinsurance that 
is made in compliance with our policy.

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C. Summary of Costs and Benefits

    In section VIII.C.5 of this final rule, we set forth a detailed 
analysis of the impacts that the changes will have on affected entities 
and beneficiaries. The impacts include the following:
1. Impacts of the Final ESRD PPS
    The impact table in section VIII.C.5.a of this final rule displays 
the estimated change in payments to ESRD facilities in CY 2022 compared 
to estimated payments in CY 2021. The overall impact of the CY 2022 
changes is projected to be a 2.5 percent increase in payments. 
Hospital-based ESRD facilities have an estimated 3.3 percent increase 
in payments compared with freestanding facilities with an estimated 2.5 
percent increase. We estimate that the aggregate ESRD PPS expenditures 
will increase by approximately $290 million in CY 2022 compared to CY 
2021. This reflects a $220 million increase from the payment rate 
update, a $70 million increase due to the updates to the outlier 
threshold amounts, and approximately $2.5 million in estimated TPNIES 
payment amounts, as further described in the next paragraph. Because of 
the projected 2.5 percent overall payment increase, we estimate there 
will be an increase in beneficiary coinsurance payments of 2.5 percent 
in CY 2022, which translates to approximately $60 million.
    Section 1881(b)(14)(D)(iv) of the Act provides that the ESRD PPS 
may include such other payment adjustments as the Secretary determines 
appropriate. Under this authority, CMS implemented Sec.  413.236 to 
establish the TPNIES, a transitional add-on payment adjustment for new 
and innovative equipment and supplies, which is not budget neutral. As 
discussed in section II.C.1.a. of this final rule, we have determined 
that the Tablo[supreg] System, a hemodialysis machine that has FDA 
authorization for home use, has met the criteria for the TPNIES for CY 
2022 payment. We estimate that the overall TPNIES payment amounts in CY 
2022 would be approximately $2.5 million, of which, approximately 
$490,000 would be attributed to beneficiary coinsurance amounts.
2. Impacts of the Final Payment for Renal Dialysis Services Furnished 
to Individuals With AKI
    The impact table in section VIII.C.5.b of this final rule displays 
the estimated change in payments to ESRD facilities in CY 2022 compared 
to estimated payments in CY 2021. The overall impact of the CY 2022 
changes is projected to be a 1.9 percent increase in payments for 
individuals with AKI. Hospital-based ESRD facilities have an estimated 
2.0 percent increase in payments compared with freestanding ESRD 
facilities with an estimated 1.9 percent increase. The overall impact 
reflects the effects of the updated wage index and the final payment 
rate update. We estimate that the aggregate payments made to ESRD 
facilities for renal dialysis services furnished to patients with AKI, 
at the final CY 2022 ESRD PPS base rate, will increase by $1 million in 
CY 2022 compared to CY 2021.
3. Impacts of the ESRD QIP
    Our finalized policy to suppress measures for the PY 2022 ESRD QIP 
and to revise the scoring and payment methodology such that no facility 
will receive a payment reduction necessitated a modification to our 
previous estimated overall economic impact of the PY 2022 ESRD QIP (84 
FR 60651). In the CY 2020 ESRD PPS final rule, we estimated that the 
overall economic impact of the PY 2022 ESRD QIP would be approximately 
$229 million as a result of the policies we had finalized at that time. 
The $229 million figure for PY 2022 included costs associated with the 
collection of information requirements, which we estimated would be 
approximately $211 million, and $18 million in estimated payment 
reductions across all facilities. However, as a result of the policies 
we are finalizing in this final rule for the PY 2022 ESRD QIP, we are 
modifying our previous estimate for PY 2022. We estimate that the new 
overall economic impact of the PY 2022 ESRD QIP will be approximately 
$215 million. The $215 million figure for PY 2022 only includes the 
costs associated with the collection of information requirements 
because there will be no payment reductions in PY 2022. We estimate 
that the overall economic impact of the PY 2024 ESRD QIP will be 
approximately $232 million, of which $215 million is associated with 
the collection of information requirements and $17 million is 
associated with the estimated payment reductions across all facilities. 
We also estimate that the overall economic impact of the PY 2025 ESRD 
QIP will be approximately $232 million.
4. Impacts of Changes to the ETC Model
    The impact estimate in section VIII.B.4 of this final rule 
describes the estimated change in anticipated Medicare program savings 
arising from the ETC Model over the duration of the ETC Model as a 
result of the changes in this final rule. We estimate that the ETC 
Model will result in $28 million in net savings over the 6.5-year 
duration of the ETC Model. We also estimate that $5 million of the 
estimated $28 million in net savings will be attributable to changes in 
this final rule.

II. Calendar Year (CY) 2022 End-Stage Renal Disease (ESRD) Prospective 
Payment System (PPS)

A. Background

1. Statutory Background
    On January 1, 2011, the Centers for Medicare & Medicaid Services 
(CMS) implemented the End-Stage Renal Disease (ESRD) Prospective 
Payment System (PPS), a case-mix adjusted bundled PPS for renal 
dialysis services furnished by ESRD facilities, as required by section 
1881(b)(14) of the Social Security Act (the Act), as added by section 
153(b) of the Medicare Improvements for Patients and Providers Act of 
2008 (MIPPA). Section 1881(b)(14)(F) of the Act, as added by section 
153(b) of MIPPA and amended by section 3401(h) of the Patient 
Protection and Affordable Care Act (the Affordable Care Act), 
established that beginning with CY 2012, and each subsequent year, the 
Secretary of the Department of Health and Human Services (the 
Secretary) shall annually increase payment amounts by an ESRD market 
basket increase factor reduced by the productivity adjustment described 
in section 1886(b)(3)(B)(xi)(II) of the Act.
    Section 632 of the American Taxpayer Relief Act of 2012 (ATRA) 
(Pub. L. 112-240) included several provisions that apply to the ESRD 
PPS. Section 632(a) of ATRA added section 1881(b)(14)(I) to the Act, 
which required the Secretary, by comparing per patient utilization data 
from 2007 with such data from 2012, to reduce the single payment for 
renal dialysis services furnished on or after January 1, 2014 to 
reflect the Secretary's estimate of the change in the utilization of 
ESRD-related drugs and biologicals (excluding oral-only ESRD-related 
drugs). Consistent with this requirement, in the CY 2014 ESRD PPS final 
rule we finalized $29.93 as the total drug utilization reduction and 
finalized a policy to implement the amount over a 3- to 4-year 
transition period (78 FR 72161 through 72170).
    Section 632(b) of ATRA prohibited the Secretary from paying for 
oral-only ESRD-related drugs and biologicals under the ESRD PPS prior 
to January 1, 2016. Section 632(c) of ATRA required the Secretary, by 
no later than January 1, 2016, to analyze the case-mix payment 
adjustments under section 1881(b)(14)(D)(i) of the Act and make

[[Page 61878]]

appropriate revisions to those adjustments.
    On April 1, 2014, the Protecting Access to Medicare Act of 2014 
(PAMA) (Pub. L. 113-93) was enacted. Section 217 of PAMA included 
several provisions that apply to the ESRD PPS. Specifically, sections 
217(b)(1) and (2) of PAMA amended sections 1881(b)(14)(F) and (I) of 
the Act and replaced the drug utilization adjustment that was finalized 
in the CY 2014 ESRD PPS final rule (78 FR 72161 through 72170) with 
specific provisions that dictated the market basket update for CY 2015 
(0.0 percent) and how the market basket should be reduced in CY 2016 
through CY 2018.
    Section 217(a)(1) of PAMA amended section 632(b)(1) of ATRA to 
provide that the Secretary may not pay for oral-only ESRD-related drugs 
under the ESRD PPS prior to January 1, 2024. Section 217(a)(2) of PAMA 
further amended section 632(b)(1) of ATRA by requiring that in 
establishing payment for oral-only drugs under the ESRD PPS, the 
Secretary must use data from the most recent year available. Section 
217(c) of PAMA provided that as part of the CY 2016 ESRD PPS 
rulemaking, the Secretary shall establish a process for (1) determining 
when a product is no longer an oral-only drug; and (2) including new 
injectable and intravenous products into the ESRD PPS bundled payment.
    Finally, on December 19, 2014, the President signed the Stephen 
Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. 
L. 113-295). Section 204 of ABLE amended section 632(b)(1) of ATRA, as 
amended by section 217(a)(1) of PAMA, to provide that payment for oral-
only renal dialysis services cannot be made under the ESRD PPS bundled 
payment prior to January 1, 2025.
2. System for Payment of Renal Dialysis Services
    Under the ESRD PPS, a single per-treatment payment is made to an 
ESRD facility for all the renal dialysis services defined in section 
1881(b)(14)(B) of the Act and furnished to individuals for the 
treatment of ESRD in the ESRD facility or in a patient's home. We have 
codified our definition of renal dialysis services at Sec.  413.171, 
which is in 42 CFR part 413, subpart H, along with other ESRD PPS 
payment policies. The ESRD PPS base rate is adjusted for 
characteristics of both adult and pediatric patients and accounts for 
patient case-mix variability. The adult case-mix adjusters include five 
categories of age, body surface area, low body mass index, onset of 
dialysis, and four comorbidity categories (that is, pericarditis, 
gastrointestinal tract bleeding, hereditary hemolytic or sickle cell 
anemia, myelodysplastic syndrome). A different set of case-mix 
adjusters are applied for the pediatric population. Pediatric patient-
level adjusters include two age categories (under age 22, or age 22-26) 
and two dialysis modalities (that is, peritoneal or hemodialysis) 
(Sec.  413.235(a) and (b)).
    The ESRD PPS provides for three facility-level adjustments. The 
first payment adjustment accounts for ESRD facilities furnishing a low 
volume of dialysis treatments (Sec.  413.232). The second adjustment 
reflects differences in area wage levels developed from core-based 
statistical areas (CBSAs) (Sec.  413.231). The third payment adjustment 
accounts for ESRD facilities furnishing renal dialysis services in a 
rural area (Sec.  413.233).
    There are four additional payment adjustments under the ESRD PPS. 
The ESRD PPS provides adjustments, when applicable, for: (1) A training 
add-on for home and self-dialysis modalities (Sec.  413.235(c)); (2) an 
additional payment for high cost outliers due to unusual variations in 
the type or amount of medically necessary care (Sec.  413.237); (3) a 
transitional drug add-on payment adjustment (TDAPA) for certain new 
renal dialysis drugs and biological products (Sec.  413.234(c)); and 
(4) a transitional add-on payment adjustment for new and innovative 
equipment and supplies (TPNIES) for certain qualifying, new and 
innovative renal dialysis equipment and supplies (Sec.  413.236(d)).
3. Updates to the ESRD PPS
    Policy changes to the ESRD PPS are proposed and finalized annually 
in the Federal Register. The CY 2011 ESRD PPS final rule was published 
on August 12, 2010 in the Federal Register (75 FR 49030 through 49214). 
That rule implemented the ESRD PPS beginning on January 1, 2011 in 
accordance with section 1881(b)(14) of the Act, as added by section 
153(b) of MIPPA, over a 4-year transition period. Since the 
implementation of the ESRD PPS, we have published annual rules to make 
routine updates, policy changes, and clarifications.
    On November 9, 2020, we published a final rule in the Federal 
Register titled, ``Medicare Program; End-Stage Renal Disease 
Prospective Payment System, Payment for Renal Dialysis Services 
Furnished to Individuals With Acute Kidney Injury, and End-Stage Renal 
Disease Quality Incentive Program,'' referred to herein as the ``CY 
2021 ESRD PPS final rule''. In that rule, we updated the ESRD PPS base 
rate, wage index, and outlier policy, for CY 2021. We also finalized an 
update to the ESRD PPS wage index to adopt the 2018 OMB delineations 
with a transition period, changes to the eligibility criteria and 
determination process for the TPNIES, an expansion of the TPNIES to 
include certain new and innovative capital-related assets that are home 
dialysis machines, an addition to the ESRD PPS base rate to include 
calcimimetics in the ESRD PPS bundled payment, and a change to the low-
volume payment adjustment eligibility criteria and attestation 
requirement to account for the coronavirus disease 2019 (COVID-19) 
Public Health Emergency (PHE). For further detailed information 
regarding these updates, see 85 FR 71398.

B. Provisions of the Proposed Rule, Public Comments, and Responses to 
the Comments on the CY 2022 ESRD PPS

    The proposed rule, titled ``Medicare Program; End-Stage Renal 
Disease Prospective Payment System, Payment for Renal Dialysis Services 
Furnished to Individuals With Acute Kidney Injury, End-Stage Renal 
Disease Quality Incentive Program, and End-Stage Renal Disease 
Treatment Choices Model'' (86 FR 36322 through 36437), referred to as 
the ``CY 2022 ESRD PPS proposed rule,'' was published in the Federal 
Register on July 9, 2021, with a comment period that ended on August 
31, 2021. In that proposed rule, we proposed to make a number of annual 
updates for CY 2022, including updates to the ESRD PPS base rate, wage 
index, outlier policy, and the offset amount for TPNIES for capital-
related assets that are home dialysis machines used in the home. The 
proposed rule presented a summary of the two CY 2022 TPNIES 
applications that we received by the February 1, 2021 deadline and our 
analysis of the applicants' claims related to substantial clinical 
improvement (SCI) and other eligibility criteria for the TPNIES.
    We received 286 public comments on our proposals, including 
comments from kidney and dialysis organizations, such as large and 
small dialysis organizations, for-profit and non-profit ESRD 
facilities, ESRD networks, and a dialysis coalition. We also received 
comments from patients; healthcare providers for adult and pediatric 
ESRD beneficiaries; home dialysis services and advocacy organizations; 
provider and legal advocacy organizations; administrators and insurance 
groups; a non-profit dialysis association, a professional association, 
and alliances for kidney care and home dialysis stakeholders; drug and 
device manufacturers; health care systems; a

[[Page 61879]]

health solutions company; and the Medicare Payment Advisory Commission 
(MedPAC).
    In this final rule, we provide a summary of each proposed 
provision, a summary of the public comments received and our responses 
to them, and the policies we are finalizing for the CY 2022 ESRD PPS.
1. CY 2022 ESRD PPS Update
a. CY 2022 ESRD Bundled (ESRDB) Market Basket Update, Productivity 
Adjustment, and Labor-Related Share
    In accordance with section 1881(b)(14)(F)(i) of the Act, as added 
by section 153(b) of MIPPA and amended by section 3401(h) of the 
Affordable Care Act, beginning in 2012, the ESRD PPS payment amounts 
are required to be annually increased by an ESRD market basket increase 
factor and reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act. The application of the productivity 
adjustment may result in the increase factor being less than 0.0 
percent for a year and may result in payment rates for a year being 
less than the payment rates for the preceding year. The statute also 
provides that the market basket increase factor should reflect the 
changes over time in the prices of an appropriate mix of goods and 
services used to furnish renal dialysis services.
    As required under section 1881(b)(14)(F)(i) of the Act, CMS 
developed an all-inclusive ESRD Bundled (ESRDB) input price index (75 
FR 49151 through 49162). In the CY 2015 ESRD PPS final rule, we rebased 
and revised the ESRDB input price index to reflect a 2012 base year (79 
FR 66129 through 66136). Subsequently, in the CY 2019 ESRD PPS final 
rule, we finalized a rebased ESRDB input price index to reflect a 2016 
base year (83 FR 56951 through 56962).
    Although ``market basket'' technically describes the mix of goods 
and services used for ESRD treatment, this term is also commonly used 
to denote the input price index (that is, cost categories, their 
respective weights, and price proxies combined) derived from a market 
basket. Accordingly, the term ``ESRDB market basket,'' as used in this 
document, refers to the ESRDB input price index.
    We proposed to use the CY 2016-based ESRDB market basket as 
finalized and described in the CY 2019 ESRD PPS final rule (83 FR 56951 
through 56962) to compute the CY 2022 ESRDB market basket increase 
factor based on the best available data. Consistent with historical 
practice, we proposed to estimate the ESRDB market basket update based 
on IHS Global Inc.'s (IGI's) forecast using the most recently available 
data. IGI is a nationally recognized economic and financial forecasting 
firm with which we contract to forecast the components of the market 
baskets. Using this methodology and the IGI first quarter 2021 forecast 
of the CY 2016-based ESRDB market basket (with historical data through 
the fourth quarter of 2020), the proposed CY 2022 ESRDB market basket 
increase factor was 1.6 percent.
    Under section 1881(b)(14)(F)(i) of the Act, for CY 2012 and each 
subsequent year, the ESRD market basket percentage increase factor 
shall be reduced by the productivity adjustment described in section 
1886(b)(3)(B)(xi)(II) of the Act. The productivity adjustment is 
calculated using a projection of multifactor productivity (MFP), which 
is derived by subtracting the contribution of labor and capital input 
growth from output growth. We finalized the detailed methodology for 
deriving the projection of MFP in the CY 2012 ESRD PPS final rule (76 
FR 40503 through 40504). The most up-to-date MFP projection methodology 
is available on the CMS website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/Downloads/MFPMethodology.pdf. We noted in the 
CY 2022 ESRD PPS proposed rule that for CY 2022 and beyond, we are 
changing the name of this adjustment to refer to it as the productivity 
adjustment, which is the term used in sections 1881(b)(14)(F)(i) and 
1886(b)(3)(B)(xi)(II) of the Act, rather than the multifactor 
productivity or MFP adjustment. This is not a change in policy, as we 
will continue to use the same methodology for deriving the adjustment 
and rely on the same underlying data. Using this methodology and the 
IGI first quarter 2021 forecast, the proposed productivity adjustment 
for CY 2022 (the 10-year moving average of MFP for the period ending CY 
2022) was 0.6 percent.
    As a result of these provisions, the proposed CY 2022 ESRD market 
basket increase factor reduced by the productivity adjustment was 1.0 
percent. The proposed market basket increase factor is calculated by 
starting with the proposed CY 2022 ESRDB market basket percentage 
increase factor of 1.6 percent and reducing it by the proposed 
productivity adjustment (the 10-year moving average of MFP for the 
period ending CY 2022) of 0.6 percent.
    As is our general practice, we proposed that if more recent data 
became available after the publication of the proposed rule and before 
the publication of the final rule (for example, a more recent estimate 
of the CY 2016-based ESRD market basket increase factor or productivity 
adjustment), we would use such data, if appropriate, to determine the 
final CY 2022 market basket update and productivity adjustment in this 
final rule (85 FR 36327).
    We invited public comment on our proposals for the CY 2022 ESRD 
market basket update and productivity adjustment. The following is a 
summary of the public comments received on these proposals and our 
responses.
    Comment: Several commenters encouraged CMS to examine the data 
sources and other elements to ensure that the market basket update 
reflects ESRD facilities' current experience. The commenters stated 
that while they understand CMS must follow the statutory framework for 
the annual market basket update, they believe that the proposed CY 2022 
market basket update appears low given inflation and rising expenses 
including rent and labor. Several commenters expressed that they 
support the proposed ESRD PPS annual payment rate update for CY 2022 
and support the use of more recent data for the market basket update 
and productivity adjustment, if available, to determine the final 
update factors for CY 2022. MedPAC commented that while it recognizes 
that CMS must provide the statutorily mandated payment update of the 
market basket minus the productivity adjustment, the Commission has 
concluded that this increase is not warranted based on their analysis 
of payment adequacy, which includes an assessment of beneficiary 
access, supply of ESRD facilities, and ESRD facilities' access to 
capital, quality, and financial indicators for the sector. MedPAC 
further recommended that Congress should eliminate the update to the 
ESRD PPS base rate for CY 2022.
    Response: We acknowledge the concerns of some of the commenters and 
appreciate the support of some of the commenters regarding the proposed 
ESRD PPS annual payment rate update and use of more recent data to 
determine the market basket and productivity adjustment in 
determination of the final update factor. We also appreciate MedPAC's 
comments but note that the ESRD market basket increase factor is 
mandated by statute. For this final rule, we have incorporated more 
current historical data and revised forecasts provided by IGI that 
factor in expected price and wage pressures. By incorporating the most 
recent estimates available of the market basket update

[[Page 61880]]

and productivity adjustment, we believe these data reflect the best 
available projection of input price inflation faced by ESRD facilities 
for CY 2022, adjusted for economy-wide productivity, which is required 
by statute. As stated previously in this section of the final rule, 
consistent with our proposal to use more recent data, the CY 2022 ESRD 
market basket increase factor is 1.9 percent based on the more recent 
IGI third quarter 2021 forecast.
    Comment: A few commenters noted that while they understand that the 
productivity adjustment is statutorily required, they believe that the 
experience of ESRD facilities argues against the idea that productivity 
can be improved year-over-year.
    Response: We acknowledge the commenters' concerns regarding 
productivity growth at the economy-wide level and its application to 
ESRD facilities. As the commenter acknowledges, however, section 
1881(b)(14)(F)(i) of the Act requires the application of the 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act to the ESRD PPS market basket increase factor for 2012 and 
subsequent years. We will continue to monitor the impact of the payment 
updates, including the effects of the productivity adjustment, on ESRD 
provider margins as well as beneficiary access to care as reported by 
MedPAC.
    Comment: One commenter recommended CMS replace the current price 
proxy for the non-Erythropoietin Stimulating Agents (ESA) 
Pharmaceutical cost weight in the 2016-based ESRD market basket 
Producer Price Index (PPI)--Commodity--Vitamin, nutrient, and hematinic 
preparations) with BLS PPI Commodity Data for Chemicals and Allied 
Products-Drugs and Pharmaceuticals, seasonally adjusted (BLS Series ID: 
WPS063 Series). The commenter further stated that they do not believe 
that the current proxy appropriately captures the price of drugs that 
fall within this category as they are not over-the-counter vitamins but 
prescription-only, synthesized hormones. The commenter also noted that 
there are new drugs under development currently that likely will be 
added to the ESRD PPS bundled payment during the next few years. The 
commenter asserted that an alternative proxy for the non-ESA drugs 
should be based on prescription drugs rather than the current proxy.
    Response: We appreciate the commenter's suggestion and share the 
commenter's desire to use the most appropriate price proxy for non-ESA 
drugs in the ESRD market basket. As described in the CY 2019 ESRD PPS 
final rule (83 FR 56960 through 56961), and in the CY 2021 ESRD PPS 
final rule (85 FR 71428), we believe the PPI for Vitamins, Nutrients, 
and Hematinic Preparation (VNHP) is the most appropriate price proxy 
for non-ESA drugs and analysis of the Average Sales Price (ASP) data 
for Non-ESA drugs in the ESRD PPS bundled payment suggests the trends 
in the PPI VNHP trends are reasonable. We appreciate the commenter's 
concern about the potential shifts in the mix of drugs within the ESRD 
PPS bundled payment as new drugs enter the market. We will continue to 
monitor the impact that these changes have on the relative cost share 
weights and the mix of Non-ESA drugs included in the ESRD PPS bundled 
payment in the ESRDB market basket, and propose changes if appropriate 
in future rulemaking.
    Final Rule Action: After considering the public comments, 
consistent with our historical practice and our proposal, we are 
estimating the market basket increase and the productivity adjustment 
based on IGI's forecast using the most recent available data. Based on 
IGI's third quarter 2021 forecast of the 2016-based ESRDB market basket 
with historical data through the second quarter of 2021, the 2016-based 
ESRDB market basket update for CY 2022 is 2.4 percent. IGI's 2021 third 
quarter forecast reflects a higher CY 2022 inflationary outlook 
compared to IGI's 2021 first quarter forecast, which is resulting in a 
notable upward revision to the CY 2022 ESRD market basket update for 
the CY 2022 ESRD PPS final rule (2.4 percent) compared to the CY 2022 
ESRD PPS proposed rule (1.6 percent). As the economic impacts of the 
COVID-19 pandemic ease, the relatively higher inflation is resulting in 
relatively higher projected growth in wage, medical materials and 
supplies, and capital prices.
    Based on the more recent data available from IGI's third quarter 
2021 forecast, the current estimate of the productivity adjustment for 
CY 2022 (the 10-year moving average of MFP for the period ending CY 
2021) is 0.5 percentage point. Therefore, the final CY 2022 ESRD market 
basket adjusted for the productivity adjustment is projected to be 1.9 
percent (2.4 percent market basket update reduced by 0.5 percentage 
point productivity adjustment).
    For the CY 2022 ESRD PPS payment update, we proposed to continue 
using a labor-related share of 52.3 percent for the ESRD PPS payment, 
which was finalized in the CY 2019 ESRD PPS final rule (83 FR 56963). 
We invited public comment on the proposed labor-related share for CY 
2022. We did not receive any comments on the proposal to continue using 
a labor-related share of 52.3 percent for CY 2022 and, therefore, are 
finalizing the continued use of a 52.3 percent labor-related share as 
proposed.
b. CY 2022 ESRD PPS Wage Indices
(1) Background
    Section 1881(b)(14)(D)(iv)(II) of the Act provides that the ESRD 
PPS may include a geographic wage index payment adjustment, such as the 
index referred to in section 1881(b)(12)(D) of the Act, as the 
Secretary determines to be appropriate. In the CY 2011 ESRD PPS final 
rule (75 FR 49200), we finalized an adjustment for wages at Sec.  
413.231. Specifically, CMS adjusts the labor-related portion of the 
base rate to account for geographic differences in the area wage levels 
using an appropriate wage index, which reflects the relative level of 
hospital wages and wage-related costs in the geographic area in which 
the ESRD facility is located. We use OMB's CBSA-based geographic area 
designations to define urban and rural areas and their corresponding 
wage index values (75 FR 49117). OMB publishes bulletins regarding CBSA 
changes, including changes to CBSA numbers and titles. The bulletins 
are available online at https://www.whitehouse.gov/omb/information-for-agencies/bulletins/.
    For CY 2022, we proposed to update the wage indices to account for 
updated wage levels in areas in which ESRD facilities are located using 
our existing methodology. We use the most recent pre-floor, pre-
reclassified hospital wage data collected annually under the inpatient 
PPS. The ESRD PPS wage index values are calculated without regard to 
geographic reclassifications authorized under sections 1886(d)(8) and 
(d)(10) of the Act and utilize prefloor hospital data that are 
unadjusted for occupational mix. For CY 2022, the updated wage data are 
for hospital cost reporting periods beginning on or after October 1, 
2017, and before October 1, 2018 (fiscal year [FY] 2018 cost report 
data).
    We have also adopted methodologies for calculating wage index 
values for ESRD facilities that are located in urban and rural areas 
where there is no hospital data. For a full discussion, see CY 2011 and 
CY 2012 ESRD PPS final rules at 75 FR 49116 through 49117 and 76 FR 
70239 through 70241, respectively. For urban areas with no hospital 
data, we compute the average wage index value of all urban areas within 
the State to serve as a reasonable

[[Page 61881]]

proxy for the wage index of that urban CBSA, that is, we use that value 
as the wage index. For rural areas with no hospital data, we compute 
the wage index using the average wage index values from all contiguous 
CBSAs to represent a reasonable proxy for that rural area. We apply the 
statewide urban average based on the average of all urban areas within 
the State to Hinesville-Fort Stewart, Georgia (78 FR 72173), and we 
apply the wage index for Guam to American Samoa and the Northern 
Mariana Islands (78 FR 72172).
    A wage index floor value (0.5000) is applied under the ESRD PPS as 
a substitute wage index for areas with very low wage index values. 
Currently, all areas with wage index values that fall below the floor 
are located in Puerto Rico. However, the wage index floor value is 
applicable for any area that may fall below the floor. A description of 
the history of the wage index floor under the ESRD PPS can be found in 
the CY 2019 ESRD PPS final rule (83 FR 56964 through 56967).
    An ESRD facility's wage index is applied to the labor-related share 
of the ESRD PPS base rate. In the CY 2019 ESRD PPS final rule (83 FR 
56963), we finalized a labor-related share of 52.3 percent, which is 
based on the 2016-based ESRDB market basket. In the CY 2021 ESRD PPS 
final rule (85 FR 71436), we updated the OMB delineations as described 
in the September 14, 2018 OMB Bulletin No. 18-04, beginning with the CY 
2021 ESRD PPS wage index. In addition, we finalized the application of 
a 5 percent cap on any decrease in an ESRD facility's wage index from 
the ESRD facility's wage index from the prior CY. We finalized that the 
transition would be phased in over 2 years, such that the reduction in 
an ESRD facility's wage index would be capped at 5 percent in CY 2021, 
and no cap would be applied to the reduction in the wage index for the 
second year, CY 2022. Thus, for CY 2022, the labor-related share to 
which a facility's wage index would be applied is 52.3 percent.
    The comments received on the proposed CY 2022 ESRD PPS wage index 
and our responses to the comments are set forth below.
    Comment: A coalition of dialysis organizations and a professional 
association acknowledged and supported the final phase-in of the 
updated OMB delineations for CY 2022. These commenters, along with 
another large dialysis organization, suggested that CMS consider ways 
to better tailor the ESRD PPS wage index, including using additional 
data beyond the hospital wage data. Another small dialysis organization 
expressed concerns that the ESRD PPS wage index does not keep pace with 
the hospital wage index, and identified several potential changes to 
align the ESRD PPS wage index with the hospital wage index, including 
the application of a statewide rural floor on wage indices, the 
application of different labor-related share percentages for areas with 
wage indices above and below 1, and allowing ESRD facilities to 
reclassify to a different geographic area. Another commenter, a non-
profit kidney care alliance, expressed similar concerns and urged CMS 
to promptly address these disparities between the ESRD PPS wage index 
and the hospital wage index in rulemaking in the near future.
    Response: We thank the commenters for their support, and we 
appreciate the suggestions for improving the ESRD PPS wage index. We 
did not propose changes to the ESRD PPS wage index methodology for CY 
2022, and therefore we are not finalizing any changes to that 
methodology in this final rule. However, we will take these comments 
into consideration to potentially inform future rulemaking.
    Comment: Three commenters, including a large dialysis organization, 
a non-profit health insurance organization in Puerto Rico, and a 
healthcare group in Puerto Rico, commented on the wage index for ESRD 
facilities located in Puerto Rico. These commenters recommended that 
CMS increase the wage index floor from 0.5000 to 0.5500; they noted 
that in the CY 2019 ESRD PPS proposed rule, CMS reported that its own 
analysis indicated that Puerto Rico's wage index likely lies between 
0.5100 and 0.5500. They noted that CMS further stated that any wage 
index values less than 0.5936 are considered outlier values. They 
pointed out that CMS still finalized a floor at 0.50 and characterized 
it as a balance between providing additional payments to affected areas 
while minimizing the impact on the ESRD PPS base rate. The commenters 
also recommended that CMS align the ESRD PPS wage index with the 
hospital wage index by applying to the ESRD PPS wage index the policy 
finalized in the FY 2020 IPPS final rule (84 FR 42326 through 42328) 
that increases the wage index for hospitals with a wage index value 
below the 25th percentile wage index. Two of the commenters further 
suggested that CMS conduct a survey of registered nurse (RN) and health 
worker wages specifically in standalone ESRD facilities in Puerto Rico 
as a means for wage index reform, noting that there is specific 
professional scope of practice standards for technicians in Puerto Rico 
outpatient facilities. Commenters asserted that RNs must provide all 
ESRD care in Puerto Rico outpatient facilities per local scope of 
practice laws, and that CMS should evaluate inpatient and outpatient 
facility data separately in order to get a fully accurate projection of 
wage costs for ESRD providers in Puerto Rico. Another commenter 
recommended that CMS evaluate policy inequities between the ESRD PPS 
wage index for ESRD facilities located in Puerto Rico compared to other 
states and territories, taking into consideration the unique 
circumstances that affect Puerto Rico, including its shortage of 
healthcare specialists and labor work force, remote geography, 
transportation and freighting costs, drug pricing, and lack of 
transitional care services.
    Response: We thank the commenters for sharing their concerns 
regarding the ESRD PPS wage index for ESRD facilities in Puerto Rico 
and their suggestions for wage index reform. As noted in the CY 2018 
ESRD PPS final rule (82 FR 50747) and the CY 2019 ESRD PPS final rule 
(83 FR 56964 through 56967), we have received conflicting information 
from commenters about the local scope of practice for RNs and other 
staff impact on facility costs in Puerto Rico. Since we did not propose 
any changes to the wage index floor or wage index methodology for CY 
2022, we are not finalizing any changes to those policies in this final 
rule. However, we appreciate the concerns that commenters have raised 
and we will take these thoughtful suggestions into account when 
considering future rulemaking.
    Final Rule Action: We are finalizing the CY 2022 ESRD PPS wage 
indices based on the latest hospital wage data as proposed. For CY 
2022, the labor-related share to which a facility's wage index is 
applied is 52.3 percent. As we finalized in the CY 2021 ESRD PPS final 
rule (85 FR 71436), there will be no cap applied to the reduction in 
the ESRD PPS wage index for CY 2022. The final CY 2022 ESRD PPS wage 
index is set forth in Addendum A and is available on the CMS website at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices. Addendum A provides a crosswalk between the CY 2021 wage index 
and the CY 2022 wage index. Addendum B provides an ESRD facility level 
impact analysis. Addendum B is available on the CMS website at https://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-
Stage-

[[Page 61882]]

Renal-Disease-ESRD-Payment-Regulations-and-Notices.
c. CY 2022 Update to the Outlier Policy
    Section 1881(b)(14)(D)(ii) of the Act requires that the ESRD PPS 
include a payment adjustment for high cost outliers due to unusual 
variations in the type or amount of medically necessary care, including 
variability in the amount of erythropoiesis-stimulating agents (ESAs) 
necessary for anemia management. Some examples of the patient 
conditions that may be reflective of higher facility costs when 
furnishing dialysis care would be frailty, obesity, and comorbidities, 
such as secondary hyperparathyroidism. The ESRD PPS recognizes high 
cost patients, and we have codified the outlier policy and our 
methodology for calculating outlier payments at Sec.  413.237.
    The policy provides that the following ESRD outlier items and 
services are included in the ESRD PPS bundle: (1) Renal dialysis drugs 
and biological products that were or would have been, prior to January 
1, 2011, separately billable under Medicare Part B; (2) renal dialysis 
laboratory tests that were or would have been, prior to January 1, 
2011, separately billable under Medicare Part B ; (3) renal dialysis 
medical/surgical supplies, including syringes, used to administer renal 
dialysis drugs and biological products that were or would have been, 
prior to January 1, 2011, separately billable under Medicare Part B; 
(4) renal dialysis drugs and biological products that were or would 
have been, prior to January 1, 2011, covered under Medicare Part D, 
including renal dialysis oral-only drugs effective January 1, 2025; and 
(5) renal dialysis equipment and supplies, except for capital-related 
assets that are home dialysis machines (as defined in Sec.  
413.236(a)(2)), that receive the transitional add-on payment adjustment 
as specified in Sec.  413.236 after the payment period has ended.
    In the CY 2011 ESRD PPS final rule (75 FR 49142), CMS stated that 
for purposes of determining whether an ESRD facility would be eligible 
for an outlier payment, it would be necessary for the facility to 
identify the actual ESRD outlier services furnished to the patient by 
line item (that is, date of service) on the monthly claim. Renal 
dialysis drugs, laboratory tests, and medical/surgical supplies that 
are recognized as outlier services were specified in Transmittal 2134, 
dated January 14, 2011.\1\ Furthermore, CMS uses administrative 
issuances to update the renal dialysis service items available for 
outlier payment via our quarterly update CMS Change Requests, when 
applicable. For example, we use these updates to identify renal 
dialysis service drugs that were or would have been covered under 
Medicare Part D for outlier eligibility purposes and items and services 
that have been incorrectly identified as eligible outlier services.
---------------------------------------------------------------------------

    \1\ Transmittal 2033 issued August 20, 2010, was rescinded and 
replaced by Transmittal 2094, dated November 17, 2010. Transmittal 
2094 identified additional drugs and laboratory tests that may also 
be eligible for ESRD outlier payment. Transmittal 2094 was rescinded 
and replaced by Transmittal 2134, dated January 14, 2011, which 
included one technical correction. https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R2134CP.pdf.
---------------------------------------------------------------------------

    Under Sec.  413.237, an ESRD facility is eligible for an outlier 
payment if its actual or imputed Medicare Allowable Payment (MAP) 
amount per treatment for ESRD outlier services exceeds a threshold. The 
MAP amount represents the average incurred amount per treatment for 
services that were or would have been considered separately billable 
services prior to January 1, 2011. The threshold is equal to the ESRD 
facility's predicted ESRD outlier services MAP amount per treatment 
(which is case-mix adjusted and described in the following paragraphs) 
plus the fixed-dollar loss (FDL) amount. In accordance with Sec.  
413.237(c), facilities are paid 80 percent of the per treatment amount 
by which the imputed MAP amount for outlier services (that is, the 
actual incurred amount) exceeds this threshold. ESRD facilities are 
eligible to receive outlier payments for treating both adult and 
pediatric dialysis patients.
    In the CY 2011 ESRD PPS final rule and codified in Sec.  
413.220(b)(4), using 2007 data, we established the outlier percentage, 
which is used to reduce the per treatment base rate to account for the 
proportion of the estimated total payments under the ESRD PPS that are 
outlier payments, at 1.0 percent of total payments (75 FR 49142 through 
49143). We also established the FDL amounts that are added to the 
predicted outlier services MAP amounts. The outlier services MAP 
amounts and FDL amounts are different for adult and pediatric patients 
due to differences in the utilization of separately billable services 
among adult and pediatric patients (75 FR 49140). As we explained in 
the CY 2011 ESRD PPS final rule (75 FR 49138 through 49139), the 
predicted outlier services MAP amounts for a patient are determined by 
multiplying the adjusted average outlier services MAP amount by the 
product of the patient-specific case-mix adjusters applicable using the 
outlier services payment multipliers developed from the regression 
analysis used to compute the payment adjustments.
    For CY 2022, we proposed that the outlier services MAP amounts and 
FDL amounts would be derived from claims data from CY 2020. As we 
stated in the CY 2022 ESRD PPS proposed rule (86 FR 36329), we believe 
that any adjustments made to the MAP amounts under the ESRD PPS should 
be based upon the most recent data year available to best predict any 
future outlier payments; therefore, we proposed the outlier thresholds 
for CY 2022 would be based on utilization of renal dialysis items and 
services furnished under the ESRD PPS in CY 2020.
    We also stated that we recognize that the utilization of ESAs and 
other outlier services have continued to decline under the ESRD PPS, 
and that we have lowered the MAP amounts and FDL amounts every year 
under the ESRD PPS. As discussed in section II.B.1.c of this final 
rule, CY 2020 claims data show outlier payments represent approximately 
0.6 percent of total payments.
(1) CY 2022 Update to the Outlier Services MAP Amounts and FDL Amounts
    For this final rule, the outlier services MAP amounts and FDL 
amounts were updated using 2020 claims data, as we proposed to do for 
CY 2022. The impact of this update is shown in Table 1, which compares 
the outlier services MAP amounts and FDL amounts used for the outlier 
policy in CY 2021 with the updated estimates for this final rule. The 
estimates for the CY 2022 outlier policy, which are included in Column 
II of Table 1, were inflation adjusted to reflect projected 2022 prices 
for outlier services.

[[Page 61883]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.000

    As demonstrated in Table 1, the estimated FDL amount per treatment 
that determines the CY 2022 outlier threshold amount for adults (Column 
II; $75.39) is lower than that used for the CY 2021 outlier policy 
(Column I; $122.49). The lower threshold is accompanied by a decrease 
in the adjusted average MAP for outlier services from $50.92 to $42.75. 
For pediatric patients, there is a decrease in the FDL amount from 
$44.78 to $26.02. There is a corresponding decrease in the adjusted 
average MAP for outlier services among pediatric patients, from $30.08 
to $27.15.
    We estimate that the percentage of patient months qualifying for 
outlier payments in CY 2022 will be 7.08 percent for adult patients and 
12.89 percent for pediatric patients, based on the 2020 claims data. 
The outlier MAP and FDL amounts continue to be lower for pediatric 
patients than adults due to the continued lower use of outlier services 
(primarily reflecting lower use of ESAs and other injectable drugs).
(2) Outlier Percentage
    In the CY 2011 ESRD PPS final rule (75 FR 49081) and under Sec.  
413.220(b)(4), we reduced the per treatment base rate by 1 percent to 
account for the proportion of the estimated total payments under the 
ESRD PPS that are outlier payments as described in Sec.  413.237. Based 
on the 2020 claims, outlier payments represented approximately 0.6 
percent of total payments, which is below the 1 percent target due to 
declines in the use of outlier services. As we stated in the CY 2022 
ESRD PPS proposed rule (86 FR 36330), recalibration of the thresholds 
using 2020 data is expected to result in aggregate outlier payments 
close to the 1 percent target in CY 2022. We stated in the CY 2022 ESRD 
PPS proposed rule that we believe the update to the outlier MAP and FDL 
amounts for CY 2022 would increase payments for ESRD beneficiaries 
requiring higher resource utilization. This would move us closer to 
meeting our 1 percent outlier policy goal, because we are using more 
current data for computing the MAP and FDL, which is more in line with 
current outlier services utilization rates. We noted in the CY 2022 
ESRD PPS proposed rule that recalibration of the FDL amounts would 
result in no change in payments to ESRD facilities for beneficiaries 
with renal dialysis items and services that are not eligible for 
outlier payments.
    The comments and our responses to the comments on our proposed 
updates to the outlier policy are set forth below.
    Comment: Several commenters suggested alternatives to our proposed 
outlier MAP amounts, FDL amounts, and outlier percentage target for CY 
2022. One large dialysis organization commented in support of using the 
most recent available CY 2020 claims data for determining the CY 2022 
outlier services MAP amounts and FDL amounts, but suggested that CMS 
undertake further action to address the issue of outlier payments 
falling short of the 1 percent target. A professional organization of 
pediatric nephrologists expressed concern that the decreasing FDL and 
MAP amounts suggest that the cost of delivering pediatric ESRD care is 
not appropriately paid under Medicare by either the existing ESRD PPS 
bundled payment or through the outlier adjustment. Several commenters 
recommended that CMS set the CY 2022 outlier percentage less than 1 
percent. For example, one commenter, a coalition of dialysis 
organizations, suggested that because the CY 2020 claims data showed 
that outlier payments represented approximately 0.6 percent of total 
ESRD PPS payments, CMS could set the CY 2022 outlier ``pool'' 
[percentage] at 0.6 percent. Similarly, a professional association 
suggested that because historical data shows that CMS regularly pays 
out between 0.5 and 0.6 percent of ESRD PPS payments as outlier 
payments, CMS should reduce the outlier percentage to better match the 
use of the outlier pool. Other commenters, including a large dialysis 
organization and a provider advocacy organization, urged CMS to reduce 
the CY 2022 outlier pool to no more than 0.5 percent of projected

[[Page 61884]]

aggregate ESRD PPS spending. Another large dialysis organization 
recommended CMS adopt the proposed FDL and MAP amounts for CY 2022, but 
urged CMS to set the outlier percentage to 0.6 percent.
    Additionally, several of these commenters suggested that in any 
year when the outlier pool retains dollars that are not paid out, CMS 
should return those dollars to providers or reallocate those dollars to 
support reducing the barriers that create inequities in the care 
dialysis patients receive.
    Response: We appreciate the support for the proposed use of CY 2020 
data and the thoughtful suggestions provided by commenters. We 
acknowledge that, even with annually adjusting the MAP and FDL to 
reflect the most recent utilization and costs of ESRD PPS eligible 
outlier services, total outlier payments have not yet reached the 1 
percent target. However, it is also true that use of eligible ESRD 
outlier services declined each year. That is, ESRD facilities incurred 
lower costs than anticipated, and those savings accrued to facilities 
more than offsetting the extent to which the consequent outlier 
payments fell short of the 1.0 percent target. We also note that 
declining FDL and MAP amounts do not in themselves suggest that the 
ESRD PPS fails to adequately pay for the delivery of either pediatric 
or adult ESRD care. Rather, the ESRD PPS outlier policy was established 
to account for unusual variations in the type or amount of medically 
necessary care. Declining FDL and MAP amounts suggest that there is 
less costly variation in such care that is not included in the ESRD PPS 
bundled payment.
    We appreciate the comments suggesting solutions for refining the 
outlier policy methodology, for example, reducing the outlier 
percentage withhold to less than 1 percent or establishing a mechanism 
that pays back ESRD facilities those allocated outlier amounts that did 
not pay out in the year projected. We did not propose any modifications 
to the ESRD PPS outlier policy for CY 2022, so we are not finalizing 
any changes to the methodology in this final rule. However, as 
discussed in section VI.E of the CY 2022 ESRD PPS proposed rule (86 FR 
36400), CMS is considering potential revisions to the calculation of 
the outlier percentage to address stakeholder concerns, including 
concerns about the 1 percent outlier percentage, and issued a request 
for information in the CY 2022 ESRD PPS proposed rule to seek feedback 
on the acceptability of possible payment adjustment methods and to 
solicit information that would better inform future modifications to 
the methodology through rulemaking.
    Final Rule Action: After considering the public comments, we are 
finalizing the updated outlier thresholds for CY 2022 displayed in 
Column II of Table 1 of this final rule and based on CY 2020 data.
d. Final Impacts to the CY 2022 ESRD PPS Base Rate
(1) ESRD PPS Base Rate
    In the CY 2011 ESRD PPS final rule (75 FR 49071 through 49083), CMS 
established the methodology for calculating the ESRD PPS per-treatment 
base rate, that is, ESRD PPS base rate, and calculating the per 
treatment payment amount, which are codified at Sec. Sec.  413.220 and 
413.230. The CY 2011 ESRD PPS final rule also provides a detailed 
discussion of the methodology used to calculate the ESRD PPS base rate 
and the computation of factors used to adjust the ESRD PPS base rate 
for projected outlier payments and budget neutrality in accordance with 
sections 1881(b)(14)(D)(ii) and 1881(b)(14)(A)(ii) of the Act, 
respectively. Specifically, the ESRD PPS base rate was developed from 
CY 2007 claims (that is, the lowest per patient utilization year as 
required by section 1881(b)(14)(A)(ii) of the Act), updated to CY 2011, 
and represented the average per treatment MAP for composite rate and 
separately billable services. In accordance with section 1881(b)(14)(D) 
of the Act and our regulation at Sec.  413.230, the per-treatment 
payment amount is the sum of the ESRD PPS base rate, adjusted for the 
patient specific case-mix adjustments, applicable facility adjustments, 
geographic differences in area wage levels using an area wage index, 
and any applicable outlier payment, training adjustment add-on, TDAPA, 
and TPNIES.
(2) Annual Payment Rate Update for CY 2022
    We are finalizing an ESRD PPS base rate for CY 2022 of $257.90. 
This update reflects several factors, described in more detail as 
follows:
    Wage Index Budget-Neutrality Adjustment Factor: We compute a wage 
index budget-neutrality adjustment factor that is applied to the ESRD 
PPS base rate. For CY 2022, we did not propose any changes to the 
methodology used to calculate this factor, which is described in detail 
in the CY 2014 ESRD PPS final rule (78 FR 72174). We computed the final 
CY 2022 wage index budget-neutrality adjustment factor using treatment 
counts from the 2020 claims and facility-specific CY 2021 payment rates 
to estimate the total dollar amount that each ESRD facility would have 
received in CY 2021. The total of these payments became the target 
amount of expenditures for all ESRD facilities for CY 2022. Next, we 
computed the estimated dollar amount that would have been paid for the 
same ESRD facilities using the ESRD PPS wage index for CY 2022. As 
discussed in section II.B.1.b of this final rule, the ESRD PPS wage 
index for CY 2022 includes an update to the most recent hospital wage 
data, use of the 2018 OMB delineations, and no cap on wage index 
decreases applied for CY 2022. The total of these payments becomes the 
new CY 2022 amount of wage-adjusted expenditures for all ESRD 
facilities. The wage index budget-neutrality factor is calculated as 
the target amount divided by the new CY 2022 amount. When we multiplied 
the wage index budget neutrality factor by the applicable CY 2022 
estimated payments, aggregate payments to ESRD facilities would remain 
budget neutral when compared to the target amount of expenditures. That 
is, the wage index budget neutrality adjustment factor ensures that 
wage index adjustments do not increase or decrease aggregate Medicare 
payments with respect to changes in wage index updates. The CY 2022 
wage index budget-neutrality adjustment factor is 0.99985. This 
application would yield a CY 2022 ESRD PPS base rate of $253.09 prior 
to the application of the market basket increase ($253.13 x 0.99985 = 
$253.09).
    Market Basket Increase: Section 1881(b)(14)(F)(i)(I) of the Act 
provides that, beginning in 2012, the ESRD PPS payment amounts are 
required to be annually increased by the ESRD market basket percentage 
increase factor. The latest CY 2022 projection of the ESRDB market 
basket percentage increase factor is 2.4 percent. In CY 2022, this 
amount must be reduced by the productivity adjustment described in 
section 1886(b)(3)(B)(xi)(II) of the Act, as required by section 
1881(b)(14)(F)(i)(II) of the Act. As discussed previously in section 
II.B.1.a of this final rule, the final productivity adjustment for CY 
2021 is 0.5 percent, thus yielding an update to the base rate of 1.9 
percent for CY 2022. Therefore, the final CY 2022 ESRD PPS proposed 
base rate is $257.90 ($253.02 x 1.019 = $257.90).
    The comments and our responses to the comments on our updates to 
the CY 2022 ESRD PPS base rate are set forth below.
    Comment: Several commenters raised concerns about the comorbidity 
case-mix adjustments under the ESRD PPS

[[Page 61885]]

and recommended eliminating them for CY 2022. Two commenters, including 
a large dialysis organization and a coalition of dialysis organizations 
encouraged CMS to eliminate the remaining comorbidity case-mix 
adjustments and thereby increase the ESRD PPS base rate for CY 2022. 
These commenters noted that the percent of claims with these conditions 
is relatively low and has been declining over time. These commenters 
argued that as the frequency of these conditions declines in the 
claims, maintaining these adjusters results in the loss of money from 
the system that could be redirected toward patient care. One of these 
commenters further argued that this means the dollars that Congress 
intended to go to providing items and services for individuals who 
receive dialysis are being inappropriately diverted away from that 
care. Both commenters further suggested that the years of discussion 
pertaining to patient-level adjustments, particularly the issues with 
the comorbid case-mix adjusters, and CMS's questions through the 
request for information (RFI) in the CY 2022 ESRD PPS proposed rule, 
should constitute enough notice to support their removal from the 
regression model for CY 2022, which includes the co-morbid case-mix 
adjusters in the calculation of the ESRD PPS payment.
    Response: As the commenters noted, we included a detailed RFI 
regarding the ESRD PPS case mix adjustments in the CY 2022 ESRD PPS 
proposed rule (82 FR 36398 through 36409). A summary of the comments 
received in response to the RFI is provided in section VI.A of this 
final rule, and we will provide further information on the CMS ESRD PPS 
website in the future. CMS is considering alternative approaches to 
calculating the ESRD PPS case-mix adjustments that directly address 
stakeholder concerns, and appropriately reflect resource use and costs. 
The RFI in the CY 2022 ESRD PPS proposed rule both sought feedback on 
the variation of case-mix adjustments with duration of dialysis 
treatment, and solicited information on alternative proxies for 
resource utilization that can be reported at the patient/treatment 
level in order to better inform future modifications to this 
methodology through rulemaking.
    With regard to the comment about removing the co-morbid adjustment 
from the case-mix for CY 2022, we note that due to the nature of 
regression analysis, which is how the current payment adjustors are 
set, making that type of adjustment would affect all the patient-level 
and facility-level adjustments. This can impact budget neutrality 
requirements and affect provider impacts differently than if adopted 
incrementally. Payment system changes can also require extensive 
efforts by CMS and providers to implement, and could not be implemented 
for CY 2022. While we discussed these case-mix adjustments in the RFI, 
we did not propose to make changes to the comorbidity case-mix 
adjustments for CY 2022; therefore, we are not finalizing any changes 
to that policy in this final rule.
    Comment: Two commenters, a large dialysis organization and a non-
profit health insurance organization in Puerto Rico, urged CMS to 
evaluate the accuracy of the ESRD PPS base rate as applied to payments 
for ESRD facilities located in Puerto Rico. These commenters encouraged 
CMS to consider the differences in patient characteristics between 
Puerto Rico and the mainland U.S., as well as differences in size, 
service capacity, and locality between the average ESRD facility in 
Puerto Rico versus other mainland providers.
    Response: As mentioned previously in this section of the final 
rule, and as further discussed in section VI.D of the CY 2022 ESRD PPS 
proposed rule (86 FR 36399), CMS is considering alternative approaches 
to calculating the case-mix adjustment, including duration of dialysis 
treatment to allocate composite rate costs for patients with higher 
resource use due to patient characteristics as reflected in the case-
mix adjustments. We are also considering all the commenters' 
suggestions in response to the RFI for alternative proxies for 
allocation of composite rate costs for those patients whose medical and 
physiologic characteristics require more resource use. We appreciate 
these comments and will take them into consideration to potentially 
inform future rulemaking.
    Final Rule Action: We are finalizing a CY 2022 ESRD PPS base rate 
of $257.90. This amount reflects the CY 2022 wage index budget-
neutrality adjustment factor of 0.99985, and the CY 2022 ESRD PPS 
productivity-adjusted market basket update of 1.9 percent.
e. Update to the Average per Treatment Offset Amount for Home Dialysis 
Machines
    In the CY 2021 ESRD PPS final rule (85 FR 71427), we expanded 
eligibility for the TPNIES under Sec.  413.236 to include certain 
capital-related assets that are home dialysis machines when used in the 
home for a single patient. To establish the basis of payment for the 
TPNIES for these items, we finalized the additional steps that the 
Medicare Administrative Contractors (MACs) must follow to calculate a 
pre-adjusted per treatment amount, using the prices they establish 
under Sec.  413.236(e) for a capital-related asset that is a home 
dialysis machine, as well as the methodology that CMS uses to calculate 
the average per treatment offset amount for home dialysis machines that 
is used in the MACs' calculation, to account for the cost of the home 
dialysis machine that is already in the ESRD PPS base rate. For 
purposes of this final rule, we will refer to this as the ``TPNIES 
offset amount.''
    The methodology for calculating the TPNIES offset amount is set 
forth in Sec.  413.236(f)(3). Section Sec.  413.236(f)(3)(v) states 
that effective January 1, 2022, CMS annually updates the amount 
determined in Sec.  413.236(f)(3)(iv) by the ESRD bundled market basket 
percentage increase factor minus the productivity adjustment factor. 
The TPNIES for capital-related assets that are home dialysis machines 
is based on 65 percent of the MAC-determined pre-adjusted per treatment 
amount, reduced by the TPNIES offset amount, and is paid for 2-calendar 
years.
    As we discussed in the CY 2022 ESRD PPS proposed rule (86 FR 
36331), the CY 2021 TPNIES offset amount for capital-related equipment 
that are home dialysis machines used in the home is $9.32. We stated 
that the proposed CY 2022 ESRD bundled market basket increase factor 
minus the productivity adjustment is 1.0 percent (1.6 percent minus 0.6 
percent). Applying the proposed update factor of 1.010 to the proposed 
CY 2021 TPNIES offset amount resulted in a proposed CY 2022 TPNIES 
offset amount of $9.41 ($9.32 x 1.010). We proposed to update this 
calculation using the most recent data available in the CY 2022 ESRD 
PPS final rule.
    The comments and our responses to the comments on the proposed 
update to the TPNIES offset amount are set forth below.
    Comment: One large dialysis organization commented in support of 
the current TPNIES policy, but recommended that CMS recalculate the 
TPNIES offset amount using a 7-year depreciation schedule, which the 
commenter asserted would more accurately align with real-world home 
dialysis machine use. This commenter also recommended that CMS revise 
the TPNIES policy to allow for a modification to the ESRD PPS base rate 
to ensure ongoing access to innovative technologies.
    Response: We appreciate the commenter's suggestion for improving

[[Page 61886]]

the TPNIES policy. As we discussed in the CY 2021 ESRD PPS final rule 
(85 FR 71421 through 71422), section 104.17 of the Provider 
Reimbursement Manual discusses that the useful life of a capital-
related asset is its expected useful life to the provider, not 
necessarily the inherent useful or physical life. Further, the manual 
provides that under the Medicare program, only the American Hospital 
Association (AHA) guidelines may be used in selecting a proper useful 
life for computing depreciation. In keeping with the Medicare policy, 
we established reliance on the AHA guidelines to determine the useful 
life of a capital-related asset that is a home dialysis machine, which 
is 5-years and not the 7 years suggested by the commenter (see 42 CFR 
413.236(f)(i)). We note that we considered alternatives, but concluded 
that this approach was simpler and appropriate for encouraging and 
supporting the uptake of new and innovative renal dialysis equipment 
and supplies (85 FR 71422).
    We did not propose changes to the methodology for updating the 
TPNIES offset amount for CY 2022, and therefore we are not finalizing 
any changes to that methodology in this final rule. However, we will 
take these recommendations into consideration to potentially inform 
future rulemaking.
    Final Rule Action: We are finalizing our proposal to calculate the 
CY 2022 TPNIES offset amount using the most recent data available. The 
CY 2021 TPNIES offset amount for capital-related equipment that are 
home dialysis machines used in the home is $9.32. As discussed 
previously in section II.B.1.a of this final rule, the CY 2022 ESRD 
bundled market basket increase factor minus the productivity adjustment 
is 1.9 percent (2.4 percent minus 0.5 percent). Applying the 
productivity adjustment factor of 1.019 to the CY 2021 TPNIES offset 
amount results in a CY 2022 TPNIES offset amount of $9.50 ($9.32 x 
1.019).
f. TDAPA and TPNIES Public Comments and Responses
    We also received several public comments on topics related to the 
TPNIES and the TDAPA policies under the ESRD PPS, including from 
individuals, such as ESRD beneficiaries, individual health care 
providers, manufacturers, healthcare groups, patient advocacy 
organizations, hospital associations, dialysis associations, as well as 
various dialysis, kidney, and professional organizations. While these 
comments related to issues that we either did not discuss in the CY 
2022 ESRD PPS proposed rule or that we discussed for background or 
context, but for which we did not propose changes, a summary of the 
significant comments and our responses are set forth below.
    Comment: Commenters overwhelmingly wrote in support of innovation 
in ESRD management generally and some specifically mentioned existing 
or upcoming technologies they thought would benefit ESRD patients. 
Other commenters expressed interest in seeing improvements in 
peritoneal dialysis, including on-line generation of dialysate and 
prevention of infections. Commenters also expressed support for home 
hemodialysis, citing its flexibility, convenience, and the comfort it 
provides patients. Commenters expressed interest in seeing improvements 
in home hemodialysis such as lower costs, more availability, better 
cannulation, reduced burden on patients and caregivers, and more 
convenient generation of dialysate. Commenters also stated they would 
like to see improvements in home dialysis that would increase 
retention, improve quality of delivered dialysate, or reduce 
complications.
    Response: We appreciate the supportive comments regarding 
innovation in ESRD therapy. Like the commenters, CMS supports 
innovation in the ESRD space and we look forward to seeing new 
technologies that improve care for beneficiaries with ESRD.
    Comments: Commenters provided input on the substantial clinical 
improvement criteria for the TPNIES under Sec.  413.236(b)(5) and Sec.  
412.87(b)(1), offering specific recommendations on what CMS should 
consider in making a determination of substantial clinical improvement 
for the TPNIES. Commenters suggested that certain innovations could be 
considered evidence of substantial clinical improvement over existing 
technologies, such as: Technical specifications that make home dialysis 
easier for disadvantaged persons, real time dialysis fluid preparation, 
and real-time monitoring of patients' treatment sessions.
    Many commenters encouraged CMS to utilize evidence outside of 
randomized controlled trials (RCTs) as a way of demonstrating 
significant clinical improvement due to the challenges of running 
clinical trials involving patients with ESRD, including difficulty in 
patient recruitment and financial barriers for innovators to conduct 
these types of large-scale, long-term trials. One commenter who agreed 
with this stated that CMS also should not only rely on short, small-
scale studies conducted by device manufacturers as the standard for 
substantial clinical improvement. A home dialysis advocacy organization 
commented that evidence from a clinical trial, abstracts of data, and 
expert opinion, such as letters from medical professionals, are 
sufficient to support a showing of substantial clinical improvement, 
rather than RCTs. That same commenter added that given the challenges 
specific to conducting studies in the ESRD space, real-world evidence 
gathered from studies conducted outside the U.S. may be extrapolated to 
Medicare beneficiaries when appropriate. One commenter, a beneficiary, 
emphasized that patients may have a drastically different perspective 
of substantial clinical improvement compared to CMS. That commenter 
stated that greater flexibility is of the utmost importance to home 
dialysis patients and, therefore, therapies that allow patients with 
ESRD to resume their normal day-to-day activities should be considered 
to show substantial clinical improvement. Other commenters also 
encouraged the use of patient preferences, patient-reported outcomes, 
and other patient-centered data when evaluating substantial clinical 
improvement. A commenter encouraged CMS to weigh the reduction of 
patient and care partner burden, improved communication with the care 
team, and improved safety through the reduction of severe adverse 
events in the evaluation of evidence.
    Other commenters offered suggestions for CMS's current process of 
evaluating evidence of substantial clinical improvement. Commenters 
asked that CMS provide guidance on evidence of substantial clinical 
improvement specific to the ESRD space, such as the development of a 
set of ESRD patient-reported outcomes for assessing substantial 
clinical improvement criteria. Other commenters also suggested using a 
panel of patients with ESRD to assist with tasks such as developing the 
set of patient-reported outcomes or providing insight for these 
outcomes during the evaluation process. Some commenters asked CMS to 
clarify how data and real-world evidence submitted as part of a TPNIES 
application is reviewed and weighed during the review process.
    Response: We appreciate the comments regarding the CMS evaluation 
process for the substantial clinical improvement criterion for the 
TPNIES. In response to commenters' suggestions regarding the use of 
expert opinions, clinical trials, abstracts of data, unpublished 
sources, and letters from health care providers in our analysis, we 
note that under Sec.  413.236(b)(5), CMS may consider all of these 
types of data,

[[Page 61887]]

among others, in making a determination of substantial clinical 
improvement. A list of information sources that we may consider in our 
determination is set forth in Sec.  412.87(b)(1)(iii). Additionally, 
under Sec.  412.87(b)(1)(iii)(N), CMS may consider other appropriate 
information sources not otherwise listed in our regulations on 
substantial clinical improvement. Further, we are taking the 
opportunity to clarify that RCTs, while potentially informative, are 
not required under existing regulations to demonstrate substantial 
clinical improvement for purpose of the TPNIES. While we did not 
propose changes to the substantial clinical improvement criteria for 
the TPNIES in the CY 2022 ESRD PPS proposed rule, we will consider 
these comments for future rulemaking. We encourage ESRD patients and 
patient advocacy organizations to submit comments on our annual ESRD 
PPS proposed rules to provide their perspectives on TPNIES 
applications.
    Comment: Several commenters suggested changes to the TPNIES policy 
under the ESRD PPS. Commenters suggested using FDA determinations (for 
example, Breakthrough Device designations) in evaluating TPNIES 
applications. Commenters also asked for CMS to provide increased 
feedback to applicants throughout the TPNIES application process, 
including providing: Parallel feedback on data needed to support a 
TPNIES application as the manufacturers are working towards FDA 
marketing authorization, public review of the complete application 
prior to finalizing TPNIES application decisions, and an appeal process 
for manufacturers whose TPNIES applications were not approved. In 
addition, commenters recommended that CMS remove MACs' discretion in 
determining pricing of new and innovative renal dialysis equipment and 
supplies, as provided under Sec.  413.236(e), and requested that CMS 
set more defined payment parameters and public transparency around 
pricing. Other commenters suggested expanding the TPNIES policy to 
allow TPNIES payments to ESRD facilities with home dialysis devices on 
operating leases and to expand the TPNIES eligibility to include all 
capital-related assets, not just home dialysis machines, as allowed 
under Sec.  413.236(b)(6). We also received comments requesting various 
extensions to the TPNIES application deadlines and payment periods such 
as: Extending the duration of the TPNIES payment to 3 years, extending 
application timetables for device manufacturers applying for the TPNIES 
in the early years of the policy, and extending application timetables 
for manufacturers impacted by the COVID-19 PHE.
    Response: We thank the public for their comments. Because we did 
not propose any changes to the TPNIES policy in the CY 2022 ESRD PPS 
proposed rule, we are not making any changes to that policy in this 
final rule; however, we will consider the commenters' recommendations 
for future rulemaking.
    Comment: Several commenters also suggested changes to the TDAPA 
policy under Sec.  413.234. For example, one commenter stated that CMS 
should consider implementing the substantial clinical improvement 
criteria used to evaluate the TPNIES applications for the TDAPA 
applications, and another commenter stated that CMS should not apply 
the TDAPA to biosimilar drugs.
    Response: We thank the public for their comments. Because we did 
not propose any changes to the TDAPA policy in the CY 2022 ESRD PPS 
proposed rule, we are not making any changes to that policy in this 
final rule; however, we will consider the commenters' recommendations 
for future rulemaking.

C. Transitional Add-On Payment Adjustment for New and Innovative 
Equipment and Supplies (TPNIES) for CY 2022 Payment

1. Background
    In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), CMS 
established the transitional add-on payment adjustment for new and 
innovative equipment and supplies (TPNIES) under the ESRD PPS, under 
the authority of section 1881(b)(14)(D)(iv) of the Act, in order to 
support ESRD facility use and beneficiary access to these new 
technologies. We established this add-on payment adjustment to help 
address the unique circumstances experienced by ESRD facilities when 
incorporating new and innovative equipment and supplies into their 
businesses and to support ESRD facilities transitioning or testing 
these products during the period when they are new to market. We added 
Sec.  413.236 to establish the eligibility criteria and payment 
policies for the TPNIES.
    In the CY 2020 ESRD PPS final rule (84 FR 60650), we established in 
Sec.  413.236(b) that for dates of service occurring on or after 
January 1, 2020, we will provide the TPNIES to an ESRD facility for 
furnishing a covered equipment or supply only if the item: (1) Has been 
designated by CMS as a renal dialysis service under Sec.  413.171; (2) 
is new, meaning granted marketing authorization by the Food and Drug 
Administration (FDA) on or after January 1, 2020; (3) is commercially 
available by January 1 of the particular calendar year, meaning the 
year in which the payment adjustment would take effect; (4) has a 
Healthcare Common Procedure Coding System (HCPCS) application submitted 
in accordance with the official Level II HCPCS coding procedures by 
September 1 of the particular calendar year; (5) is innovative, meaning 
it meets the substantial clinical improvement criteria specified in the 
Inpatient Prospective Payment System (IPPS) regulations at Sec.  
412.87(b)(1) and related guidance, and (6) is not a capital related 
asset that an ESRD facility has an economic interest in through 
ownership (regardless of the manner in which it was acquired).
    Regarding the innovation requirement in Sec.  413.236(b)(5), in the 
CY 2020 ESRD PPS final rule (84 FR 60690), we stated that we will use 
the following criteria to evaluate substantial clinical improvement for 
purposes of the TPNIES under the ESRD PPS based on the IPPS substantial 
clinical improvement criteria in Sec.  412.87(b)(1) and related 
guidance:
    A new technology represents an advance that substantially improves, 
relative to renal dialysis services previously available, the diagnosis 
or treatment of Medicare beneficiaries. First, CMS considers the 
totality of the circumstances when making a determination that a new 
renal dialysis equipment or supply represents an advance that 
substantially improves, relative to renal dialysis services previously 
available, the diagnosis or treatment of Medicare beneficiaries. 
Second, a determination that a new renal dialysis equipment or supply 
represents an advance that substantially improves, relative to renal 
dialysis services previously available, the diagnosis or treatment of 
Medicare beneficiaries means one of the following:
     The new renal dialysis equipment or supply offers a 
treatment option for a patient population unresponsive to, or 
ineligible for, currently available treatments; or
     The new renal dialysis equipment or supply offers the 
ability to diagnose a medical condition in a patient population where 
that medical condition is currently undetectable, or offers the ability 
to diagnose a medical condition earlier in a patient population than 
allowed by currently available methods, and there must also be evidence 
that use of the new renal

[[Page 61888]]

dialysis service to make a diagnosis affects the management of the 
patient; or
     The use of the new renal dialysis equipment or supply 
significantly improves clinical outcomes relative to renal dialysis 
services previously available as demonstrated by one or more of the 
following: A reduction in at least one clinically significant adverse 
event, including a reduction in mortality or a clinically significant 
complication; a decreased rate of at least one subsequent diagnostic or 
therapeutic intervention; a decreased number of future hospitalizations 
or physician visits; a more rapid beneficial resolution of the disease 
process treatment including, but not limited to, a reduced length of 
stay or recovery time; an improvement in one or more activities of 
daily living; an improved quality of life; or, a demonstrated greater 
medication adherence or compliance; or,
     The totality of the circumstances otherwise demonstrates 
that the new renal dialysis equipment or supply substantially improves, 
relative to renal dialysis services previously available, the diagnosis 
or treatment of Medicare beneficiaries.
    Third, evidence from the following published or unpublished 
information sources from within the U.S. or elsewhere may be sufficient 
to establish that a new renal dialysis equipment or supply represents 
an advance that substantially improves, relative to renal dialysis 
services previously available, the diagnosis or treatment of Medicare 
beneficiaries: Clinical trials, peer reviewed journal articles; study 
results; meta-analyses; consensus statements; white papers; patient 
surveys; case studies; reports; systematic literature reviews; letters 
from major healthcare associations; editorials and letters to the 
editor; and public comments. Other appropriate information sources may 
be considered.
    Fourth, the medical condition diagnosed or treated by the new renal 
dialysis equipment or supply may have a low prevalence among Medicare 
beneficiaries. Fifth, the new renal dialysis equipment or supply may 
represent an advance that substantially improves, relative to services 
or technologies previously available, the diagnosis or treatment of a 
subpopulation of patients with the medical condition diagnosed or 
treated by the new renal dialysis equipment or supply.
    In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), we 
also established a process modeled after IPPS's process of determining 
if a new medical service or technology meets the substantial clinical 
improvement criteria specified in Sec.  412.87(b)(1). Specifically, 
similar to the IPPS New Technology Add-On Payment, we wanted to align 
our goals with the agency's efforts to transform the healthcare 
delivery system for the ESRD beneficiary through competition and 
innovation to provide patients with better value and results. As we 
discussed in the CY 2020 ESRD PPS final rule (84 FR 60682), we believe 
it is appropriate to facilitate access to new and innovative equipment 
and supplies through add-on payments similar to the IPPS New Technology 
Add-On Payment and to provide stakeholders with standard criteria for 
both inpatient and outpatient settings. In Sec.  413.236(c), we 
established a process for our announcement of TPNIES determinations and 
a deadline for consideration of new renal dialysis equipment or supply 
applications under the ESRD PPS. CMS will consider whether a new renal 
dialysis equipment or supply meets the eligibility criteria specified 
in Sec.  413.236(b) and summarize the applications received in the 
annual ESRD PPS proposed rules. Then, after consideration of public 
comments, we will announce the results in the Federal Register as part 
of our annual updates and changes to the ESRD PPS in the ESRD PPS final 
rule. In the CY 2020 ESRD PPS final rule, we also specified certain 
deadlines for the application requirements. We noted that we would only 
consider a complete application received by February 1 prior to the 
particular calendar year. In addition, we required that FDA marketing 
authorization for the equipment or supply must occur by September 1 
prior to the particular calendar year. We also stated in the CY 2020 
ESRD PPS final rule (84 FR 60690 through 60691) that we would establish 
a workgroup of CMS medical and other staff to review the materials 
submitted as part of the TPNIES application, public comments, FDA 
marketing authorization, and HCPCS application information and assess 
the extent to which the product provides substantial clinical 
improvement over current technologies.
    In the CY 2020 ESRD PPS final rule, we established Sec.  413.236(d) 
to provide a payment adjustment for a new and innovative renal dialysis 
equipment or supply. We stated that the TPNIES is paid for 2-calendar 
years. Following payment of the TPNIES, the ESRD PPS base rate will not 
be modified and the new and innovative renal dialysis equipment or 
supply will become an eligible outlier service as provided in Sec.  
413.237.
    Regarding the basis of payment for the TPNIES, in the CY 2020 ESRD 
PPS final rule, we finalized at Sec.  413.236(e) that the TPNIES is 
based on 65 percent of the price established by the MACs, using the 
information from the invoice and other specified sources of 
information.
    In the CY 2021 ESRD PPS final rule (85 FR 71410 through 71464), we 
made several changes to the TPNIES eligibility criteria at Sec.  
413.236. First, we revised the definition of new at Sec.  413.236(b)(2) 
as within 3 years beginning on the date of the FDA marketing 
authorization. Second, we changed the deadline for TPNIES applicants' 
HCPCS Level II code application submission from September 1 of the 
particular calendar year to the HCPCS Level II code application 
deadline for biannual Coding Cycle 2 for durable medical equipment, 
orthotics, prosthetics, and supplies (DMEPOS) items and services as 
specified in the HCPCS Level II coding guidance on the CMS website 
prior to the calendar year. In addition, a copy of the applicable FDA 
marketing authorization must be submitted to CMS by the HCPCS Level II 
code application deadline for biannual Coding Cycle 2 for DMEPOS items 
and services as specified in the HCPCS Level II coding guidance on the 
CMS website in order for the equipment or supply to be eligible for the 
TPNIES the following year. Third, we revised Sec.  413.236(b)(5) to 
remove a reference to related guidance on the substantial clinical 
improvement criterion, as the guidance had already been codified.
    Finally, in the CY 2021 ESRD PPS final rule, we expanded the TPNIES 
policy to include certain capital-related assets that are home dialysis 
machines when used in the home for a single patient. We explained that 
capital-related assets are defined in the Provider Reimbursement Manual 
(chapter 1, section 104.1) as assets that a provider has an economic 
interest in through ownership (regardless of the manner in which they 
were acquired). We noted that examples of capital-related assets for 
ESRD facilities are dialysis machines and water purification systems. 
We explained that, although we stated in the CY 2020 ESRD PPS proposed 
rule (84 FR 38354) that we did not believe capital-related assets 
should be eligible for additional payment through the TPNIES because 
the cost of these items is captured in cost reports, they depreciate 
over time, and are generally used for multiple patients, there were a 
number of other factors we considered that led us to consider expanding 
eligibility for these technologies in the CY 2021 ESRD PPS

[[Page 61889]]

rulemaking. We explained that, following publication of the CY 2020 
ESRD PPS final rule, we continued to study the issue of payment for 
capital-related assets under the ESRD PPS, taking into account 
information from a wide variety of stakeholders and recent developments 
and initiatives regarding kidney care. For example, we considered 
various HHS home dialysis initiatives, Executive Orders to transform 
kidney care, and how the risk of COVID-19 for particularly vulnerable 
ESRD beneficiaries could be mitigated by encouraging home dialysis.
    After closely considering these issues, we proposed a revision to 
Sec.  413.236(b)(6) in the CY 2021 ESRD PPS proposed rule to provide an 
exception to the general exclusion for capital-related assets from 
eligibility for the TPNIES for capital-related assets that are home 
dialysis machines when used in the home for a single patient and that 
meet the other eligibility criteria in Sec.  413.235(b), and finalized 
the exception as proposed in the CY 2021 ESRD PPS final rule. We 
finalized the same determination process for TPNIES applications for 
capital-related assets that are home dialysis machines as for all other 
TPNIES applications; that we will consider whether the new home 
dialysis machine meets the eligibility criteria specified in Sec.  
413.236(b) and announce the results in the Federal Register as part of 
our annual updates and changes to the ESRD PPS. Per Sec.  413.236(c), 
we will only consider, for additional payment using the TPNIES for a 
particular calendar year, an application for a capital-related asset 
that is a home dialysis machine received by February 1 prior to the 
particular calendar year. If the application is not received by 
February 1, the application will be denied and the applicant is able to 
reapply within 3 years beginning on the date of FDA marketing 
authorization in order to be considered for the TPNIES, in accordance 
with Sec.  413.236(b)(2).
    In the CY 2021 ESRD PPS final rule, at Sec.  413.236(f), we 
finalized a pricing methodology for capital-related assets that are 
home dialysis machines when used in the home for a single patient, 
which requires the MACs to calculate the annual allowance and the 
preadjusted per treatment amount. The pre-adjusted per treatment amount 
is reduced by an estimated average per treatment offset amount to 
account for the costs already paid through the ESRD PPS base rate. The 
CY 2021 TPNIES offset amount was $9.32. We finalized that this amount 
will be updated on an annual basis so that it is consistent with how 
the ESRD PPS base rate is updated.
    We revised Sec.  413.236(d) to reflect that we would pay 65 percent 
of the pre-adjusted per treatment amount minus the offset for capital-
related assets that are home dialysis machines when used in the home 
for a single patient.
    We revised Sec.  413.236(d)(2) to reflect that following payment of 
the TPNIES, the ESRD PPS base rate will not be modified and the new and 
innovative renal dialysis equipment or supply will be an eligible 
outlier service as provided in Sec.  413.237, except a capital-related 
asset that is a home dialysis machine will not be an eligible outlier 
service as provided in Sec.  413.237.
    In summary, under the current eligibility requirements in Sec.  
413.236(b), CMS provides for a TPNIES to an ESRD facility for 
furnishing a covered equipment or supply only if the item: (1) Has been 
designated by CMS as a renal dialysis service under Sec.  413.171; (2) 
Is new, meaning within 3 years beginning on the date of the FDA 
marketing authorization; (3) Is commercially available by January 1 of 
the particular calendar year, meaning the year in which the payment 
adjustment would take effect; (4) Has a complete HCPCS Level II code 
application submitted in accordance with the HCPCS Level II coding 
procedures on the CMS website, by the HCPCS Level II code application 
deadline for biannual Coding Cycle 2 for DMEPOS items and services as 
specified in the HCPCS Level II coding guidance on the CMS website 
prior to the calendar year; (5) Is innovative, meaning it meets the 
criteria specified in Sec.  Sec.  412.87(b)(1); and (6) Is not a 
capital-related asset, except for capital-related assets that are home 
dialysis machines.
    We received two applications for the TPNIES for CY 2022. One 
applicant, CloudCath (the applicant for the CloudCath Peritoneal 
Dialysis Drain Set Monitoring System), withdrew its application from 
consideration after the issuance of the CY 2022 ESRD PPS proposed rule 
because it did not receive FDA marketing authorization by July 6, 2021, 
which was the HCPCS Level II code application deadline for biannual 
Coding Cycle 2 for DMEPOS items and services. Under Sec.  Sec.  
413.236(c), an applicant for the TPNIES must receive FDA marketing 
authorization for its new equipment or supply by the HCPCS Level II 
Code application deadline for biannual Coding Cycle 2 for DMEPOS items 
and services as specified in the HCPCS Level II coding guidance on the 
CMS website prior to the particular calendar year. Therefore, the 
CloudCath Peritoneal Dialysis Drain Set Monitoring System is not 
eligible for consideration for the TPNIES for CY 2022. We are not 
including in this final rule the description and discussion of this 
application, which was included in the CY 2022 ESRD PPS proposed rule. 
We note that we received public comments on the application that was 
withdrawn. However, because the application was withdrawn and thus the 
technology is ineligible for the TPNIES for CY 2022, we are not 
summarizing nor responding to public comments regarding the TPNIES 
criteria for this technology in this final rule. A discussion of the 
remaining application, which met this deadline, is presented in this 
final rule.
    The application discussed in this final rule is for a technology 
commonly used for the treatment of ESRD: Hemodialysis (HD). A detailed 
definition for HD is included in Chapter 11, Section 10 of the Medicare 
Benefits Policy Manual (Pub. L. 100-02).\2\ In brief, HD is a process 
that involves blood passing through an artificial kidney machine and 
the waste products diffusing across a manmade membrane into a bath 
solution known as dialysate after which the cleansed blood is returned 
to the patient's body. HD is accomplished usually in 3 to 5 hour 
sessions, 3 times a week.
---------------------------------------------------------------------------

    \2\ Medicare Benefits Policy Manual (Pub. L. 100-102), available 
at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c11.pdf.
---------------------------------------------------------------------------

a. Tablo[supreg] System
    Outset Medical, Inc. submitted an application for the TPNIES for 
the Tablo[supreg] System for CY 2022. According to the applicant, the 
technology is an HD machine that has been designed for patient-driven 
self-care and to minimize system training time. The applicant stated 
that the system is intended to substantially improve the treatment of 
people with ESRD by removing barriers to home dialysis. The applicant 
explained that the Tablo[supreg] System is comprised of (1) the 
Tablo[supreg] Console with integrated water purification, on-demand 
dialysate production, and a touchscreen interface; (2) a proprietary, 
disposable, single-use pre-strung cartridge; and (3) the Tablo[supreg] 
Connectivity and Data Ecosystem. Per the applicant, the system is built 
to function in a connected setting with cloud-based system monitoring, 
patient analytics and clinical recordkeeping.
    The applicant stated that the Tablo[supreg] System's features 
combine to provide a significantly differentiated HD solution with many 
benefits. First, the applicant stated that the Tablo[supreg] System's 
touchscreen interface made it easy to learn and use, guiding users 
through treatment using step-by-step

[[Page 61890]]

instructions with simple words and animation. The applicant also stated 
that instructions include non-technical language and color-coded parts 
to enable easier training, faster set-up, and simpler management 
including clear alarm explanations and resolution instructions.
    Second, the applicant stated that the Tablo[supreg] System can 
accommodate treatments at home, allowing for flexibility in treatment 
frequencies, durations, and flow rates. Per the applicant, the 
Tablo[supreg] System did not have a pre-configured dialyzer, which 
allows clinicians to use a broad range of dialyzer types and 
manufactures, allowing for greater customization of treatment for the 
patient. The applicant stated that this was an improvement over the 
incumbent home device, which requires a separate device component and 
complex process to switch to another dialyzer.
    Third, the applicant stated that the Tablo[supreg] System is an 
all-in-one system with integrated water purification and on-demand 
dialysate production, eliminating the need for industrial water 
treatment rooms that are required to operate traditional HD machines. 
The applicant also stated that electronic data capture and automatic 
wireless transmission eliminate the need for manual record keeping by 
the patient, care partner, or nurse. Per the applicant, a single-use 
Tablo[supreg] Cartridge with pre-strung blood, saline, and infusion 
tubing and a series of sensor-receptors mounted to an organizer snaps 
into the system, minimizing difficult connections that require 
additional training. The applicant stated that automated features, 
including an integrated blood pressure monitor, air removal, priming, 
and blood return, minimize user errors, save time, and streamline the 
user experience.
    Fourth, the applicant stated that the Tablo[supreg] System's two-
way wireless connectivity and data analytics provide the ability to 
continuously activate new capabilities and enhancements through 
wireless software updates, while also enabling predictive preventative 
maintenance to maximize machine uptime.
    The applicant stated that currently 88 percent of patients receive 
HD in a clinic 3 times per week, for 3.0 to 4.5 hours a day and fewer 
than 2 percent perform HD treatment at home.\3\ The applicant stated 
that 25 to 36 percent of home HD patients return to in-center care 
within 1 year of initiating HD at home.4 5 Per the 
applicant, barriers to home dialysis adoption and retention have been 
well studied and include treatment burden for patients and care partner 
fatigue; technical challenges with operating a HD machine; space, home 
modifications, and supplies management; patients not wanting medical 
equipment in the home; and safety concerns.6 7
---------------------------------------------------------------------------

    \3\ United States Renal Data System. 2020 USRDS Annual Data 
Report: Epidemiology of kidney disease in the United States, End-
Stage Renal Disease Chapter 2. National Institutes of Health, 
National Institute of Diabetes and Digestive and Kidney Diseases, 
Bethesda, MD 2020. Available at: https://adr.usrds.org/2020/end-stage-renaldisease/introduction-to-volume-2. Accessed on Jan. 21, 
2021.
    \4\ Seshasai, R.K., et al. (2019). The home hemodialysis patient 
experience: A qualitative assessment of modality use and 
discontinuation. Hemodialysis International, 23: 139-150, 2019. 
doi:10.1111/hdi.12713.
    \5\ Weinhandl, Eric D., Collins Allan, Incidence of Therapy 
Cessation among Home Hemodialysis Patients in the United States, 
Abstract presented, American Society of Nephrology Kidney Week 2016.
    \6\ Seshasai, R.K., et al (2019). The home hemodialysis patient 
experience: A qualitative assessment of modality use and 
discontinuation. Hemodialysis International, 23: 139-150, 2019. 
doi:10.1111/hdi.12713.
    \7\ Chan, Christopher T. et al. (2018). Exploring Barriers and 
Potential Solutions in Home Dialysis: An NKF-KDOQI Conference 
Outcomes Report American Journal of Kidney Diseases, Volume 73, 
Issue 3, 363-371.
---------------------------------------------------------------------------

    The applicant stated that innovation in making home dialysis more 
accessible to patients has been lacking due to a lack of investment 
funding, limited incremental reimbursement for new technology, and a 
consolidated, price-sensitive dialysis provider market where the lack 
of market competition is costly and has been associated with increased 
hospitalizations in dialysis patients.\8\ The applicant stated that the 
Tablo[supreg] System was designed to address many system-related 
barriers that result in patients deciding on in-center care and/or 
stopping home modalities due to the burden of self-managed therapy.
---------------------------------------------------------------------------

    \8\ Erickson, K.F., Zheng, Y., Ho, V., Winkelmayer, W.C., 
Bhattacharya, J., & Chertow, G.M. (2018). Market Competition and 
Health Outcomes in Hemodialysis. Health services research, 53(5), 
3680-3703. https://doi.org/10.1111/1475-6773.12835.
---------------------------------------------------------------------------

    The applicant stated that while peritoneal dialysis (PD), like HD, 
removes excess fluid and waste from the body, it has a different 
mechanism of action and relies on the body's own membrane, the 
peritoneum, to act as the ``dialyzer''. Per the applicant, PD requires 
surgical placement of a catheter in the abdomen and utilizes a 
cleansing fluid, dialysate, that must be infused and dwell in the 
abdomen to remove waste products from the blood. The applicant stated 
that PD must be conducted daily to achieve adequate dialysis and can be 
conducted manually or via a cycler; while in contrast, HD directly 
cleanses the blood with the use of a HD machine, dialysate and a 
dialyzer, which acts as an artificial kidney in removing excess fluid 
and toxins. The applicant stated that HD also requires surgical 
placement of a dialysis access, which is usually in the form of a 
catheter or a more permanent arteriovenous fistula.\9\
---------------------------------------------------------------------------

    \9\ Blake, P.G., Quinn, R.R., & Oliver, M.J. (2013). Peritoneal 
dialysis and the process of modality selection. Peritoneal dialysis 
international: Journal of the International Society for Peritoneal 
Dialysis, 33(3), 233-241. https://doi.org/10.3747/pdi.2012.00119.
---------------------------------------------------------------------------

    The applicant asserted that PD is the dominant home therapy used 
around the world, but should not be solely relied upon to increase 
growth in home dialysis, as there are physiological 
contraindications.\10\ The applicant also stated that there is recent 
evidence that post 90-day mortality is higher in PD patients than in HD 
patients. Per the applicant, multivariable risk-adjusted analyses 
demonstrated that the mortality hazard ratio of HD versus PD is 0.74 
(95 percent confidence interval (CI), 0.68-0.80) in the 270 to 360-day 
period after starting dialysis.\11\ The applicant stated that patients 
and clinicians should weigh the risks and benefits of both options and 
select the one that meets the individual patient's preferences, goals, 
values and physiology. Per the applicant, because PD relies on the 
patient's own membrane, physiologic changes can occur and result in 
patients who are unable to continue PD due to loss of the ability to 
achieve adequacy. The applicant stated that these home patients could 
consider home HD rather than a return to in-center and noted that the 
practice of transitioning from one home modality to another is 
acknowledged by experts to be underutilized and is particularly 
pronounced in the U.S., where the ratio of PD use to home HD is 
6:1,\12\ as compared to 4:1 in Canada.\13\
---------------------------------------------------------------------------

    \10\ Ibid.
    \11\ Mukhopadhyay, P., Woodside, K.J., Schaubel, D.E., Repeck, 
K., McCullough, K., Shahinian, V.B., . . . & Saran, R. (2020). 
Survival among incident peritoneal dialysis versus hemodialysis 
patients who initiate with an arteriovenous fistula. Kidney 
Medicine, 2(6), 732-741.
    \12\ United States Renal Data System. 2020 USRDS Annual Data 
Report: Epidemiology of kidney disease in the United States, End-
Stage Renal Disease Chapter 2. National Institutes of Health, 
National Institute of Diabetes and Digestive and Kidney Diseases, 
Bethesda, MD 2020. Available at: https://adr.usrds.org/2020/end-stage-renaldisease/introduction-to-volume-2. Accessed on Jan 21, 
2021.
    \13\ Canada Institute for Health Information (2020): Annual 
Statistics. Available at: https://secure.cihi.ca/estore/productSeries.htm?locale=en&pc=PCC24&_ga=2.265337481.729263172.1612199530-510791291.1610562424. Accessed on Jan. 31, 2021.

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[[Page 61891]]

    The applicant asserted that the Tablo[supreg] System presented a 
significant clinical improvement over NxStage[supreg] System 
OneTM (NxStage[supreg]), the current standard of home HD 
care, with the goal of getting patients access to easier to use 
technology and increasing the number of patients who can do dialysis at 
home. Per the applicant, NxStage[supreg] is the only other mobile HD 
machine that is approved for home use.
(1) Renal Dialysis Service Criterion (Sec.  413.236(b)(1))
    With respect to the first TPNIES eligibility criterion under Sec.  
413.236(b)(1), whether the item has been designated by CMS as a renal 
dialysis service under Sec.  413.171, maintenance dialysis treatments 
and all associated services, including historically defined dialysis-
related drugs, laboratory tests, equipment, supplies, and staff time, 
were included in the composite rate for renal dialysis services as of 
December 31, 2010 (75 FR 49036). An in-home HD machine would be 
considered equipment essential for the provision of maintenance 
dialysis. We received no public comments on whether the Tablo[supreg] 
System meets this criterion. Based on its status as an in-home HD 
machine, we consider the Tablo[supreg] System to be a renal dialysis 
service under Sec.  413.171.
(2) Newness Criterion (Sec.  413.236(b)(2))
    With respect to the second TPNIES eligibility criterion under Sec.  
413.236(b)(2), whether the item is new, meaning within 3 years 
beginning on the date of the FDA marketing authorization, the applicant 
indicated that the Tablo[supreg] System received FDA marketing 
authorization for home use on March 31, 2020.\14\ We received no public 
comments on whether the Tablo[supreg] System meets the newness 
criterion. Based on the information provided by the applicant, we agree 
that the Tablo[supreg] System meets the newness criterion.
---------------------------------------------------------------------------

    \14\ As we stated in the CY 2022 ESRD PPS proposed rule (86 FR 
36334), in reviewing the enclosure to which the March 31, 2020 FDA 
authorization letter refers, the applicant's Section 510(k) 
submission indicated that the Tablo[supreg] Cartridge was reviewed 
separately from the Tablo[supreg] System and has its own separate 
510(k) clearance. We further stated that, in the CY 2021 ESRD PPS 
final rule, CMS determined that the cartridge did not meet the 
newness criterion for the TPNIES (85 FR 71464) and as such, the 
cartridge was not new.
---------------------------------------------------------------------------

(3) Commercial Availability Criterion (Sec.  413.236(b)(3))
    With respect to the third eligibility criterion under Sec.  
413.236(b)(3), whether the item is commercially available by January 1 
of the particular calendar year, meaning the year in which the payment 
adjustment would take effect, applicant indicated that the 
Tablo[supreg] System became available for home use on April 1, 2020. We 
received no public comments on whether the Tablo[supreg] System meets 
the commercial availability criterion. Based on the information 
provided by the applicant, we agree that the Tablo[supreg] System meets 
the commercial availability criterion.
(4) HCPCS Level II Application Criterion (Sec.  413.236(b)(4))
    The fourth TPNIES eligibility criterion, under Sec.  413.236(b)(4), 
is whether the applicant has submitted a complete HCPCS Level II code 
application in accordance with the HCPCS Level II coding procedures on 
the CMS website, by the HCPCS Level II code application deadline for 
biannual Coding Cycle 2 for DMEPOS items and services as specified in 
the HCPCS Level II coding guidance on the CMS website prior to the 
particular calendar year. The applicant indicated that it submitted a 
HCPCS Level II code application on July 6, 2021, which was same day as 
the deadline specified HCPCS Level II code application deadline for 
biannual Coding Cycle 2 for DMEPOS items and services specified in CMS 
guidance.\15\ We received no public comments on whether the 
Tablo[supreg] System meets this criterion. Based on the information 
provided by the applicant, we agree the applicant has met the HCPCS 
Level II application criterion.
---------------------------------------------------------------------------

    \15\ https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/2020-HCPCS-Application-and-Instructions.pdf.
---------------------------------------------------------------------------

(5) Innovation Criterion (Sec. Sec.  413.236(b)(5) and 412.87(b)(1))
    With respect to the fifth TPNIES eligibility criterion under Sec.  
413.236(b)(5), that the item is innovative, meaning it meets the 
substantial clinical improvement criteria specified in Sec.  
412.87(b)(1), the applicant claimed that the Tablo[supreg] System 
significantly improves clinical outcomes relative to the current 
standard of care for home HD services, which it identified as the 
incumbent NxStage[supreg] home dialysis machine. The applicant 
presented the following substantial clinical improvement claims: (1) 
Decreased treatment frequency with adequate dialysis clearance; (2) 
increased adherence to dialysis treatment and retention to home 
therapy; and (3) improved patient quality of life. The applicant 
supported these claims with the Tablo[supreg] System Investigational 
Device Exemption (IDE) Study \16\ and secondary support from four 
papers 17 18 19 20 and two posters.21 22 The 
applicant also provided comparison data from three studies directly 
related to the incumbent 23 24 25 and an additional study 
that, based on the timeframe of the study, likely involved participants 
undergoing treatment with NxStage[supreg] although the article does not 
directly reference the incumbent.\26\
---------------------------------------------------------------------------

    \16\ Clinicaltrials.gov website. https://www.clinicaltrials.gov/ct2/show/NCT02460263. Last Updated July 1, 2020. https://www.clinicaltrials.gov/ProvidedDocs/63/NCT02460263/Prot_000.pdf.
    \17\ Chertow, G.M., Alvarez, L., Plumb, T.J., Prichard, S.S., & 
Aragon, M. (2020). Patient-reported outcomes from the 
investigational device exemption study of the Tablo hemodialysis 
system. Hemodialysis International, 24(4), 480-486.
    \18\ Leypoldt, J.K., Prichard, S., Chertow, G.M., & Alvarez, L. 
(2019). Differential molecular modeling predictions of mid and 
conventional dialysate flows. Blood purification, 47(4), 369-376.
    \19\ Safety and efficacy of the Tablo hemodialysis system for 
in-center and home hemodialysis Plumb, T.J., Alvarez, L., Ross, 
D.L., Lee, J.J., Mulhern, J.G., Bell, J.L., Abra, G., Prichard, 
S.S., Chertow, G.M. and Aragon, M.A. (2019), Hemodialysis 
International.
    \20\ Plumb, Troy J., Luis Alvarez, Dennis L. Ross, Joseph J. 
Lee, Jeffrey G. Mulhern, Jeffrey L. Bell, Graham E. Abra, Sarah S. 
Prichard, Glenn M. Chertow, and Michael A. Aragon. ``Self-care 
training using the Tablo hemodialysis system.'' Hemodialysis 
International (2020).
    \21\ Alvarez, Luis et al. Urea Clearance Results in Patients 
Dialyzed Thrice-weekly Using a Dialysate Flow of 300 mL/min, 
clinical abstract, presented March 2019, Annual Dialysis Conference, 
Dallas, TX.
    \22\ Chahal, Y., Plumb, T., Aragon M. (2020). Patient Device 
Preference for Home Hemodialysis: A Subset Analysis of the Tablo 
Home IDE Trial. Poster Presentation at National Kidney Foundation 
Spring Clinical Conference, March 2020.
    \23\ Kraus, M., et al, A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease. 
Hemodialysis International, 11: 468-477, (2007).
    \24\ Finkelstein, F.O., et al. (2012). At-home short daily 
hemodialysis improves the long-term health-related quality of life. 
Kidney international, 82(5), 561-569.
    \25\ Weinhandl, E.D., Gilbertson, D.T., & Collins, A.J. (2016). 
Mortality, hospitalization, and technique failure in daily home 
hemodialysis and matched peritoneal dialysis patients: A matched 
cohort study. American Journal of Kidney Diseases, 67(1), 98-110.
    \26\ Suri, R.S., Li, L., & Nesrallah, G.E. (2015). The risk of 
hospitalization and modality failure with home dialysis. Kidney 
international, 88(2), 360-368.
---------------------------------------------------------------------------

    We provided an overview of these ten sources in the CY 2022 ESRD 
PPS proposed rule (86 FR 36333 through 36343), followed by the 
applicant's summary of how the data support each claim of substantial 
clinical improvement.\27\ We also included in the CY 2022 ESRD PPS 
proposed rule a discussion of how we were applying the requirements of 
Sec.  413.236(b)(5) to our review of the application and a summary of 
our preliminary concerns.

[[Page 61892]]

We stated that we did not include detailed summaries of the remaining 
supplemental content included with the application. Specifically, the 
applicant submitted numerous supplemental background materials related 
to the dialysis industry, reimbursement patterns, modalities, treatment 
frequencies, patient adherence, hospitalization rates, and quality of 
life. The applicant also submitted several letters of support for the 
Tablo[supreg] System; three from dialysis patients, three from 
nephrologists, and one from a dialysis clinic nurse. These letters 
emphasized benefits of the Tablo[supreg] System, including reduced 
frequency of dialysis treatment, improved home dialysis retention, 
reduced patient and caregiver burden, reduced patient fatigue, and 
improved patient quality of life.
---------------------------------------------------------------------------

    \27\ 86 FR 36335-36342.
---------------------------------------------------------------------------

(a) Applicant Substantial Clinical Improvement Sources
    As we discussed in the CY 2022 ESRD PPS proposed rule (86 FR 
36335), the applicant's primary support for its three substantial 
clinical improvement claims came from a prospective, multicenter, open-
label, non-randomized crossover study that compared in-center and in-
home HD performance using the Tablo[supreg] System. Per the applicant, 
this study is referred to as the Tablo[supreg] System Investigational 
Device Exemption (IDE) Study and the original study protocol and 
amendments were approved by FDA and registered on http://www.clinicaltrials.gov as ID: NCT02460263. The applicant stated that of 
the 30 participants enrolled (17 White and 13 Black or African 
American), 28 (18 men and 10 women) completed the study. Thirteen of 
the participants had previous home HD experience with NxStage[supreg], 
and the remainder had previously received conventional in-center HD 
care. The applicant also noted that the Tablo[supreg] System IDE study 
sample was comprised of a representative cohort of dialysis patients 
and reported that it was similar to the population studied for the IDE 
study for the incumbent NxStage[supreg]. As described in the study 
protocol, the primary and secondary efficacy endpoints were a 
standardized weekly Kt/V of greater than or equal to 2.1 and 
ultrafiltration (fluid removal) value as reported by the device within 
ten percent of the expected fluid removal based on the ultrafiltration 
prescription and the Tablo[supreg] System Console fluid removal 
algorithm, respectively.\28\ We clarified in the CY 2022 ESRD PPS 
proposed rule that Kt/V is a value used to quantify dialysis treatment 
adequacy and ``K'' = dialyzer clearance, ``t'' = time, and ``V'' = 
Volume of distribution of urea. The applicant stated that each study 
participant served as his or her own control and remained in the trial 
for approximately 21 weeks, during which time they were prescribed HD 
with the Tablo[supreg] System on a 4 times per week schedule. The 
applicant explained that the trial consisted of 4 treatment periods: 
(1) A 1 week, in-center run-in period; (2) an in-center period of 32 
treatments (approximately 8 weeks) during which ESRD facility staff 
managed the dialysis treatments; (3) a transition period of up to 4 
weeks to train the patient and care partner in managing the dialysis; 
and (4) a final in-home period of 32 treatments (approximately 8 
weeks).
---------------------------------------------------------------------------

    \28\ Clinicaltrials.gov website. https://www.clinicaltrials.gov/ct2/show/NCT02460263. Last Updated July 1, 2020. https://www.clinicaltrials.gov/ProvidedDocs/63/NCT02460263/Prot_000.pdf.
---------------------------------------------------------------------------

    With respect to the applicant's secondary sources of support, a 
poster presentation from Alvarez, et al., presented dialysis adequacy 
data collected from a retrospective review of 29 patients' (18 males, 
11 females and 17 percent Black, 10 percent Hispanic) dialysis records. 
The study compared Kt/V results of patients aged 34-84 receiving 
dialysis using the Tablo[supreg] System to patients receiving dialysis 
from a conventional HD machine. The majority of patients used a fistula 
or graft (59 percent fistula, 28 percent graft, 10 percent catheter). 
One hundred ninety two dialysis treatments were conducted on a thrice-
weekly schedule using the Tablo[supreg] System with a dialysate flow 
rate of 300 mL per minute. A single pool Kt/V of greater than 1.2 was 
achieved in 94 percent of treatments in patients less than 90 kg with 
an average duration of treatment at 224 +/-29 minutes and in 79 percent 
of treatments in patients greater than 90 kg with an average duration 
of treatment at 249 +/-27 minutes. The average achieved Kt/V was 1.4 +/
-0.2 among treatments provided with the Tablo[supreg] System. Eighty-
eight treatments were conducted using a conventional HD machine with a 
dialysate flow rate of 500 mL per minute. A single pool Kt/V of greater 
than 1.2 was achieved in 93 percent of treatments in patients less than 
90 kg with an average duration of treatment at 227 +/-21 minutes and in 
83 percent of treatments in patients greater than 90 kg with an average 
duration of treatment at 249 +/-14 minutes. The average achieved Kt/V 
was 1.6 +/-0.4 among the conventional HD treatments.\29\
---------------------------------------------------------------------------

    \29\ Alvarez, Luis et al. Urea Clearance Results in Patients 
Dialyzed Thrice-weekly Using a Dialysate Flow of 300 mL/min, 
clinical abstract, presented March 2019, Annual Dialysis Conference, 
Dallas, TX.
---------------------------------------------------------------------------

    Next, an article from Chertow, et al., described additional data 
from the Tablo[supreg] System IDE study (discussed previously), 
including health-related quality of life, to further assess the safety 
of home HD with the Tablo[supreg] System. Demographic information 
identified the mean age as 49.8 + 13 years, 62 percent male, 62 percent 
White, 38 percent Black or African American, 23 percent Hispanic or 
Latino, 68 percent Not Hispanic or Latino, and 8 percent not reported, 
among patients established on home HD. Among the patients new to home 
HD, the mean age was identified as 54.2 + 10.4 years, 65 percent male, 
53 percent White, 47 percent Black or African American, 29 percent 
Hispanic or Latino, 71 percent Not Hispanic or Latino, and 0 percent 
not reported. Twenty-eight of 30 patients (93 percent) completed all 
trial periods. Adherence to the prescribed 4 treatments per week 
schedule was 96 percent in-center and 99 percent in-home. The median 
time to recovery was 1.5 hours during the in-center and 2 hours during 
the at-home phase of the trial. Median index values on the 5-level 
EuroQol-5 Dimension (EQ-5D-5L) (a self-assessed, health related, 
quality of life questionnaire) were similar during the in-center as 
compared to in-home dialysis at 0.832 and 0.826, respectively. Patients 
new to home HD had lower median values (0.751) for both in-center and 
in-home periods. Patients who had used home dialysis prior to the trial 
had higher median values during both in-center (0.903) and in-home 
(0.906) periods. Patients reported feeling alert or well-rested with 
little difficulty falling or staying asleep or feeling tired and worn 
out when using the Tablo[supreg] System in either environment. The 
authors concluded that when using the Tablo[supreg] System in-home, 
patients reported similar time to recovery, general health status, and 
sleep quality compared to using the Tablo[supreg] System in-center.\30\
---------------------------------------------------------------------------

    \30\ Chertow, G.M., Alvarez, L., Plumb, T.J., Prichard, S.S., & 
Aragon, M. (2020). Patient-reported outcomes from the 
investigational device exemption study of the Tablo hemodialysis 
system. Hemodialysis International, 24(4), 480-486.
---------------------------------------------------------------------------

    Next, an article from Leypoldt, et al., described the use of uremic 
solute kinetic models to assess dialysis adequacy via theoretical 
single pool Kt/V levels when varying the dialysis blood flow rates and 
the patient urea volume of distribution. A comparison was made between 
dialysate flows of 300 and 500 mL/min at blood flows of both 300 and 
400 mL/min. The patient urea volume of

[[Page 61893]]

distribution range modeled by the authors ranged from 25 to 45 L. Under 
ideal conditions, the authors demonstrated that with a blood flow of 
300 mL per minute, a single pool Kt/V of greater than 1.2 could be 
achieved in patients with a urea volume of distribution of 35 L and 240 
minutes of dialysis. Patients with a urea volume of distribution of 40 
L would require 255 minutes of dialysis. Patients with a urea volume of 
distribution of 45 L would require over 270 minutes of dialysis. With a 
blood flow of 400 mL per minute, patients with a urea volume of 
distribution of 40 L could achieve the target single pool Kt/V of 
greater than 1.2 with 240 minutes of dialysis. Patients with a volume 
of distribution of 45 L could achieve the target with 270 minutes of 
dialysis. The authors did not model urea kinetics for patients with 
volumes of distribution greater than 45 L.\31\
---------------------------------------------------------------------------

    \31\ Leypoldt, J.K., Prichard, S., Chertow, G.M., & Alvarez, L. 
(2019). Differential molecular modeling predictions of mid and 
conventional dialysate flows. Blood purification, 47(4), 369-376.
---------------------------------------------------------------------------

    Next, an article by Plumb, et al., described the Tablo[supreg] 
System IDE study (discussed previously). Demographic information 
reflected the mean age as 52.3 + 11.6 years, 19 men and the following 
racial and ethnic representation: 17 White, 13 Black or African 
American, 8 Hispanic or Latino, and 21 Not Hispanic or Latino. 
Comparisons among the 28 patients in this study and subsequent 
secondary analyses were either made between the 8 weeks of using the 
Tablo[supreg] System for in-center HD and the 8 weeks of the 
Tablo[supreg] System for in-home HD or between using the Tablo[supreg] 
System in-home HD and the treatment provided prior to study enrollment. 
In both settings, patients dialyzed using the Tablo[supreg] System 4 
times per week. The primary efficacy endpoint was achievement of a 
weekly standard Kt/V greater than or equal to 2.1 in both the 8-week 
in-center phase of the study and the 8-week in-home phase of the study. 
This endpoint was achieved in 199 of 200 weeks in the in-center 
dialysis period and in 168 of 171 weeks in the in-home dialysis period. 
The primary safety endpoint of adverse event rates were similar at 1.9 
percent in the in-center dialysis period and 1.8 percent in the in-home 
dialysis period. The secondary efficacy endpoint was whether the 
ultrafiltration volume and rate achieved the prescribed levels. In both 
in-center and in-home dialysis, 94 percent of treatments achieved 
successful delivery of ultrafiltration, defined as a rate within ten 
percent of the prescribed value. Of 960 in-center dialysis services and 
896 in-home dialysis services, 922 and 884 were completed respectively, 
yielding adherence rates of 96 percent and 99 percent.\32\
---------------------------------------------------------------------------

    \32\ Safety and efficacy of the Tablo hemodialysis system for 
in-center and home hemodialysis Plumb, T.J., Alvarez, L., Ross, 
D.L., Lee, J.J., Mulhern, J.G., Bell, J.L., Abra, G., Prichard, 
S.S., Chertow, G.M. and Aragon, M.A. (2019), Hemodialysis 
International.
---------------------------------------------------------------------------

    Next, a separate article by Plumb et al., reported additional data 
from the Tablo[supreg] System IDE study (previously discussed) 
regarding participants' assessment of the Tablo[supreg] System's ease-
of-use, the degree of dependence on health care workers and caregivers 
after training with the system was complete, and the training time 
required for a participant to be competent in self-care. Demographic 
information reflected the mean age as 52.6 years, 18 men, 10 women, 16 
White, 7 Hispanic or Latino, 9 Not Hispanic or Latino, and 12 Black or 
African American. Participants were stratified according to whether 
they were previously on self-care dialysis at home or conventional in-
center HD. Thirteen participants had previous experience performing 
self-care HD. The remaining 15 participants had previous experience 
with in-center HD only. All participants rated the Tablo[supreg] 
System's setup, treatment, and takedown on a scale from 1 (very 
difficult) to 5 (very simple) and indicated whether they had required 
assistance with treatment over the prior 7 days. Set up times were 
similar regardless of whether the participants were previously on self-
care HD or conventional in-center HD. For the participants previously 
on in-center HD, the average set up time for the concentrates was 0.93 
minutes and for the cartridge, 9.35 minutes. For participants 
previously on self-care home HD, the average set up time for the 
concentrates was 1.22 minutes and for the cartridge, 10.28 minutes. The 
average rating of the Tablo[supreg] System's ease of use for setup was 
4.5, treatment 4.6, and take down 4.6 among the participants previously 
on self-care home HD. In comparison, based on recollection (not based 
on rating during time of use) these participants' average rating of 
their previous device's ease of use for setup was 3.5, treatment 3.3, 
and take down 3.8. The average rating of the Tablo[supreg] System's 
ease of use for setup and treatment was 4.6 and 4.7 for take down among 
participants without prior self-care experience.
    Among patients surveyed, caregiver assistance was required in 62 
percent of patient-weeks during home self-care. Participants previously 
on self-care home HD required some caregiver assistance in 42 percent 
of the in-home dialysis treatment weeks. Participants previously on 
conventional in-center dialysis required some caregiver assistance in 
35 percent of the in-home dialysis treatment weeks. The requirement for 
some form of assistance among participants with or without previous 
self-care experience was not meaningfully different. Finally, the 
authors noted that a protocol amendment allowed for the recording of 
the number of training sessions necessary to deem a patient competent 
to do self-care dialysis. This recording was limited to the last 15 
participants enrolled into the study. Five of these participants had 
previous self-care dialysis at home experience. The average number of 
training sessions required to be deemed competent was 3.6 for 
participants with previous self-care dialysis at home experience and 
3.9 sessions for participants with only conventional in-center HD 
experience.\33\
---------------------------------------------------------------------------

    \33\ Plumb, Troy J., Luis Alvarez, Dennis L. Ross, Joseph J. 
Lee, Jeffrey G. Mulhern, Jeffrey L. Bell, Graham E. Abra, Sarah S. 
Prichard, Glenn M. Chertow, and Michael A. Aragon. ``Self-care 
training using the Tablo hemodialysis system.'' Hemodialysis 
International (2020).
---------------------------------------------------------------------------

    Next, a poster presentation from Chahal, et al., reported patient 
device preference of prior in-home HD patients based on data from the 
Tablo[supreg] System IDE study (previously discussed). The authors 
noted that 13 of the 30 participants in the Tablo[supreg] System IDE 
trial were performing in-home HD at the time of enrollment and that 
prior to the study, dialysis prescriptions averaged 4.5 treatments per 
week with an average time of 3.1 hours per session. Trial prescriptions 
were for 4 days per week and an average of 3.4 hours per session. 
Adherence to the study regimen was 97 percent and 92 percent of surveys 
were completed. The authors concluded that participants with prior home 
HD experience preferred the Tablo[supreg] System compared to their 
prior device and 85.6 percent found that the Tablo[supreg] System was 
easier to use.\34\
---------------------------------------------------------------------------

    \34\ Chahal, Y., Plumb, T., Aragon M. (2020). Patient Device 
Preference for Home Hemodialysis: A Subset Analysis of the Tablo 
Home IDE Trial. Poster Presentation at National Kidney Foundation 
Spring Clinical Conference, March 2020.
---------------------------------------------------------------------------

    As stated previously in the CY 2022 ESRD PPS proposed rule (86 FR 
36337), the applicant submitted several sources pertaining to the 
incumbent, NxStage[supreg]. First, an article from Kraus et al., 
described a feasibility study to demonstrate the safety of center-based 
versus home-based daily HD with the NxStage[supreg] portable HD device. 
This retrospective analysis examined the extent to which clinical 
effects

[[Page 61894]]

previously associated with short-daily dialysis were also seen using 
the NxStage[supreg] device. The authors conducted a prospective, two-
treatment, two-period, open-label, crossover study of in-center HD vs. 
home HD in 32 patients treated at six U.S. centers. Demographic 
information reflected the mean age as 51 years, 63 percent male, 38 
percent female, 24 White, 6 Black or African American, 1 American 
Indian or Alaskan native, and 1 Asian. The 8-week In-Center Phase (6 
days/week) was followed by a 2-week transition period and then followed 
by the 8-week Home Phase (6 days/week). Data was collected 
retrospectively on HD treatment parameters immediately preceding the 
study in a subset of patients. Twenty-six out of 32 patients (81 
percent) successfully completed the study. Treatment compliance 
(defined as completing 43 to 48 treatments in a given phase) was 
comparable between the 2 treatment environments (88 percent In-Center 
vs. 89 percent Home). Successful delivery of at least 90 percent of 
prescribed fluid volume (primary endpoint) was achieved in 98.5 percent 
of treatments in-center and 97.3 percent at home. Total effluent volume 
as a percentage of prescribed volume was between 94 percent and 100 
percent for all study weeks. The composite rate of intradialytic and 
interdialytic adverse events per 100 treatments was significantly 
higher for the In-Center Phase (5.30) compared with the Home Phase 
(2.10; p=0.007). Compared with the period immediately preceding the 
study, there were reductions in blood pressure, antihypertensive 
medications, and interdialytic weight gain. The study concluded that 
daily home HD with a small, easy-to-use HD device is a viable dialysis 
option for ESRD patients capable of self/partner administered 
dialysis.\35\
---------------------------------------------------------------------------

    \35\ Kraus, M., et al., A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease. 
Hemodialysis International, 11: 468-477, (2007).
---------------------------------------------------------------------------

    Second, an article from Finkelstein et al., reported on interim 
results of the Following Rehabilitation, Economics and Everyday-
Dialysis Outcome Measurements (FREEDOM) study, a multi-center, 
prospective, cohort study of at-home short daily HD with a planned 12-
month follow-up (ClinicalTrials.gov identifier, NCT00288613). Eligible 
patients were adults with ESRD requiring dialysis who were being 
initiated on short daily HD (prescribed 6 times per week) at home using 
the NxStage[supreg] cycler and who had Medicare as their primary 
insurance payer. The authors examined the long-term effect of short 
daily HD on health-related quality of life, as measured by the Short 
Form-36 (SF-36) health survey. The survey was administered at baseline, 
4 and 12 months after initiation of short daily HD to 291 (total 
cohort) participants. Demographic information reflected the mean age as 
53 years, 66 percent male and 70 percent White. Of the 291 
participants, 154 completed the 12-month follow-up (as-treated cohort).
    In the total cohort analysis, both the physical- and mental-
component summary scores improved over the 12-month period, as did all 
8 individual domains of the SF-36. The as-treated cohort analysis 
showed similar improvements with the exception of the role-emotional 
domain. Significantly, in the as-treated cohort, the percentage of 
patients achieving a physical component summary score at least 
equivalent to the general population more than doubled. The authors 
concluded by noting that at-home short daily HD is associated with 
long-term improvements in various physical and mental health-related 
quality of life measures.\36\
---------------------------------------------------------------------------

    \36\ Finkelstein, F.O., et al. (2012). At-home short daily 
hemodialysis improves the long-term health-related quality of life. 
Kidney International, 82(5), 561-569.
---------------------------------------------------------------------------

    Third, in Weinhandl, et al., authors described a cohort study in 
which 4,201 new home HD patients in 2007 were matched with 4,201 new PD 
patients in 2010 from the United States Renal Data System (USRDS) 
database to assess relative mortality, hospitalization, and technique 
failure. Demographic information reflected the mean age as 53.8 + 14.9 
years, 67 percent male, 33 percent female, 24.4 percent Black, and 75.6 
percent Nonblack. Daily home HD patients initiated use of 
NxStage[supreg] from 2007 through 2010. Authors reported home HD was 
associated with 20 percent lower risk for all-cause mortality, 8 
percent lower risk for all-cause hospitalization, and 37 percent lower 
risk for technique failure, all relative to PD. Regarding 
hospitalization, risk comparisons favored home HD for cardiovascular 
disease and dialysis access infection and PD for bloodstream infection. 
Authors noted that matching was unlikely to reduce confounding 
attributable to unmeasured factors, including residual kidney function; 
lack of data regarding dialysis frequency, duration, and dose in daily 
home HD patients and frequency and solution in PD patients; and 
diagnosis codes used to classify admissions. The authors concluded that 
these data suggest that relative to PD, daily home HD is associated 
with decreased mortality, hospitalization, and technique failure but 
that risks for mortality and hospitalization were similar with these 
modalities in new dialysis patients.\37\
---------------------------------------------------------------------------

    \37\ Weinhandl, E.D., Gilbertson, D.T., & Collins, A.J. (2016). 
Mortality, hospitalization, and technique failure in daily home 
hemodialysis and matched peritoneal dialysis patients: a matched 
cohort study. American Journal of Kidney Diseases, 67(1), 98-110.
---------------------------------------------------------------------------

    Fourth, in Suri et al., 1116, daily home HD patients were matched 
by propensity scores to 2,784, contemporaneous USRDS patients receiving 
home PD. The authors compared hospitalization rates from 
cardiovascular, infectious, access-related or bleeding causes, and 
modality failure risk. Similar analyses were performed for 1,187, daily 
home HD patients matched to 3,173, USRDS patients receiving in-center 
conventional HD. Demographic information identified the mean age as 
50.5 years, 67.3 percent male, 70.9 percent White, 26.6 percent Black, 
and 2.5 percent Other, among the daily home HD patients. Among the home 
PD patients, the mean age was identified as 50.9 years, 66.9 percent 
male, 73.1 percent White, 25.1 percent Black and 1.2 percent Other. The 
composite hospitalization rate was significantly lower with daily home 
HD than with PD (0.93 vs. 1.35/patient-year). Daily home HD patients 
spent significantly fewer days in the hospital than PD patients (5.2 
vs. 9.2 days/patient-year), and significantly more daily home HD 
patients remained admission-free (52 percent daily home dialysis vs. 32 
percent PD). In contrast, there was no significant difference in 
hospitalizations between daily home HD and conventional HD (0.93 vs. 
1.10/patient-year). Cardiovascular hospitalizations were lower with 
daily home HD than with conventional HD (0.68) while infectious and 
access hospitalizations were higher (1.15) and 1.25 respectively). 
Significantly more PD than daily home HD patients switched back to in-
center HD (44 percent vs. 15 percent). In this prevalent cohort, daily 
home HD was associated with fewer admissions and hospital days than PD, 
and a substantially lower risk of modality failure.\38\
---------------------------------------------------------------------------

    \38\ Suri, R.S., Li, L., & Nesrallah, G.E. (2015). The risk of 
hospitalization and modality failure with home dialysis. Kidney 
International, 88(2), 360-368.
---------------------------------------------------------------------------

(b) Applicant Substantial Clinical Improvement Claims
    Regarding the applicant's first claim that the Tablo[supreg] System 
decreases treatment frequency with adequate

[[Page 61895]]

dialysis clearance, the applicant stated that the Tablo[supreg] System 
is the only mobile HD device approved for use in the home that can 
achieve adequate dialysis in as little as 3 treatments per week, while 
also providing flexibility for more frequent dialysis and thus greater 
personalization of care. The applicant stated that adequate dialysis 
for a standard, thrice-weekly treatment schedule is a single treatment 
clearance of urea, expressed as a single-pool Kt/V (spKt/V) of greater 
than 1.2 where ``K'' = dialyzer clearance, ``t'' = time, and ``V'' = 
Volume of distribution of urea. The applicant also stated that dialyzer 
clearance, or ``K'', is dependent on the mass transfer coefficient 
(KoA) characteristics of the prescribed dialyzer and prescribed blood 
and dialysate flow rates. The applicant further noted that limitations 
in ``K'' or ``t'' affect the ability of a patient to achieve adequate 
clearance during a dialysis treatment. Per the applicant, across a 
broad range of weights, patients using the Tablo[supreg] System can 
achieve the target of dialysis adequacy, a single pool Kt/V of 1.2, 
with 3 treatments per week in less than 4 hours.\39\ The applicant also 
stated that when used 4 times per week, patients using the 
Tablo[supreg] System had a higher mean weekly standard Kt/V with 
equivalent or better dialysis-related hospitalization rates,\40\ as 
compared to NxStage[supreg] IDE patients prescribed therapy at 6 days 
per week.\41\
---------------------------------------------------------------------------

    \39\ Alvarez, Luis et al. Urea Clearance Results in Patients 
Dialyzed Thrice-weekly Using a Dialysate Flow of 300 mL/min, 
clinical abstract, presented March 2019, Annual Dialysis Conference, 
Dallas, TX.
    \40\ Plumb, T.J., Alvarez, L., Ross, D.L., Lee, J.J., Mulhern, 
J.G., Bell, J.L., Abra, G., Prichard, S.S., Chertow, G.M. and 
Aragon, M.A. (2019). Safety and efficacy of the Tablo hemodialysis 
system for in-center and home hemodialysis. Hemodialysis 
International.
    \41\ NxStage Clearance Calculator. Available at: https://dosingcalculator.nxstage.com/DosingCalculator/. Accessed on Jan 21, 
2021.
---------------------------------------------------------------------------

    The applicant stated that the Tablo[supreg] System's on-demand 
dialysate production has no limitation to the volume of dialysate that 
can be produced and used during a single treatment. The applicant 
further stated that this facilitates the delivery of adequate dialysis 
clearance (Kt/V) in a standard duration and target frequency of 3 times 
per week, as well as alternate frequencies and durations as preferred 
by a patient or recommended by a health care provider.
    The applicant asserted that NxStage,[supreg] when attached to its 
PureFlowTM device, requires users to batch a set amount of 
dialysate (maximum of 60 liters) in advance of a treatment or use 
sterile dialysate bags (maximum of 30 liters). The applicant also 
stated that at its maximum dialysate flow rate (Qd) of 300ml/min, 
NxStage[supreg] greatly limits time by restricting treatment to a 
maximum of 200 minutes before exhausting its dialysate capacity (200 
min = 60L/300ml/min). The applicant stated that Dialysis Outcomes and 
Practice Patterns Study (DOPPS) data demonstrate that the current U.S. 
practice for thrice-weekly dialysis occurs at an average treatment time 
of greater than 220 minutes, and has increased in the last 25 
years.\42\ Per the applicant, with the limited ``t'', a single-pooled 
Kt/V of >1.2 cannot be expected to be achieved for the majority of U.S. 
patients with ESRD on a thrice-weekly schedule, requiring increased 
treatment frequency \43\ at home for these patients to meet the desired 
clearance level.
---------------------------------------------------------------------------

    \42\ Tentori F, Zhang J, Li Y, Karaboyas A, Kerr P, Saran R, 
Bommer J, Port F, Akiba T, Pisoni R, Robinson B. Longer dialysis 
session length is associated with better intermediate outcomes and 
survival among patients on in-center three times per week 
hemodialysis: Results from the Dialysis Outcomes and Practice 
Patterns Study (DOPPS). Nephrol Dial Transplant. 2012 
Nov;27(11):4180-8. doi: 10.1093/ndt/gfs021. Epub 2012 Mar 19. PMID: 
22431708; PMCID: PMC3529546.
    \43\ Health Management Associates (HMA) analysis of 2018 100% 
Medicare Outpatient file.
---------------------------------------------------------------------------

    In citing Leypoldt, et al., the applicant stated that data from the 
Hemodialysis (HEMO) trial combined with modeling results from Leypoldt, 
et al.,\44\ allowed for an estimation of the patients with ESRD, based 
on weight, that cannot be expected to achieve target clearance with 
standard thrice-weekly dialysis at this treatment duration. The 
applicant explained that because urea is evenly distributed throughout 
a body's water, the volume of distribution of urea is equal to a 
patient's total volume of water. The applicant also stated that total 
body water and volume of distribution of urea can be expressed as a 
volume or as a percentage of total weight and can vary based on 
numerous factors including disease state. The applicant stated that it 
is possible to estimate the percent of water for the ESRD population 
from the HEMO trial as summarized in Leypoldt et al.\45\ The applicant 
stated that in the trial, the mean patient weight was 69.8kg and the 
mean patient volume of body water (V) was 30.9L. The applicant further 
explained that from this, total body water (and volume of distribution 
of urea) were calculated as 44.3 percent of the mean weight of patients 
with ESRD (44.3 = 30.9L/69.8kg x 100). Per the applicant, applying this 
44.3 percent of total body weight to the volumes of distribution in 
Leypoldt et al.\46\ allowed for the conversion of the kinetic model 
described into anticipated patient weights. The applicant further 
stated that in calculating with standard blood flow and a higher 
dialyzer mass transfer area coefficient for urea (KoA) dialyzer, a 200 
minute treatment at a dialysate flow rate (Qd) of 300ml/min would not 
achieve what the applicant refers to as the CMS target spKt/V target 
1.2 for patients with a volume of distribution of urea (V) of 35L or 
greater. The applicant stated that these assumptions were drawn from 
NxStage[supreg] technical specifications.47 48 The applicant 
stated that at 44.3 percent of total weight, this volume of 
distribution of urea correlated to patients with ESRD with a mean 
weight above 79 kg (79 = 35L/.443) or approximately 174 pounds. Per the 
applicant, patients at or above this weight cannot be expected to 
achieve a spKt/V urea of 1.2 on a thrice-weekly schedule using the 
NxStage[supreg] system at its maximal dialysate flow rate.
---------------------------------------------------------------------------

    \44\ Leypoldt, J.K., Prichard, S., Chertow, G.M., & Alvarez, L. 
(2019). Differential molecular modeling predictions of mid and 
conventional dialysate flows. Blood purification, 47(4), 369-376.
    \45\ Ibid.
    \46\ Ibid.
    \47\ Leypoldt, J.K., Prichard, S., Chertow, G.M., & Alvarez, L. 
(2019). Differential molecular modeling predictions of mid and 
conventional dialysate flows. Blood purification, 47(4), 369-376.
    \48\ Daugirdas JT, Greene T, Depner TA, Chumela C, Rocco, MJ, 
Chertow, GM for the Hemodialysis (HEMO) Study Group. 
Anthropometrically Estimated Total Body Water Volumes are Larger 
than Modeled Urea Volume in Chronic Hemodialysis Patients: Effects 
of Age, Race and Gender. 2003. Kidney Int. 64:1108-1119.
---------------------------------------------------------------------------

    The applicant stated that for the majority of the U.S. prevalent 
ESRD population between the ages of 22-74, whose mean weight is between 
84.3-89.1 kg by age group,\49\ thrice-weekly therapy at home on 
NxStage[supreg] would not achieve the Medicare coverage standard. 
Specifically, per the applicant, Medicare's national coverage policy is 
to reimburse for dialysis care 3 times per week, regardless of the 
modality that is used, and health care providers are expected to ensure 
that patients receive adequate clearance with the 3 times per week 
cadence. The applicant also stated that MACs have discretion in 
reimbursing additional treatments with medical justification.\50\ Per 
the applicant, an analysis of Medicare

[[Page 61896]]

claims data from 2018 found that despite the limitations of the 
reimbursement policy, Medicare paid for 5 or more treatments per week 
in 50 percent of home HD patients nationwide, amounting to an estimated 
annual cost to Medicare of $122 to $126 million.\51\ However, as we 
stated in the CY 2022 ESRD PPS proposed rule (86 FR 36339), based on 
CMS review of dialysis facility claims data, among all beneficiaries 
who had home dialysis treatments in 2018, 39.1 percent had 5 or more 
dialysis sessions at least once during any week. The overall percentage 
of beneficiary-weeks that had 5 or more home HD sessions in 2018 was 
20.9 percent. Medicare payment for these additional sessions totaled 
$17 million. We noted that, as indicated in Local Coverage 
Determination ID L35014, ``Frequency of Dialysis'' (revised effective 
September 26, 2019),\52\ CMS established payment for HD based on 
conventional treatment which is defined as 3 times per week. Sessions 
in excess of 3 times per week must be both reasonable and necessary in 
order to receive payment. Covered indications include metabolic 
conditions (acidosis, hyperkalemia, hyperphosphatemia), fluid positive 
status not controlled with routine dialysis, pregnancy, heart failure, 
pericarditis, and incomplete dialysis secondary to hypotension or 
access issues. The applicant asserted that the use of the Tablo[supreg] 
System would decrease the number of necessary dialysis treatments, 
without affecting patient outcomes such as clearance or 
hospitalizations.
---------------------------------------------------------------------------

    \49\ United States Renal Data System. 2020 USRDS Annual Data 
Report: Epidemiology of kidney disease in the United States, End-
Stage Renal Disease Chapter 2. National Institutes of Health, 
National Institute of Diabetes and Digestive and Kidney Diseases, 
Bethesda, MD, 2020. Available at: https://adr.usrds.org/2020/end-stage-renaldisease/introduction-to-volume-2. Accessed on Jan 21, 
2021.
    \50\ Wilk, A.S., Hirth, R.A., Zhang, W., Wheeler, J.R., Turenne, 
M.N., Nahra, T. A., . . . & Messana, J.M. (2018). Persistent 
variation in Medicare payment authorization for home hemodialysis 
treatments. Health services research, 53(2), 649-670.
    \51\ Health Management Associates (HMA) analysis of 2018 100 
percent Medicare Outpatient file.
    \52\ Medicare Coverage Database. Retrieved May 24, 2021 from: 
https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=35014&ver=39&NCDId=79&ncdver=1&SearchType=Advanced&CoverageSelection=Both&NCSelection=NCA%7CCAL%7CNCD%7CMEDCAC%7CTA%7CMCD&ArticleType=Ed%7CKey%7CSAD%7CFAQ&PolicyType=Final&s=-%7C5%7C6%7C66%7C67%7C9%7C38%7C63%7C41%7C64%7C65%7C44&KeyWord=transplant&KeyWordLookUp=Doc&KeyWordSearchType=Exact&kq=true&bc=IAAAADgAAAAA&
.
---------------------------------------------------------------------------

    The applicant stated that there was clinical evidence and expert 
consensus that as treatment frequency increases, native residual kidney 
function drops, patient and care partner burden increases, and vascular 
access complications increase.53 54 Per the applicant, home 
use of the Tablo[supreg] System could reduce the need for a fifth or 
sixth weekly treatment without increasing patients' symptom burden.\55\ 
The applicant stated that by achieving adequacy targets with fewer 
treatments, Tablo[supreg] System patients could be expected to have 
fewer vascular access interventions and health care providers will have 
increased flexibility in personalizing the frequency and duration of 
patient treatments.56 57 The applicant stated that reducing 
treatment frequency while maintaining adequate patient clearance levels 
may also reduce complications that lead to hospitalizations. The 
applicant stated that during the Tablo[supreg] System IDE study, 
patients using the Tablo[supreg] System 4 times per week, for an 
average duration of less than 4 hours per treatment, had an all-cause 
hospital admission rate of 426 per 1,000 patient-years whereas in the 
general dialysis population, the all-cause admission rate was 1,688 per 
1,000 patient-years, and for patients who utilized PD, the 
hospitalization rate was 1,460 per 1,000 patient years.\58\
---------------------------------------------------------------------------

    \53\ National Kidney Foundation. KDOQI clinical practice 
guideline for hemodialysis adequacy: 2015 update. Am J Kidney Dis. 
2015; 66(5):884-930.
    \54\ Shafi T, Wilson RF, Greer R, Zhang A, Sozio S, Tan M, Bass 
EB. End-stage Renal Disease in the Medicare Population: Frequency 
and Duration of Hemodialysis and Quality of Life Assessment. 
Technology Assessment Program Project ID No. JHE51000. (Prepared by 
the Johns Hopkins University Evidence-based Practice Center under 
contract number HHSA 290-2015-00006I) Rockville, MD: Agency for 
Healthcare Research and Quality. July 2020. Available at: http://www.ahrq.gov/research/findings/ta/index.html.
    \55\ Safety and efficacy of the Tablo hemodialysis system for 
in-center and home hemodialysis Plumb, T.J., Alvarez, L., Ross, 
D.L., Lee, J.J., Mulhern, J.G., Bell, J.L., Abra, G., Prichard, 
S.S., Chertow, G.M. and Aragon, M.A. (2019), Hemodialysis 
International.
    \56\ FHN Trial Group. (2010). In-center hemodialysis six times 
per week versus three times per week. New England Journal of 
Medicine, 363(24), 2287-2300.
    \57\ Kuo, T.H., Tseng, C.T., Lin, W.H., Chao, J.Y., Wang, W.M., 
Li, C.Y., & Wang, M.C. (2015). Association Between Vascular Access 
Dysfunction and Subsequent Major Adverse Cardiovascular Events in 
Patients on Hemodialysis: A Population-Based Nested Case-Control 
Study. Medicine, 94(26).
    \58\ United States Renal Data System. 2020 USRDS Annual Data 
Report: Epidemiology of kidney disease in the United States, End-
Stage Renal Disease Chapter 2. National Institutes of Health, 
National Institute of Diabetes and Digestive and Kidney Diseases, 
Bethesda, MD, 2020. Available at: https://adr.usrds.org/2020/end-stage-renaldisease/introduction-to-volume-2. Reference Table G2.
---------------------------------------------------------------------------

    The applicant stated that while NxStage[supreg] has not 
specifically reported the hospitalization rates per patient-year from 
its IDE study, published data from Weinhandl et al.,\59\ and Suri et 
al.,\60\ reported hospital admission rates amongst patients on daily 
home HD ranging from 930 to 1,663 per 1,000 patient-years, using a 
national sample of dialysis patients matched for comparison to similar 
peritoneal and in-center dialysis patients. We clarified in the CY 2022 
ESRD PPS proposed rule (86 FR 36339-36340) that this would represent 
930 to 1,663 cases observed among 1,000 persons during 1 year. The 
applicant also noted that all data on home patients in Weinhandl et al. 
came from a matched cohort of NxStage[supreg] patients. Per the 
applicant, in Suri et al., data were collected prior to 2015 and that 
during this timeframe, it could be reasonably assumed that home HD 
patients were using NxStage[supreg] for treatment. The applicant stated 
that the results from these studies suggested that patients receiving 
treatment at home with NxStage[supreg] 5 to 6 times per week do not 
have a lower all-cause hospitalization rate, relative to matched in-
center HD patients. The applicant concluded by stating that because of 
the clinical and demographic diversity of the Tablo[supreg] System's 
patient population, the applicant's results showed incremental 
improvement over the hospitalization rate of the current home HD 
population.
---------------------------------------------------------------------------

    \59\ Weinhandl, E.D., Gilbertson, D.T., & Collins, A.J. (2016). 
Mortality, hospitalization, and technique failure in daily home 
hemodialysis and matched peritoneal dialysis patients: a matched 
cohort study. American Journal of Kidney Diseases, 67(1), 98-110.
    \60\ Suri, R.S., Li, L., & Nesrallah, G.E. (2015). The risk of 
hospitalization and modality failure with home dialysis. Kidney 
international, 88(2), 360-368.
---------------------------------------------------------------------------

    Regarding the applicant's second claim that the Tablo[supreg] 
System increased adherence to dialysis treatment and retention to home 
therapy, the applicant stated that patients using the Tablo[supreg] 
System have improved adherence to prescribed treatments and a higher 
rate of retention to home therapy. The applicant further stated that 
this increased adherence and retention is likely to improve patient 
outcomes by reducing the rate of dialysis-related hospitalizations and 
other adverse events associated with missing treatment in this patient 
population.\61\
---------------------------------------------------------------------------

    \61\ Chan, K.E., Thadhani, R.I., & Maddux, F.W. (2014). 
Adherence barriers to chronic dialysis in the United States. Journal 
of the American Society of Nephrology, 25(11), 2642-2648. Supporting 
evidence of association between decreased dialysis adherence and 
poor patient health and utilization outcomes.
---------------------------------------------------------------------------

    The applicant stated that adherence to prescribed dialysis 
treatments is crucial for dialysis patients because missed treatments 
increased the risk of dialysis dropout, hospitalization, and death.\62\ 
Per the applicant, the Tablo[supreg] System IDE study demonstrated a 99 
percent treatment adherence rate to all

[[Page 61897]]

prescribed home treatments \63\ among both prior in-center participants 
and prior self-care home HD participants who used NxStage[supreg]. The 
applicant also stated that the Tablo[supreg] System's adherence rates 
were similar among both the prior in-center and prior self-care 
participants. The applicant stated that these results represent a 
significant improvement over the treatment adherence rate reported in 
the NxStage[supreg] IDE, where the treatment compliance rate was 
defined less stringently as missing 5 or fewer treatments of the 48 
possible treatments and was only 89 percent among patients at home and 
during the study period.\64\ Per the applicant, using a comparable 
metric of missing 5 or fewer of all possible treatments at home, 
Tablo[supreg] System IDE patients at home had a 100 percent treatment 
compliance rate.
---------------------------------------------------------------------------

    \62\ Weinhandl, Eric D., Collins Allan, Incidence of Therapy 
Cessation among Home Hemodialysis Patients in the United States, 
Abstract presented, American Society of Nephrology Kidney Week 2016.
    \63\ Safety and efficacy of the Tablo hemodialysis system for 
in-center and home hemodialysis Plumb, T.J., Alvarez, L., Ross, 
D.L., Lee, J.J., Mulhern, J.G., Bell, J.L., Abra, G., Prichard, 
S.S., Chertow, G.M. and Aragon, M.A. (2019), Hemodialysis 
International.
    \64\ Kraus, M., et al. A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease. 
Hemodialysis International, 11: 468-477, (2007). The authors 
performed a feasibility study to demonstrate the safety of center-
based vs. home-based daily hemodialysis with the NxStage System One 
portable hemodialysis device.
---------------------------------------------------------------------------

    The applicant stated that technique failure in home HD, defined as 
reduced retention at home and a return to in-center care, has been high 
with NxStage[supreg]. Per the applicant, real world data show that 
technique failure occurs in 36 percent of home HD patients using 
NxStage[supreg] within 1 year of initiating treatment.\65\ The 
applicant stated that this was challenging for the patient and taxing 
on the healthcare system that had invested in providing patients with 
home dialysis training and in paying for more frequent therapy.
---------------------------------------------------------------------------

    \65\ Weinhandl, Eric D., Collins Allan, Incidence of Therapy 
Cessation among Home Hemodialysis Patients in the United States, 
Abstract presented, American Society of Nephrology Kidney Week 2016.
---------------------------------------------------------------------------

    The applicant stated that by directly comparing the Tablo[supreg] 
System's retention to that of NxStage[supreg], the applicant assessed 
rates in the analogous IDE populations while excluding those who exited 
either study for reasons unrelated to the device such as receipt of a 
transplant or death. The applicant stated that the Tablo[supreg] System 
demonstrated a 97 percent (28 of 29) patient retention rate for the 
entire IDE study and a 100 percent retention rate in the in-home phase 
of the trial among both prior NxStage[supreg] users and prior in-center 
patients.\66\ The applicant stated that in comparison, 81 percent of 
participants completed the NxStage[supreg] IDE study.\67\
---------------------------------------------------------------------------

    \66\ Safety and efficacy of the Tablo hemodialysis system for 
in-center and home hemodialysis Plumb, T.J., Alvarez, L., Ross, 
D.L., Lee, J.J., Mulhern, J.G., Bell, J.L., Abra, G., Prichard, 
S.S., Chertow, G.M. and Aragon, M.A. (2019), Hemodialysis 
International.
    \67\ Kraus M, Burkart J, Hegeman R, Solomon R, Coplon N, Moran 
J. A comparison of center-based vs. home-based daily hemodialysis 
for patients with end-stage renal disease. Hemodial Int. 2007 Oct; 
11(4):468-77. doi: 10.1111/j.1542-4758.2007.00229.x. PMID: 17922746.
---------------------------------------------------------------------------

    The applicant stated that the Tablo[supreg] System's ease of use 
contributed to the improved adherence and retention rates and that the 
Tablo[supreg] System is designed to enable patients to become 
proficient and independent in using the Tablo[supreg] System after an 
average of 3.9 days.\68\ Per the applicant, published NxStage[supreg] 
IDE data \69\ reported an average of 14.5 days ``to complete device 
training on NxStage[supreg].'' The applicant stated that, in 
comparison, device-related training time is reduced by at least 50 
percent on the Tablo[supreg] System. Per the applicant, the reduced 
training time and ease of use would likely improve retention and 
potentially reduce the number of reimbursable training sessions. The 
applicant stated that because of the significant role that caregivers 
play in supporting home dialysis treatments,\70\ care partner burnout 
and a patient's perception of being a burden is associated with 
discontinuation of home therapy.71 72
---------------------------------------------------------------------------

    \68\ Plumb, Troy J., Luis Alvarez, Dennis L. Ross, Joseph J. 
Lee, Jeffrey G. Mulhern, Jeffrey L. Bell, Graham E. Abra, Sarah S. 
Prichard, Glenn M. Chertow, and Michael A. Aragon. ``Self-care 
training using the Tablo hemodialysis system.'' Hemodialysis 
International (2020).
    \69\ Kraus, M., et al, A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease. 
Hemodialysis International, 11: 468-477, (2007).
    \70\ Seshasai, R.K., et al. (2019) The home hemodialysis patient 
experience: A qualitative assessment of modality use and 
discontinuation. Hemodialysis International, 23: 139-150 (2019).
    \71\ Suri, R.S., Larive, B., Hall, Y., Kimmel, P.L., Kliger, 
A.S., Levin, N., . . . & Frequent Hemodialysis Network (FHN) Trial 
Group. (2014). Effects of frequent hemodialysis on perceived 
caregiver burden in the Frequent Hemodialysis Network trials. 
Clinical Journal of the American Society of Nephrology, 9(5), 936-
942.
    \72\ Jacquet, S., & Trinh, E. (2019). The potential burden of 
home dialysis on patients and caregivers: a narrative review. 
Canadian journal of kidney health and disease, 6, 2054358119893335.
---------------------------------------------------------------------------

    Per the applicant, the 28 patients who entered the home phase of 
the Tablo[supreg] System IDE study were asked weekly if they needed 
help with their dialysis treatments during the prior 7 days. The 
applicant stated that a 96 percent response rate (216 of 224 possible) 
was achieved at the end of the study and that for both prior-in-center 
and NxStage[supreg] study participants, in 79 percent of the treatment 
weeks, patients reported needing no assistance from their care partner 
in performing dialysis set-up, treatment, or breakdown. The applicant 
explained that among the 13 prior in-home patients, all of whom were 
formerly NxStage[supreg] users, participants reported needing help from 
a trained individual with dialysis treatment in 69 percent of treatment 
weeks, with 46 percent of instances involving a need for device-related 
help. We clarified in the CY 2022 ESRD PPS proposed rule (86 FR 36340--
36341) that per Plumb, et al.,\73\ this was the baseline percentage and 
reflected 9 of the 13 patients with previous self-care experience. The 
applicant stated that patients reported needing help with treatment in 
only 42 percent of treatment weeks while using the Tablo[supreg] 
System, which was a 39 percent reduction from baseline NxStage[supreg] 
use; and only 18 percent of these instances related to use of the 
Tablo[supreg] System, which was a 61 percent reduction in rate from 
baseline NxStage[supreg] use.\74\
---------------------------------------------------------------------------

    \73\ Plumb, Troy J., Luis Alvarez, Dennis L. Ross, Joseph J. 
Lee, Jeffrey G. Mulhern, Jeffrey L. Bell, Graham E. Abra, Sarah S. 
Prichard, Glenn M. Chertow, and Michael A. Aragon. ``Self-care 
training using the Tablo hemodialysis system.'' Hemodialysis 
International (2020).
    \74\ Ibid.
---------------------------------------------------------------------------

    The applicant stated that it collected weekly data from patients by 
asking them to rate the extent to which they believed that they were a 
burden on a scale of 1 to 5, with 1 representing never and 5 
representing always. The applicant stated that this measure was adapted 
from an instrument used in assessing terminally ill patients.\75\ The 
applicant stated that the subpopulation of study participants who had 
previously used NxStage[supreg] reported an average score of 3.1 for 
self-perceived burden on their care partner when using their prior 
device, which subsequently reduced to 2.4 when using the Tablo[supreg] 
System (a 23 percent reduction in score from baseline NxStage[supreg] 
use).\76\ Per the applicant, these data underscored that a significant 
increase in patients' confidence, ability to achieve treatment 
independence at home, and subsequent reduction in the sense of self 
burden can positively contributed to success in the home setting. The 
applicant further noted that the ease of use, reduced training time, 
and substantial reduction in care partner assistance required for

[[Page 61898]]

the Tablo[supreg] System correlated to the improved retention and 
adherence rates in the Tablo[supreg] System IDE study. The applicant 
stated that on a population level, this likely translated to reduced 
barriers to continuing home HD once initiated, and ultimately, a 
reduced risk of adverse outcomes due to missed treatments. The 
applicant also stated that the Tablo[supreg] System's electronic data 
capture and automatic wireless transmission eliminates the need for 
manual record keeping, which represented an improvement with respect to 
burden and monitoring as compared to NxStage[supreg].
---------------------------------------------------------------------------

    \75\ Chochinov, H.M., Kristjanson, L.J., Hack, T.F., Hassard, 
T., McClement, S., & Harlos, M. (2007). Burden to others and the 
terminally ill. Journal of pain and symptom management, 34(5), 463-
471.
    \76\ Chertow, G.M., Alvarez, L., Plumb, T.J., Prichard, S.S., & 
Aragon, M. (2020). Patient-reported outcomes from the 
investigational device exemption study of the Tablo hemodialysis 
system. Hemodialysis International, 24(4), 480-486.
---------------------------------------------------------------------------

    Regarding the applicant's third claim that the Tablo[supreg] System 
improved patient quality of life, the applicant stated that patients on 
the Tablo[supreg] System experienced reduced disease burden, dialysis 
related symptoms, and an improved quality of life at home as compared 
to in-center and existing home care options. Per the applicant, 
patients with ESRD experience significant dialysis-related symptoms 
including difficulty sleeping, dizziness, and pain associated with 
recovery time that affect mental and physical health and lead to 
decreased overall quality of life.\77\ Per the applicant, the 
Tablo[supreg] System IDE study assessed several validated Patient-
Reported Outcome Measures (PROMs) to better understand overall health-
related quality of life (HR-QoL). The applicant explained that the 
overall measure was the EQ-5D-5L, a validated, preference-based PROM in 
which patients self-assess mobility, self-care, usual activities, pain/
discomfort, and anxiety/depression.\78\ The applicant stated that from 
these domains, an index value is calculated to report a summary score 
that ranges from 0 (death) to 1 (full health).
---------------------------------------------------------------------------

    \77\ Gabbay, E., Meyer, K.B., Griffith, J.L., Richardson, M.M., 
& Miskulin, D.C. (2010). Temporal trends in healthrelated quality of 
life among hemodialysis patients in the United States. Clinical 
journal of the American Society of Nephrology, 5(2), 261-267.
    \78\ Yang, F., Wong, C.K., Luo, N., Piercy, J., Moon, R., & 
Jackson, J. (2019). Mapping the kidney disease quality of life 36-
item short form survey (KDQOL-36) to the EQ-5D-3L and the EQ-5D-5L 
in patients undergoing dialysis. The European Journal of Health 
Economics, 20(8), 1195-1206.
---------------------------------------------------------------------------

    Per the applicant, while the NxStage[supreg] IDE study did not 
report results for a quality-of-life instrument, HR-QoL was assessed in 
NxStage[supreg] patients in a prospective multicenter observational 
study referred to as the FREEDOM trial, which examined the effects of 
at-home dialysis 6 times per week with the NxStage[supreg] System on 
costs and HR-QoL using the SF-36 instrument. The applicant further 
stated that the reported results at 4-month follow-up among these 
patients \79\ translates to a mean EQ-5D score of 0.70. The applicant 
included an appendix describing the Methodology to Derive EQ-5D Scores 
from the FREEDOM Study Results in its application and derived a 
predicted mean EQ-5D score of 0.695-0.70 at follow up for the FREEDOM 
study. The applicant further noted that because this estimate is based 
on the average aggregate change for an adjusted measure that was then 
translated to the EQ-5D scale, and the applicant did not have access to 
standard error estimates for the Mental Component Score (MCS) and 
Physical Component Score (PCS), its interpretation of this estimate and 
its variance is limited. Per the applicant, nonetheless, it provided a 
sense of the comparable HR-QoL of this sample of NxStage[supreg] 
patients at follow-up. The applicant further noted that mean EQ-5D 
index values for traditional HD and PD patients reported from a meta-
analysis of existing studies in the literature are 0.56 (95 percent CI: 
0.49-0.62) and 0.58 (95 percent CI: 0.5-0.67), respectively.\80\
---------------------------------------------------------------------------

    \79\ Finkelstein, F.O., et al. (2012). At-home short daily 
hemodialysis improves the long-term health-related quality of life. 
Kidney international, 82(5), 561-569.
    \80\ Liem, Y.S., Bosch, J.L., & Hunink, M.M. (2008). Preference-
based quality of life of patients on renal replacement therapy: a 
systematic review and meta-analysis. Value in Health, 11(4), 733-
741.
---------------------------------------------------------------------------

    Per the applicant, patients in the Tablo[supreg] System IDE study 
reported mean EQ-5D index values of 0.821 (SD: 0.163) \81\ 
in the home phase of the study with final measures taken at 
approximately 5 months from trial start. The applicant stated that this 
is a significant improvement when using traditional HD patients as a 
comparator, and higher overall HR-QoL as compared to NxStage[supreg] 
patients. The applicant emphasized that participants in the 
Tablo[supreg] System IDE trial underwent a reduced treatment frequency 
as compared to participants in the FREEDOM study who were prescribed 6 
treatments per week on NxStage[supreg]. The applicant stated that among 
patients in the Tablo[supreg] System IDE study who had previously been 
using NxStage[supreg], the mean EQ-5D score during the in-home phase of 
the study was 0.906 (SD: 0.119) and asserted that this is 
significantly greater than index population values for HD and PD.
---------------------------------------------------------------------------

    \81\ Chertow, G.M., Alvarez, L., Plumb, T.J., Prichard, S.S., & 
Aragon, M. (2020). Patient-reported outcomes from the 
investigational device exemption study of the Tablo hemodialysis 
system. Hemodialysis International, 24(4), 480-486.
---------------------------------------------------------------------------

    The applicant stated that sleep problems are present in 60 percent 
of patients with chronic kidney disease (CKD) and ESRD \82\ and that 
patients ranked fatigue and lack of energy as the most important 
contributor to their decreased quality of life.\83\ Per the applicant, 
the frequency of sleep-related symptoms among the Tablo[supreg] 
System's patients was assessed by a survey that was administered weekly 
during the Tablo[supreg] System IDE study. The applicant stated that, 
in the absence of a well-validated sleep survey specific to the ESRD 
population, study investigators selected survey questions from 
previously validated sleep questionnaires in the non-ESRD population, 
based on their relevance to the study population.84 85 The 
applicant explained that questions were designed to focus on quality of 
sleep and restfulness and noted that these measures are validated for 
use among chronically ill populations and measure the frequency of 4 
key sleep-related symptoms. The applicant stated that, while at home, 
patients on the Tablo[supreg] System reported improved quality of 
sleep, with a measurable reduction in rate of patient-reported sleep 
symptoms ranging from a 10-60 percent reduction, depending on 
symptom.\86\ The applicant stated that this reduction was observed 
among study participants who were previously receiving dialysis in-
center (average magnitude of reduction in rate across symptoms: 42 
percent) and among study participants who were previously receiving in-
home dialysis on NxStage[supreg] (average magnitude of reduction in 
rate across symptoms: 27 percent). Per the applicant, on average, 
sleep-related difficulties reduced from being reported in 33 percent of 
treatment weeks while on NxStage[supreg] to 23 percent of treatment 
weeks while on the Tablo[supreg] System.
---------------------------------------------------------------------------

    \82\ Davison SN, Levin A, Moss AH, Jha V, Brown EA, Brennan F, 
Murtagh FE, Naicker S, Germain MJ, O'Donoghue DJ, Morton RL, Obrador 
GT; Kidney Disease: Improving Global Outcomes. Executive summary of 
the KDIGO Controversies Conference on Supportive Care in Chronic 
Kidney Disease: developing a roadmap to improving quality care. 
Kidney Int. 2015 Sep;88(3):447-59.
    \83\ Urquhart-Secord, Rachel et al (2016). Patient and Caregiver 
Priorities for Outcomes in Hemodialysis: An International Nominal 
Group Technique Study American Journal of Kidney Diseases, Volume 
68, Issue 3, 444-454.
    \84\ Morin, C.M., Belleville, G., B[eacute]langer, L., & Ivers, 
H. (2011). The Insomnia Severity Index: psychometric indicators to 
detect insomnia cases and evaluate treatment response. Sleep, 34(5), 
601-608.
    \85\ Natale, V., Fabbri, M., Tonetti, L., & Martoni, M. (2014). 
Psychometric goodness of the mini sleep questionnaire. Psychiatry 
and clinical neurosciences, 68(7), 568-573.
    \86\ Chertow, G.M., Alvarez, L., Plumb, T.J., Prichard, S.S., & 
Aragon, M. (2020). Patient-reported outcomes from the 
investigational device exemption study of the Tablo hemodialysis 
system. Hemodialysis International, 24(4), 480-486.

---------------------------------------------------------------------------

[[Page 61899]]

    The applicant stated that hypotensive symptoms such as feelings of 
dizziness and lightheadedness are associated with the drops in blood 
pressure that can occur during dialysis and are also among the top ten 
symptoms dialysis patients report that impact their quality of 
life.\87\ Per the applicant, participants in the Tablo[supreg] System 
IDE study were asked at the time of enrollment regarding symptoms 
previously experienced during dialysis. The applicant also stated that 
at the end of each study treatment, participants were surveyed 
regarding the presence of any symptoms during that treatment on the 
Tablo[supreg] System. Per the applicant, a total of 8 (26.7 percent) 
subjects reported hypotensive symptoms during the Tablo[supreg] System 
treatments during the in-home treatment period, compared to 27 (90 
percent) subjects reporting hypotensive symptoms at baseline (prior to 
initiating care on the Tablo[supreg] System). The applicant reported a 
70 percent reduction in the rate of patient-reported hypotensive 
symptoms while on the Tablo[supreg] System, though, as we stated in the 
CY 2022 ESRD PPS proposed rule (86 FR 36342), we were unable to 
validate the source of this statement.
---------------------------------------------------------------------------

    \87\ Urquhart-Secord, Rachel et al (2016). Patient and Caregiver 
Priorities for Outcomes in Hemodialysis: An International Nominal 
Group Technique Study American Journal of Kidney Diseases, Volume 
68, Issue 3, 444-454.
---------------------------------------------------------------------------

    The applicant stated that currently, ESRD patients on dialysis 
report meaningfully lower quality of life compared to those with other 
chronic illnesses.\88\ The applicant further noted that decreased 
quality of life is associated with a meaningful decline in continuation 
of home therapy, dialysis frequency, and worse clinical and health care 
utilization outcomes.\89\
---------------------------------------------------------------------------

    \88\ Liem, Y.S., Bosch, J.L., Arends, L.R., Heijenbrok-Kal, 
M.H., & Hunink, M.M. (2007). Quality of life assessed with the 
Medical Outcomes Study Short Form 36-Item Health Survey of patients 
on renal replacement therapy: a systematic review and meta-analysis. 
Value in Health, 10(5), 390-397.
    \89\ Lowrie, E.G., Curtin, R.B., LePain, N., & Schatell, D. 
(2003). Medical outcomes study short form-36: a consistent and 
powerful predictor of morbidity and mortality in dialysis patients. 
American Journal of Kidney Diseases, 41(6), 1286-1292.
---------------------------------------------------------------------------

    The applicant concluded by asserting that the totality of evidence 
submitted in support of the Tablo[supreg] System demonstrates 
substantial clinical improvement over the current standard of home 
dialysis care. The applicant also stated that patient preference for 
devices is currently used by FDA to guide marketing authorization 
decisions and provides important information on the benefit and risks 
that some patients are willing to trade when choosing a device.\90\ Per 
the applicant, patients may be more likely to choose home dialysis to 
the extent that the device is both accessible and easy to use. The 
applicant also stated that 86 percent of prior NxStage[supreg] patients 
in the Tablo[supreg] System IDE study found the Tablo[supreg] System 
easier to use than their incumbent device and preferred to remain on 
the Tablo[supreg] System at the end of the study.\91\
---------------------------------------------------------------------------

    \90\ Food and Drug Administration Center for Devices and 
Radiological Health (2020). ``Patient Preference-Sensitive Areas: 
Using Patient Preference Information in Medical Device Evaluation'' 
Available at: https://www.fda.gov/about-fda/cdrh-patient-engagement/patient-preference-sensitive-areas-using-patientpreference-information-medical-device-evaluation. Accessed Jan 21, 2021.
    \91\ Chahal, Y., Plumb, T., Aragon M. (2020). Patient Device 
Preference for Home Hemodialysis: A Subset Analysis of the Tablo 
Home IDE Trial. Poster Presentation at National Kidney Foundation 
Spring Clinical Conference, March 2020.
---------------------------------------------------------------------------

    In summary, the applicant claimed that the Tablo[supreg] System 
improves the treatment of Medicare beneficiaries relative to the 
incumbent by focusing on outcomes set forth in Sec.  
412.87(b)(1)(ii)(C), including a decreased number of treatments to 
achieve dialysis adequacy, which the applicant stated leads to greater 
adherence to prescribed therapy, and improved quality of life.
(c) CMS Assessment of Substantial Clinical Improvement Claims and 
Sources
    As discussed in the CY 2022 ESRD PPS proposed rule (86 FR 36342), 
after a review of the information provided by the applicant, we had 
identified the following preliminary concerns regarding the substantial 
clinical improvement eligibility criterion for the TPNIES. We noted 
that, consistent with Sec.  413.236(c), CMS would announce its final 
determination regarding whether the Tablo[supreg] System meets the 
substantial clinical improvement criterion and other eligibility 
criteria for the TPNIES in this CY 2022 ESRD PPS final rule.
    With respect to the applicant's claim that patients can achieve 
dialysis adequacy in as little as 3 treatments per week, we noted that 
the Tablo[supreg] System IDE study did not test whether patients 
receive adequate dialysis on a thrice-weekly schedule. Instead, data 
published from the Tablo[supreg] System IDE study addressed a weekly 
measure of dialysis adequacy among patients treated on a 4 times per 
week schedule. The applicant relied on modeling and unpublished data on 
patients receiving thrice-weekly dialysis in making the conclusion that 
dialysis adequacy can be reached on a thrice-weekly schedule. 
Specifically, the applicant referred to a theoretical modeling study 
based on historical data from the USRDS, Medicare claims, and 
historical outcomes from NxStage[supreg] observational studies. The 
applicant also stated that findings from a retrospective review of 29 
patients receiving treatment with the Tablo[supreg] System on a thrice-
weekly schedule affirmed the results from the modeling study. We also 
noted that the authors in Alvarez et al.\92\ stated that conclusions 
about fluid removal could not be made from their study.
---------------------------------------------------------------------------

    \92\ Alvarez, Luis et al. Urea Clearance Results in Patients 
Dialyzed Thrice-weekly Using a Dialysate Flow of 300 mL/min, 
clinical abstract, presented March 2019, Annual Dialysis Conference, 
Dallas, Texas.
---------------------------------------------------------------------------

    We stated that we were interested in whether additional studies 
were available that address issues related to effective fluid removal 
using home self-care dialysis thrice-weekly with the Tablo[supreg] 
System. We invited comments on whether less frequent dialysis sessions 
would represent substantial clinical improvement over shorter, more 
frequent sessions that, according to the applicant, were common among 
users of the incumbent technology.
    The applicant's second claim was that the Tablo[supreg] System 
increased adherence to dialysis treatment and retention to home 
therapy, which may reduce dialysis-related hospitalizations and other 
adverse events associated with missing treatment. This claim was 
supported by the Tablo[supreg] System IDE study (28 participants 
completed the study) and the use of historical comparisons to prior 
studies involving the NxStage[supreg] System. The applicant noted that 
hospitalization rates from the Tablo[supreg] System IDE trial were 
lower than rates in the general dialysis population and rates reported 
in two observational studies of patients using the NxStage[supreg] 
device. While the applicant cited an all-cause hospitalization rate of 
426 per 1000 patient years in the Tablo[supreg] System IDE study, we 
pointed out in the CY 2022 ESRD PPS proposed rule that it did not 
appear that the sources 93 94 published these 
hospitalization rates. We further noted that the applicant relied on 
historical comparisons in asserting that that patients treated with the 
Tablo[supreg] System experience reduced

[[Page 61900]]

disease burden and improved quality of life.
---------------------------------------------------------------------------

    \93\ Safety and efficacy of the Tablo hemodialysis system for 
in-center and home hemodialysis Plumb, T.J., Alvarez, L., Ross, 
D.L., Lee, J.J., Mulhern, J.G., Bell, J.L., Abra, G., Prichard, 
S.S., Chertow, G.M. and Aragon, M.A. (2019), Hemodialysis 
International.
    \94\ Chertow, G.M., Alvarez, L., Plumb, T.J., Prichard, S.S., & 
Aragon, M. (2020). Patient-reported outcomes from the 
investigational device exemption study of the Tablo hemodialysis 
system. Hemodialysis International, 24(4), 480-486.
---------------------------------------------------------------------------

    We noted in the CY 2022 ESRD PPS proposed rule (86 FR 36343) that 
in the Tablo[supreg] System IDE study, the before-after comparisons in 
patients with NxStage[supreg] regarding improved sleep compared to 
prior to the Tablo[supreg] System may be prone to recall bias in that 
participants' experiences with NxStage[supreg] were not recorded at the 
time they were receiving NxStage[supreg] treatments, but rather, were 
based on recall at the time of the Tablo[supreg] System IDE study.
    We stated that we understood that greater flexibility for patients 
in the way that they receive their dialysis treatments may represent a 
benefit to Medicare beneficiaries who are candidates to receive this 
treatment in the home setting. We invited comments on whether this 
potential benefit represents substantial clinical improvement, 
including whether the Tablo[supreg] System represented an advance that 
substantially improves, relative to renal dialysis services previously 
available, the treatment of Medicare beneficiaries.
    We received multiple comments on the substantial clinical 
improvement claims made in the TPNIES application for the Tablo[supreg] 
System, ranging from commenters with concerns about the claims, 
including from a manufacturer of a competitor device, to comments in 
support of the application, including from the applicant. The comments 
on the three substantial clinical improvement claims made by the 
applicant, and our responses to the comments, are set forth below.
    Comment: A commenter, a manufacturer of a competitor device, 
asserted that the Tablo[supreg] System does not meet the substantial 
clinical improvement criterion. The commenter asserted that the 
applicant's claims were not supported by robust clinical evidence. The 
commenter made several criticisms about the Tablo[supreg] System IDE 
trial and the other clinical evidence provided by the applicant, 
emphasizing the lack of a direct head-to-head comparison with the 
NxStage[supreg] device as well as relying on theoretical modeling. For 
example, the commenter stated that the applicant did not submit 
adequate evidence to demonstrate its first claim, that decreased home 
HD treatment frequency with the Tablo[supreg] System offered a 
substantial clinical benefit for home HD patients, because the 
applicant's study examined patients that dialyzed on the Tablo[supreg] 
System more than three times per week and did not compare the 
Tablo[supreg] System machine to the NxStage[supreg] machine, which the 
commenter claimed is also capable of thrice-weekly dialysis. Further, 
the commenter stated that current models of the NxStage[supreg] System 
OneTM offer dialysate flow rates of 300ml/minute and 
NxStage[supreg] patients can currently dialyze with any amount of 
dialysate prescribed by their doctor. The commenter asserted that the 
NxStage[supreg] machine is more flexible than the Tablo[supreg] System 
and that other incumbent systems, such as the Fresenius 
2008K@homeTM, are capable of even more urea clearance than 
the Tablo[supreg] System in the same amount of time. Even though the 
commenter stated that patients using other home HD machines are able to 
achieve dialysis adequacy on a thrice-weekly dialysis schedule, the 
commenter also stated that it was not aware of any additional data in 
support of adequate fluid removal using a thrice-weekly dialysis 
schedule with the Tablo[supreg] System.
    The commenter also expressed concerns with the applicant's claim 
that less frequent dialysis sessions may represent substantial clinical 
improvement over shorter, more frequent sessions because certain 
clinical and quality of life advancements, like more energy and 
vitality, are closely linked to more frequent treatments, which more 
closely mirror the natural function of a patient's kidney. This same 
point was also raised by other commenters, including health care 
providers. These other commenters also expressed a preference for more 
frequent dialysis stating that it results in increased energy levels, 
improved sleep and mental health, and that patients undergoing more 
frequent dialysis need fewer dietary restrictions and antihypertensive 
and phosphate binder medications. Additionally, the commenter stated 
that evidence suggests there is no disadvantage in access complications 
for patients that undergo more frequent dialysis, while also noting 
that the applicant did not present studies that compared vascular 
access with the Tablo[supreg] System to NxStage[supreg].
    The commenter stated that the applicant did not provide sufficient 
clinical evidence for its claim that the Tablo[supreg] System results 
in an incremental improvement in hospitalization rates because the 
sources that the applicant provided were not yet published.
    Similarly, the commenter asserted that the applicant did not 
demonstrate that the Tablo[supreg] System increases adherence to the 
dialysis treatment and retention to home therapy because the studies 
cited by the applicant did not compare adherence, retention, or ease of 
use for the Tablo[supreg] System with the NxStage[supreg] or the 
Fresenius 2008K@homeTM systems. The commenter stated that 
the Tablo[supreg] System IDE study on which the applicant relied to 
demonstrate treatment adherence and retention had several weaknesses 
including a small patient population, narrow patient inclusion 
criteria, and short duration. While the commenter acknowledged that the 
applicant did compare adherence rates from the Tablo[supreg] System IDE 
Study to adherence in the NxStage[supreg] IDE study, the commenter 
explained that this methodology was not appropriate because the studies 
had different definitions of treatment compliance. The commenter noted 
that the applicant's comparison of patient retention rates from the 
Tablo[supreg] System and NxStage[supreg] IDE studies was similarly not 
appropriate because the equipment used during the time of the 
NxStage[supreg] IDE study was completely different from that which is 
widely used today (that is, NxStage[supreg] touchscreen 
VersiHDTM, Express Warmer, PureFlowTM SL).
    Also, regarding the applicant's adherence claim, the commenter 
identified several factors that it argued may reduce dialysis adherence 
using the Tablo[supreg] System and restrict its use to a small subset 
of dialysis patients. First, the commenter stated that patients without 
consistent access to clean tap water may be at risk for disruptions in 
dialysis treatment with the Tablo[supreg] System. The commenter 
identified potential tap water disruptions such as water main breaks or 
the loss tap water during power outages for patients who rely on well-
based water. The commenter further stated that water source disruptions 
do not hinder NxStage[supreg] patients from continuing their treatment 
because they can treat with pre-mixed dialysate bags. The commenter 
concluded that the Tablo[supreg] System's on-demand dialysate 
production is not a substantial clinical improvement over the 
NxStage[supreg] System OneTM with PureFlowTM SL's 
on-site dialysate production. Second, the commenter stated, as did 
several other commenters, that the Tablo[supreg] System increases 
electric and water utility expenses by requiring a large volume of 
water to complete the reverse osmosis process and because the system 
must heat the water prior to use for dialysate and for sterilization 
after treatment. Third, the commenter stated that the Tablo[supreg] 
System has not received FDA marketing authorization for solo home 
hemodialysis (hemodialysis without a care partner) during waking hours, 
as well as nocturnal home hemodialysis, whereas the NxStage[supreg] 
System OneTM has received these FDA marketing 
authorizations.

[[Page 61901]]

    The commenter stated that the applicant did not provide sufficient 
evidence to advance its claim that the Tablo[supreg] System improves 
patient quality of life. The commenter stated that no comparison of 
incremental benefit in quality of life of the Tablo[supreg] System over 
NxStage[supreg] was provided. The commenter further stated that studies 
involving hundreds of patients have been specifically designed to test 
quality of life outcomes, among NxStage[supreg] users and have been 
published in peer-reviewed journals demonstrating quality of life 
improvements among NxStage[supreg] users. The commenter stated that 
there is a high bar for relying on quality of life evidence to 
demonstrate innovation, recognizing the breadth of evidence that exists 
for current technologies. Regarding the applicant's evidence on its 
improved patient quality of life claim, the commenter stated that it 
was unable to confirm the applicant's claim of a 70 percent reduction 
in the rate of patient-reported hypotensive symptoms while on the 
Tablo[supreg] System and asserted that data also supports a reduction 
in intradialytic hypotensive episodes among NxStage[supreg] patients, 
referring to an article by Murashima et al.\95\
---------------------------------------------------------------------------

    \95\ Murashima M, Kumar D, Doyle AM, Glickman JD. Comparison of 
intradialytic blood pressure variability between conventional 
thrice-weekly hemodialysis and short daily hemodialysis. Hemodial 
Int. 2010 Jul;14(3):270-7. doi: 10.1111/j.1542-4758.2010.00438.x. 
PMID: 20337744.
---------------------------------------------------------------------------

    The commenter similarly questioned the applicant's claims regarding 
sleep quality and related symptoms stating that the Tablo[supreg] 
System IDE data did not compare the Tablo[supreg] System to NxStage, 
relied on a small sample size, was of short duration, and was not 
accurate because study results may have been affected by recall bias. 
Regarding the recall bias concern, additional commenters also wrote in 
with concurring comments. These commenters explained that participants' 
experiences with NxStage[supreg] were not recorded at the time they 
were receiving NxStage[supreg] treatments, but rather, were based on 
recall at the time of the Tablo[supreg] System IDE study.
    Regarding the applicant's claim that the Tablo[supreg] System users 
spend less time in training compared to existing technologies, the 
commenter questioned the applicant's reference to 14.5 days to complete 
training on NxStage, stating that this timeframe includes training 
about aspects of home dialysis beyond the functionality of the machine. 
The commenter stated that only approximately 5 session-equivalents are 
machine-focused during training with NxStage[supreg]. The commenter 
also stated that because 13 patients in the Tablo[supreg] System IDE 
study had previous home HD experience, the study participants would 
have already been trained on the most difficult aspects of home 
therapy, such as self-cannulation. Therefore, the commenter suggested 
review of a larger number of patients who are truly new to home 
therapy.
    The commenter rejected the applicant's assertions that the 
Tablo[supreg] System's features are unique and stated that the 
applicant did not submit data demonstrating that the Tablo[supreg] 
System is easier to use than other devices. The commenter stated its 
belief that many aspects of the Tablo[supreg] System are more difficult 
to use than NxStage[supreg] and highlighted key features that have 
become available since publication of the NxStage[supreg] IDE study. 
The commenter also challenged the applicant's description of the 
Tablo[supreg] System's cartridge as being ``pre-strung'' compared to 
existing cartridges and stated that NxStage[supreg] offers a cartridge 
that requires 4 fewer blood tubing connections. The commenter also 
stated that NxStage[supreg] systems are the only home HD systems 
approved for self-treatment without a care partner, addressing partner 
fatigue.
    The commenter and several members of the public identified the 
ability to travel as a quality of life issue. They stated that because 
the Tablo[supreg] System weighs nearly 200 pounds, it is not portable, 
while the NxStage[supreg] device is lighter and portable. Due to its 
portability, the competitor commenter added that 70 percent of 
NxStage[supreg] users reported traveling while using the machine.
    Finally, this commenter stated that while certain patients may 
prefer certain features of the Tablo[supreg] System, the presence of an 
additional option for home dialysis machine does not in itself 
represent a clinical improvement.
    Response: We appreciate the input provided by the commenters. We 
have taken this information into consideration in our determination of 
whether the Tablo[supreg] System meets the eligibility criteria at 
Sec.  413.236(b)(5) and Sec.  412.87(b)(1), and have responded in 
further detail to comments discussing the significant clinical 
improvement claims for the Tablo[supreg] System at the end of this 
section of the final rule.
    Comment: We received a comment from the applicant in support of the 
TPNIES approval for the Tablo[supreg] System.
    With respect to the claim that patients can achieve dialysis 
adequacy in as little as three treatments per week and the concern we 
expressed in the CY 2022 ESRD PPS proposed rule that the Tablo[supreg] 
System IDE study did not test whether patients receive adequate 
dialysis on a thrice-weekly schedule, the applicant clarified that the 
intent was not to position three times per week home dialysis as 
substantial clinical improvement over short daily or more frequent 
dialysis. Instead, their claim is that more frequent dialysis, which 
they believe is a requirement for NxStage, is significantly more 
burdensome for patients with ESRD for whom thrice-weekly treatments may 
be appropriate.
    The applicant stated that the Tablo[supreg] System's ability to 
achieve Kt/V targets of 1.2 on a thrice-weekly treatment schedule at 
home represents substantial clinical improvement because they believe 
it allows patients the benefits of home dialysis whether administered 
three or four times per week, which had not been an option previously 
because of the technical limitations of the NxStage[supreg] system. 
Specifically, per the applicant, on a standard treatment duration, 
three day per week schedule patients with weights above 79kg do not 
have sufficient dialysate with NxStage[supreg] (maximum of 60L) to 
achieve the CMS mandated target without increasing the amount of time 
per treatment that the patient has to dialyze. The applicant further 
stated that the Tablo[supreg] System can achieve levels of efficiency 
nearly on par with in-center hemodialysis on conventional hardware. The 
applicant also noted that patients treated with NxStage[supreg] would 
exhaust its dialysate at 3 hours 20 minutes at an equivalent dialysate 
flow rate of 300ml/min. In support of that claim, the applicant 
referred to kinetic modeling, the clearance kinetics of the 
NxStage[supreg] dialyzer, and the percentage of body water 
96 97 in patients weighing 174 pounds or greater. The 
applicant concluded that patients treated with NxStage[supreg] would 
require greater than thrice-weekly treatments to achieve hemodialysis 
adequacy with spKt/V of >1.2. The applicant stated that because the 
Tablo[supreg] System is able to generate dialysate on demand at 300ml/
min for up to 12 hours without volume limitations, it allows patients 
the flexibility to adequately dialyze at the frequency that is best for 
them rather

[[Page 61902]]

than requiring them to perform more frequent treatments.
---------------------------------------------------------------------------

    \96\ Leypoldt, J. K., Prichard, S., Chertow, G. M., & Alvarez, 
L. (2019). Differential molecular modeling predictions of mid and 
conventional dialysate flows. Blood purification, 47(4), 369-376. 
Depner T, Beck G, Daugirdas J, Kusek J, Eknoyan G. Lessons from the 
Hemodialysis (HEMO) Study: an improved measure of the actual 
hemodialysis dose. Am J Kidney Dis. 1999 Jan;33(1):142-9.
    \97\ Depner T, Beck G, Daugirdas J, Kusek J, Eknoyan G. Lessons 
from the Hemodialysis (HEMO) Study: an improved measure of the 
actual hemodialysis dose. Am J Kidney Dis. 1999 Jan;33(1):142-9.
---------------------------------------------------------------------------

    The applicant stated that their evidence on achieving Kt/V of 1.2 
on a conventional three times per week dialysis schedule came from an 
observational study conducted on an in-center patient population using 
the Tablo[supreg] System prior to its FDA marketing authorization for 
home HD. The applicant referred to abstracts presented at the 2019 
Annual Dialysis Conference as summarized in the CY 2022 ESRD PPS 
proposed rule. The applicant emphasized that evidence from published 
and unpublished sources may be sufficient in establishing substantial 
clinical improvement.
    In response to concerns regarding the sufficiency of the clinical 
evidence presented, the applicant commented that because the patient 
population in the Tablo[supreg] System IDE study, was more diverse and 
reflective of the general dialysis population with respect to diabetes 
and other comorbidities than the population in the NxStage[supreg] IDE 
study, study results regarding Tablo[supreg] System can be better 
applied to the Medicare population.
    In their application, the applicant claimed that Tablo[supreg] 
System patients can be expected to have fewer vascular access 
interventions, and health care providers will have increased 
flexibility in personalizing the frequency and duration of patient 
treatments.98 99 The applicant emphasized in its comment 
that Tablo[supreg] System users may experience reduced vascular access 
infection related hospitalizations, relying on data from the 
Tablo[supreg] System IDE study. The applicant stated that patients 
prescribed 5-6 days weekly dialysis sessions with NxStage[supreg] who 
were converted to 4 weekly dialysis sessions with the Tablo[supreg] 
System, experienced no hospitalizations during the home arm of the 
trial. The applicant commented that these data were not included in the 
Tablo[supreg] System IDE publication because the sample size was modest 
and relatively few patients required hospitalization. The applicant 
also stated that 14 of the 35 patients enrolled in the NxStage[supreg] 
IDE dropped out before completing the trial, making it difficult to 
calculate an unbiased estimate of the hospitalization rate. The 
applicant compared the Tablo[supreg] System IDE hospitalization rate to 
two North American observational studies by Weinhandl et al.\100\ and 
Suri et al.\101\ of patients receiving home HD (likely NxStage[supreg] 
or K@Home). The applicant further stated that Suri et al. reported a 
hospitalization rate of 930 per 1000 patient-years and Weinhandl et al. 
noted a rate of 1663 per 1000 patient-years. The applicant stated that 
results from these studies suggest that patients receiving treatment at 
home with NxStage[supreg] 5-6 times per week had similar, not lower, 
rates of hospitalization relative to matched patients receiving in-
center hemodialysis. The applicant further noted that the modest sample 
size of the Tablo[supreg] System IDE precludes valid inference testing, 
but that the hospitalization rate observed (426 per 1000 patient-years) 
was roughly one-quarter that seen among a national cohort of patients 
on home HD in the US, and less than one-half that seen among a Canadian 
cohort, despite the high proportion of non-white patients and patients 
with diabetes, characteristics typically associated with higher rates 
of hospitalization.
---------------------------------------------------------------------------

    \98\ FHN Trial Group. (2010). In-center hemodialysis six times 
per week versus three times per week. New England Journal of 
Medicine, 363(24), 2287-2300.
    \99\ Kuo, T.H., Tseng, C.T., Lin, W.H., Chao, J.Y., Wang, W.M., 
Li, C.Y., & Wang, M.C. (2015). Association Between Vascular Access 
Dysfunction and Subsequent Major Adverse Cardiovascular Events in 
Patients on Hemodialysis: A Population-Based Nested Case-Control 
Study. Medicine, 94(26).
    \100\ Weinhandl, E. D., Gilbertson, D. T., & Collins, A. J. 
(2016). Mortality, hospitalization, and technique failure in daily 
home hemodialysis and matched peritoneal dialysis patients: a 
matched cohort study. American Journal of Kidney Diseases, 67(1), 
98-110.
    \101\ Suri, R. S., Li, L., & Nesrallah, G. E. (2015). The risk 
of hospitalization and modality failure with home dialysis. Kidney 
international, 88(2), 360-368.
---------------------------------------------------------------------------

    With respect to the claim that the Tablo[supreg] System increases 
adherence to dialysis treatment and retention to home therapy, the 
applicant provided additional support. Specifically, the applicant 
stated that in its real-world home population, to date, no patients 
have chosen to return to in-center HD once going home with the 
Tablo[supreg] System. The applicant submitted new data to further 
establish first-year attrition comparisons. The applicant stated that 
it contracted with a third-party research firm \102\ to conduct an 
analysis of patients dialyzing at home using the Tablo[supreg] System, 
matched to patients in the USRDS who completed home HD training between 
the years 2016 through 2018. Per the applicant, home HD attrition was 
defined as either death or conversion to in-facility HD and kidney 
transplantation was excluded from attrition. The applicant further 
stated that the cohort included 39 patients that initiated home HD with 
the Tablo[supreg] System since the device's FDA marketing authorization 
for home use in March of 2020.
---------------------------------------------------------------------------

    \102\ Analysis conducted by the Chronic Disease Research Group 
(CDRG), a division of the Hennepin Healthcare Research Institute.
---------------------------------------------------------------------------

    The applicant further clarified that this patient population is 
separate and distinct from the participants in the Tablo[supreg] System 
IDE study. The applicant stated that there were 4 attrition events 
among the 39 Tablo[supreg] System users and 3,602 attrition events 
among the 9,827 home HD starts in the broader population of patients 
receiving home HD. The applicant further noted that the cumulative 
incidence of attrition at 1 year was 26.8 percent among Tablo[supreg] 
System users and 42.5 percent among all home HD starts with the 
unadjusted Cox regression hazard ratio of home HD attrition among 
Tablo[supreg] System users versus home HD starts in years 2016 through 
2018 at 0.38 (95% confidence interval, 0.14-1.02; p = 0.06), a more 
than 60 percent reduction in attrition with the Tablo[supreg] System. 
The applicant also acknowledged that the limited sample size reduces 
power in demonstrating a statistically significant result, but asserted 
that the preliminary data suggest that use of the Tablo[supreg] System 
should reduce home HD attrition.
    In the CY 2022 ESRD PPS proposed rule, CMS acknowledged the 
applicant's claim regarding the benefit of greater flexibility for 
patients in the way that they receive their dialysis treatments. The 
applicant stated in their comment that the Tablo[supreg] System 
represents substantial clinical improvement over NxStage[supreg] in 
several ways: Allowing patients, in consultation with their clinicians, 
to develop a treatment schedule tailored to their individual needs, 
reducing the time spent on dialysis-related tasks including the 
elimination of a 6-8 hour pre-treatment dialysate production, and 
reducing supply storage requirements.
    With respect to the claim that the Tablo[supreg] System improves 
patient quality of life, the applicant stated in their comment that 
Tablo[supreg] System IDE showed favorable effects on patient-reported 
outcomes, including the EQ-5D survey instrument that has been widely 
applied to many chronic disease populations, as well as a number of 
surveys related to the process of home dialysis.
    The applicant's comment included the results from an online survey 
conducted by a third-party research firm \103\ and a network of 
dialysis organizations and regional offices \104\ between July 29 and 
August 9, 2021. Per

[[Page 61903]]

the applicant, 184 nephrologists and 202 patients were surveyed 
regarding a list of potential benefits and system features of a blinded 
home HD system concept reflecting the features of the Tablo[supreg] 
System. The applicant stated that 77 percent of nephrologists rated the 
Tablo[supreg] System's features as a substantial clinical improvement 
in home HD care and 98 percent indicated that the Tablo[supreg] 
System's benefits would make them more likely to recommend home HD to 
their patients. The applicant further stated that 72 percent of 
patients receiving in-center HD or PD rated the Tablo[supreg] System's 
features as a significant improvement in home HD care and 77 percent of 
those patients stated they would be more likely to try home HD. The 
applicant stated that of the current home HD population dialyzing on 
the incumbent device, 84 percent rated the Tablo[supreg] System's 
features as a significant improvement in home HD care.
---------------------------------------------------------------------------

    \103\ Health Advances, US Home Hemodialysis Nephrologist and 
Patient Perspectives Presentation, August 13, 2021.
    \104\ National Kidney Foundation.
---------------------------------------------------------------------------

    The applicant's comment acknowledged that NxStage[supreg] would be 
an available option to patients who prefer to travel with a home 
dialysis device but stated that the majority of patients ranked the 
effectiveness of treatment above the ability to travel with their 
device.
    With respect to CMS's recall bias concern that participants' 
experiences with NxStage[supreg] were not recorded at the time they 
were receiving NxStage[supreg] treatments, but rather, were based on 
recall at the time of the Tablo[supreg] System IDE study, the applicant 
clarified that 13 of the 29 Tablo[supreg] System IDE study participants 
who completed the trial had been dialyzing at home with NxStage[supreg] 
in advance of the Tablo[supreg] System IDE study and that baseline 
surveys were taken while patients were actively treating with 
NxStage[supreg]. The applicant commented that survey questions were 
sourced from validated sleep questionnaires and did not ask patients 
for a comparison to a prior time point, but focused on a rating of 
sleep during the prior week.
    The applicant commented that to further assess the prevalence of 
sleep related symptoms in home HD patients, a third-party research firm 
conducted a survey of current non-Tablo[supreg] System HD patients. The 
applicant stated that of home HD respondents, 64 percent reported very 
poor to poor sleep quality and all respondents stating that improved 
sleep would represent substantial clinical improvement.\105\ The 
applicant stated that collectively, its results confirm that achieving 
satisfactory sleep remains a major challenge for patients on dialysis 
and that using the Tablo[supreg] System has the potential to improve 
sleep quality, which may also enhance physical, cognitive, and sexual 
function, and expand functional capacity.
---------------------------------------------------------------------------

    \105\ Health Advances, US Home Hemodialysis Nephrologist and 
Patient Perspectives Presentation, August 13, 2021.
---------------------------------------------------------------------------

    The applicant's comment emphasized the safety features and ease-of-
use of the Tablo[supreg] System. The applicant stated that the 
Tablo[supreg] System offers patients a differentiated level of safety 
in having met higher, more updated safety standards of performance, 
such as fluid removal, air detection, temperature, dialysate flow rate 
and other parameters than the previously approved NxStage[supreg] 
device. The applicant also stated that the remote monitoring and remote 
technical support features are only available with the Tablo[supreg] 
System and reduce patient apprehension to perform treatments at home. 
The applicant's comment again asserted that, overall, the totality of 
the evidence demonstrates that the Tablo[supreg] System offers 
substantial clinical improvement in home HD treatment.
    Response: We thank the applicant for their comment and have taken 
the additional information provided into consideration in our 
determination of whether the Tablo[supreg] System meets the eligibility 
criteria at Sec.  413.236(b)(5) and Sec.  412.87(b)(1). We have 
responded in further detail to comments discussing the significant 
clinical improvement claims for the Tablo[supreg] System at the end of 
this section (II.C.5.c) of the final rule.
    Comment: We received many comments from clinicians, patients, and 
caregivers supporting the Tablo[supreg] System's TPNIES application. 
For example, many commenters stated that using the Tablo[supreg] System 
is convenient and allows for the flexibility to personalize treatment 
for a diversity of patient needs. Commenters stated that patients are 
allowed to create their own schedules, which enables them to continue 
working and enjoying life's activities. Patient commenters stated that 
they have become more active and engaged participants in their own 
care. Commenters appreciated the convenience and comfort of being able 
to dialyze at home instead of in-center, stating that doing so 
alleviates stress, reduces exposure to COVID-19 and reduces the burden 
of arranging for and traveling to in-center treatments.
    Patient and caregiver commenters expressed appreciation for the 
Tablo[supreg] System's on-demand dialysate for several reasons. First, 
commenters stated that patients have more dialysis-free time by not 
needing to prepare solution or handle heavy bags of dialysate. Second, 
commenters stated that there are fewer supplies to store for the 
Tablo[supreg] System as compared to the NxStage[supreg] System for 
which it was necessary to store up to 20 boxes of dialysate and 
supplies. Third, commenters stated that dialysate delivery may be 
challenged in regions with extreme climates and could compromise 
treatment. Commenters also stated that there is less wasted dialysate 
with use of the Tablo[supreg] System.
    Patient commenters identified several clinical improvements that 
they attribute to treatment with the Tablo[supreg] System including 
reduced cramping and fatigue after dialysis treatment, reduced need for 
blood pressure medication, improved mood, and less frequent use and 
wear on the vascular access site with fewer weekly treatments. 
Commenters also stated that that features and conveniences of the 
Tablo[supreg] System result in less burn out \106\ of patients and 
caregivers, better adherence, retention and overall quality of life.
---------------------------------------------------------------------------

    \106\ As discussed in the CY 2021 ESRD PPS final rule (85 FR 
71462), a significant challenge to increasing the use of home 
dialysis includes burn out (or technique failure) and return to in-
center HD. According to one recent observational study, 
approximately 25 percent of patients who initiate home HD return to 
in-center HD within the first year (Seshasai RK, Mitra N, Chaknos 
CM, Li J, Wirtalla C, Negoianu D, Glickman JD, Dember LM. Factors 
Associated With Discontinuation of Home Hemodialysis. Am J Kidney 
Dis. 2016 Apr;67(4):629-37.)
---------------------------------------------------------------------------

    Many commenters including patients, caregivers and clinicians 
commented on the Tablo[supreg] System's features and ease-of-use. 
Commenters stated that the complexity of a dialysis machine and lengthy 
training can be intimidating and act as a deterrent in the adoption of 
home dialysis. Commenters stated that some patients and caregivers 
cannot afford extended absences from work, childcare or other 
responsibilities to complete dialysis training and that training with 
the Tablo[supreg] System ranges from 10 days to 2 weeks compared to 
training with NxStage[supreg] which averages 4-6 weeks. Several 
commenters stated that patients with prior home dialysis experience can 
begin home treatments using the Tablo[supreg] System after just 3-4 
training days. One commenter stated that a comparison of training for 
the Tablo[supreg] System versus other devices in the market does not 
exist.
    Commenters stated that patients may also fear not being able to 
remember what to do in an urgent situation and highlighted the 
Tablo[supreg] System's safety features that prevent patient harm, 
including step-by-step instructions with less memorization, and fewer 
treatment steps, and 24/7 technical support.

[[Page 61904]]

Commenters stated that remote treatment monitoring in real time, allows 
clinicians to intervene as needed with treatment modifications. 
Commenters stated that the Tablo[supreg] System's instructions can be 
set in other languages. Commenters also expressed appreciation for the 
Tablo[supreg] System's built-in warmer that helps to prevent 
hypothermia during treatment, built-in blood pressure monitoring, flush 
feature, closed loop cartridge to minimize risk of infection, automatic 
record keeping, and the quicker set up and take down times. Commenters 
stated that the Tablo[supreg] System looks less like an intrusive 
medical device and the built-in wheels make it easy to move it from 
room to room.
    One commenter stated that patients previously not deemed suitable 
for home HD, due to large body size, work schedules, etc. may now 
become candidates with the use of the Tablo[supreg] System. Another 
commenter stated that patients lacking social support and financial 
resources may not be good candidates for home dialysis.
    Response: We appreciate the input provided by these commenters. We 
have taken this information into consideration in our determination of 
whether the Tablo[supreg] System meets the eligibility criteria at 
Sec.  413.236(b)(5) and Sec.  412.87(b)(1). We have responded in 
further detail to comments discussing the significant clinical 
improvement claims for the Tablo[supreg] System at the end of this 
section (II.C.5.c) of the final rule.
    Comment: We received several comments from health care providers 
and patients regarding the Tablo[supreg] System and less frequent 
dialysis treatments. A physician commenter stated that the question of 
whether less frequent dialysis is clinically preferable to shorter, 
more frequent [dialysis] sessions does not appear to be definitively 
decided in clinical research for all patients. The commenter stated 
that while patients derive significant benefit from more frequent 
dialysis, having the ability to achieve at least adequate dialysis at 
three days per week is a significant advancement compared with what has 
been offered. Commenters stated that the treating clinician remains in 
the best position to prescribe the appropriate frequency of dialysis 
for their patients but that it is possible for researchers to 
accurately assess improvements in clinical outcomes related to 
frequency of dialysis treatments. A commenter, who is a health care 
provider, shared their experience with the Tablo[supreg] System in a 
dialysis unit, stating that their unit tested the Tablo[supreg] System 
and found that on the whole, the patients could reach dialysis adequacy 
on a traditional thrice-weekly frequency. While this commenter referred 
to an abstract documenting these results, it was not provided.
    Response: We appreciate the input provided by these commenters. We 
have taken this information into consideration in our determination of 
whether the Tablo[supreg] System meets the eligibility criteria at 
Sec.  413.236(b)(5) and Sec.  412.87(b)(1). We have responded in 
further detail to comments discussing the significant clinical 
improvement claims for the Tablo[supreg] System at the end of this 
section (II.C.5.c) of the final rule.
    Comment: We received several comments from the public, including 
health care providers and patients, regarding how to demonstrate 
substantial clinical improvement in connection with a home hemodialysis 
machine such as the Tablo[supreg] System. One commenter stated that 
clinical trials, abstract data and expert opinion is sufficient to 
support substantial clinical improvement and that this type of evidence 
is often the basis of clinical guidelines from the National Kidney 
Foundation (NKF) Kidney Disease Outcome Quality Initiative. The 
commenter stated that new companies are not equipped to conduct in-
depth studies until they have significant numbers of patients on their 
device or therapy which creates a barrier to recruiting study 
participants and thus, limiting investment in the new technology. 
Another commenter stated that the ESRD sector does not easily lend 
itself to robust clinical trials, and this fact should be considered 
when determining whether an applicant for TPNIES has demonstrated 
substantial clinical improvement. Commenters referred to the CMS TPNIES 
application template, which indicates that published, unpublished, and 
clinical expertise are all acceptable forms of supporting evidence and 
that placing a heavy emphasize on published long-term studies for 
purposes of evaluating substantial clinical improvement limits the 
ability of new companies to enter the market and deprives patients of 
potentially lifesaving technologies. A non-profit dialysis association 
stated that CMS should consider the extent to which the technology has 
demonstrated improved quality of life in determining whether the 
technology represents substantial clinical improvement.
    Many commenters stated that patients should be given a choice in 
deciding which home hemodialysis machine is best for them, and that 
providing patients with an additional choice is evidence of substantial 
clinical improvement. A physician commenter indicated that it is not 
clear why patients prefer one machine over another or feel better with 
one prescription over another, but a choice based on patient preference 
can improve patient retention to a particular therapy, one of the ways 
to demonstrate substantial clinical improvement. This commenter stated 
that evidence that a home dialysis machine improves retention should be 
sufficient evidence to approve the TPNIES for that home dialysis 
machine.
    Response: We appreciate the commenters' input regarding whether the 
Tablo[supreg] System meets the innovation criterion at Sec.  
413.236(b)(5) and substantial clinical improvement criteria at Sec.  
412.87(b)(1). After carefully reviewing the application, the 
information submitted by the applicant addressing our concerns raised 
in the CY 2022 ESRD PPS proposed rule, as well as the many comments 
submitted by the public, we agree with the applicant and several 
members of the dialysis community that the Tablo[supreg] System 
represents an advance that substantially improves, relative to renal 
dialysis services previously available, the treatment of Medicare 
beneficiaries. We find that the data submitted demonstrate greater 
medication adherence or compliance of home HD among users of the 
Tablo[supreg] System that is not as evident for users of existing home 
HD technologies, as specified under Sec.  412.87(b)(1)(C)(7). We also 
believe that the Tablo[supreg] System may provide added flexibility 
around the frequency and duration of home HD that could benefit some 
patients, specifically, patients who may prefer fewer, slightly longer 
treatments but who would otherwise be limited to more frequent home HD 
treatments. We believe additional flexibilities around home HD 
treatments may represent an improvement in one or more activities of 
daily living and an improved quality of life for Medicare 
beneficiaries, as specified under Sec.  412.87(b)(1)(C)(4) and Sec.  
412.87(b)(1)(C)(5), respectively. We also recognize that patient 
preference and choice is especially important for patients with ESRD, 
who undergo demanding, often grueling, dialysis therapy, and we believe 
that patients who prefer their method and frequency of dialysis are 
more likely to adhere to the therapy, and thus increase adherence rates 
overall.
    We acknowledge the concerns raised by commenters regarding the 
substantial clinical improvement claims in the Tablo[supreg] System 
application. As we had previously noted in the CY 2022 ESRD PPS 
proposed rule, we had some of the same concerns as commenters regarding

[[Page 61905]]

the evidence submitted to support the claims of significant clinical 
improvement. However, at this time, we feel that our concerns have been 
sufficiently addressed. For example, with respect to the applicant's 
claim that the Tablo[supreg] System increases adherence to dialysis 
treatment and retention to home therapy, although the adherence and 
retention data provided in the initial application had limitations, 
additional information was submitted by the applicant to support this 
claim in its comment on the CY 2022 ESRD PPS proposed rule. This data 
showed lower attrition rates at 1 year between patients using the 
Tablo[supreg] System for home HD, separate from the group of patients 
in the Tablo[supreg] System IDE, matched with patients who had 
completed home HD patients, using data from the USRDS. With respect to 
the applicant's claim that the Tablo[supreg] System improves patient 
quality of life, we note that the applicant addressed our concerns 
about the potential for recall bias in their claim of improved sleep 
quality and related symptoms in their comment, explaining that baseline 
surveys were taken while patients were actively treating with 
NxStage[supreg]. Also, while some commenters opposed the applicant's 
use of unpublished data to support its claim of improved 
hospitalization, we note that under Sec.  413.236(b)(5) and 
412.87(b)(1)(iii), CMS may consider unpublished data in making a 
determination of substantial clinical improvement as we recognize in 
some situations, published data may not be available. Overall, we 
believe the applicant was able to address our concerns about its 
substantial clinical improvement claims from the discussion in the CY 
2022 ESRD proposed rule.
    We also note that, under our TPNIES policy and Sec.  
412.87(b)(1)(i), CMS is required to consider the totality of the 
circumstances when making a determination that a new renal dialysis 
equipment or supply represents an advance that substantially improves, 
relative to renal dialysis services previously available, the diagnosis 
or treatment of Medicare beneficiaries. We believe the circumstances we 
may consider in our review of the TPNIES applications, specifically 
within the context of the ESRD PPS, include the state of the ESRD 
landscape and the particular challenges and vulnerabilities of patients 
with ESRD. While we recognize that published studies and randomized 
controlled trials are often the gold standard in demonstrating 
superiority of one product over another, our review is not limited to 
evidence from large randomized controlled trials; we also consider a 
range of evidence from published or unpublished information sources, 
including other appropriate information sources not otherwise listed 
under Sec.  412.87(b)(1)(iii). As codified under Sec.  
412.87(b)(1)(iii), evidence from published or unpublished information 
sources may be sufficient to establish that a new technology represents 
a substantial clinical improvement.
    Additional information we considered in our review of the 
Tablo[supreg] System was the new data provided by the applicant 
surveying over 180 nephrologists and over 200 patients undergoing 
dialysis treatment HD, along with substantial supportive comments from 
patients, caregivers, and health care providers, about the benefits of 
the Tablo[supreg] System in providing an improved quality of life, an 
improvement in one or more activities of daily living, and a decreased 
rate of at least one subsequent therapeutic intervention, as specified 
under Sec. Sec.  12.87(b)(1)(C)(6), 412.87(b)(1)(C)(5), 
412.87(b)(1)(C)(2), respectively.
    We also note that, at this time, patients with ESRD are facing new, 
additional risks when receiving dialysis treatment due to the COVID-19 
pandemic. As some of the commenters noted, ESRD patients are among the 
most vulnerable in the Medicare population and are at an increased risk 
for COVID-19 associated morbidity and mortality.107 108 As 
we discussed in the CY 2021 ESRD PPS final rule, Medicare's ESRD 
population aligns with the profile of patients who are more susceptible 
to COVID-19. As we stated in that rule, we believe it is important to 
reduce the risk of infection among beneficiaries with ESRD, and this 
can be done through isolating patients from in-center exposure by 
encouraging home HD (85 FR 71416). We also believe that providing 
patients with an additional option for home HD is especially important 
given that the adoption of home HD has been limited, with approximately 
only 1% of ESRD patients utilizing this modality.\109\ Therefore, we 
are interested in supporting the use of technologies that expand 
patient options for dialyzing safely at home at this time.
---------------------------------------------------------------------------

    \107\ Ziemba R, Campbell KN, Tang T, et al. Excess Death 
Estimates in Patients with End-Stage Renal Disease--United States, 
February-August 2020. MMWR Morb Mortal Wkly Rep 2021;70:825-829. DOI 
http://dx.doi.org/10.15585/mmwr.mm7022e2.
    \108\ https://www.cdc.gov/coronavirus/2019-ncov/hcp/dialysis/home-dialysis.html.
    \109\ Mailloux LU, Blagg CR. Berns JS (ed.) Home Hemodialysis. 
Uptodate. Nov 18, 2016.
---------------------------------------------------------------------------

    For all of these reasons, we conclude that the Tablo[supreg] System 
meets the TPNIES innovation criteria under Sec.  413.236(b)(5) and 
Sec.  412.87(b)(1).
(6) Capital Related Assets Criterion (Sec.  413.236(b)(6))
    Regarding the final TPNIES eligibility criterion under Sec.  
413.236(b)(6), whether the item is a ``capital-related asset'' that is 
a ``home dialysis machine,'' these terms are defined in Sec.  
413.236(a)(2). The applicant identified the Tablo[supreg] System as an 
asset that an ESRD facility has an economic interest in through 
ownership, is subject to depreciation, and is an HD machine that 
received FDA marketing authorization for home use. We received no 
public comments on this criterion. We agree that the Tablo[supreg] 
System is a capital-related asset and home dialysis machine and 
therefore meets this criterion.
    The remaining comments and our responses regarding the 
Tablo[supreg] System and its eligibility for the TPNIES are set forth 
below.
    Comment: We received a comment that 70% of the patient population 
in the Tablo[supreg] System IDE study were non-white, suggesting 
Tablo[supreg] System's ability to create greater home adoption and 
retention in ways that are aligned with the proposed incentive for 
closing gaps in health equity access to home HD.
    Response: We thank the commenter for their input. While health 
equity is not a specific TPNIES eligibility criteria under Sec.  
413.236(b), we strongly support health equity and believe that the 
approval of the Tablo[supreg] System under the criterion of Sec.  
413.236(b) will encourage uptake of home HD for vulnerable patients 
with ESRD.
    Comment: We received several comments pertaining to the 
relationship between the cost of the Tablo[supreg] System and its 
connection to beneficiary access. Several commenters stated that the 
initial cost of the Tablo[supreg] System is 2 to 3 times that of older 
technologies, and that combined with potentially fewer treatments over 
which to amortize the cost, it would be difficult for ESRD facilities 
to incorporate the Tablo[supreg] System into their businesses without a 
payment adjustment under the ESRD PPS. These commenters expressed 
support for CMS approving the TPNIES for the Tablo[supreg] System.
    The applicant stated that after the initial capital investment, the 
per treatment costs of using the Tablo[supreg] System are considerably 
less than that of the NxStage[supreg] System. Another commenter stated 
that the Tablo[supreg] System is more affordable than other home 
dialysis machines and is cost

[[Page 61906]]

effective. Commenters stated that a TPNIES approval for the 
Tablo[supreg] System would help to offset the Tablo[supreg] System's 
acquisition costs, particularly for small and mid-size dialysis 
organizations and independent providers and facilitate economies of 
scale, allowing ESRD facilities to lower the cost of home HD care in 
the future.
    Commenters also asserted that a TPNIES approval would increase home 
dialysis utilization and retention of patients on home dialysis, and 
improve clinical and patient-reported outcomes, overall. For example, 
several commenters stated that use of the Tablo[supreg] System may help 
to push the national home hemodialysis prevalence above its stagnant 
level of 2 percent and a TPNIES approval would further support the 
goals of the ETC Model.
    Response: We appreciate the commenters' input. We note that cost is 
not a consideration for TPNIES eligibility under Sec.  413.236(b), and 
therefore is not relevant to our review of the Tablo[supreg] System's 
application. However, we believe that approval of the Tablo[supreg] 
System supports the goals of the ETC model by expanding beneficiary 
access to and retention of home HD.
    Comment: The Tablo[supreg] System applicant commented on the CMS 
spending estimate of Medicare payment for additional home HD sessions, 
noting differences between its analysis and that of CMS but agreeing 
with CMS' estimates on spending for the fifth treatment. Several 
commenters stated that while existing guidance \110\ allows for 
treatments more than three times per week when they are reasonable and 
necessary, coverage decisions are unrelated to the TPNIES eligibility 
determination. A commenter stated that the applicant provided no 
evidence regarding dialysis frequency for the population of patients 
that meet Medicare's clinical coverage criteria for additional 
treatments.
---------------------------------------------------------------------------

    \110\ Medicare Coverage Database. Retrieved May 24, 2021 from: 
https://www.cms.gov/medicarecoverage-database/details/lcd-details.aspx?LCDId=35014&ver=39&NCDId=79&ncdver=1&SearchType=Advanced&CoverageSelection=Both&NCSelection=NCA%7CCAL%7CNCD%7CMEDCAC%7CTA%7CMCD&ArticleType=Ed%7CKey%7CSAD%7CFAQ&PolicyType=Final&s=-%7C5%7C6%7C66%7C67%7C9%7C38%7C63%7C41%7C64%7C65%7C44&KeyWord=transplant&KeyWordLookUp=Doc&KeyWordSearchType=Exact&kq=true&bc=IAAAADgAAAAA&
.
---------------------------------------------------------------------------

    Response: We thank the commenters for their input and note that our 
CMS spending estimate of Medicare payment for additional home HD 
sessions that was included in the CY 2022 ESRD PPS proposed rule (86 FR 
36339) was not part of our analysis of the TPNIES eligibility criteria 
in Sec.  413.236(b). In addition, while Medicare clinical coverage 
criteria are beyond the scope of this rulemaking, we are not suggesting 
that the way in which ESRD facilities reflect home HD treatments on 
their claims would change due to our decision on the Tablo[supreg] 
System application.
    Comment: We received several comments from health care 
professionals with experience in using the Tablo[supreg] System in a 
clinical setting, rather than a home setting. One commenter stated that 
the Tablo[supreg] System is a benefit for ESRD facilities with staffing 
shortages because less time will need to be spent with each patient. 
Several commenters shared their favorable experiences in using the 
Tablo[supreg] System in the hospital inpatient and intensive care unit 
settings and in treating COVID-19 patients. One commenter stated that 
15 AKI inpatients with a mean age of 65 years were provided multiple 
Tablo[supreg] System treatments 3-6 times per week. The commenter 
further explained that the best urea reduction ratio achieved in the 
first 1-4 treatments, if available, was 41%; most treatments were 
successful and were slowed for hypotension or tachycardia; and some 
were aborted because of water pressure alarms signaling the need for 
filter replacement or clotted lines related to hypercoagulability among 
COVID-19 patients. The commenter further stated that most treatments 
were limited to 3-4 hours but up to 8 hours. Some commenters stated 
that patients treated with the Tablo[supreg] System in the hospital or 
ESRD facility setting gain familiarity and comfort with the device 
making it an easier transition to using the system at home.
    Response: We thank the commenters for their input. Currently, the 
only capital-related assets not excluded from eligibility for the 
TPNIES under Sec.  413.236(b)(6) are home dialysis machines used in the 
home for a single patient, as defined in Sec.  413.236(a)(2). While 
these commenters' experiences with the Tablo[supreg] System do not 
involve its use in the home setting, we appreciate the additional input 
regarding the benefits of the Tablo[supreg] System.
    After a consideration of all the public comments received, we have 
determined that the evidence and public comments submitted are 
sufficient to demonstrate that the Tablo[supreg] System meets all of 
the eligibility criteria to qualify for the TPNIES for CY 2022. As a 
result, the Tablo[supreg] System will be paid for using a TPNIES per 
Sec.  413.236(d).

III. Calendar Year (CY) 2022 Payment for Renal Dialysis Services 
Furnished to Individuals With Acute Kidney Injury (AKI)

A. Background

    The Trade Preferences Extension Act of 2015 (TPEA) (Pub. L. 114-27) 
was enacted on June 29, 2015, and amended the Act to provide coverage 
and payment for dialysis furnished by an ESRD facility to an individual 
with acute kidney injury (AKI). Specifically, section 808(a) of the 
TPEA amended section 1861(s)(2)(F) of the Act to provide coverage for 
renal dialysis services furnished on or after January 1, 2017, by a 
renal dialysis facility or a provider of services paid under section 
1881(b)(14) of the Act to an individual with AKI. Section 808(b) of the 
TPEA amended section 1834 of the Act by adding a subsection (r) to 
provide payment, beginning January 1, 2017, for renal dialysis services 
furnished by renal dialysis facilities or providers of services paid 
under section 1881(b)(14) of the Act to individuals with AKI at the 
ESRD PPS base rate, as adjusted by any applicable geographic adjustment 
applied under section 1881(b)(14)(D)(iv)(II) of the Act and adjusted 
(on a budget neutral basis for payments under section 1834(r) of the 
Act) by any other adjustment factor under section 1881(b)(14)(D) of the 
Act that the Secretary elects.
    In the CY 2017 ESRD PPS final rule, we finalized several coverage 
and payment policies to implement subsection (r) of section 1834 of the 
Act and the amendments to section 1881(s)(2)(F) of the Act, including 
the payment rate for AKI dialysis (81 FR 77866 through 77872, and 
77965). We interpret section 1834(r)(1) of the Act as requiring the 
amount of payment for AKI dialysis services to be the base rate for 
renal dialysis services determined for a year under the ESRD PPS base 
rate as set forth in Sec.  413.220, updated by the ESRD bundled market 
basket percentage increase factor minus a productivity adjustment as 
set forth in Sec.  413.196(d)(1), adjusted for wages as set forth in 
Sec.  413.231, and adjusted by any other amounts deemed appropriate by 
the Secretary under Sec.  413.373. We codified this policy in Sec.  
413.372 (81 FR 77965).

B. Summary of the Proposed Provisions, Public Comments, and Responses 
to Comments on the CY 2022 Payment for Renal Dialysis Services 
Furnished to Individuals With AKI

    The proposed rule, titled ``Medicare Program; End-Stage Renal 
Disease Prospective Payment System, Payment

[[Page 61907]]

for Renal Dialysis Services Furnished to Individuals With Acute Kidney 
Injury, End-Stage Renal Disease Quality Incentive Program, and End-
Stage Renal Disease Treatment Choices Model'' (86 FR 36322 through 
36437), referred to as the ``CY 2022 ESRD PPS proposed rule,'' was 
published in the Federal Register on July 9, 2021, with a comment 
period that ended on August 31, 2021. In that proposed rule, we 
proposed to update the AKI dialysis payment rate for CY 2022. We 
received 6 public comments on our proposal from large dialysis 
organizations, a non-profit dialysis association, a professional 
association, a provider advocacy organization, and a healthcare group.
    In this final rule, we provide a summary of each proposed 
provision, a summary of the public comments received and our responses 
to them, and the policies we are finalizing for CY 2022 payment for 
renal dialysis services furnished to individuals with AKI.

C. Annual Payment Rate Update for CY 2022

    The payment rate for AKI dialysis is the ESRD PPS base rate 
determined for a year under section 1881(b)(14) of the Act, which is 
the finalized ESRD PPS base rate, including the applicable annual 
productivity-adjusted market basket payment update, geographic wage 
adjustments, and any other discretionary adjustments, for such year. We 
note that ESRD facilities could bill Medicare for non-renal dialysis 
items and services and receive separate payment in addition to the 
payment rate for AKI dialysis.
    As discussed in section II.B.1.d of this final rule, the CY 2022 
ESRD PPS base rate is $257.90, which reflects the application of the CY 
2022 wage index budget-neutrality adjustment factor of 0.99985 and the 
CY 2022 ESRDB market basket increase of 2.4 percent reduced by the 
productivity adjustment of 0.5 percentage point, that is, 1.9 percent. 
Accordingly, we are finalizing a CY 2022 per treatment payment rate of 
$257.90 for renal dialysis services furnished by ESRD facilities to 
individuals with AKI. This payment rate is further adjusted by the wage 
index, as discussed in the next section of this final rule.
2. Geographic Adjustment Factor
    Under section 1834(r)(1) of the Act and Sec.  413.372, the amount 
of payment for AKI dialysis services is the base rate for renal 
dialysis services determined for a year under section 1881(b)(14) of 
the Act (updated by the ESRD bundled market basket and reduced by the 
productivity adjustment), as adjusted by any applicable geographic 
adjustment factor applied under section 1881(b)(14)(D)(iv)(II) of the 
Act. Accordingly, we apply the same wage index under Sec.  413.231 that 
is used under the ESRD PPS and discussed in section II.B.1.b of this 
final rule. The AKI dialysis payment rate is adjusted by the wage index 
for a particular ESRD facility in the same way that the ESRD PPS base 
rate is adjusted by the wage index for that facility (81 FR 77868). 
Specifically, we apply the wage index to the labor-related share of the 
ESRD PPS base rate that we utilize for AKI dialysis to compute the wage 
adjusted per-treatment AKI dialysis payment rate. As stated previously, 
we are finalizing a CY 2022 AKI dialysis payment rate of $257.90, 
adjusted by the ESRD facility's wage index.
    The comments and our responses to the comments on our AKI dialysis 
payment proposal are set forth below.
    Comment: Several commenters, including a large dialysis 
organization and a professional association, commented in support of 
the proposed update to the AKI dialysis payment rate for CY 2022. They 
also expressed support for using the same methodology as in previous 
years for the AKI update. A large dialysis organization expressed 
specific appreciation for the detailed explanation of the CMS process 
and methodology to develop the AKI payment amount that has been 
included in prior rules. This organization noted that CMS has 
recognized that treatment for AKI differs from treatment for ESRD. The 
organization stated that although the services provided to AKI patients 
may be the same, their frequency may exceed those typically required by 
patients with ESRD. The organization also noted that in the CY 2017 
ESRD PPS final rule, CMS indicated that it planned to make available 
public use files on utilization of services by AKI patients once the 
agency had compiled one full year of claims. The organization stated 
that CMS subsequently reported that the agency would continue to 
monitor utilization trends of items and services furnished to 
individuals with AKI. Along with other commenters, the large dialysis 
organization supports the data collection effort and CMS's commitment 
to ensure a data-driven approach to developing methodological changes 
to the AKI's rate development. The commenters urged CMS to share its 
monitoring plans to allow the public to better understand the specific 
data elements that CMS is collecting and analyzing.
    Response: We appreciate the comments in support of the AKI payment 
rate update. As the commenter stated, we have been monitoring the 
trends of AKI beneficiaries in ESRD facilities and acute inpatient 
hemodialysis. This has included quantification of drugs, laboratory 
tests and other services provided on acute inpatient dialysis claims. 
We also examine other diagnoses recorded before an acute inpatient 
dialysis claim.
    During the TEP held in December 2020, we reviewed dialysis-related 
costs, resource utilization and characteristics of the AKI-D 
(outpatient dialysis for patients with AKI) population beginning 
January 1, 2017, when their outpatient dialysis treatment first became 
eligible under the ESRD PPS claims. That report can be found at the 
following link: https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-summary-report-april-2021.pdf. As we continue to analyze costs, utilization and 
patient characteristics, we will also examine data as it relates to an 
additional site of service for AKI patients. We will also incorporate 
additional data monitoring for COVID-19 patients who have experienced 
AKI. The results of the data analysis will be shared in the future in 
public use files on the ESRD PPS website.
    Final Rule Action: We are finalizing the AKI payment rate as 
proposed, that is, the AKI payment rate is based on the finalized ESRD 
PPS base rate. Specifically, the final CY 2022 ESRD PPS base rate is 
$257.90. Accordingly, we are finalizing a CY 2022 payment rate of 
$257.90 for renal dialysis services furnished by ESRD facilities to 
individuals with AKI.

IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)

A. Background

    For a detailed discussion of the End-Stage Renal Disease Quality 
Incentive Program's (ESRD QIP's) background and history, including a 
description of the Program's authorizing statute and the policies that 
we have adopted in previous final rules, we refer readers to the 
following final rules:
     CY 2011 ESRD PPS final rule (75 FR 49030),
     CY 2012 ESRD PPS final rule (76 FR 628),
     CY 2012 ESRD PPS final rule (76 FR 70228),
     CY 2013 ESRD PPS final rule (77 FR 67450),
     CY 2014 ESRD PPS final rule (78 FR 72156),
     CY 2015 ESRD PPS final rule (79 FR 66120),
     CY 2016 ESRD PPS final rule (80 FR 68968),

[[Page 61908]]

     CY 2017 ESRD PPS final rule (81 FR 77834),
     CY 2018 ESRD PPS final rule (82 FR 50738),
     CY 2019 ESRD PPS final rule (83 FR 56922),
     CY 2020 ESRD PPS final rule (84 FR 60648), and
     CY 2021 ESRD PPS final rule (85 FR 71398).
    We have also codified many of our policies for the ESRD QIP at 42 
CFR 413.177 and 413.178.

B. Extraordinary Circumstances Exception (ECE) Previously Granted for 
the ESRD QIP Including Notification of ECE Due to ESRD Quality 
Reporting System Issues

1. Extraordinary Circumstance Exception (ECE) Previously Granted in 
Response to the COVID-19 PHE
    On March 22, 2020, in response to the COVID-19 PHE, we announced 
relief for clinicians, providers, hospitals, and facilities 
participating in Medicare quality reporting and value-based purchasing 
programs.\111\ On March 27, 2020, we published a supplemental guidance 
memorandum that described the scope and duration of the ECEs we were 
granting under each Medicare quality reporting and value-based 
purchasing (VBP) program.\112\ Each of these ECEs relieved these 
providers and facilities of their obligation to report data for Q4 CY 
2019, Q1 and Q2 CY 2020, but we stated that we would score such data if 
optionally reported.
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    \111\ CMS, Press Release, CMS Announces Relief for Clinicians, 
Providers, Hospitals and Facilities Participating in Quality 
Reporting Programs in Response to COVID-19 (Mar. 22, 2020), https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
    \112\ CMS, Exceptions and Extensions for Quality Reporting 
Requirements for Acute Care Hospitals, PPS-Exempt Cancer Hospitals, 
Inpatient Psychiatric Facilities, Skilled Nursing Facilities, Home 
Health Agencies, Hospices, Inpatient Rehabilitation Facilities, 
Long-Term Care Hospitals, Ambulatory Surgical Centers, Renal 
Dialysis Facilities, and MIPS Eligible Clinicians Affected by COVID-
19 (Mar. 27, 2020), https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf.
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    The September 2020 IFC updated the ECE we granted in response to 
the COVID-19 PHE for the ESRD QIP and several other quality reporting 
programs (85 FR 54827 through 54838).
    In the IFC, we updated the ECE policy for the ESRD QIP (85 FR 54828 
through 54830). First, we updated our regulations at Sec.  
413.178(d)(7) to state that a facility has opted out of the ECE for 
COVID-19 with respect to the reporting of Q4 CY 2019 NHSN data if the 
facility actually reported the data by the March 31, 2020 deadline but 
did not notify CMS that it would do so. Additionally, we finalized that 
facilities would not have the option to opt-out of the ECE we granted 
with respect to Q1 and Q2 2020 ESRD QIP data. We stated that measures 
calculated using excepted data could affect the national comparability 
of these data due to the geographic differences of COVID-19 incidence 
rates and hospitalizations along with different impacts resulting from 
different State and local law and policy changes implemented in 
response to COVID-19, and therefore may not provide a nationally 
comparable assessment of performance in keeping with the program goal 
of national comparison.
    In the September 2020 IFC, we welcomed public comments on our 
policy to update our regulations at Sec.  413.178(d)(7) to consider a 
facility as having opted out of the ECE with respect to NHSN data 
reported for Q4 2019 if the facility actually reported the data by the 
submission deadline, without notifying CMS, and on the exception we 
finalized to the ECE opt out policy for the ESRD QIP to exclude any 
ESRD QIP data that facilities optionally reported during Q1 and Q2 2020 
from our calculation of PY 2022 TPSs and from the baseline for PY 2023. 
The comments we received on these policies and our responses are set 
forth below.
    Comment: Several commenters supported CMS' updated application of 
the ECE granted in response to the PHE due to COVID-19. A few 
commenters also agreed with CMS' concerns regarding the national 
comparability of data from Q1 and Q2 of CY 2020 and noted that the 
integrity and validity of any measurement calculations associated with 
these data could be compromised.
    Response: We thank commenters for their support.
    Comment: A few commenters expressed strong concern that the data 
collected under the ESRD QIP will not adequately reflect the quality of 
care provided due to the impact of COVID-19 and the shortened data 
collection period. A few commenters noted that the data collected under 
the ESRD QIP for 2020 will be limited due to the COVID-19 PHE and the 
nationwide ECE excluding Q1 and Q2 data from consideration, and will 
undermine the reliability of measure results for scoring purposes. A 
few commenters recommended that CMS suspend penalties and payment 
adjustments for the 2020 performance year, expressing concern that the 
data collected under the ESRD QIP will not adequately reflect the 
quality of care provided due to the impact of the COVID-19 PHE and the 
nationwide ECE.
    Response: We share commenters' concerns regarding the potential 
impact on ESRD QIP measure calculations for PY 2022 due to the COVID-19 
PHE and the shortened data collection period resulting from the 
nationwide ECE. In order to avoid unfairly penalizing facilities based 
on data that may not accurately reflect the quality of care provided 
due to circumstances beyond their control, in section IV.D of this 
final rule we are finalizing our proposal to adopt a special scoring 
and payment policy for PY 2022, under which we will not score or apply 
payment reductions to any ESRD facilities for PY 2022 under the ESRD 
QIP.
    Comment: A few commenters expressed strong support for extending 
the ECE through the end of 2020, noting the continuing impact of COVID-
19 on dialysis facilities. A few commenters also noted that COVID-19 
case rates were higher in Q3 and Q4 of 2020 for patients attributed to 
dialysis facilities in certain geographic regions, and that these 
higher case rates may have affected performance scores under ESRD QIP.
    Response: We agree that the impact of COVID-19 on dialysis 
facilities in 2020 has affected our ability to accurately measure their 
performance. We resumed data collection for the ESRD QIP on July 1, 
2020 because we believe that collecting ESRD QIP measure data is 
important in order to better understand the impact of COVID-19 on the 
data as it relates to factors such as the changing geographic 
differences in COVID-19 incidence and the quality of ESRD care provided 
to Medicare beneficiaries. However, to avoid unfairly penalizing 
facilities based on data that may not accurately reflect their quality 
of care, we are finalizing a measure suppression policy for the 
duration of the COVID-19 PHE and a special scoring and payment policy 
for PY 2022 in sections IV.C. and IV.D. of this final rule.
    Comment: One commenter expressed support for CMS' intention to 
provide subregulatory notice of decisions surrounding payment 
adjustments and penalties under the ESRD QIP.
    Response: In the September 2020 IFC, we stated that in the interest 
of time and transparency, we may provide subregulatory advance notice 
of our intentions regarding payment adjustments and penalties (85 FR 
54830). However, we would like to clarify that we would use rulemaking 
to propose any actual modifications to the ESRD QIP scoring and payment 
adjustment methodologies and that we

[[Page 61909]]

are using this final rule to finalize our scoring and payment 
adjustment policy for PY 2022.
    Comment: One commenter requested that CMS provide further guidance 
to facilities regarding the criteria for requesting an ECE during a 
pandemic.
    Response: The criteria for requesting an ECE under the ESRD QIP 
during a pandemic are the same as the criteria for requesting an ECE 
under the ESRD QIP due to other extraordinary circumstances beyond a 
facility's control. These requirements can be found in our regulations 
at 42 CFR 413.178(d)(3) through (7). Under these requirements, a 
facility may request an ECE within 90 days of the extraordinary 
circumstance occurring and must submit an ECE request form to CMS with 
the following information:
    (i) Facility CCN.
    (ii) Facility name.
    (iii) CEO name and contact information.
    (iv) Additional contact name and contact information.
    (v) Reason for requesting an exception.
    (vi) Dates affected.
    (vii) Date the facility will start submitting data again, with 
justification for this date.
    (viii) Evidence of the impact of the extraordinary circumstances, 
including but not limited to photographs, newspaper, and other media 
articles.
    In certain circumstances, such as a determination that an 
extraordinary circumstance has occurred that affects an entire region 
or locale, CMS may grant exceptions to facilities without a request. We 
note that facilities may also reject an ECE granted by CMS under 
certain circumstances. Technical details can be viewed on the 
QualityNet website.\113\
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    \113\ https://qualitynet.cms.gov/esrd/esrdqip/participation#tab5.
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    As established in the September 2020 IFC, we have finalized our 
updated application of the ECE granted in response to the COVID-19 PHE.
2. ECE Due to ESRD Quality Reporting System (EQRS) Issues
    On November 9, 2020,\114\ we launched the ESRD Quality Reporting 
System (EQRS). The EQRS contains the functionalities of the following 
three legacy ESRD Systems in one global application: (1) A quality 
measure and VBP performance score review system (ESRD QIP System); (2) 
an ESRD patient registry and quality measure reporting system through 
the Consolidated Renal Operations in a Web-enabled Network (CROWNWeb); 
and (3) Medicare coverage determination support through the Renal 
Management Information System (REMIS). The transition to EQRS supports 
our efforts to consolidate the functionalities of the CROWNWeb, ESRD 
QIP System, and REMIS applications into a single system, and aims to 
provide ongoing support to the ESRD user community to foster accurate 
and timely monthly data submission. This migration eliminates the need 
for multiple user accounts, and will in the long-term also improve the 
overall user experience and reduce burden due to enhanced navigation 
features.
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    \114\ https://mycrownweb.org/2020/11/november-2020-newsletter/.
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    In order to access EQRS, all authorized users must create an 
account with the Health Care Quality Information Systems (HCQIS) Access 
Roles and Profile, known as HARP, which is a secure identity management 
portal provided by CMS. Previously, users created separate accounts for 
each ESRD application through CMS' Enterprise Identity Data Management 
(EIDM) system. Creating an account via HARP provides users with a user 
ID and password that can be used to access many CMS applications. It 
also provides a single location for users to modify their profile, 
change their password, update their challenge question, and add or 
remove two-factor authentication devices. Users can register for a HARP 
account by going to the QualityNet HARP Registration page, available at 
https://harp.cms.gov/register/profile-info.
    We stated in the CY 2022 ESRD PPS proposed rule (86 FR 36348) that 
since the launch of EQRS, several critical data submission issues had 
been identified that impact the overall quality and accuracy of data 
available to support the implementation of the ESRD QIP, and we 
suspended all clinical data submissions into EQRS to allow time to 
resolve the issue.\115\ Based on our assessment, the data submission 
issues only impacted ESRD QIP, Dialysis Star Ratings, Dialysis Facility 
Compare and data submitted for ESRD Network quality improvement 
activities. In the proposed rule, we noted that we had analyzed the 
data submission issues and stated our belief that the data systems 
issues would be resolved on or about July 12, 2021.\116\
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    \115\ https://mycrownweb.org/2021/02/eqrs-data-reporting-update-feb-2021/.
    \116\ On July 9, 2021, we announced that the EQRS data 
suspension will be concluded as of July 12, 2021, and that EQRS 
testing had been performed to ensure that the system is working as 
expected. https://mycrownweb.org/2021/07/eqrs-data-reporting-to-resume/.
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    We recognized that these operational systems issues would prevent 
facilities from submitting ESRD QIP clinical data until the data 
systems issues were resolved. Therefore, we announced a blanket 
extension of remaining CY 2020 clinical reporting deadlines (86 FR 
36348 through 36349). Under this extension, facilities would have until 
September 1, 2021 to submit September through December 2020 ESRD QIP 
clinical data. In the proposed rule (86 FR 36348), we stated our belief 
that this reporting extension aligned with the time estimated for 
resolution of our operational systems issues and would give dialysis 
facilities nearly 7 weeks to submit their data to EQRS. We stated that 
we would provide further details to facilities when the EQRS issues 
were resolved, as well as when facilities could begin submitting their 
data for CY 2020 and CY 2021, through routine communication channels to 
facilities, vendors, Quality Improvement Organizations (QIOs) and ESRD 
Networks. We stated that the communications could include memos, 
emails, and notices on the public QualityNet website (https://www.qualitynet.org/). As this situation was ongoing at the time, we 
stated in the proposed rule that we would announce any relevant 
extension deadlines and data submission requirements for impacted CY 
2021 data through the routine communication channels discussed above. 
On September 3, 2021, we announced that the September 1, 2021 data 
submission deadline for September-December 2020 clinical data had been 
extended to September 15, 2021 in order to give facilities additional 
time to submit their data.\117\
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    \117\ https://mycrownweb.org/2021/09/clarified-eqrs-2020-data-submission-deadline-extension-2021-clinical-data-submission-deadline/. We also have provided additional information at: https://mycrownweb.org/wp-content/uploads/2021/07/FAQ_Resuming-2020_2021Clinical-Data-Submission_Final_508.pdf.
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    Because the current data submissions issue would not be resolved 
until or about July 12, 2021 and had impacted all facilities that 
participate in ESRD QIP, we stated our belief that granting a blanket 
ECE to all facilities without a request under 42 CFR 413.178(d)(6)(ii) 
was the appropriate remedy under these circumstances. We also stated 
our belief that requiring facilities to report the CY 2020 data 
impacted by this ECE by September 1, 2021 was reasonable. In our data 
suspension announcements, we noted that facilities were expected to 
continue to use EQRS to collect clinical data to complete tasks such as 
admit and discharge patients, complete CMS

[[Page 61910]]

forms (such as the CMS-2728: End Stage Renal Disease Medical Evidence 
Report Medicare Entitlement and/or Patient Registration, CMS-2744: End 
Stage Renal Disease Annual Facility Survey Form, and CMS-2746: ESRD 
Death Notification), add or update treatment summaries, resolve 
notifications within a timely manner, and should also continue to keep 
facilities' information up-to-date.\118\ In other words, although 
facilities were unable to submit clinical data through EQRS, facilities 
were advised that they must continue to collect the clinical data.
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    \118\ https://mycrownweb.org/2021/02/eqrs-data-reporting-update-feb-2021/.
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    In the proposed rule (86 FR 36349), we stated that while we were 
working to resolve all known systems issues by July 12, 2021 and reopen 
submissions so that facilities may submit their September through 
December 2020 ESRD QIP data no later than September 1, 2021, we would 
only be able to ensure the validity of the impacted data after they are 
submitted. Given that the system issues experienced during the initial 
implementation of the EQRS, if not fully resolved, could potentially 
impact the accuracy and reliability of the data reported, we were 
concerned that facilities may be unfairly penalized because the current 
systems issues may impact the quality of the data. The EQRS system 
issues had resulted in multiple or incorrect dates of patient 
admissions and/or discharges, as well as showing duplicate patient 
records. Facilities had also expressed concerns about their experience 
with EQRS issues, noting that there was no way for a facility to verify 
accuracy or completeness. They had reported issues including missing 
record status in response files, which meant that facilities did not 
know if the records were accepted or received an error response, and 
issues with determining whether clinical data were accepted because the 
information did not show in the user interface or the reports that 
facilities were receiving from EQRS.
    We stated in the proposed rule that we recognized stakeholders' 
concerns about the potential impact to the quality of data for CY 2020. 
We stated our belief that the observed system issues, and any 
unresolved issues that may be identified only after data submissions 
are resumed, could impact the quality and accuracy of the data needed 
to calculate accurate ESRD QIP scores used for PY 2022 ESRD QIP 
calculations because patient admittance dates, discharge dates, record 
status in response files, clinical data, and the number of active 
patient cases are data points that are included in measure calculations 
for all of the PY 2022 ESRD QIP measures. If these data points were 
incorrect, then this would impact our ability to accurately calculate 
measures and would distort a facility's measure performance.
    Therefore, because of the EQRS system issues described above, and 
additionally, due to the impact of the COVID-19 PHE on some of the PY 
2022 ESRD QIP measures, as described more fully in section IV.C. of 
this final rule, we proposed to not score or award a TPS to any 
facility, or reduce payment to any facility, in PY 2022. As discussed 
more fully in section IV.D below, we are finalizing that proposal in 
this final rule.
    Although we considered if there may be any alternative data sources 
for the measures impacted by these EQRS system issues, we concluded 
that this was not feasible for several reasons. First, all 14 ESRD QIP 
measures for PY 2022 were impacted by these system issues. Although 
certain measures do not require that facilities submit clinical data 
into EQRS, we use EQRS data to determine whether a facility has treated 
a sufficient number of patients in order to meet the measure's minimum 
patient case threshold necessary to calculate the measure for ESRD QIP. 
For example, the National Healthcare Safety Network (NHSN) Bloodstream 
Infection (BSI) clinical measure requires that facilities report data 
to NHSN. However, the measure also has a requirement to exclude 
facilities that do not treat at least 11 eligible in-center 
hemodialysis patients during the 12 month performance period. In order 
to determine whether a facility has treated at least 11 eligible 
patients, we use EQRS admission data and Medicare claims data in order 
to determine whether the facility is eligible to receive a score on the 
measure.\119\
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    \119\ https://www.cms.gov/files/document/cy-2021-final-technical-specifications-20201130.pdf.
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    We ultimately decided to propose the special rule for PY 2022, as 
described further, because not only do these system issues impact all 
ESRD QIP measures, which could lead to distorted performance scores and 
unfair penalties, but we also wanted to provide facilities with the 
business certainty they need regarding their PY 2022 payments. In order 
to determine whether all data quality issues have been resolved when 
EQRS reopens for data submissions, we stated that we would need time to 
validate the impacted data after facilities are able to resume data 
submission. Due to the timing of this reporting extension, we stated 
our belief that there were no feasible alternative data sources for PY 
2022. Therefore, we stated that the scoring and payment modifications 
we proposed for PY 2022 were appropriate in this situation.
    Comment: Several commenters expressed appreciation and support for 
the reporting extension granted due to EQRS issues. A few commenters 
noted that facilities have experienced challenges with reporting data 
to EQRS and that the extension is helpful particularly as facilities 
continue to also address the impact of the COVID-19 PHE.
    Response: We thank the commenters for their support.
    Comment: A few commenters requested that CMS extend the reporting 
extension to the end of CY 2021, noting the ongoing COVID-19 PHE and 
continued challenges with data reporting. One commenter expressed the 
belief that extending the reporting deadline to the end of CY 2021 will 
help to ensure the accuracy and completeness of the data submitted. One 
commenter expressed concern that EQRS issues may not be fully resolved 
by the anticipated deadline, and requested that CMS issue further 
flexibilities if necessary.
    Response: Although we initially extended the data submission 
deadline to September 1, 2021, we subsequently extended that deadline 
to September 15, 2021 in order to give facilities additional time to 
submit their data. We note that all outstanding EQRS issues have been 
resolved and we reopened access to EQRS on July 12, 2021. We believe 
that 2 months was sufficient time for facilities to report September 
through December 2020 ESRD QIP data.
    Comment: A few commenters expressed support for the issuance of 
notifications through routine communication channels, in the event that 
an additional extension is granted due to unresolved EQRS issues.
    Response: We thank the commenters for their support.

C. Flexibilities for the ESRD QIP in Response to the COVID-19 PHE

1. Adoption of a Measure Suppression Policy for the Duration of the 
COVID-19 PHE
    In the CY 2022 ESRD PPS proposed rule, we stated that in previous 
rules, we have identified the need for flexibility in our quality 
measurement programs to account for changing conditions that are beyond 
participating facilities' or practitioners' control. We identified this 
need because we would like to ensure that participants in our

[[Page 61911]]

programs are not affected negatively when their quality performance 
suffers for reasons not due to the care provided, but instead due to 
external factors.
    A significant example of the type of external factor that may 
affect quality measurement is the COVID-19 PHE, which has had, and 
continues to have, significant and ongoing effects on the provision of 
medical care in the country and around the world. The COVID-19 pandemic 
and associated PHE have impeded effective quality measurement in many 
ways. Changes to clinical practices to accommodate safety protocols for 
medical personnel and patients, as well as unpredicted changes in the 
number of stays and facility-level case mixes, have affected the data 
used in quality measurement and the resulting quality scores. Measures 
used in the ESRD QIP need to be evaluated to determine whether their 
specifications need to be updated to account for new clinical 
guidelines, diagnosis or procedure codes, and medication changes that 
we have observed during the PHE. Additionally, because COVID-19 
prevalence is not consistent across the country, dialysis facilities 
located in different areas have been affected differently at different 
times throughout the pandemic. Under those circumstances, we stated in 
the proposed rule that we remain significantly concerned that the ESRD 
QIP's quality measure scores that are calculated using data submitted 
during the PHE for COVID-19 will be distorted and will result in skewed 
payment incentives and inequitable payments, particularly for dialysis 
facilities that have treated more COVID-19 patients than others.
    We further stated that it is not our intention to penalize dialysis 
facilities based on measure scores that we believe are distorted by the 
COVID-19 pandemic and, thus, not reflective of the quality of care that 
the measures in the ESRD QIP were designed to assess. As previously 
discussed, the COVID-19 pandemic has had, and continues to have, 
significant and enduring effects on health care systems around the 
world, and affects care decisions, including those made on clinical 
topics covered by the ESRD QIP's measures. As a result of the COVID-19 
PHE, dialysis facilities could provide care to their patients that 
meets the underlying clinical standard but results in worse measured 
performance, and by extension, payment penalties in the ESRD QIP. We 
also stated that we are concerned that regional differences in COVID-19 
prevalence during the performance period for PY 2022 have directly 
affected dialysis facilities' measure scores on the ESRD QIP for PY 
2022. Although these regional differences in COVID-19 prevalence rates 
do not reflect differences in the quality of care furnished by dialysis 
facilities, they could directly affect the payment penalties that these 
facilities could receive and could result in an unfair and inequitable 
distribution of those penalties. These inequities could be especially 
pronounced for dialysis facilities that have treated a large number of 
COVID-19 patients.
    We therefore proposed to adopt a policy for the duration of the 
COVID-19 PHE that would enable us to suppress the use of ESRD QIP 
measure data for all facilities if we determine that circumstances 
caused by the COVID-19 PHE have affected those measures and the 
resulting total performance scores (TPSs) significantly (86 FR 36350). 
We also proposed to suppress certain measures for the PY 2022 program 
year because we have determined that circumstances caused by the COVID-
19 PHE have affected those measures significantly. In addition, due to 
both the impacts of the COVID-19 PHE on certain measures and the EQRS 
system issues described in section IV.B.2. we proposed to adopt a 
special scoring and payment rule for PY 2022, as described more fully 
in section IV.D.
    In developing the proposed policy, we considered what circumstances 
caused by the COVID-19 PHE would affect a quality measure significantly 
enough to warrant its suppression in a value-based purchasing (VBP) 
program. We stated our belief that a significant deviation in measured 
performance that can be reasonably attributed to the COVID-19 PHE is a 
significant indicator of changes in clinical conditions that affect 
quality measurement. Similarly, we stated our belief that a measure may 
be focused on a clinical topic or subject that is proximal to the 
disease, pathogen, or other health impacts of the PHE. As has been the 
case during the COVID-19 pandemic, we stated our belief that rapid or 
unprecedented changes in clinical guidelines and care delivery, 
potentially including appropriate treatments, drugs, or other protocols 
may affect quality measurement significantly and should not be 
attributed to the participating facility positively or negatively. We 
also noted that scientific understanding of a particular disease or 
pathogen may evolve quickly during an emergency, especially in cases of 
new disease or conditions. Finally, we stated our belief that, as 
evidenced during the COVID-19 pandemic, national or regional shortages 
or changes in health care personnel, medical supplies, equipment, 
diagnostic tools, and patient case volumes or case mix may result in 
significant distortions to quality measurement.
    Based on these considerations, we developed a number of Measure 
Suppression Factors that we believe should guide our determination of 
whether to propose to suppress ESRD QIP measures for one or more 
payment years that overlap with the COVID-19 PHE. We proposed to adopt 
these Measure Suppression Factors for use in the ESRD QIP and, for 
consistency, the following other VBP programs: Hospital VBP Program, 
Hospital Readmissions Reduction Program, Hospital-Acquired Condition 
(HAC) Reduction Program, and Skilled Nursing Facility VBP Program (see, 
for example, 86 FR 25460 through 25462, 25470 through 25472, and 25497 
through 25499). We stated our belief that these Measure Suppression 
Factors will help us evaluate measures in the ESRD QIP and that their 
adoption in the other VBP programs noted previously will help ensure 
consistency in our measure evaluations across programs. The proposed 
Measure Suppression Factors are as follows:
     Factor 1: Significant deviation in national performance on 
the measure during the COVID-19 PHE, which could be significantly 
better or significantly worse compared to historical performance during 
the immediately preceding program years.
     Factor 2: Clinical proximity of the measure's focus to the 
relevant disease, pathogen, or health impacts of the COVID-19 PHE.
     Factor 3: Rapid or unprecedented changes in:
    ++ Clinical guidelines, care delivery or practice, treatments, 
drugs, or related protocols, or equipment or diagnostic tools or 
materials; or
    ++ the generally accepted scientific understanding of the nature or 
biological pathway of the disease or pathogen, particularly for a novel 
disease or pathogen of unknown origin.
     Factor 4: Significant national shortages or rapid or 
unprecedented changes in:
    ++ Healthcare personnel;
    ++ medical supplies, equipment, or diagnostic tools or materials; 
or
    ++ patient case volumes or facility-level case mix.
    In the CY 2022 ESRD PPS proposed rule, we also considered 
alternatives to this proposed policy that could fulfill our objective 
to not penalize dialysis facilities for measure results that are 
distorted due to the COVID-19 PHE. As previously noted, the country 
continues to grapple with the effects of the COVID-19 pandemic, and in 
March

[[Page 61912]]

2020, CMS issued a nationwide, blanket Extraordinary Circumstances 
Exception (ECE) for all hospitals and other facilities participating in 
our quality reporting and VBP programs in response to the COVID-19 PHE. 
This blanket ECE excepted all data reporting requirements for Q1 and Q2 
2020 data, including claims data and data collected through the CDC's 
web-based surveillance system for this data period, and quality data 
collection resumed on July 1, 2020. For claims-based measures, we also 
stated that we would exclude all qualifying Q1 and Q2 2020 claims from 
our measure calculations. We considered extending this blanket ECE that 
we issued for Q1 and Q2 2020 to also include Q3 and Q4 2020. This 
alternative would have protected providers and suppliers from having 
their quality data used for quality scoring purposes if those data were 
likely to have been affected significantly by the COVID-19 PHE. 
However, this option would have made quality data collection and 
reporting to CMS no longer mandatory and would have left us with no 
comprehensive data available to provide confidential performance 
feedback to providers nor for monitoring and to inform decision-making 
for potential future programmatic changes, particularly as the PHE is 
extended.
    As an alternative to the proposed quality measure suppression 
policy, we also considered not suppressing any measures under the ESRD 
QIP. However, this alternative would mean assessing dialysis facilities 
using quality measure data that has been significantly affected by the 
COVID-19 pandemic. Additionally, given the geographic disparities in 
the COVID-19 pandemic's effects, we stated in the proposed rule that 
implementation of the PY 2022 ESRD QIP as previously finalized would 
place dialysis facilities in regions that were more heavily impacted by 
the pandemic in Q3 and Q4 of 2020 at a disadvantage compared to 
facilities in regions that were more heavily impacted during the first 
two quarters for CY 2020 (86 FR 36350 through 36351).
    We stated in the proposed rule that we viewed this measure 
suppression proposal as a necessity to ensure that the ESRD QIP does 
not penalize facilities based on external factors that were beyond the 
control of facilities. We intended for this proposed policy to provide 
short-term relief to dialysis facilities when we have determined that 
one or more of the Measure Suppression Factors warrants the suppression 
of an ESRD QIP measure.
    We welcomed public comments on this proposal for the adoption of a 
measure suppression policy for the duration of the COVID-19 PHE, and 
also on the proposed Measure Suppression Factors that we developed for 
purposes of this proposed policy. The comments we received and our 
responses are set forth below.
    Comment: Many commenters expressed support for the measure 
suppression policy for the duration of the COVID-19 PHE. Several 
commenters expressed appreciation that the proposed measure suppression 
policy would help to address the ongoing challenges of the COVID-19 
PHE. Several commenters expressed support for the proposed measure 
suppression policy, noting that measure scores may be distorted due to 
the substantial impact of the COVID-19 PHE on facility performance and 
that such a policy would help to avoid penalizing facilities based on 
potentially distorted data due to the COVID-19 PHE.
    Response: We thank commenters for their support.
    Comment: One commenter acknowledged the benefit of the proposed 
measure suppression policy, but also expressed concern regarding the 
exclusion of data showing the high morbidity and mortality of ESRD 
patients with COVID-19.
    Response: Although we will not score facilities using data 
submitted during the ECE, we do intend to make individual facility data 
that was reported available to that facility so that the facility has 
an opportunity assess the impact of COVID-19 on its ESRD patients. We 
will also publicly report the measure rates with appropriate caveats. 
We believe that providing as much information as possible to facilities 
in this way while also publicly reporting performance data to the 
public with appropriate caveats balances fairness in our value-based 
purchasing programs with the public's need for transparency.
    Comment: Several commenters expressed support for the proposals to 
address the negative impact of the pandemic on the ESRD QIP and 
recommended that CMS consider similar considerations for CY 2021 
measure data. A few commenters strongly recommended that CMS consider 
extending relief under the ESRD QIP to PY 2023, citing the rise of the 
Delta variant and continuing impact of COVID-19 on facilities as well 
as the healthcare system nationwide. These commenters noted the 
continuing impact of the PHE on ESRD QIP measures, due both to the 
impact of COVID-19 on ESRD patients which may result in new hospital 
admissions and impact facility performance on SHR and SRR measures, as 
well as the strain on the healthcare system due to the influx of COVID-
19 patients which may impact the availability of vascular access 
procedures and transplant evaluations. A few commenters noted that 
geographic variations in the COVID-19 PHE during CY 2021 continue to 
exacerbate distortions in ESRD QIP measure performance.
    Response: The measure suppression policy that we are finalizing in 
this final rule applies for the duration of the COVID-19 PHE. We will 
continue to monitor the impact of the COVID-19 PHE on dialysis 
facilities, and we would consider proposing in a future rulemaking to 
suppress one or more individual ESRD QIP measures for a future ESRD QIP 
payment year if we conclude that circumstances caused by the COVID-19 
PHE have affected those measures and the resulting TPSs based on CY 
2021 data.
    Comment: Several commenters expressed support for the proposed 
Measure Suppression Factors. Several commenters noted that they will 
help to mitigate the negative impact of the challenges presented by the 
COVID-19 PHE such as significant deviation in national performance, the 
distorting impact on measures themselves, changing guidelines and 
protocols related to the PHE, and challenges due to shortages in both 
medical supplies, staffing, and patient volume and case-mix on quality 
measures. One commenter expressed support for the proposed Measure 
Suppression Factors, noting that they will help to ensure consistency 
in measure evaluation and suppression.
    Response: We thank commenters for their support.
    Comment: A few commenters expressed concern regarding the proposed 
Measure Suppression Factors. One commenter expressed concern that 
proposed Measure Suppression Factor 2 may overlook indirect or 
downstream clinical impacts that may not be considered ``proximate,'' 
noting for example the impact of the COVID-19 PHE shutdown on non-
urgent scheduled vascular placement procedures leading to reduced 
catheter insertions and fistula rates as well as a delay in patient 
follow up regarding such procedures due to patient fears of COVID-19 
exposure. One commenter expressed concern that proposed Measure 
Suppression Factor 4 does not sufficiently address regional or State-
by-State impacts on personnel, patient volumes or case-mix, and medical

[[Page 61913]]

supplies or equipment, and recommended that CMS broaden application of 
its scope to include sub-national, regional, and State impacts. One 
commenter recommended that CMS consider under Measure Suppression 
Factor 4 the impact of healthcare personnel shortages on ESRD 
facilities as a result of the COVID-19 PHE. One commenter recommended 
that CMS consider including under Measure Suppression Factor 4 
circumstances where there is a statistically meaningful lower 
denominator from prior years due to factors outside of a facility's 
control, such as changes in demographics.
    Response: We developed the Measure Suppression Factors based on 
several considerations specifically related to the PHE for COVID-19, 
including national, regional, and State impacts. For example, we note 
that Measure Suppression Factor 4 addresses healthcare shortages in 
personnel as well as patient volumes and facility-level case mix. We 
believe the Measure Suppression Factors we are adopting for the COVID-
19 PHE are sufficient to guide us in identifying whether circumstances 
caused by the COVID-19 PHE have affected ESRD QIP measures and the 
resulting TPSs.
    Comment: One commenter recommended adding an additional measure 
suppression factor to suppress a measure in cases where the measure 
denominator is statistically meaningfully lower due to circumstances 
beyond the facility's control such as COVID-19 mortality, noting that 
this may significantly also impact measure performance.
    Response: We believe that the commenter's suggestion would be 
captured by the proposed Measure Suppression Factor 4. As we discussed 
in the proposed rule (86 FR 36350), we developed these suppression 
factors to assess changing conditions due to the COVID-19 PHE and 
proposed them consistently in several of our value-based purchasing 
programs. As we stated above, we believe the Measure Suppression 
Factors we are adopting for the COVID-19 PHE are sufficient to guide us 
in identifying whether circumstances caused by the COVID-19 PHE have 
affected ESRD QIP measures and the resulting TPSs.
    Comment: A few commenters expressed support for the proposal to 
provide confidential feedback reports to dialysis facilities under the 
proposed measure suppression policy, noting that it will allow 
facilities to focus on performance improvement and also allow CMS to 
track developments in the field.
    Response: We thank the commenters for their support and note that 
we are finalizing this proposal in this final rule.
    Comment: One commenter expressed support for the public reporting 
of performance scores from CY 2020 with appropriate caveats.
    Response: We thank the commenter for its support.
    Comment: A few commenters did not support the public reporting of 
suppressed measures, noting reliability concerns due to the impact of 
the COVID-19 PHE on measure data.
    Response: We believe it is important to balance fairness with the 
public's need for transparency. Therefore, we intend to make the data 
publicly available. In order to address concerns about publicly 
reporting data that was collected by facilities during the COVID-19 
PHE, we will appropriately caveat the publicly displayed data for 
suppressed measures to note that the measures have been suppressed for 
purposes of scoring and payment adjustments because of the effects of 
the COVID-19 PHE. We believe these caveats will mitigate any public 
confusion that could otherwise result from the display.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to adopt a measure suppression policy for the 
duration of the COVID-19 PHE. We are also finalizing the proposed 
Measure Suppression Factors that we proposed for purposes of this 
measure suppression policy. We will also publicly report the data with 
appropriate caveats.
2. Suppression of Four ESRD QIP Measures for PY 2022
a. Background
    In response to the PHE for COVID-19, we conducted analyses of the 
14 current ESRD QIP measures to determine whether and how COVID-19 may 
have impacted the validity of these measures. For the reasons discussed 
in the CY 2022 ESRD PPS proposed rule, we concluded that COVID-19 has 
so severely impacted the validity of four measures that we believe we 
cannot fairly and equitably score these measures for the PY 2022 
program year. Accordingly, we proposed to suppress these measures for 
the PY 2022 program year for all ESRD QIP participants (86 FR 36351). 
Specifically, the measures we proposed to suppress for the PY 2022 ESRD 
QIP are as follows:
     SHR clinical measure (under Measure Suppression Factor 1, 
Significant deviation in national performance on the measure during the 
COVID-19 PHE, which could be significantly better or significantly 
worse compared to historical performance during the immediately 
preceding program years; and Measure Suppression Factor 4, Significant 
national shortages or rapid or unprecedented changes in:
    ++ healthcare personnel;
    ++ medical supplies, equipment, or diagnostic tools or materials; 
or
    ++ patient case volumes or facility-level case mix);
     Standardized Readmission Ratio (SRR) clinical measure 
(under Measure Suppression Factor 1, Significant deviation in national 
performance on the measure during the COVID-19 PHE, which could be 
significantly better or significantly worse compared to historical 
performance during the immediately preceding program years; and Measure 
Suppression Factor 4, Significant national shortages or rapid or 
unprecedented changes in:
    ++ healthcare personnel;
    ++ medical supplies, equipment, or diagnostic tools or materials; 
or
    ++ patient case volumes or facility-level case mix);
     In-Center Hemodialysis Consumer Assessment of Healthcare 
Providers and Systems (ICH CAHPS) Survey Administration clinical 
measure (under Measure Suppression Factor 1, Significant deviation in 
national performance on the measure during the COVID-19 PHE, which 
could be significantly better or significantly worse compared to 
historical performance during the immediately preceding program years); 
and
     Long-Term Catheter Rate clinical measure (under Measure 
Suppression Factor 1, Significant deviation in national performance on 
the measure during the COVID-19 PHE, which could be significantly 
better or significantly worse compared to historical performance during 
the immediately preceding program years).
    We received comments on additional measures that we should consider 
suppressing and address them below.
    Comment: Several commenters recommended that we suppress the 
Standardized Fistula Rate measure. A few commenters noted that the 
Standardized Fistula Rate measure and the Long-Term Catheter Rate 
measure are both Hemodialysis Vascular Access measures, but only the 
Long-Term Catheter Rate measure is proposed for suppression. A few 
commenters noted that AV fistula placements may have been delayed 
because it was not clear whether such procedures were considered an 
``elective surgery'' in the beginning of the PHE and also because

[[Page 61914]]

ESRD patients may have delayed or avoided medical treatments because of 
COVID-19 concerns. Several commenters recommended that CMS suppress the 
Percentage of Prevalent Patients Waitlisted (PPPW) measure, noting that 
the COVID-19 PHE had a significant negative impact on transplant 
surgeries, referrals and waitlists, as well as other related areas. A 
few commenters also noted that waitlist additions significantly 
decreased during the COVID-19 PHE.
    A few commenters recommended that CMS consider suppressing the Kt/V 
Dialysis Adequacy measure, noting that the impact of the COVID-19 PHE 
on catheter rates has a corresponding impact on the Kt/V measure, as 
patients with catheters will have lower Kt/V rates. One commenter 
recommended suppressing the Kt/V Dialysis Adequacy measure under 
proposed Measure Suppression Factor 1, due to significant deviation in 
national measure performance. One commenter recommended that CMS 
suppress the NHSN BSI clinical measure under Measure Suppression Factor 
3 and Factor 4, noting that challenges in care delivery and treatment 
related to catheter removal and AVF insertion resulted in an increased 
likelihood of patient infection, as well as an increase in patient 
volume and case-mix due to COVID-19 patients developing AKI and 
requiring catheterization.
    Response: At the time of the proposed rule, there was not 
sufficient data to determine whether suppression was appropriate for 
the Standardized Fistula Rate measure, the PPPW measure, the Kt/V 
Dialysis Adequacy measure, or the NHSN BSI clinical measure. We note 
that the status of the data remains unchanged since the proposed rule 
was published. Although we agree with commenters that performance on 
the Standardized Fistula Rate measure is linked to measure performance 
on the Long-Term Catheter Rate measure, the data that was available at 
the time of the proposed rule indicated that the COVID-19 PHE had a 
comparatively lower impact on the Standardized Fistula Rate measure.
    For the PPPW measure, our analysis of the relevant data available 
at the time of the proposed rule indicated temporal declines in 
waitlist removal among prevalent patients and similarly a decline in 
waitlisting and transplants in incident ESRD patients in March 2020 
through May 2020 compared to prior years. However, we also observed 
that trends generally returned to normal starting in June and July 2020 
and reflected data similar to prior years.
    Although performance on the Kt/V Dialysis Adequacy measure deviated 
temporarily, our analysis indicated that Kt/V rates stabilized shortly 
thereafter and reflect measure performance similar to prior years. 
Based on our analysis, Kt/V rates in CY 2020 were similar to rates in 
CY 2019 until April, where they dropped by an average of 0.4 percent. 
However, beginning in June 2020, Kt/V rates were the same as or higher 
than national average rates in March 2020.
    We were unable to assess the impact of the COVID-19 PHE on the NHSN 
BSI clinical measure, which requires a full 12 months of data in order 
to calculate measure performance. The CDC will not be able to calculate 
measure performance for the NHSN BSI clinical measure because the 
nationwide ECE granted in response to the COVID-19 PHE excepted data 
from Q1 and Q2 of CY 2020. As a result, facilities will not receive 
scores for the NHSN BSI clinical measure. We also note that suppressing 
the NHSN BSI clinical measure would be unlikely under Measure 
Suppression Factor 3 and Factor 4, as the links between those factors 
and the impacts on measure performance cited by the commenter are not 
sufficiently direct. Although challenges in care delivery and treatment 
related to catheter removal and AVF insertion resulted in an increased 
likelihood of patient infection, as well as an increase in patient 
volume and case-mix due to COVID-19 patients developing AKI and 
requiring catheterization, neither of those directly caused patients to 
develop more bloodstream infections as a result of the COVID-19 PHE.
    However, we will continue to monitor and review the data and 
consider proposing in a future rulemaking to suppress one or more 
individual ESRD QIP measures for a future ESRD QIP payment year if we 
conclude that circumstances caused by the COVID-19 PHE have affected 
those measures and the resulting TPSs based on CY 2021 data.
b. Suppression of the SHR clinical measure for PY 2022
    In the CY 2022 ESRD PPS proposed rule (86 FR 36351 through 36352), 
we proposed to suppress the SHR clinical measure for the PY 2022 
program year under proposed Measure Suppression Factor 1, Significant 
deviation in national performance on the measure during the COVID-19 
PHE, which could be significantly better or significantly worse as 
compared to historical performance during the immediately preceding 
program years. The SHR clinical measure is an all-cause, risk-
standardized rate of hospitalizations during a 1-year observation 
window. The standardized hospitalization ratio is defined as the ratio 
of the number of hospital admissions that occur for Medicare ESRD 
dialysis patients treated at a particular facility to the number of 
hospitalizations that would be expected given the characteristics of 
the dialysis facility's patients and the national norm for dialysis 
facilities. This measure is calculated as a ratio but can also be 
expressed as a rate. The intent of the SHR clinical measure is to 
improve health care delivery and care coordination to help reduce 
unplanned hospitalization among ESRD patients.
    Based on our analysis of Medicare dialysis patient data from 
January 2020 through August 2020, we found that hospitalizations 
involving patients diagnosed with COVID-19 resulted in higher mortality 
rates, higher rates of discharge to hospice or skilled nursing 
facilities, and lower rates of discharge to home than hospitalizations 
involving patients who were not diagnosed with COVID-19. Specifically, 
the hospitalization rate for Medicare dialysis patients diagnosed with 
COVID-19 was more than 7 times greater than the hospitalization rate 
during the same period for Medicare dialysis patients who were not 
diagnosed with COVID-19, which is much greater than the relative risk 
of hospitalization for any other comorbidity. In the proposed rule (86 
FR 36351), we stated that this indicates that COVID-19 has had a 
significant impact on the hospitalization rate for dialysis patients. 
Because COVID-19 Medicare dialysis patients are at significantly 
greater risk of hospitalization, and the SHR clinical measure was not 
developed to account for the impact of COVID-19 on this patient 
population, we expressed our concern about the effects of the observed 
COVID-19 hospitalizations on the SHR clinical measure. We also noted 
that COVID-19 affected different regions of the country at different 
rates depending on factors like time of year, geographic density, State 
and local policies, and health care system capacity. Because of the 
increased hospitalization risk associated with COVID-19 and the 
Medicare dialysis patient population, we expressed our concern that 
these regional differences in COVID-19 rates have led to distorted 
hospitalization rates such that we could not reliably measure national 
performance on the SHR clinical measure.
    Our analysis of the available Medicare claims data indicated that 
the COVID-19 PHE has had significant effects on hospital admissions of 
dialysis patients,

[[Page 61915]]

and would result in significant deviation in national performance on 
the measure during the COVID-19 PHE which could be significantly worse 
as compared to historical performance during the immediately preceding 
program years. Not only are there effects on patients diagnosed with 
COVID-19, but the presence of the virus strongly affected hospital 
admission patterns of dialysis patients from March 2020 to June 2020, 
and we expressed our concern that similar effects would be seen in the 
balance of the calendar year (CY) as the PHE continued. Because the 
COVID-19 pandemic swept through geographic regions of the country 
unevenly, we expressed our concern that dialysis facilities in 
different regions of the country would have been affected differently 
throughout the 2020 year, thereby skewing measure performance and 
affecting national comparability due to significant and unprecedented 
changes in patient case volumes or facility-level case mix. Given the 
limitations of the data available to us for CY 2020, we stated our 
belief the resulting performance measurement on the SHR clinical 
measure would not be sufficiently reliable or valid for use in the ESRD 
QIP.
    We proposed to suppress this measure for the PY 2022 program year, 
rather than remove it, because we believe that the SHR clinical measure 
is an important part of the ESRD QIP measure set. However, we were 
concerned that the COVID-19 PHE affected measure performance on the 
current SHR clinical measure such that we would not be able to score 
facilities fairly or equitably on it. Additionally, we stated that we 
would continue to collect the measure's claims data from participating 
facilities so that we could monitor the effect of the circumstances on 
quality measurement and determine the appropriate policies in the 
future. We would also continue to provide confidential feedback reports 
to facilities as part of program activities to ensure that they are 
made aware of the changes in performance rates that we observe. We also 
stated our intent to publicly report PY 2022 data where feasible and 
appropriately caveated.
    In the proposed rule, we stated that we were currently exploring 
ways to adjust effectively for the systematic effects of the COVID-19 
PHE on hospital admissions for the SHR clinical measure. However, we 
are still working to improve these COVID-19 adjustments and verify the 
validity of a potential modified version of the SHR clinical measure as 
additional data become available. As an alternative, we considered 
whether we could exclude patients with a diagnosis of COVID-19 from the 
SHR clinical measure cohort, but we determined suppression will provide 
us with additional time and additional months of data potentially 
impacted by COVID-19 to more thoroughly evaluate a broader range of 
alternatives. We want to ensure that the measure reflects care provided 
to Medicare dialysis patients and we are concerned that excluding 
otherwise eligible patients may not accurately reflect the care 
provided, particularly given the unequal distribution of COVID-19 
patients across facilities and hospitals over time. As an alternative 
approach, we stated that we also might consider updating the 
specifications for the SHR clinical measure to eliminate any exposure 
time and events after infection for patients who contract COVID-19, as 
COVID-19 symptoms may continue to affect patients after infection. We 
stated our belief that this approach might help distinguish between 
ESRD-related hospitalizations and COVID-19 related hospitalizations 
that might otherwise impact SHR clinical measure calculations.
    We welcomed public comment on our proposal to suppress the SHR 
clinical measure for PY 2022. The comments we received and our 
responses are set forth below.
    Comment: Several commenters expressed support for the proposal to 
suppress the SHR clinical measure for PY 2022, agreeing that the COVID-
19 PHE has impacted the validity and reliability of performance scoring 
for PY 2022.
    Response: We thank the commenters for their support.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to suppress the SHR clinical measure for PY 
2022.
c. Suppression of the SRR Clinical Measure for PY 2022
    In the CY 2022 ESRD PPS proposed rule (86 FR 36352 through 36353), 
we proposed to suppress the SRR clinical measure for the PY 2022 
program year under proposed Measure Suppression Factor 1, Significant 
deviation in national performance on the measure during the COVID-19 
PHE, which could be significantly better or significantly worse 
compared to historical performance during the immediately preceding 
program years. The SRR assesses the number of readmission events for 
the patients at a facility, relative to the number of readmission 
events that would be expected based on overall national rates and the 
characteristics of the patients at that facility as well as the number 
of discharges. The intent of the SRR clinical measure is to improve 
care coordination between dialysis facilities and hospitals to improve 
communication prior to and post discharge.
    Based on our analysis, we found that index discharge 
hospitalizations involving dialysis patients diagnosed with COVID-19 
resulted in lower readmissions and higher mortality rates within the 
first 7 days. We used index hospitalizations occurring from January 1, 
2020 through June 30, 2020 to identify eligible index hospitalizations 
and unplanned hospital readmissions. In an analysis of unadjusted 
readmission and death rates by COVID-19 hospitalization status and days 
since index discharge, during the first 4 to 7 days after discharge 
there was a readmission rate of 81.3 percent of dialysis patients 
hospitalized with COVID-19, as compared to 82.6 percent of dialysis 
patients hospitalized without COVID-19. During that same 4 to 7 day 
time period, the unadjusted mortality rate for dialysis patients 
hospitalized with COVID-19 was 16.9 percent, compared with 10.9 percent 
of patients hospitalized without COVID-19. Based on this discrepancy, 
we were concerned about the effects of these observations on the 
calculations for the SRR clinical measure. The denominator of SRR 
reflects the expected number of index discharges followed by an 
unplanned readmission within 4 to 30 days in each facility, which is 
derived from a model that accounts for patient characteristics, the 
dialysis facility to which the patient is discharged, and the 
discharging acute care or critical access hospitals involved. Our 
analysis indicated potential competing risks of higher mortality and 
lower readmissions due to patient death or discharge to hospice, both 
of which would remove them from the denominator for the SRR clinical 
measure. If readmissions rates are lower because patient mortality is 
higher due to the impact of COVID-19 on dialysis patients, then 
readmission rates would be distorted by appearing significantly better 
compared to historical performance during the immediately preceding 
program years. Based on the impact of COVID-19 on SRR results, 
including the deviance in measurement, we concluded that the SRR 
clinical measure met our criteria for Factor 1 where performance data 
would significantly deviate from historical data performance and would 
be considered unreliable. Therefore, we stated our belief that the 
resulting performance measurement on the SRR clinical

[[Page 61916]]

measure would not be sufficiently reliable or valid for use in the ESRD 
QIP.
    We proposed to suppress this measure for the PY 2022 program year, 
rather than remove it, because we believe that the SRR clinical measure 
is an important part of the ESRD QIP Program measure set. However, we 
were concerned that the PHE for the COVID-19 pandemic affected measure 
performance on the current SRR clinical measure such that we would not 
be able to score facilities fairly or equitably on it. Additionally, we 
stated that we would continue to collect the measure's claims data from 
participating facilities so that we could monitor the effect of the 
circumstances on quality measurement and determine the appropriate 
policies in the future. We would also continue to provide confidential 
feedback reports to facilities as part of program activities to ensure 
that they are made aware of the changes in performance rates that we 
observe. We also stated our intent to publicly report PY 2022 data 
where feasible and appropriately caveated.
    In the proposed rule, we stated that we were currently exploring 
ways to adjust effectively for the systematic effects of the COVID-19 
PHE on hospital admissions for the SRR clinical measure. However, we 
are still working to improve these COVID-19 adjustments and verify the 
validity of a potential modified version of the SRR clinical measure as 
additional data becomes available. As an alternative approach, we 
stated that we might also consider eliminating from the calculation of 
the SRR clinical measure any cases of patients who had a COVID-19 event 
prior to or at the time of index hospitalization. We stated our belief 
this approach might help distinguish between ESRD-related readmissions 
and COVID-19 related readmissions that might otherwise impact SRR 
clinical measure calculations.
    We welcomed public comment on our proposal to suppress the SRR 
clinical measure for PY 2022. The comments we received and our 
responses are set forth below.
    Comment: Several commenters expressed support for the proposal to 
suppress the SRR clinical measure for PY 2022, agreeing that the COVID-
19 PHE has impacted the validity and reliability of performance scoring 
for PY 2022.
    Response: We thank the commenters for their support.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to suppress the SRR clinical measure for PY 
2022.
d. Suppression of the ICH CAHPS Clinical Measure for PY 2022
    In the CY 2022 ESRD PPS proposed rule (86 FR 36353), we proposed to 
suppress the ICH CAHPS clinical measure for the PY 2022 program year 
under proposed Measure Suppression Factor 1, Significant deviation in 
national performance on the measure during the COVID-19 PHE, which 
could be significantly better or significantly worse compared to 
historical performance during the immediately preceding program years. 
Based on our analysis of CY 2020 ICH CAHPS data, we found a significant 
decrease in response scores as compared to previous years.
    The ICH CAHPS clinical measure is scored based on three composite 
measures and three global ratings.\120\ Global ratings questions employ 
a scale of 0 to 10, worst to best; each of the questions within a 
composite measure use either ``Yes'' or ``No'' responses, or response 
categories ranging from ``Never'' to ``Always'' to assess the patient's 
experience of care at a facility. Facility performance on each 
composite measure is determined by the percent of patients who choose 
``top-box'' responses (that is, most positive or ``Always'') to the ICH 
CAHPS survey questions in each domain. The ICH CAHPS survey is 
administered twice yearly, once in the spring and once in the fall.
---------------------------------------------------------------------------

    \120\ Groupings of questions and composite measures can be found 
at https://ichcahps.org/Portals/0/SurveyMaterials/ICH_Composites_English.pdf.
---------------------------------------------------------------------------

    Because of the ECE we granted in response to the COVID-19 PHE, 
facilities were not required to submit CY 2020 spring ICH CAHPS data 
for purposes of the ESRD QIP. On September 2, 2020, we published an 
interim final rule with comment (IFC) in the Federal Register titled, 
``Medicare and Medicaid Programs, Clinical Laboratory Improvement 
Amendments (CLIA), and Patient Protection and Affordable Care Act; 
Additional Policy and Regulatory Revisions in Response to the COVID-19 
Public Health Emergency'' (85 FR 54820) referred to herein as the 
``September 2020 IFC''. In the September 2020 IFC, we noted that we 
would not use any first or second quarter CY 2020 data to calculate 
TPSs for the applicable performance period (85 FR 54829 through 54830). 
Because the PY 2022 performance period for the ICH CAHPS measure is 
January 1, 2020 through December 31, 2020, and the ICH CAHPS survey is 
administered twice a year (once in the spring and once in the fall), in 
the proposed rule we stated that we only have data available from the 
fall CY 2020 survey to calculate facility performance on this measure. 
Therefore, facilities would only be scored on data based on one ICH 
CAHPS survey administration for CY 2020, rather than two. Even if we 
were to score facilities based on the one ICH CAHPS survey administered 
in the fall, our preliminary data indicated that 95 percent of 
facilities would not be eligible for scoring on ICH CAHPS for CY 2020. 
By contrast, 58.9 percent of facilities were not eligible for ICH CAHPS 
during CY 2018. If we were to score the 5 percent of eligible 
facilities on ICH CAHPS, we stated our belief that there would be a 
significant deviation in national performance on this measure compared 
to the national performance based on 41.1 percent of facilities 
eligible for scoring on ICH CAHPS during 2018 (86 FR 36353). We also 
stated that this is a significant deviation in national performance on 
this measure compared to historical performance during the immediately 
preceding program years. Given this significant deviation in national 
performance during the PHE, we expressed our belief that the ICH CAHPS 
clinical measure meets the criteria for Measure Suppression Factor 1.
    We also stated our belief that this significant change in 
performance may unfairly penalize facilities and that suppressing this 
measure for the PY 2022 program year would address concerns about the 
potential unintended consequences of penalizing facilities that treat 
COVID-19 diagnosed patients in the ESRD QIP. As alternative approaches, 
we considered changing the performance period or scoring facilities on 
one survey administration, but otherwise meeting the 30 completed 
surveys requirement. However, we found that neither of these approaches 
were feasible; extending the performance period would not accurately 
reflect ICH CAHPS performance during CY 2020, and as discussed above, 
an estimated 95 percent of facilities would not be eligible for ICH 
CAHPS scoring on one survey. Therefore, to avoid unfairly penalizing 
facilities due to their performance on the ICH CAHPS survey for the PY 
2022 ESRD QIP, we stated our belief that it is appropriate to suppress 
the ICH CAHPS measure for CY 2020, which is the performance period for 
the PY 2022 ESRD QIP program year (83 FR 57010).
    We proposed to suppress this measure for the PY 2022 program year, 
rather than remove it, because we believe that the ICH CAHPS measure is 
an important part of the ESRD QIP measure set.

[[Page 61917]]

However, we were concerned that the COVID-19 PHE affected measure 
performance on the current ICH CAHPS measure such that we would not be 
able to score facilities fairly or equitably on it. Additionally, 
participating facilities would continue to report the measure's data to 
CMS so that we could monitor the effect of the circumstances on quality 
measurement and determine the appropriate policies in the future. In 
the proposed rule, we stated that we would also continue to provide 
confidential feedback reports to facilities as part of program 
activities to ensure that they are made aware of the changes in 
performance rates that we observe (86 FR 36353). We also stated our 
intent to publicly report PY 2022 data where feasible and appropriately 
caveated.
    We welcomed public comment on our proposal to suppress the ICH 
CAHPS measure for the PY 2022 program year. The comments we received 
and our responses are set forth below.
    Comment: Several commenters expressed support for the proposal to 
suppress the ICH CAHPS measure for PY 2022, agreeing that the COVID-19 
PHE has impacted the validity and reliability of performance scoring 
for PY 2022.
    Response: We thank the commenters for their support.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to suppress the ICH CAHPS measure for PY 2022.
e. Suppression of the Long-Term Catheter Rate Clinical Measure for PY 
2022
    In the CY 2022 ESRD PPS proposed rule (86 FR 36353 through 36354), 
we proposed to suppress the Long-Term Catheter Rate clinical measure 
for the PY 2022 program year under proposed Measure Suppression Factor 
1, Significant deviation in national performance on the measure during 
the COVID-19 PHE, which could be significantly better or significantly 
worse compared to historical performance during the immediately 
preceding program years. Based on our analysis of Long-Term Catheter 
Rate clinical measure data during CY 2020, we found a significant 
increase in long-term catheter use as compared to previous years, which 
may be the result of hesitancy to seek medical treatment among dialysis 
patients concerned about being exposed to COVID-19 during the PHE.
    In the CY 2018 ESRD PPS final rule, we finalized the inclusion of 
the Hemodialysis Vascular Access: Long-Term Catheter Rate clinical 
measure in the ESRD QIP measure set beginning with the PY 2021 program 
(82 FR 50778). The Long-Term Catheter Rate clinical measure is defined 
as the percentage of adult hemodialysis patient-months using a catheter 
continuously for three months or longer for vascular access. The 
measure is based on vascular access data reported in CROWNWeb (now 
EQRS) and excludes patient-months where a patient has a catheter in 
place and has a limited life expectancy.
    Our analysis based on the available data indicated that long-term 
catheter use rates increased significantly during the COVID-19 PHE. 
Average long-term catheter rates were averaging around 12 percent in CY 
2017 and CY 2018. In CY 2019, rates increased to average around 12.25 
percent. This increase continued into CY 2020, with rates reaching a 
peak of 14.7 percent in June 2020 and declining slightly to 14.3 
percent in July and August 2020. After remaining around 12 percent for 
3 consecutive years, in the proposed rule we stated that we view a 
sudden 2 percent increase in average long-term catheter rates as a 
significant deviation compared to historical performance during 
immediately preceding years (86 FR 36354). We were concerned that the 
COVID-PHE impacted the ability of ESRD patients to seek treatment from 
medical providers regarding their catheter use, either due to 
difficulty accessing treatment due to COVID-19 precautions at 
healthcare facilities, or due to increased patient reluctance to seek 
medical treatment because of risk of COVID-19 exposure and increased 
health risks resulting therefrom, and that these contributed to the 
significant increase in long-term catheter use rates.
    We proposed to suppress this measure for the PY 2022 program year, 
rather than remove it, because we believe that the Long-Term Catheter 
Rate clinical measure is an important part of the ESRD QIP measure set. 
However, we were concerned that the PHE for COVID-19 affected measure 
performance on the current Long-Term Catheter Rate clinical measure 
such that we would not be able to score facilities fairly or equitably 
on it. Additionally, participating facilities would continue to report 
the measure's data to CMS so that we could monitor the effect of the 
circumstances on quality measurement and determine the appropriate 
policies in the future. In the proposed rule (86 FR 36354), we stated 
that we would also continue to provide confidential feedback reports to 
facilities as part of program activities to ensure that they are made 
aware of the changes in performance rates that we observe. We also 
stated our intent to publicly report PY 2022 data where feasible and 
appropriately caveated.
    We welcomed public comment on our proposal to suppress the Long-
Term Catheter Rate clinical measure for the PY 2022 program year. The 
comments we received and our responses are set forth below.
    Comment: Several commenters expressed support for the proposal to 
suppress the Long-Term Catheter Rate clinical measure for PY 2022, 
agreeing that the COVID-19 PHE has impacted the validity and 
reliability of performance scoring for PY 2022.
    Response: We thank the commenters for their support.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to suppress the Long-Term Catheter Rate 
clinical measure for PY 2022.

D. Special Scoring Methodology and Payment Policy for the PY 2022 ESRD 
QIP

    As described in section IV.B.2. of the proposed rule, we have 
considered the impact of operational systems issues preventing 
facilities from submitting September through December 2020 patient and 
clinical data into the EQRS from November 1, 2020 through on or about 
July 12, 2021. Even when facilities are able to submit the September 
through December 2020 patient and clinical data by September 1, 2021, 
we will need time to validate the quality and reliability of the 
impacted data in order to determine whether all data quality issues 
have been resolved (86 FR 36354). In addition, as described in section 
IV.C. we stated our belief that four of the ESRD QIP measures have been 
impacted by the COVID-19 PHE that could result in distorted measure 
performance for PY 2022.
    It is not our intention to penalize dialysis facilities based on 
the performance on data that are not reliable, thus, not reflective of 
the quality of care that the measures in the program are designed to 
assess. Therefore, we proposed a special rule for PY 2022 scoring for 
the ESRD QIP under which we would calculate measure rates for all 
measures, but would not calculate achievement and improvement points 
for any of them because they have all been impacted by the operational 
systems issues and, as we stated previously, we believe that four of 
them have additionally been significantly impacted by COVID-19. Because 
we would not calculate achievement and improvement scores for any 
measures, we also proposed under this special rule that we would

[[Page 61918]]

not score any of the measures in the four domains or calculate or award 
Total Performance Scores for any facility. We also proposed to not 
apply any payment reductions to ESRD facilities for PY 2022.
    In order to ensure that a facility is aware of any changes to its 
measure rates that we have observed, we proposed to provide 
confidential feedback reports that contain the measure rates we 
calculated for PY 2022. Performance scores for facilities would be 
released on Dialysis Facility Compare and footnoted to indicate 
potential accuracy concerns with the scores. Performance score 
certificates would be generated with the TPS showing as ``Not 
Applicable.''
    We proposed to codify these policies for PY 2022 at 42 CFR 
413.177(a) and 413.178(h).
    However, we stated that if the proposed measure suppression 
policies and proposed special scoring and payment policies in the 
proposed rule were not finalized, the PY 2022 ESRD QIP payment would be 
implemented in accordance with our current policy, as well as the 
payment reduction ranges finalized in the CY 2020 ESRD PPS final rule 
(84 FR 60725 through 60727).
    We invited public comment on this proposed special scoring and 
payment policy for the PY 2022 ESRD QIP. The comments we received and 
our responses are set forth below.
    Comment: Many commenters expressed support for the proposed special 
scoring methodology and payment policy for PY 2022. Several commenters 
agreed that quality measure data submitted during the COVID-19 PHE 
should not be used for performance scoring or payment in the ESRD QIP, 
and expressed their concerns regarding the impact of the COVID-19 PHE 
on quality measure data. Several commenters agreed that facilities 
should not be penalized due to the potential impact of EQRS issues on 
the reliability and accuracy of the data. One commenter expressed the 
belief that this proposal would allow staff members to remain focused 
on COVID-19 safety.
    Response: We thank the commenters for their support.
    Comment: A few commenters recommended that CMS apply this special 
scoring methodology and payment policy to PY 2023 and possibly future 
years, noting the continuing impact of the COVID-19 PHE on facilities 
and the ESRD patient population. A few commenters expressed the belief 
that it is appropriate to let the healthcare system stabilize from the 
effects of the PHE before imposing penalties.
    Response: We thank the commenters for this feedback. We acknowledge 
the continuing impact of the COVID-19 PHE on facilities and the ESRD 
patient population. We will continue to monitor the impact of the 
COVID-19 PHE on the ESRD QIP in order to consider, based on the data, 
whether to propose changes to the scoring methodology for PY 2023.
    Final Rule Action: After considering public comments, we are 
finalizing our special scoring and payment policy for the PY 2022 ESRD 
QIP as proposed. We are also finalizing our proposal to codify these 
policies for PY 2022 at 42 CFR 413.177(a) and 413.178(h).

E. Updates to Requirements Beginning With the PY 2024 ESRD QIP

1. PY 2024 ESRD QIP Measure Set
    Under our current policy, we retain all ESRD QIP measures from year 
to year unless we propose through rulemaking to remove them or 
otherwise provide notification of immediate removal if a measure raises 
potential safety issues (77 FR 67475). Accordingly, the PY 2024 ESRD 
QIP measure set will include the same 14 measures as the PY 2023 ESRD 
QIP measure set (85 FR 71465 through 71466). These measures were 
described in Table 2 in the CY 2022 ESRD PPS proposed rule (86 FR 
36355) and are described in Table 2 in this final rule. For the most 
recent information on each measure's technical specifications for PY 
2024, we refer readers to the CMS ESRD Measures Manual for the 2021 
Performance Period.\121\
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    \121\ https://www.cms.gov/files/document/esrd-measures-manual-v61.pdf. We note that information for the 2022 Performance Period is 
also now available at: https://www.cms.gov/files/document/esrd-measures-manual-v70.pdf.
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BILLING CODE 4120-01-P

[[Page 61919]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.001

BILLING CODE 4120-01-C
    We discuss our proposal to update the SHR clinical measure in the 
following section.
a. Update to the Standardized Hospitalization Ratio (SHR) Clinical 
Measure Beginning With the PY 2024 ESRD QIP
    In the CY 2017 ESRD PPS final rule, we adopted the SHR clinical 
measure under the authority of section 1881(h)(2)(B)(ii) of the Act (81 
FR 77906 through 77911). The SHR clinical measure is a National Quality 
Forum (NQF)-endorsed all-cause, risk-standardized rate of 
hospitalizations during a 1-year observation window. The standardized 
hospitalization ratio is defined as the ratio of the number of hospital 
admissions that occur for Medicare ESRD dialysis patients treated at a 
particular facility to the number of hospitalizations that would be 
expected

[[Page 61920]]

given the characteristics of the dialysis facility's patients and the 
national norm for dialysis facilities. This measure is calculated as a 
ratio but can also be expressed as a rate.
    In the CY 2022 ESRD PPS proposed rule (86 FR 36356), we stated that 
hospitalizations are an important indicator of patient morbidity and 
quality of life. On average, dialysis patients are admitted to the 
hospital nearly twice a year and spend an average of 11.2 days in the 
hospital per year.\122\ Hospitalizations account for approximately 33 
percent of total Medicare expenditures for ESRD patients.\123\ Studies 
have shown that improved health care delivery and care coordination may 
help reduce unplanned acute care including hospitalization.\124\ 
Hospitalization rates vary across dialysis facilities even after 
adjustment for patient characteristics, suggesting that 
hospitalizations might be influenced by dialysis facility practices. An 
adjusted facility-level standardized hospitalization ratio, accounting 
for differences in patients' characteristics, plays an important role 
in identifying potential problems, and helps facilities provide cost-
effective quality health care to help limit escalating medical costs.
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    \122\ United States Renal Data System. 2018 United States Renal 
Data System annual data report: Epidemiology of kidney disease in 
the United States. National Institutes of Health, National Institute 
of Diabetes and Digestive and Kidney Diseases, Bethesda, MD, 2018.
    \123\ Ibid.
    \124\ Office of the Assistant Secretary for Planning and 
Evaluation, U.S. Department of Health & Human Services. Advancing 
American Kidney Health. 2019. Available at: https://aspe.hhs.gov/system/files/pdf/262046/AdvancingAmericanKidneyHealth.pdf.
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    In the CY 2017 ESRD PPS final rule, we finalized our proposal to 
adopt the SHR clinical measure, which was a modified version of the 
NQF-endorsed SHR clinical measure (NQF #1463), as part of the ESRD QIP 
measure set (81 FR 77911). In that final rule, we stated that our 
modified SHR clinical measure would incorporate 210 prevalent 
comorbidities into our risk adjustment calculation, as our analyses 
suggested that incorporating prevalent comorbidities would result in a 
more robust and reliable measure of hospitalization (81 FR 77906 
through 77907). In that final rule, we explained that data used to 
calculate the SHR clinical measure are derived from an extensive 
national ESRD patient database (81 FR 77908). We noted that the 
database is comprehensive for Medicare Parts A and B patients, and that 
non-Medicare patients are included in all sources except for the 
Medicare payment records. In that final rule, we also stated that the 
Standard Information Management System/CROWNWeb provides tracking by 
dialysis provider and treatment modality for non-Medicare patients, and 
information on hospitalizations and patient comorbidities are obtained 
from Medicare Inpatient Claims Standard Analysis Files. In the CY 2019 
ESRD PPS final rule, we increased the weight of the SHR clinical 
measure from 8.25 percent to 14 percent of the TPS (83 FR 56992 through 
56997).
    On November 20, 2020, NQF completed its most recent review of the 
SHR clinical measure, a measure maintenance review, and renewed the 
measure's endorsement. As part of this review, the NQF endorsed 
updating the prevalent comorbidity adjustment, which would group 210 
individual ICD-9-CM prevalent comorbidities into 90 condition groups, 
derived from the Agency for Healthcare Research and Quality (AHRQ) 
Clinical Classifications Software (CCS) groups. The updated prevalent 
comorbidity adjustment would also limit the source of prevalent 
comorbidities to inpatient claims. The switch to using only Medicare 
inpatient claims to identify prevalent comorbidities is due to the lack 
of Medicare outpatient claims data for the growing Medicare Advantage 
(MA) patient population. By using the original set of Medicare claims 
datasets (inpatient, outpatient, hospice, skilled nursing, and home 
health), the NQF stated its concern that MA patient prevalent 
comorbidities would be systematically biased. These MA patient 
prevalent comorbidities would only be populated by Medicare inpatient 
claims, as compared to non-MA patient prevalent comorbidities that 
would be populated by the aforementioned set of Medicare claim sources. 
The updated NQF-endorsed SHR clinical measure would also include all 
time at risk for MA patients, and added a MA indicator for adjustment 
in the model. The NQF-endorsed specifications also included updates to 
parameterization of existing adjustment factors and re-evaluation of 
interactions, and also created three distinct groups of patients to use 
in the SHR model based on time spent in a skilled nursing facility, 
noting that nursing home residence is a marker of higher morbidity.
    The updated SHR clinical measure was included on the publicly 
available ``List of Measures under Consideration for December 21, 
2020'' (MUC List), a list of measures under consideration for use in 
various Medicare programs.\125\ When the Measure Applications 
Partnership Hospital Workgroup convened on January 11, 2021, it 
reviewed the MUC List, including the SHR clinical measure. The Measure 
Applications Partnership Hospital Workgroup recognized that 
hospitalization rates vary across dialysis facilities, even after 
adjusting for patient characteristics, which suggests that 
hospitalizations might be influenced by dialysis facility practices. 
The Measure Applications Partnership Hospital Workgroup also noted that 
the SHR clinical measure seeks to improve patient outcomes by measuring 
hospitalization ratios among dialysis facilities, and that the measure 
seeks to promote communication between the dialysis facilities and 
other care settings to improve care transitions.\126\ In its final 
report, the Measure Applications Partnership supported this measure for 
rulemaking.\127\
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    \125\ National Quality Forum. List of Measures Under 
Consideration for December 21, 2020. Accessed at: https://www.cms.gov/files/document/measures-under-consideration-list-2020-report.pdf on January 29 2021.
    \126\ Measure Applications Partnership. Measure Applications 
Partnership Preliminary Recommendations 2020-2021. Accessed on 
January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \127\ Measure Applications Partnership. Measure Applications 
Partnership 2020-2021: Considerations for Implementing Measures in 
Federal Programs: Clinician, Hospital & PAC/LTC. Accessed on April 
28, 2021 at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94893.
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    In the CY 2022 ESRD PPS proposed rule (86 FR 36356), we proposed to 
update the SHR clinical measure specifications to align with the NQF-
endorsed updates. These included updates to the risk adjustment method 
of the measure, which include a prevalent comorbidity adjustment, the 
addition of MA patients and a MA indicator in the model, updates to 
parameterization of existing adjustment factors and re-evaluation of 
interactions, and an indicator for a patient's time spent in a skilled 
nursing facility.
    In the proposed rule, we expressed our belief that adopting these 
updates would be consistent with our stated goal of evaluating 
opportunities to more closely align ESRD QIP measures with NQF measure 
specifications (84 FR 60724). The SHR clinical measure seeks to improve 
patient outcomes by measuring hospitalization ratios among dialysis 
facilities, and we stated our belief that these updates would result in 
a more reliable and robust SHR clinical measure.
    We sought comment on this proposal to update the SHR clinical 
measure

[[Page 61921]]

specifications for use in the ESRD QIP beginning with PY 2024. The 
comments we received and our responses are set forth below.
    Comment: A few commenters expressed support for the proposed 
updates to the SHR clinical measure specifications. One commenter noted 
that such updates are NQF-endorsed and supported by the MAP.
    Response: We thank the commenters for their support.
    Comment: A few commenters expressed concern regarding the proposed 
updates to the risk adjustment method of the SHR clinical measure and 
recommended that CMS perform a sensitivity analysis of the risk model 
fit, comparing the prior risk model's outcomes with the updated risk 
model's performance to assess the impact of the new approach.
    Response: We are finalizing the proposed updates to the SHR 
clinical measure because they are endorsed by the NQF and would align 
the specifications of the SHR clinical measure with the NQF-endorsed 
specifications. Although we are not bound by the NQF's decisions 
regarding measure specifications, we believe that adopting these 
updates is consistent with our stated goal of evaluating opportunities 
to more closely align ESRD QIP measures with NQF measure specifications 
(84 FR 60724). The updates to the SHR clinical measure were reviewed 
and endorsed by NQF in 2020. As part of that NQF review, both the 
current and proposed SHR risk adjustment model results were presented 
in the Testing Forms and were available for discussion during the NQF 
review process. In addition, the NQF review included comparisons of 
both the prior and updated risk adjustment model performance for other 
aspects of the Scientific Acceptability criteria (reliability and 
validity). Both the NQF Methodology Panel and Admissions/Readmissions 
Standing Committee had the opportunity to review the models' 
performance (that is, the ``risk model fit'') on those and other 
endorsement criteria prior to NQF's decision to endorse the proposed 
model changes. Because the NQF review included an analysis of the risk 
model's performance, we believe that the NQF review effectively 
constituted a sensitivity review (that is, an analysis of the degree to 
which the elements of the risk model contribute to the risk of 
hospitalization) of the proposed specification changes, because it 
compared all important criteria used by NQF between the prior and 
proposed versions of SHR.
    Comment: A few commenters expressed concern that the proposed 
update to the comorbidity adjustment may skew the model toward a sicker 
patient population, noting that the approach would result in 
inaccurately low hospitalization rates leading to erroneously high 
scores. One commenter expressed concern that this may be misleading to 
patients and might disincentivize improvements that might actually 
lower hospitalizations.
    Response: We developed the proposed updated version of the SHR 
clinical measure to directly correct a progressive bias related to our 
prior definition of an ``active Medicare patient'' in the context of 
the rapid increase in Medicare chronic dialysis patients with Medicare 
Advantage coverage. In the prior version of the SHR clinical measure, 
``active'' Medicare status was defined by ``use'' criteria. An 
individual patient met our use criteria if they either had $900 or more 
in paid Medicare outpatient dialysis claims or an acute inpatient 
hospitalization. Either claims-based criterion conveyed active Medicare 
status for purposes of the measure for the event month and two 
consecutive following months. Nearly all Medicare fee-for-service 
patients meet the use criterion of $900 paid claims for dialysis 
because this amount reflects between 2 to 3 outpatient dialysis 
treatments at current reimbursement rates. However, the only MA 
patients meeting these use criteria were those hospitalized in the 
year. As a result, the time at risk calculated in the old SHR clinical 
measure underestimated the time at risk for MA patients because not all 
are hospitalized in a year and virtually no MA patients meet the other 
use criterion, due to CMS' lack of access to outpatient claims for MA 
enrollees. The proposed updated version of the SHR clinical measure 
currently utilizes Medicare's Enrollment Database to identify Medicare 
Advantage patient status monthly. Combined with our patient-level 
treatment history file, we are able to calculate true MA patient time 
at risk at a given dialysis facility, without bias from the ``use'' 
test.
    For the purposes of identifying co-morbidities from Medicare Claims 
for risk adjustment, we use all inpatient claims in the prior calendar 
year. We are able to obtain inpatient claims for both Medicare fee-for-
service patients as well as MA patients, as hospitals and other 
inpatient providers furnish inpatient claims for MA patients to their 
Medicare Administrative Contractors (MACs) for informational purposes. 
For beneficiaries enrolled in Medicare Advantage, those inpatient 
claims are often referred to as ``shadow'' claims, as they are not used 
for direct billing. For Medicare Fee-for Service beneficiaries, we only 
use paid inpatient claims. Unlike for Medicare fee-for-service 
beneficiaries, CMS has virtually no access to outpatient claims for 
Medicare Advantage beneficiaries. We no longer use outpatient claims 
sources to identify co-morbidities, eliminating potential bias related 
to the lack of access to outpatient claims for MA patients. 
Identification of prevalent comorbidities based on only inpatient 
claims results in fewer comorbidities for each patient compared to use 
of the universe of Medicare claims. However, use of only inpatient 
claims results in similar numbers and types of comorbidities for MA 
patients and other Medicare patients. For instance, in an analysis of a 
set of comorbidity groups used in a recent SRR calculation, we found 
that inpatient claims identified 12 comorbid conditions for MA patients 
on average compared to 12.4 comorbid conditions for other (non-MA) 
Medicare patients.
    In the revised SHR clinical measure, we use all available inpatient 
claims in the prior calendar year for both Fee-For-Service (FFS) and MA 
patients. While we agree that limiting co-morbidity ascertainment to 
inpatient claims results in a less comprehensive set of co-morbidities, 
our proposed updated risk-adjustment methodology protects against 
potential bias in determining comorbidity burden due to differences in 
our access to claims data for FFS and MA patients discussed above. As 
the SHR clinical measure relies on use of inpatient claims to identify 
co-morbidities in the prior calendar year, we expect that this lookback 
period reflects more current conditions that are more likely to be 
predictive of hospitalization risk. Therefore, we do not believe that 
outpatient claim derived co-morbidities are as clinically relevant to 
the risk-adjustment needed for the SHR clinical measure. Moreover, our 
approach does not require us to exclude MA patients from the measures. 
We do not want to eliminate a sizable percentage of the current 
observations from the SHR clinical measure, particularly given the 
anticipated growth of MA patients with diagnoses of ESRD that will 
result from changes to the MA program regulations related to the 
ability of prevalent ESRD patients to choose MA plans beginning in 
2021, as finalized in the Medicare Program; Contract Year 2021 Policy 
and Technical Changes to the Medicare Advantage Program, Medicare 
Prescription Drug Benefit Program, and Medicare Cost Plan Program final 
rule

[[Page 61922]]

(85 FR 33821 through 33824), which implemented provisions of the 21st 
Century Cures Act to remove the prohibition on ESRD beneficiaries 
enrolling in an MA plan.\128\ Finally, to account for potential 
underlying co-morbidity differences between MA and FFS patients that 
cannot be observed due to potentially incomplete claims-based 
ascertainment of health status for MA patients, we included all time at 
risk for Medicare Advantage patients and added a Medicare Advantage 
indicator for adjustment in the model.
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    \128\ The 21st Century Cures Act (Pub. L. 114-255) amended 
sections 1851, 1852, and 1853 of the Act to expand enrollment 
options for individuals with ESRD and make associated payment and 
coverage changes to the MA and original Medicare programs. 
Specifically, since the beginning of the MA program, individuals 
with ESRD have not been able to enroll in MA plans subject to 
limited exceptions. Section 17006(a) of the Cures Act removed this 
prohibition effective for plan years beginning on or after January 
1, 2021.
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    Regarding the possibility that the SHR risk model changes described 
above would increase model bias, we disagree and believe that the 
concern that the revised model would bias the SHR toward sicker 
patients is unfounded. First, we have discussed above the frequency of 
inpatient claims diagnoses for FFS and MA patients under the new 
approach. The average number of diagnoses reported from inpatient 
claims for FFS and MA patients are very similar, strongly suggesting 
that using only the inpatient claims source is an accurate reflection 
of the comorbidities for both patient populations. The proposed SHR 
risk model also includes a Medicare Advantage indicator variable in the 
model that would guard against bias by minimizing the potential impact 
of differences in unobserved comorbidities from outpatient claims 
sources. Considering that the proposed model eliminates a sizeable 
known bias related to the lack of data about outpatient claims for MA 
patients, we believe the proposed SHR risk model provides a more 
accurate representation of dialysis facility performance and, 
therefore, utility to the dialysis community.
    Comment: A few commenters expressed concern regarding the 
parameterization modifications of existing adjustment factors included 
in the proposed updates to the SHR clinical measure. Although a few 
commenters agreed that the updated parameterization of existing 
adjustment factors and reevaluation of interactions is important, they 
expressed concern that the p-values, or calculated probability values, 
of SHR risk models indicate that the model would not be generalizable.
    Response: We believe that the proposed risk adjustment model, which 
includes updates to the parameterization of existing adjustment factors 
(that is, modifying the functional forms of adjustment factors) and re-
evaluation of interactions, is more appropriate because it captures all 
Medicare patients. Since we are only using the SHR risk models for 
purposes of the SHR clinical measure, we believe that generalizability 
is not an issue.
    Comment: One commenter requested that CMS indicate how Medicare 
Advantage patients will be identified under the proposed SHR measure 
specifications.
    Response: Medicare Advantage patient status will be obtained from 
the Medicare Enrollment Database (EDB). We will confirm the presence of 
usable ICD diagnosis codes from MA inpatient claims.
    Comment: A few commenters recommended that the ESRD QIP should use 
true risk-standardized rate measures in order to more accurately 
reflect facility performance, as the ratio measures have relatively 
wide confidence intervals that can lead to facilities being 
misclassified and their actual performance not being reported. One 
commenter expressed the belief that a more direct, transparent, risk-
adjusted rate measure would result in more significant improvement, 
noting that ESRD patient hospitalization rates have increased between 
2016 and 2018 and questioned whether the SHR clinical measure has had a 
meaningful impact.
    Response: We believe that the use of a ratio is appropriate for the 
SHR clinical measure. The ratio estimate that we proposed is the ratio 
of the facility adjusted rate to the standard rate. The ratio is also a 
scientifically valid approach, and ratio measures are well accepted in 
the published literature. Additionally, the risk-adjustment approach 
(which is based on application of a specific risk-adjustment model) 
currently used for the SHR, SRR, and SWR measures leads naturally to a 
standardized ratio, which compares the rate for this facility with the 
national rate, having adjusted for the patient mix and is relatively 
straightforward. We do not believe that rates are more direct and 
transparent than ratios, and we disagree with the commenter who stated 
that a risk-adjusted rate measure would lead to significant improvement 
in performance on the SHR clinical measure. Like ratios, risk-adjusted 
rates are not the same as actual rates and require a consideration of 
the patient mix adjustment for interpretation. Furthermore, because the 
indirect standardized rate is equal to the multiplication of the 
indirect standardized ratio and a national rate, where the national 
rate is a constant for all facilities, classifications of facilities 
based on indirect standardized ratios and rates are equivalent. 
Finally, we disagree that hospitalization rates have increased between 
2016 and 2018. Hospitalization rates have decreased since 2015 as 
evidenced by the negative coefficients for calendar year from the SHR 
model. The hospitalization rate for 2016 decreased by 2.7 percent 
compared to 2015 (p-value <0.0001). Subsequent years had a larger 
decrease in the hospitalization rate compared to 2015 at 6.8 percent 
lower for 2017 and about 5.7 percent lower for 2018 (p-value<0.0001 for 
both) compared to 2015. Although 2018 had a slightly higher rate than 
2017, there is an overall downward trend.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to update the SHR clinical measure 
specifications for use in the ESRD QIP beginning with PY 2024.
2. Performance Standards for the PY 2024 ESRD QIP
    Section 1881(h)(4)(A) of the Act requires the Secretary to 
establish performance standards with respect to the measures selected 
for the ESRD QIP for a performance period with respect to a year. The 
performance standards must include levels of achievement and 
improvement, as required by section 1881(h)(4)(B) of the Act, and must 
be established prior to the beginning of the performance period for the 
year involved, as required by section 1881(h)(4)(C) of the Act. We 
refer readers to the CY 2013 ESRD PPS final rule (76 FR 70277) for a 
discussion of the achievement and improvement standards that we have 
established for clinical measures used in the ESRD QIP. We define the 
terms ``achievement threshold,'' ``benchmark,'' ``improvement 
threshold,'' and ``performance standard'' in our regulations at Sec.  
413.178(a)(1), (3), (7), and (12), respectively.
a. Update to the Performance Standards Applicable to the PY 2024 
Clinical Measures
    Our current policy is to automatically adopt a performance and 
baseline period for each year that is 1 year advanced from those 
specified for the previous payment year (84 FR 60728). Under this 
policy, CY 2022 is currently the performance period and CY 2020 is the 
baseline period for the PY 2024 ESRD QIP. However, under the nationwide 
ECE that we granted in

[[Page 61923]]

response to the COVID-19 PHE, first and second quarter data for CY 2020 
are excluded from scoring for purposes of the ESRD QIP. In the CY 2022 
ESRD PPS proposed rule (86 FR 36357), we stated that we were concerned 
that it would be difficult to assess levels of achievement and 
improvement if the performance standards were based on partial year 
data.\129\ Our preliminary analysis indicated that the effect of the 
excluded data would create higher performance standards for certain 
measures and lower performance standards for other measures, which may 
skew achievement and improvement thresholds for facilities and 
therefore may result in performance standards that do not accurately 
reflect levels of achievement and improvement.
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    \129\ We note that for most ESRD QIP measures, this partial year 
data would be measure data from July and August 2020.
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    Our current policy substitutes the performance standard, 
achievement threshold, and/or benchmark for a measure for a performance 
year if final numerical values for the performance standard, 
achievement threshold, and/or benchmark are worse than the numerical 
values for that measure in the previous year of the ESRD QIP (82 FR 
50764). We stated in the proposed rule that we adopted this policy 
because we believe that the ESRD QIP should not have lower performance 
standards than in previous years (86 FR 36357). However, our general 
policy provides flexibility to substitute the performance standard, 
achievement threshold, and benchmark in appropriate cases (82 FR 
50764).
    Although the lower performance standards would be substituted with 
those from the prior year, the higher performance standards would be 
used to set performance standards for certain measures, even though 
they would be based on partial year data. In the proposed rule (86 FR 
36357), we stated that we were concerned that this may create 
performance standards for certain measures that would be difficult for 
facilities to attain with a full 12 months of data.
    Therefore, in the CY 2022 ESRD PPS proposed rule (86 FR 36357), we 
proposed to calculate the performance standards for PY 2024 using CY 
2019 data, which are the most recently available full calendar year of 
data we can use to calculate those standards. Due to the impact of CY 
2020 data that are excluded from the ESRD QIP for scoring purposes, we 
stated our belief that using CY 2019 data for performance standard 
setting purposes is appropriate. Consistent with our established 
policy, we would continue to use the prior year's numerical values for 
performance standard, achievement threshold, and benchmark if the most 
recent full CY's final numerical values are worse.
    We welcomed public comments on this proposal. The comments we 
received and our responses are set forth below.
    Comment: Several commenters expressed support for the proposed use 
of CY 2019 data for calculating performance standards, achievement 
thresholds, and benchmarks for PY 2024. A few commenters noted that the 
significant impact of the COVID-19 PHE would make CY 2020 measure data 
inappropriate for setting PY 2024 performance standards. A few 
commenters supported the proposal because CY 2019 is the most recently 
available full calendar year of data.
    Response: We thank the commenters for their support.
    Comment: One commenter expressed concern with the proposed use of 
CY 2019 data for calculating performance standards, achievement 
thresholds, and benchmarks for PY 2024, noting that the ongoing COVID-
19 PHE continues to impact measure performance and that using CY 2019 
as a pre-pandemic baseline for setting performance standards may 
unfairly penalize facilities.
    Response: We acknowledge the commenter's concern regarding the 
ongoing impact of the COVID-19 PHE, but disagree that using CY 2019 
data for calculating performance standards will unfairly penalize 
facilities. We note that, due to the nationwide ECE granted in response 
to the COVID-19 PHE that excluded first and second quarter data from CY 
2020, only 6 months of CY 2020 data would be used to calculate 
performance standards, achievement thresholds, and benchmarks for PY 
2024. We believe that there is a greater risk of unfairly penalizing 
facilities based on performance standards calculated using only 6 
months of CY 2020 data, as our preliminary analysis indicated that the 
effect of the excluded data would create higher performance standards 
for certain measures and lower performance standards for other measures 
which may not accurately reflect levels of achievement and improvement.
    Comment: One commenter expressed concern that the proposed update 
only addresses achievement scores, and requested that CMS clarify what 
year improvement scores will be based on.
    Response: We proposed to use CY 2019 data to calculate all 
performance standards for PY 2024, including achievement and 
improvement thresholds. This is consistent with the definition of 
``performance standards'' codified at 42 CFR 413.178(a)(12), which 
includes all of the performance levels used to award points to a 
facility. Therefore, the improvement scores will be calculated using CY 
2019 as the baseline year.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to calculate the performance standards for PY 
2024 using CY 2019 data.
b. Finalized Performance Standards for the PY 2024 ESRD QIP
    Table 3 displays the achievement thresholds, 50th percentiles of 
the national performance, and benchmarks for the PY 2024 clinical 
measures, and in the proposed rule we stated that we would use these 
standards if our proposal to use CY 2019 as the baseline period is 
finalized (86 FR 36357). As discussed in IV.E.2.a. of this final rule, 
we are finalizing our proposal to calculate the performance standards 
for the PY 2024 ESRD QIP using CY 2019 data.
BILLING CODE 4120-01-P

[[Page 61924]]

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    In addition, we summarize in Table 4 existing requirements for 
successful reporting on reporting measures in the PY 2024 ESRD QIP. We 
did not make any proposals to change these standards as a result of the 
COVID-19 PHE.

[[Page 61925]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.003

3. Eligibility Requirements for the PY 2024 ESRD QIP
    Our current minimum eligibility requirements for scoring the ESRD 
QIP measures are described in Table 5.

[[Page 61926]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.004

4. Payment Reduction Scale for the PY 2024 ESRD QIP
    Under our current policy, a facility will not receive a payment 
reduction for a payment year in connection with its performance for the 
ESRD QIP if it achieves a TPS that is at or above the minimum TPS 
(mTPS) that we establish for the payment year. We have defined the mTPS 
in our regulations at Sec.  413.178(a)(8) as, with respect to a payment 
year, the TPS that an ESRD facility would receive if, during the 
baseline period it performed at the 50th percentile of national 
performance on all clinical measures and the median of national ESRD 
facility performance on all reporting measures.
    Our current policy, which is codified at Sec.  413.177 of our 
regulations, also implements the payment reductions on a sliding scale 
using ranges that reflect payment reduction differentials of 0.5 
percent for each 10 points that the facility's TPS falls below the mTPS 
(76 FR 634 through 635).
    For PY 2024, based on available data, a facility must meet or 
exceed a mTPS of 57 in order to avoid a payment reduction. We note that 
the mTPS in this final rule is based on data from CY 2019 because we 
are finalizing our proposal to calculate the performance standards 
using CY 2019 data.
    We refer readers to Table 3 of this final rule for the finalized 
values of the 50th percentile of national performance for each clinical 
measure. We stated in the CY 2022 ESRD PPS proposed rule that under our 
current policy, a facility that achieves a TPS of 56 or below would 
receive a payment reduction based on the TPS ranges indicated in Table 
6 (86 FR 36360 through 36361). Table 6 of this final rule is a 
reproduction of Table 6 from the CY 2022 ESRD PPS proposed rule without 
any changes.

[[Page 61927]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.005

BILLING CODE 4120-01-C
    In the CY 2022 ESRD PPS proposed rule (86 FR 36361), we stated that 
if we did not finalize the proposed update to our performance standards 
policy as described in the proposed rule (86 FR 36357), then we would 
update the mTPS for PY 2024, as well as the payment reduction ranges 
for that payment year, in the CY 2022 ESRD PPS final rule using data 
from CY 2020. However, as discussed in section IV.E.2.a. of this final 
rule, we are finalizing as proposed the update to our performance 
standards for PY 2024, and therefore we will use the mTPS and payment 
reduction ranges for PY 2024 that are described in Table 6.

F. Updates for the PY 2025 ESRD QIP

1. Continuing Measures for the PY 2025 ESRD QIP
    Under our previously adopted policy, the PY 2024 ESRD QIP measure 
set will also be used for PY 2025. We did not propose to adopt any new 
measures beginning with the PY 2025 ESRD QIP.
2. Performance Period for the PY 2025 ESRD QIP
    We continue to believe that 12-month performance and baseline 
periods provide us sufficiently reliable quality measure data for the 
ESRD QIP. Under this policy, we would adopt CY 2023 as the performance 
period and CY 2021 as the baseline period for the PY 2025 ESRD QIP.
    We did not propose any changes to this policy.
3. Performance Standards for the PY 2025 ESRD QIP
    Section 1881(h)(4)(A) of the Act requires the Secretary to 
establish performance standards with respect to the measures selected 
for the ESRD QIP for a performance period with respect to a year. The 
performance standards must include levels of achievement and 
improvement, as required by section 1881(h)(4)(B) of the Act, and must 
be established prior to the beginning of the performance period for the 
year involved, as required by section 1881(h)(4)(C) of the Act. We 
refer readers to the CY 2012 ESRD PPS final rule (76 FR 70277) for a 
discussion of the achievement and improvement standards that we have 
established for clinical measures used in the ESRD QIP. We define the 
terms ``achievement threshold,'' ``benchmark,'' ``improvement 
threshold,'' and ``performance standard'' in our regulations at Sec.  
413.178(a)(1), (3), (7), and (12), respectively. In section IV.E.2.a. 
of this final rule, we note that we are finalizing our proposal to use 
CY 2019 data for purposes of calculating the performance standards for 
PY 2024 because, due to the anticipated impact of CY 2020 data that is 
excluded from the ESRD QIP for scoring purposes during CY 2020, we 
believe that using CY 2019 data for performance standard setting 
purposes would be appropriate.
a. Performance Standards for Clinical Measures in the PY 2025 ESRD QIP
    At this time, we do not have the necessary data to assign numerical 
values to the achievement thresholds, benchmarks, and 50th percentiles 
of national performance for the clinical measures for the PY 2025 ESRD 
QIP because we do not have CY 2021 data. We intend to publish these 
numerical values, using CY 2021 data, in the CY 2023 ESRD PPS final 
rule.
b. Performance Standards for the Reporting Measures in the PY 2025 ESRD 
QIP
    In the CY 2019 ESRD PPS final rule, we finalized the continued use 
of existing performance standards for the Screening for Clinical 
Depression and Follow-Up reporting measure, the Ultrafiltration Rate 
reporting measure, the NHSN Dialysis Event reporting measure, and the 
MedRec reporting measure (83 FR 57010 through 57011). In the CY 2022 
ESRD PPS proposed rule (86 FR 36361), we stated that we will continue 
use of these performance standards in PY 2025.
4. Scoring the PY 2025 ESRD QIP
a. Scoring Facility Performance on Clinical Measures
    In the CY 2014 ESRD PPS final rule, we finalized policies for 
scoring performance on clinical measures based on achievement and 
improvement (78 FR 72215 through 72216). In the CY 2019 ESRD PPS final 
rule, we finalized a policy to continue use of this methodology for 
future payment years (83 FR 57011) and we codified these scoring 
policies at Sec.  413.178(e).
    We did not propose any changes to this policy for PY 2025.
b. Scoring Facility Performance on Reporting Measures
    Our policy for scoring performance on reporting measures is 
codified at Sec.  413.178(e), and more information on our scoring 
policy for reporting measures can be found in the CY 2020 ESRD PPS 
final rule (84 FR 60728). We previously finalized policies for scoring 
performance on the NHSN Dialysis Event reporting measure in the CY 2018 
ESRD PPS final rule (82 FR 50780 through 50781), as well as policies 
for scoring the MedRec reporting measure and Clinical Depression 
Screening and Follow-up reporting measure in the CY 2019 ESRD PPS final 
rule (83 FR 57011). We also previously finalized the scoring policy for 
the STrR reporting measure in the CY 2020 ESRD PPS final rule (84 FR 
60721 through 60723). In the CY 2021 ESRD PPS final rule, we finalized 
our updated scoring methodology for the Ultrafiltration Rate reporting 
measure (85 FR 71468 through 71470).
    We did not propose any changes to these policies for PY 2025.

[[Page 61928]]

5. Weighting the Measure Domains and the TPS for PY 2025
    Under our current policy, we assign the Patient & Family Engagement 
Measure Domain a weight of 15 percent of the TPS, the Care Coordination 
Measure Domain a weight of 30 percent of the TPS, the Clinical Care 
Measure Domain a weight of 40 percent of the TPS, and the Safety 
Measure domain a weight of 15 percent of the TPS.
    In the CY 2019 ESRD PPS final rule, we finalized a policy to assign 
weights to individual measures and a policy to redistribute the weight 
of unscored measures (83 FR 57011 through 57012). In the CY 2020 ESRD 
PPS final rule, we finalized a policy to use the measure weights we 
finalized for PY 2022 for the PY 2023 ESRD QIP and subsequent payment 
years, and also to use the PY 2022 measure weight redistribution policy 
for the PY 2023 ESRD QIP and subsequent payment years (84 FR 60728 
through 60729). We did not propose any updates to these policies for PY 
2025.

G. Requests for Information (RFIs) on Topics Relevant to ESRD QIP

1. Closing the Health Equity Gap in CMS Quality Programs Request for 
Information
    Persistent inequities in health care outcomes exist in the United 
States (U.S.), including among Medicare patients. In recognition of 
persistent health disparities and the importance of closing the health 
equity gap, in the CY 2022 ESRD PPS proposed rule we requested 
information on expanding several related CMS programs to make reporting 
of health disparities based on social risk factors and race and 
ethnicity, and disability more comprehensive and actionable for 
dialysis facilities, providers, and patients (86 FR 36362 through 
36369). The RFI that was included in the proposed rule is part of an 
ongoing effort across CMS to evaluate appropriate initiatives to reduce 
health disparities. Feedback will be used to inform the creation of a 
future, comprehensive, RFI focused on closing the health equity gap in 
CMS programs and policies. This RFI contained four parts:
     Background. This section provided information on existing 
statements describing our commitment to health equity, and existing 
initiatives with an emphasis on reducing disparity.
     Current CMS Disparity Methods. This section described the 
methods, measures, and indicators of social risk currently used with 
the CMS Disparity Methods.
     Future potential stratification of quality measure 
results. This section described four potential future expansions of the 
CMS Disparity Methods, including (a) Future potential stratification of 
quality measure results by dual eligibility; (b) Future potential 
stratification of quality measure results by race and ethnicity; (c) 
Improving Demographic Data Collection; and (d) Potential Creation of an 
ESRD Facility Equity Score to Synthesize Results Across Multiple Social 
Risk Factors.
     Solicitation of public comment. This section specified 11 
requests for feedback on these topics. We reviewed feedback on these 
topics and note our intention for an additional RFI or rulemaking on 
this topic in the future.
a. Background
    Significant and persistent inequities in health care outcomes exist 
in the U.S.\130\ Belonging to a racial or ethnic minority group, living 
with a disability, being a member of the lesbian, gay, bisexual, 
transgender, and queer (LGBTQ+) community, living in a rural area, or 
being near or below the poverty level, is often associated with worse 
health outcomes.131 132 133 134 135 136 137 138 Such 
disparities in health outcomes are the result of number of factors, but 
importantly for CMS programs, although not the sole determinant, poor 
access and provision of lower quality health care contribute to health 
disparities. For instance, numerous studies have shown that among 
Medicare beneficiaries, racial and ethnic minority individuals often 
receive lower quality of care, report lower experiences of care, and 
experience more frequent hospital readmissions and operative 
complications.139 140 141 142 143 144 Readmission rates for 
common conditions in the Hospital Readmissions Reduction Program are 
higher for Black Medicare beneficiaries and higher for Hispanic 
Medicare beneficiaries with Congestive Heart Failure and Acute 
Myocardial Infarction.145 146 147 148 149 Although Black 
Americans represent 7.5 percent of all older adult Medicare 
beneficiaries, they represent 28 percent of those with ESRD.\150\ Among 
individuals with ESRD the odds of 30-day hospital readmission are 19 
percent higher for Black beneficiaries as compared with white 
beneficiaries.\151\ Studies have also shown that African Americans are 
significantly more likely than white Americans to die prematurely from 
heart disease and

[[Page 61929]]

stroke.\152\ The COVID-19 pandemic has further illustrated many of 
these longstanding health inequities with higher rates of infection, 
hospitalization, and mortality among Black, Latino, and Indigenous and 
Native American persons relative to white persons.\153\ \154\ In the 
ESRD patient population, one study found that the rate of COVID-19 
hospitalizations among dialysis patients peaked at 40 times higher than 
the rate in the general population during the pandemic, with Black, 
Latino, and Asian persons hospitalized at a higher rate than white 
persons.\155\ As noted by the Centers for Disease Control and 
Prevention, ``long-standing systemic health and social inequities have 
put many people from racial and ethnic minority groups at increased 
risk of getting sick and dying from COVID-19.''\156\ One important 
strategy for addressing these important inequities is by improving data 
collection to allow for better measurement and reporting on equity 
across our programs and policies.
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    \130\ United States Department of Health and Human Services. 
``Healthy People 2020: Disparities. 2014.'' Available at: https://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities.
    \131\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \132\ Lindenauer PK, Lagu T, Rothberg MB, et al. Income 
Inequality and 30 Day Outcomes After Acute Myocardial Infarction, 
Heart Failure, and Pneumonia: Retrospective Cohort Study. British 
Medical Journal. 2013;346.
    \133\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity 
of Care in U.S. Hospitals. New England Journal of Medicine. 
2014;371(24):2298-2308.
    \134\ Polyakova, M., et al. Racial Disparities In Excess All-
Cause Mortality During The Early COVID-19 Pandemic Varied 
Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
    \135\ Rural Health Research Gateway. Rural Communities: Age, 
Income, and Health Status. Rural Health Research Recap. November 
2018.
    \136\ Polyakova, M., et al. Racial Disparities In Excess All-
Cause Mortality During The Early COVID-19 Pandemic Varied 
Substantially Across States. Health Affairs. 2021; 40(2): 307-316.
    \137\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \138\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7386532/.
    \139\ Martino, SC, Elliott, MN, Dembosky, JW, Hambarsoomian, K, 
Burkhart, Q, Klein, DJ, Gildner, J, and Haviland, AM. Racial, 
Ethnic, and Gender Disparities in Health Care in Medicare Advantage. 
Baltimore, MD: CMS Office of Minority Health. 2020.
    \140\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \141\ Singh JA, Lu X, Rosenthal GE, Ibrahim S, Cram P. Racial 
disparities in knee and hip total joint arthroplasty: An 18-year 
analysis of national Medicare data. Ann Rheum Dis. 2014 
Dec;73(12):2107-15.
    \142\ Rivera-Hernandez M, Rahman M, Mor V, Trivedi AN. Racial 
Disparities in Readmission Rates among Patients Discharged to 
Skilled Nursing Facilities. J Am Geriatr Soc. 2019 Aug;67(8):1672-
1679.
    \143\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \144\ Tsai TC, Orav EJ, Joynt KE. Disparities in surgical 30-day 
readmission rates for Medicare beneficiaries by race and site of 
care. Ann Surg. Jun 2014;259(6):1086-1090.
    \145\ Rodriguez F, Joynt KE, Lopez L, Saldana F, Jha AK. 
Readmission rates for Hispanic Medicare beneficiaries with heart 
failure and acute myocardial infarction. Am Heart J. Aug 
2011;162(2):254-261 e253.
    \146\ Centers for Medicare and Medicaid Services. Medicare 
Hospital Quality Chartbook: Performance Report on Outcome Measures; 
2014.
    \147\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
    \148\ Prieto-Centurion V, Gussin HA, Rolle AJ, Krishnan JA. 
Chronic obstructive pulmonary disease readmissions at minority-
serving institutions. Ann Am Thorac Soc. Dec 2013;10(6):680-684.
    \149\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 
2011;305(7):675-681.
    \150\ https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/ESRD-Infographic.pdf.
    \151\ Ibid.
    \152\ HHS. Heart disease and African Americans. (March 29, 
2021). https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19.
    \153\ https://www.cms.gov/files/document/medicare-covid-19-data-snapshot-fact-sheet.pdf.
    \154\ Ochieng N, Cubanski J, Neuman T, Artiga S, and Damico A. 
Racial and Ethnic Health Inequities and Medicare. Kaiser Family 
Foundation. February 2021. Available at: https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
    \155\ Weinhandl ED, Wetmore, JB, Peng Y, et al. Initial effects 
of COVID-19 on patients with ESKD. J Am Soc Nephrol. Published 
online April 8, 2021.doi:10.1681/ASN.2021010009.
    \156\ https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html.
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    We are committed to achieving equity in health care outcomes for 
our beneficiaries by supporting providers in quality improvement 
activities to reduce health inequities, enabling them to make more 
informed decisions, and promoting provider accountability for health 
care disparities.\157\ For the purposes of this rule, we are using a 
definition of equity established in Executive Order 13985, as ``the 
consistent and systematic fair, just, and impartial treatment of all 
individuals, including individuals who belong to underserved 
communities that have been denied such treatment, such as Black, 
Latino, and Indigenous and Native American persons, Asian Americans and 
Pacific Islanders and other persons of color; members of religious 
minorities; lesbian, gay, bisexual, transgender, and queer (LGBTQ+) 
persons; persons with disabilities; persons who live in rural areas; 
and persons otherwise adversely affected by persistent poverty or 
inequality.'' \158\ We note that this definition was recently 
established by the Biden administration, and provides a useful, common 
definition for equity across different areas of government, although 
numerous other definitions of equity exist.
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    \157\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \158\ https://www.federalregister.gov/documents/2021/01/25/2021-01753/advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government.
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    Our ongoing commitment to closing the equity gap in CMS quality 
programs is demonstrated by a portfolio of programs aimed at making 
information on the quality of health care providers and services, 
including disparities, more transparent to consumers and providers. The 
CMS Equity Plan for Improving Quality in Medicare outlines a path to 
equity which aims to support Quality Improvement Networks and Quality 
Improvement Organizations (QIN-QIOs); Federal, State, local, and tribal 
organizations; providers; researchers; policymakers; beneficiaries and 
their families; and other stakeholders in activities to achieve health 
equity.\159\ The CMS Equity Plan for Improving Quality in Medicare 
focuses on three core priority areas which inform our policies and 
programs: (1) Increasing understanding and awareness of disparities; 
(2) developing and disseminating solutions to achieve health equity; 
and (3) implementing sustainable actions to achieve health equity.\160\ 
The CMS Quality Strategy \161\ and Meaningful Measures Framework \162\ 
include elimination of racial and ethnic disparities as a central 
principle. Our efforts aimed at closing the health equity gap to date 
have included both providing transparency of health disparities, 
supporting providers with evidence-informed solutions to achieve health 
equity, and reporting to providers on gaps in quality in the following:
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    \159\ Centers for Medicare & Medicaid Services Office of 
Minority Health. The CMS Equity Plan for Improving Quality in 
Medicare. 2015. https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
    \160\ Centers for Medicare & Medicaid Services Office of 
Minority Health. Paving The Way To Equity: A Progress Report. 2015-
2021. https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf.
    \161\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \162\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.
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     The CMS Mapping Medicare Disparities Tool which is an 
interactive map that identifies areas of disparities and is a starting 
point to understand and investigate geographic, racial and ethnic 
differences in health outcomes for Medicare patients.\163\
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    \163\ https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH-Mapping-Medicare-Disparities.
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     The Racial, Ethnic, and Gender Disparities in Health Care 
in Medicare Advantage Stratified Report, which highlights racial and 
ethnic differences in health care experiences and clinical care, 
compares quality of care for women and men, and looks at racial and 
ethnic differences in quality of care among women and men separately 
for Medicare Advantage plans.\164\
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    \164\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
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     The Rural-Urban Disparities in Health Care in Medicare 
Report which details rural-urban differences in health care experiences 
and clinical care.\165\
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    \165\ Centers for Medicare & Medicaid Services. Rural-Urban 
Disparities in Health Care in Medicare. 2019. https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Rural-Urban-Disparities-in-Health-Care-in-Medicare-Report.pdf.
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     The Standardized Patient Assessment Data Elements for 
certain post-acute care Quality Reporting Programs, which now includes 
data reporting for race and ethnicity and preferred language, in 
addition to screening questions for social needs (84 FR 42536 through 
42588).
     The CMS Innovation Center's Accountable Health Communities 
Model which includes standardized collection of health-related social 
needs data.
     The Guide to Reducing Disparities which provides an 
overview of key issues related to disparities in readmissions and 
reviews set of activities that can help hospital leaders reduce 
readmissions in diverse populations.\166\
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    \166\ Guide to Reducing Disparities in Readmissions. CMS Office 
of Minority Health. Revised August 2018. Available at: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Readmissions_Guide.pdf.
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     The Chronic Kidney Disease Disparities: Educational Guide 
for Primary Care, which is intended to foster the development of 
primary care practice teams in order to enhance care for vulnerable 
patients with chronic kidney disease (CKD) and are at risk of 
progression of disease or complications. The guide provides information 
about disparities in the care of patients with CKD, presents potential 
actions that

[[Page 61930]]

may improve care, and suggests other available resources that may be 
used by primary care practice teams in caring for vulnerable 
patients.\167\
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    \167\ CMS. Chronic Kidney Disease Disparities: Educational Guide 
for Primary Care. February 2020. Available at: https://www.cms.gov/files/document/chronic-kidney-disease-disparities-educational-guide-primary-care.pdf.
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     The CMS Disparity Methods which provide hospital-level 
confidential results stratified by dual eligibility for condition-
specific readmission measures currently included in the Hospital 
Readmissions Reduction Program (see 84 FR 42496 through 42500 for a 
discussion of using stratified data in additional measures).
    These programs are informed by reports by the National Academies of 
Science, Engineering and Medicine (NASEM) \168\ and the Office of the 
Assistant Secretary for Planning and Evaluation (ASPE) \169\ which have 
examined the influence of social risk factors on several of our quality 
programs. In this request for public comment, we addressed only the 
eighth initiative listed above, the CMS Disparity Methods, which we 
have implemented for measures in the Hospital Readmissions Reduction 
Program and are considering in other programs, including the ESRD QIP. 
We discussed the implementation of these methods to date and presented 
considerations for continuing to improve and expand these methods to 
provide providers and ultimately consumers with actionable information 
on disparities in health care quality to support efforts at closing the 
equity gap.
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    \168\ National Academies of Sciences, Engineering, and Medicine. 
2016. Accounting for Social Risk Factors in Medicare Payment: 
Identifying Social Risk Factors. Washington, DC: The National 
Academies Press. https://doi.org/10.17226/21858.
    \169\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
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b. Current CMS Disparity Methods
    We first sought public comment on potential confidential and public 
reporting of ESRD QIP measure data stratified by social risk factors in 
the CY 2018 ESRD PPS proposed rule (82 FR 31202). We initially focused 
on stratification by dual eligibility, which is consistent with 
recommendations from ASPE's First Report to Congress which was required 
by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act 
of 2014 (Pub. L. 113-185).\170\ This report found that in the context 
of value-based purchasing (VBP) programs, dual eligibility was among 
the most powerful predictors of poor health outcomes among those social 
risk factors that ASPE examined and tested.
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    \170\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
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    In the FY 2018 IPPS/LTCH PPS final rule, we also solicited feedback 
on two potential methods for illuminating differences in outcomes rates 
among patient groups within a provider's patient population that would 
also allow for a comparison of those differences, or disparities, 
across providers for the Hospital IQR Program (82 FR 38403 through 
38409). The first method (the Within-Hospital disparity method) 
promotes quality improvement by calculating differences in outcome 
rates among patient groups within a hospital while accounting for their 
clinical risk factors. This method also allows for a comparison of the 
magnitude of disparity across hospitals, so hospitals could assess how 
well they are closing disparity gaps compared to other hospitals. The 
second methodological approach (the Across-Hospital method) is 
complementary and assesses hospitals' outcome rates for dual-eligible 
patients only, across hospitals, allowing for a comparison among 
hospitals on their performance caring for their patients with social 
risk factors. In the CY 2018 ESRD PPS proposed rule (82 FR 31202 
through 31203), we also specifically solicited feedback on which social 
risk factors provide the most valuable information to stakeholders. In 
addition, feedback was solicited on the methodology for illuminating 
differences in outcomes rates among patient groups within a provider's 
patient population that would also allow for a comparison of those 
differences, or disparities, across providers. Overall, comments 
supported the use of dual eligibility as a proxy for social risk, 
although commenters also suggested investigation of additional social 
risk factors, and we continue to consider commenter suggestions for 
which risk factors provide the most valuable information to 
stakeholders.
c. Future Potential Expansion of the CMS Disparity Methods to the ESRD 
QIP
    We are committed to advancing health equity by improving data 
collection to better measure and analyze disparities across programs 
and policies.\171\ As we previously noted, we have been considering, 
among other things, expanding our efforts to provide stratified data 
for additional social risk factors and measures, optimizing the ease-
of-use of the results, enhancing public transparency of equity results, 
and building towards provider accountability for health equity. We 
sought public comment on the potential stratification of quality 
measures in the ESRD QIP across two social risk factors: dual 
eligibility and race/ethnicity.
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    \171\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
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(1) Stratification of Quality Measure Results--Dual Eligibility
    As described in the previous section, landmark reports by NASEM 
\172\ and ASPE,\173\ which have examined the influence of social risk 
factors on several of our quality programs, have shown that in the 
context of VBP programs, dual eligibility, as an indicator of social 
risk, is a powerful predictor of poor health outcomes. We are 
considering stratification of quality measure results in the ESRD QIP 
and are considering which measures would be most appropriate for 
stratification and if dual eligibility would be a meaningful social 
risk factor for stratification.
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    \172\ National Academies of Sciences, Engineering, and Medicine. 
2016. Accounting for Social Risk Factors in Medicare Payment: 
Identifying Social Risk Factors. Washington, DC: The National 
Academies Press. https://doi.org/10.17226/21858.
    \173\ https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
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    For the ESRD QIP, we would consider disparity reporting using two 
disparity methods derived from the Within-Facility and Across-Facility 
methods. The first method (based on the Within-Hospital disparity 
method, described previously) would aim to promote quality improvement 
by calculating differences in outcome rates between dual and non-dual 
eligible patient groups within a facility while accounting for their 
clinical risk factors. This method would allow for a comparison of 
those differences, or disparities, across facilities, so facilities 
could assess how well they are closing disparity gaps compared to other 
facilities. The second approach (based on the Across-Hospital method) 
would be complementary and assesses facilities' outcome rates for 
subgroups of patients, such as dual eligible patients, across 
facilities, allowing for a comparison among facilities on their 
performance caring for their patients with social risk factors.
(2) Stratification of Quality Measure Results--Race and Ethnicity
    The Administration's Executive Order on Advancing Racial Equity and 
Support for Underserved Communities

[[Page 61931]]

Through the Federal Government directs agencies to assess potential 
barriers that underserved communities and individuals may face to 
enrollment in and access to benefits and services in Federal programs. 
As summarized earlier in the preamble, studies have shown that among 
Medicare beneficiaries, racial and ethnic minority persons often 
experience worse health outcomes, including more frequent hospital 
readmissions and procedural complications.\174\ We also note that the 
prevalence of ESRD is higher among racial minorities.\175\ For example, 
in 2016 ESRD prevalence was approximately 9.5 times greater in Native 
Hawaiians and Pacific Islanders, 3.7 times greater in African 
Americans, 1.5 times greater in American Indians and Alaska Natives, 
and 1.3 times greater in Asians.\176\ An important part of identifying 
and addressing inequities in health care is improving data collection 
to allow us to better measure and report on equity across our programs 
and policies. We are considering stratification of quality measure 
results in the ESRD QIP by race and ethnicity, and are identifying 
which measures would be most appropriate for stratification.
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    \174\ https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
    \175\ United States Renal Data System. 2018 Annual Data Report: 
ESRD Incidence, Prevalence, Patient Characteristics, and Treatment 
Modalities. Available online at https://www.usrds.org/2018/view/Default.aspx.
    \176\ United States Renal Data System. 2018 Annual Data Report, 
Vol 2, Figure 1.12. Available online at https://www.usrds.org/2018/view/Default.aspx.
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    As outlined in the 1997 Office of Management and Budget (OMB) 
Revisions to the Standards for the Collection of Federal Data on Race 
and Ethnicity, the racial and ethnic categories which may be used for 
reporting the disparity methods are considered to be social and 
cultural, not biological or genetic.\177\ The 1997 OMB Standard lists 
five minimum categories of race: (1) American Indian or Alaska Native; 
(2) Asian; (3) Black or African American; (4) Native Hawaiian or Other 
Pacific Islander; (5) and White. In the OMB standards, Hispanic or 
Latino is the only ethnicity category included, and since race and 
ethnicity are two separate and distinct concepts, persons who report 
themselves as Hispanic or Latino can be of any race.\178\ Another 
example, the ``Race & Ethnicity--CDC'' code system in Public Health 
Information Network (PHIN) Vocabulary Access and Distribution Systems 
(VADS) \179\ permits a much more granular structured recording of a 
patient's race and ethnicity with its inclusion of over 900 concepts 
for race and ethnicity. The recording and exchange of patient race and 
ethnicity at such a granular level can facilitate the accurate 
identification and analysis of health disparities based on race and 
ethnicity. Further, the ``Race & Ethnicity--CDC'' code system has a 
hierarchy that rolls up to the OMB minimum categories for race and 
ethnicity and, thus, supports aggregation and reporting using the OMB 
standard. The Office of the National Coordinator for Health Information 
Technology (ONC) includes both the CDC and OMB standards in its 
criterion for certified health IT products.\180\ For race and 
ethnicity, a certified health IT product must be able to express both 
detailed races and ethnicities using any of the 900 plus concepts in 
the ``Race & Ethnicity--CDC'' code system in PHIN VADS, as well as 
aggregate each one of a patient's races and ethnicities to the 
categories in the OMB standard for race and ethnicity. This approach 
can reduce burden on providers recording demographics using certified 
products.
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    \177\ Executive Office of the President Office of Management and 
Budget, Office of Information and Regulatory Affairs. Revisions to 
the standards for the classification of federal data on race and 
ethnicity. Vol 62. Federal Register. 1997:58782-58790.
    \178\ https://www.census.gov/topics/population/hispanic-origin/about.html.
    \179\ https://phinvads.cdc.gov/vads/ViewValueSet.action?id=67D34BBC-617F-DD11-B38D-00188B398520.
    \180\ ONC criteria for certified health IT products: https://www.healthit.gov/isa/representing-patient-race-and-ethnicity.
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    Self-reported race and ethnicity data remain the gold standard for 
classifying an individual according to race or ethnicity. However, 
historical inaccuracies in Federal data systems and limited collection 
classifications have contributed to the limited quality of race and 
ethnicity information in our administrative data systems.\181\ In 
recent decades, to address these data quality issues, we have 
undertaken numerous initiatives, including updating data taxonomies and 
conducting direct mailings to some beneficiaries to enable more 
comprehensive race and ethnic identification.\182\ \183\ Despite those 
efforts, studies reveal varying data accuracy in identification of 
racial and ethnic groups in Medicare administrative data, with higher 
sensitivity for correctly identifying white and Black individuals, and 
lower sensitivity for correctly identifying individuals of Hispanic 
ethnicity or of Asian/Pacific Islander and American Indian/Alaskan 
Native race.\184\ Incorrectly classified race or ethnicity may result 
in overestimation or underestimation in the quality of care received by 
certain groups of beneficiaries.
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    \181\ Eicheldinger, C., & Bonito, A. (2008). More accurate 
racial and ethnic codes for Medicare administrative data. Health 
Care Financing Review, 29(3), 27-42.
    \182\ Filice CE, Joynt KE. Examining Race and Ethnicity 
Information in Medicare Administrative Data. Med Care. 
2017;55(12):e170-e176. doi:10.1097/MLR.0000000000000608.
    \183\ Eicheldinger, C., & Bonito, A. (2008). More accurate 
racial and ethnic codes for Medicare administrative data. Health 
Care Financing Review, 29(3), 27-42.
    \184\ Centers for Medicare & Medicaid Services. Building an 
Organizational Response to Health Disparities Inventory of Resources 
for Standardized Demographic and Language Data Collection. 2020. 
https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Data-Collection-Resources.pdf.
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    We continue to work with public and private partners to better 
collect and leverage data on social risk to improve our understanding 
of how these factors can be better measured in order to close the 
health equity gap. Among other things, we have developed an Inventory 
of Resources for Standardized Demographic and Language Data Collection 
\185\ and supported collection of specialized International 
Classification of Disease, 10th Edition, Clinical Modification (ICD-10-
CM) codes for describing the socioeconomic, cultural, and environmental 
determinants of health, and sponsored several initiatives to 
statistically estimate race and ethnicity information when it is 
absent.\186\
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    \185\ Centers for Medicare & Medicaid Services. Building an 
Organizational Response to Health Disparities Inventory of Resources 
for Standardized Demographic and Language Data Collection. 2020. 
https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Data-Collection-Resources.pdf.
    \186\ https://pubmed.ncbi.nlm.nih.gov/18567241/, https://pubmed.ncbi.nlm.nih.gov/30506674/, Eicheldinger C, Bonito A. More 
accurate racial and ethnic codes for Medicare administrative data. 
Health Care Finance Rev. 2008;29(3):27-42. Haas A, Elliott MN, 
Dembosky JW, et al. Imputation of race/ethnicity to enable 
measurement of HEDIS performance by race/ethnicity. Health Serv Res. 
2019;54(1):13-23. doi:10.1111/1475-6773.13099.
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    ONC included social, psychological, and behavioral standards in the 
2015 Edition health information technology certification criteria (2015 
Edition), providing interoperability standards LOINC (Logical 
Observation Identifiers Names and Codes) and SNOMED CT (Systematized 
Nomenclature of Medicine--Clinical Terms) for financial strain, 
education, social connection and isolation, and others. Additional 
stakeholder efforts underway to expand capabilities to capture 
additional social determinants of health data elements include the 
Gravity Project to identify and harmonize social risk factor data for 
interoperable electronic health

[[Page 61932]]

information exchange for EHR fields, as well as proposals to expand the 
ICD-10 (International Classification of Diseases, Tenth Revision) Z-
codes, the alphanumeric codes used worldwide to represent 
diagnoses.\187\
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    \187\ https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
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    While development of sustainable and consistent programs to collect 
data on social determinants of health can be considerable undertakings, 
we recognize that another method to identify better race and ethnicity 
data is needed in the short term to address the need for reporting on 
health equity. In working with our contractors, two algorithms have 
been developed to indirectly estimate the race and ethnicity of 
Medicare beneficiaries (as described further in the next section). We 
believe that using indirect estimation can help to overcome the current 
limitations of demographic information and enable timelier reporting of 
equity results until longer term collaborations to improve demographic 
data quality across the health care sector materialize. The use of 
indirectly estimated race and ethnicity for conducting stratified 
reporting does not place any additional collection or reporting burdens 
on facilities as these data are derived using existing administrative 
and Census-linked data.
    Indirect estimation relies on a statistical imputation method for 
inferring a missing variable or improving an imperfect administrative 
variable using a related set of information that is more readily 
available.\188\ Indirectly estimated data are most commonly used at the 
population level (such as the facility or health plan-level), where 
aggregated results form a more accurate description of the population 
than existing, imperfect data sets. These methods often estimate race 
and ethnicity using a combination of other data sources which are 
predictive of self-identified race and ethnicity, such as language 
preference, information about race and ethnicity in our administrative 
records, first and last names matched to validated lists of names 
correlated to specific national origin groups, and the racial and 
ethnic composition of the surrounding neighborhood. Indirect estimation 
has been used in other settings to support population-based equity 
measurement when self-identified data are not available.\189\
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    \188\ IOM. 2009. Race, Ethnicity, and Language Data: 
Standardization for Health Care Quality Improvement. Washington, DC: 
The National Academies Press.
    \189\ IOM. 2009. Race, Ethnicity, and Language Data: 
Standardization for Health Care Quality Improvement. Washington, DC: 
The National Academies Press.
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    As discussed earlier in the preamble, we have previously supported 
the development of two such methods of indirect estimation of race and 
ethnicity of Medicare beneficiaries. One indirect estimation approach, 
developed by our contractor, uses Medicare administrative data, first 
name and surname matching, derived from the U.S. Census and other 
sources, with beneficiary language preference, State of residence, and 
the source of the race and ethnicity code in Medicare administrative 
data to reclassify some beneficiaries as Hispanic or Asian Pacific 
Islander (API).\190\ In recent years, we have also worked with another 
contractor to develop a new approach, the Medicare Bayesian Improved 
Surname Geocoding (MBISG), which combines Medicare administrative data, 
first and surname matching, geocoded residential address linked to the 
2010 U.S. Census, and uses both Bayesian updating and multinomial 
logistic regression to estimate the probability of belonging to each of 
six racial/ethnic groups.\191\
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    \190\ Eicheldinger, C., & Bonito, A. (2008). More accurate 
racial and ethnic codes for Medicare administrative data. Health 
Care Financing Review, 29(3), 27-42.
    \191\ Haas, A., Elliott, M. et al (2018). Imputation of race/
ethnicity to enable measurement of HEDIS performance by race/
ethnicity. Health Services Research, 54:13-23.
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    The MBISG model is currently used to conduct the national, 
contract-level, stratified reporting of Medicare Part C & D performance 
data for Medicare Advantage Plans by race and ethnicity.\192\ 
Validation testing reveals concordances with self-reported race and 
ethnicity of 0.96-0.99 for API, Black, Hispanic, and White 
beneficiaries for MBISG version 2.1.\193\ \194\ The algorithms under 
consideration are considerably less accurate for individuals who self-
identify as American Indian or Alaskan Native as well as for those who 
self-identify as multiracial.\195\ Indirect estimation can be a 
statistically reliable approach for calculating population-level equity 
results for groups of individuals (such as the facility-level) and is 
not intended, nor being considered, as an approach for inferring the 
race and ethnicity of an individual.
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    \192\ https://www.cms.gov/About-CMS/Agency-Information/OMH/research-and-data/statistics-and-data/stratified-reporting.
    \193\ Haas, A., Elliott, M. et al (2018). Imputation of race/
ethnicity to enable measurement of HEDIS performance by race/
ethnicity. Health Services Research, 54:13-23.
    \194\ https://www.cms.gov/files/document/racial-ethnic-gender-disparities-health-care-medicare-advantage.pdf.
    \195\ Haas, A., Elliott, M. et al. (2018). Imputation of race/
ethnicity to enable measurement of HEDIS performance by race/
ethnicity. Health Services Research, 54:13-23 and Bonito AJ, Bann C, 
Eicheldinger C, Carpenter L. Creation of New Race-Ethnicity Codes 
and Socioeconomic Status (SES) Indicators for Medicare 
Beneficiaries. Final Report, Sub-Task 2. (Prepared by RTI 
International for the Centers for Medicare and Medicaid Services 
through an interagency agreement with the Agency for Healthcare 
Research and Policy, under Contract No. 500-00-0024, Task No. 21) 
AHRQ Publication No. 08-0029-EF. Rockville, MD, Agency for 
Healthcare Research and Quality. January 2008.
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    However, despite the high degree of statistical accuracy of the 
indirect estimation algorithms under consideration there remains the 
small risk of unintentionally introducing bias. For example, if the 
indirect estimation is not as accurate in correctly estimating race and 
ethnicity in certain geographies or populations it could lead to some 
bias in the method results. Such bias might result in slight 
overestimation or underestimation of the quality of care received by a 
given group. We believe this amount of bias is considerably less than 
would be expected if stratified reporting was conducted using the race 
and ethnicity currently contained in our administrative data. Indirect 
estimation of race and ethnicity is envisioned as an intermediate step, 
filling the pressing need for more accurate demographic information for 
the purposes of exploring inequities in service delivery, while 
allowing newer approaches, as described in the next section, for 
enhancing demographic data collection. We expressed interest in 
learning more about, and solicited comments about, the potential 
benefits and challenges associated with measuring facility equity using 
an imputation algorithm to enhance existing administrative data quality 
for race and ethnicity until self-reported information is sufficiently 
available.
(3) Improving Demographic Data Collection
    Stratified facility-level reporting using indirectly estimated race 
and ethnicity and dual eligibility would represent an important advance 
in our ability to provide equity reports to facilities. However, self-
reported disability status, race, ethnicity, sexual orientation and 
gender identity data remain the gold standard for classifying an 
individual according to disability status, race, or ethnicity. The CMS 
Quality Strategy outlines our commitment to strengthening 
infrastructure and data systems by ensuring that standardized 
demographic information is collected to identify disparities in health 
care delivery outcomes.\196\ Collection and

[[Page 61933]]

sharing of a standardized set of social, psychological, and behavioral 
data by facilities, including disability status and race and ethnicity, 
using electronic data definitions which permit nationwide, 
interoperable health information exchange, can significantly enhance 
the accuracy and robustness of our equity reporting.\197\ This could 
potentially include expansion to additional social risk factors, such 
as language preference and disability status, where accuracy of 
administrative data is currently limited. We are mindful that 
additional resources, including data collection and staff training may 
be necessary to ensure that conditions are created whereby all patients 
are comfortable answering all demographic questions, and that 
individual preferences for non-response are maintained.
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    \196\ The Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \197\ The Office of the National Coordinator for Health 
Information Technology. United State Core Data for Interoperability 
Draft Version 2. 2021. https://www.healthit.gov/isa/sites/isa/files/2021-01/Draft-USCDI-Version-2-January-2021-Final.pdf.
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    We are also interested in learning about and solicited comments on 
current data collection practices by facilities to capture demographic 
data elements (such as race, ethnicity, sex, sexual orientation and 
gender identity (SOGI), language preference, and disability status). 
Further, we are interested in potential challenges facing facility 
collection of a minimum set of demographic data elements in alignment 
with national data collection standards (such as the standards 
finalized by the Affordable Care Act \198\) and standards for 
interoperable exchange (such as the U.S. Core Data for Interoperability 
put forth by ONC for incorporation in certified health IT products as 
part of the 2015 Edition of health IT certification criteria \199\). 
Advancing data interoperability through collection of a minimum set of 
demographic data collection has the potential for improving the 
robustness of the disparity methods results, potentially permitting 
reporting using more accurate, self-reported, information, such as race 
and ethnicity, and expanding reporting to additional dimensions of 
equity, including stratified reporting by disability status.
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    \198\ https://minorityhealth.hhs.gov/assets/pdf/checked/1/Fact_Sheet_Section_4302.pdf.
    \199\ https://www.healthit.gov/sites/default/files/2020-08/2015EdCures_Update_CCG_USCDI.pdf.
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(4) Potential Creation of an ESRD Facility Equity Score To Synthesize 
Results Across Multiple Social Risk Factors
    As we describe previously, we are considering expanding the 
disparity methods to include two social risk factors (dual eligibility 
and race/ethnicity). This approach would improve the comprehensiveness 
of health equity information provided to facilities. Aggregated results 
from multiple measures and multiple social risk factors, from the CMS 
Disparity Methods, in the format of a summary score, can improve the 
usefulness of the equity results. In working with our contractors, we 
recently developed an equity summary score for Medicare Advantage 
contract/plans, the Health Equity Summary Score (HESS), with 
application to stratified reporting using two social risk factors: Dual 
eligibility and race and as described in Incentivizing Excellent Care 
to At-Risk Groups with a Health Equity Summary Score.\200\
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    \200\ Agniel D, Martino SC, Burkhart Q, et al. Incentivizing 
Excellent Care to At-Risk Groups with a Health Equity Summary Score. 
J Gen Intern Med. Published online November 11, 2019 Nov 11. doi: 
10.1007/s11606-019-05473-x.
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    The HESS calculates standardized and combined performance scores 
blended across the two social risk factors. The HESS also combines 
results of the within-plan (similar to the Within-Facility method) and 
across-plan method (similar to the Across-Facility method) across 
multiple performance measures.
    We are considering building an ESRD Facility Equity Score, not yet 
developed, which would be modeled off the HESS but adapted to the 
context of risk-adjusted facility outcome measures and potentially 
other ESRD QIP quality measures. We envision that the ESRD Facility 
Equity Score would synthesize results for a range of measures and using 
multiple social risk factors, using measures and social risk factors 
which would be reported to facilities as part of the CMS Disparity 
Methods. We believe that creation of the ESRD Facility Equity Score has 
the potential to supplement the overall measure data already reporting 
on the Care Compare or successor website, by providing easy to 
interpret information regarding disparities measured within individual 
facilities and across facilities nationally. A summary score would 
decrease burden by minimizing the number of measure results provided 
and providing an overall indicator of equity.
    The ESRD Facility Equity Score under consideration would 
potentially:
     Summarize facility performance across multiple social risk 
factors (initially dual eligibility and indirectly estimated race and 
ethnicity, as described above).
     Summarize facility performance across the two disparity 
methods (that is, the Within-Facility Disparity Method and the Across-
Facility Disparity Method) and potentially multiple measures.
    Prior to any future public reporting of stratified measure data 
using indirectly estimated race and ethnicity information, if we 
determine that an ESRD Facility Equity Score can be feasibly and 
accurately calculated, we would provide results of the ESRD Facility 
Equity Score, in confidential facility specific reports which 
facilities and their ESRD Networks would be able to download. Any 
potential future proposal to display the ESRD Facility Equity Score on 
the Care Compare or successor website would be made through future RFI 
or rulemaking.
d. Solicitation of Public Comment
    We sought comment on the possibility of stratifying ESRD QIP 
measures by dual eligibility and race and ethnicity. We solicited 
public comments on the application of the within-facility or across-
facility disparities methods if we were to stratify ESRD QIP measures. 
We also sought comment on the possibility of facility collection of 
standardized demographic information for the purposes of potential 
future quality reporting and measure stratification. In addition, we 
sought comment on the potential design of a facility equity score for 
calculating results across multiple social risk factors and measures, 
including race and disability. Any data pertaining to these areas that 
are recommended for collection for measure reporting for a CMS program 
and any potential public disclosure on Care Compare or successor 
website would be addressed through a separate and future notice-and-
comment rulemaking. We plan to continue working with ASPE, facilities, 
the public, and other key stakeholders on this important issue to 
identify policy solutions that achieve the goals of attaining health 
equity for all patients and minimizing unintended consequences. We 
noted for readers that responses to the RFI will not directly impact 
payment decisions. We also noted our intention for additional RFI or 
rulemaking on this topic in the future.
    Specifically, we invited public comment on the following:

[[Page 61934]]

Future Potential Stratification of Quality Measure Results
     The possible stratification of facility-specific reports 
for ESRD QIP measure data by dual-eligibility status, including which 
measures would be most appropriate for stratification;
     The potential future application of indirect estimation of 
race and ethnicity information to permit stratification of measure data 
for reporting ESRD facility-level disparity results;
     Appropriate privacy safeguards with respect to data 
produced from the indirect estimation of race and ethnicity to ensure 
that such data is properly identified if/when it is shared with 
facilities.
     Ways to address the challenges of defining and collecting, 
accurate and standardized self-identified demographic information, 
including information on race and ethnicity, disability, and language 
preference for the purposes of reporting, measure stratification and 
other data collection efforts relating to quality.
     Recommendations for other types of readily available data 
elements for measuring disadvantage and discrimination for the purposes 
of reporting, measure stratification and other data collection efforts 
relating to quality, in addition, or in combination with race and 
ethnicity
     Recommendations for types of quality measures or 
measurement domains to prioritize for stratified reporting by dual 
eligibility, race and ethnicity, and disability.
     Examples of approaches, methods, research, and/or 
considerations for use of data-driven technologies that do not 
facilitate exacerbation of health inequities, recognizing that biases 
may occur in methodology or be encoded in datasets.
    We received comments on these topics.
    Comments: Many commenters expressed support for stratification by 
dual eligibility, race, and ethnicity. A few commenters expressed the 
belief that stratification of quality measures by social risk factors, 
such as dual eligibility and race and ethnicity, is essential to 
advancing health equity as such factors have been shown to have a 
likely impact on health outcomes. A few commenters expressed the belief 
that stratification will improve transparency, help identify existing 
disparities and inform efforts to reduce those disparities. A few 
commenters recommended that CMS take a stepwise approach to 
stratification. A few commenters stated that stratifying data is 
important to help identify health equity gaps, but recommended that CMS 
take action on its findings in order to address the health equity gap 
and reduce disparities in care. A few commenters recommended that CMS 
make stratified data publicly available to inform both CMS and 
stakeholders of the diverse needs of different patient populations, and 
identify needed policy changes to improve patient access to treatment. 
A few commenters expressed support for stratification but suggested 
setting a threshold at the 10th decile of low-income patient 
distribution to include facilities that serve a disproportionately high 
percentage of low-income patients. One commenter recommended that 
adjusting measures for social risk factors, including dual-eligibility 
or income, may reduce the likelihood of program penalties increasing 
existing disparities. One commenter supported the proposed 
stratification of facility-specific reports for ESRD QIP measure data 
by dual-eligibility status and race and ethnicity; however, this 
commenter also recommended CMS monitor for unintended consequences 
believing that stratification risks disparities in patient treatment.
    Many commenters expressed support for stratification by dual 
eligibility. A few commenters supported stratification by dual eligible 
status, noting that it can be used as a proxy for socio-economic status 
and is an objective classification that may have less biased data. A 
few commenters expressed the belief that stratification could help 
facilities identify and reduce disparities, but noted that differences 
in Medicaid eligibility between states may impact comparability when 
stratifying measures by dual eligibility. One commenter expressed 
concern that dual eligibility may be too blunt a data point to identify 
the underlying cause of disparity, noting that disparities experienced 
by ESRD patients stem from a wide range of social risk factors. One 
commenter noted that understanding differences between dual-eligible 
and non-dual-eligible patients in baseline chronic kidney disease care 
could inform ways to allocate resources aimed at slowing the 
progression of CKD. One commenter noted the correlation between a 
facility's dual-eligible patient population and a facility's payment 
reduction based on its ESRD QIP scores, citing studies indicating that 
facilities serving a higher proportion of dual eligible/low-income 
patients are more likely to have higher ESRD QIP payment reductions.
    Several commenters noted that, although stratification may help 
identify and address health equity gaps, many disparities begin decades 
prior to starting dialysis, and encouraged CMS to explore ways to 
address health disparities earlier in the progression of kidney 
disease. One commenter expressed concern that stratification may create 
unintended consequences such as disparities in patient treatment based 
on social determinants of health. One commenter recommended CMS 
consider options beyond stratification of ESRD QIP measures by dual 
eligible status or race and ethnicity to address health equity gaps. 
One commenter expressed its belief that the segmentation of populations 
using dual eligibility or race and ethnicity as the proxy for ``social 
risk,'' for example, is problematic and that the primary goal across 
all CMS programs should be to prioritize self-reported race, ethnicity, 
and other social determinants of health data as the sole source of 
stratifying populations to understand disparities.
    Many commenters expressed support for stratification of measures by 
race and ethnicity, noting that such factors have been identified as 
likely having an impact on health outcomes. A few commenters expressed 
support for the use of indirect estimation of race and ethnicity for 
purposes of calculating facility level performance measures as a 
preliminary step while more precise methods are developed. One 
commenter expressed support for the expansion of CMS Disparity Methods 
to the ESRD QIP and stratifying by race and ethnicity, both within and 
across facilities. One commenter recommended that disparities methods 
should be implemented in a way that is minimally burdensome and 
confidentially reported.
    A few commenters requested clarification regarding the application 
of disparity methods to the ESRD QIP, noting that disparity methods are 
currently applied to hospital readmissions measures which may be linked 
to factors outside the facility's ability to influence. A few 
commenters expressed concern regarding the indirect estimation of race 
and ethnicity, believing that it was not worth the increased and 
unknown risk of bias that it could unintentionally create and 
recommended that indirect data be evaluated to ensure CMS is not 
introducing bias into the system or underestimating or overestimating 
the quality of care for a certain population. A few commenters 
expressed concern that the imputation method is imprecise, particularly 
for indigenous and multi-racial patients and recommended that self-
reported data was more accurate. One commenter

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questioned whether either of the two disparities methods would help 
close the health equity gap, and suggested that CMS consider whether an 
indirect estimation approach might divert resources away from 
developing better methods. One commenter recommended a step-wise 
approach to use the ``Within Facility Disparity Method'' before 
expanding to apply an ``Across-Facility Disparity Method'' to assess 
how a facility is addressing equity, as well as to better establish 
what resources may be required to effectively address equity.
    Several commenters expressed support for the stratification of the 
SRR, STrR, and SHR measures by dual-eligibility status and race/
ethnicity, noting that evidence has indicated disparities may factor 
into measure performance in other healthcare settings, and that such 
stratification may inform clinical practices and care. Several 
commenters suggested that the vascular access measures are appropriate 
for stratification by dual eligibility and race/ethnicity. A few 
commenters also recommended that these measures be stratified by 
insurance status at the time of dialysis initiation in order to provide 
insight into patients' abilities to access pre-dialysis care and 
vascular access placement. A few commenters stated that the PPPW 
measure is appropriate for potential stratification by dual eligibility 
status, race/ethnicity, as well as geographic area. A few commenters 
recommended that stratification is adopted for measures where it has 
been shown, or is clearly suspected based on research from other care 
settings, that disparities are driving differences in the outcomes 
being reported. A few commenters expressed the belief that most ESRD 
QIP measures would benefit from stratification. One commenter 
recommended that CMS encourage all health care providers and 
organizations to collect and stratify both patient and caregiver data 
for all measures.
    A few commenters recommended that CMS develop best practices to 
ensure the security of data and its utilization, noting the sensitive 
nature of the data and the importance of gaining beneficiaries' trust. 
A few commenters agreed that data elements should be subject to 
existing privacy and security requirements, and recommended that CMS 
establish an open and transparent process to work with NQF and other 
stakeholders to develop data options. One commenter expressed its 
belief in the unassailable importance of privacy safeguards for all 
uses of sensitive personal information such as race, ethnicity, and 
other social risk factors and recommended CMS consider using only self-
reported data to alleviate risk of misidentification and to promote 
robust collection of patient-reported information.
    A few commenters expressed the belief that patient self-reporting 
is the most appropriate way to collect social determinants of health 
data such as race and ethnicity, agreeing with CMS' assessment that 
self-reported patient data is the gold standard. A few commenters noted 
that one challenge may be that the concept of race is subjective and 
may be imprecise due to differences in cultural understanding. A few 
commenters recommended that CMS encourage facilities to collect self-
reported race and ethnicity data, as well as establish a timeframe for 
meeting specific data collection goals including data completeness and 
accuracy requirements. One commenter noted that many health care 
organizations are already collecting self-reported demographic 
information and have been for years. One commenter expressed its belief 
that the primary goal across all CMS programs should be to prioritize 
self-reported race, ethnicity, and other social determinants of health 
data as the sole source of stratifying populations to understand 
disparities. One commenter recommended that, given the importance of 
self-reported data, CMS work on developing data collection language 
that is more person-centric in order to encourage trust among those 
patients whose data are being collected.
    Several commenters expressed support for collecting additional 
information that will likely impact patient outcomes, such as insurance 
status at dialysis initiation and geographic area of residence. Several 
commenters recommended the use of Z-codes or other data sources to 
collect data to report on factors such as housing insecurity, financial 
insecurity, caregiver support, mental illness, physical illness, age, 
education level, transportation insecurity, food insecurity, marital 
status, violence, safety concerns, and child care. One commenter 
recommended that CMS adopt a definition of health equity that takes 
into account the needs of various patient populations and structural 
issues associated with equity, such as race, ethnicity, sex, SOGI, 
language preference, tribal membership, and disability status.
    A few commenters recommended that CMS work with the kidney care 
community to develop risk adjusters for measures. A few commenters 
requested that methodologies use data elements that are available to 
providers and that calculations can be replicated to promote 
transparency. A few commenters recommended that CMS also consider 
eliminating bias in kidney function testing, noting for example that 
the eGFR test is biased based on racial assumptions and can impact 
transplant eligibility among Black patients. One commenter expressed 
concern that many approaches based on data-driven technologies are less 
accessible to vulnerable patient populations and would potentially 
exacerbate existing inequities. This commenter also noted that 
smartphone technologies may be more promising as an example of a data-
driven technology that does not facilitate exacerbation of health 
inequities.
    Response: We appreciate all of the comments and interest in this 
topic. We believe that this input is very valuable in the continuing 
development of the CMS health equity quality measurement efforts. We 
will continue to take all concerns, comments, and suggestions into 
account for future development and expansion of our health equity 
quality measurement efforts.
Improving Demographic Data Collection
     Experiences of users of certified health IT regarding 
local adoption of practices for collection of social, psychological, 
and behavioral data elements, the perceived value of using these data 
for improving decision-making and care delivery, and the potential 
challenges and benefits of collecting more granular, structured 
demographic information, such as the ``Race & Ethnicity--CDC'' code 
system.
     The possible collection of a minimum set of social, 
psychological, and behavioral data elements by ESRD facilities at the 
time of admission using structured, interoperable electronic data 
standards, for the purposes of reporting, measure stratification and 
other data collection efforts relating to quality.
    We received comments on these topics.
    Comments: Many commenters expressed support for CMS' efforts to 
address inequities in health outcomes through improving data collection 
and patient outcome measurement. Several commenters supported the use 
of minimally burdensome data collection efforts. A few commenters noted 
that much of the information that CMS would like to collect is reported 
on Form 2728--ESRD Medical Evidence Report Medicare Entitlement And/Or 
Patient Registration (OMB control number 0938-0046), and encouraged 
that CMS to be economical in its expansion of data collection on the 
Form 2728 so as to not create additional patient concerns. One 
commenter recommended that a system of data

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collection and reporting should not add to the confusion about what the 
terms race and ethnicity mean, and what labels appropriately fit either 
of these broad concepts. One commenter recommended that CMS collect 
data on demographic characteristics in a way that aligns with adoption 
of FHIR standards, noting that FHIR may be used to appropriately group 
demographic characteristics in a standardized way. One commenter noted 
the potential challenge of uploading data from facility EMR systems to 
CMS for measure calculation purposes. A few commenters expressed 
concerns with adjusting for social factors when there is a ``small 
numbers'' problem in ESRD QIP that can impact the accuracy of 
performance measurement and that will be aggravated with dividing 
categories into smaller subsets. One commenter expressed its belief 
that modifications to current data collection related to social, 
psychological, and behavioral data could be useful to CMS to address 
equity and quality of care. However, the commenter did not recommend 
the application of CDC's 900-variable system of identifying race and 
ethnicity, as provided in the CDC's Race and Ethnicity Code Set Version 
1.0, in a highly granular way believing the volume of data that would 
need to be collected would make the process labor intensive for 
clinical staff. One commenter recommended that CMS work to improve and 
standardize the underlying data collection and metrics; this commenter 
recommended a joint development process that includes the Center for 
Medicare & Medicaid Innovation (CMMI) and the Office of the National 
Coordinator for Health Information Technology (ONC) in collaboration 
with health systems, practices, and patient/community representation.
    Other commenters noted the importance of closing the health equity 
gap through measurement of demographic characteristics. One commenter 
suggested that agencies leverage the role of social workers in 
identifying sociodemographic factors and barriers to health equity. 
Another commenter supported this method, noting that although this may 
add another step to data collection processes, it would be valuable in 
addressing health equity gaps. To reduce possible workload burden on 
organizations that are new to this process, a commenter recommended a 
gradual approach to data collection. In addition, commenters suggested 
reducing burden by adopting standardized screening tools to collect 
this information, such as ICD-10-CM Z-codes, which in practice would 
allow patients to be referred to resources and initiatives when 
appropriate. Several commenters encouraged collection of comprehensive 
social determinants of health and demographic information in addition 
to race and ethnicity, such as disability, sexual orientation, and 
primary language. Several commenters provided feedback on the potential 
use of an indirect estimation algorithm when race and ethnicity are 
missing or incorrect, and emphasized the sensitivity of demographic 
information and recommended that CMS use caution when using estimates 
from the algorithm, including assessing for potential bias, reporting 
the results of indirect estimation alongside direct self-report at the 
organizational level for comparison, and establishing a timeline to 
transition to entirely directly collected data. Commenters also advised 
that CMS be transparent with beneficiaries and explain why data are 
being collected and the plans to use these data. A commenter noted that 
information technology infrastructure should be established in advance 
to ensure that this information is being used and exchanged 
appropriately.
    Response: We appreciate all of the comments and interest in this 
topic. We believe that this input is very valuable in the continuing 
development of the CMS health equity quality measurement efforts. We 
will continue to take all concerns, comments, and suggestions into 
account for future development and expansion of our health equity 
quality measurement efforts.
Potential Creation of an ESRD Facility Equity Score To Synthesize 
Results Across Multiple Social Risk Factors
     The possible creation and confidential reporting of an 
ESRD Facility Equity Score to synthesize results across multiple social 
risk factors and disparity measures.
     Interventions ESRD facilities could institute to improve a 
low facility equity score and how improved demographic data could 
assist with these efforts.
    We received comments on these topics.
    Comments: Several commenters expressed support for the concept of 
an ESRD Facility Equity Score, but requested that CMS provide further 
details. Several commenters recommended that CMS work with stakeholders 
in the kidney care community to develop an equity score in order to 
ensure transparency and to make sure providers are able to address 
identified inequities. One commenter recommended that CMS include 
education, training, and resources for implementation of an equity 
score.
    A few commenters noted the challenge of developing a scoring 
methodology that could address risk across different factors. A few 
commenters questioned whether the score would be meaningful for 
patients. A few commenters expressed concern for public reporting of a 
Facility Equity Score, noting that it might be misleading to patients 
and may not reflect quality of care because facilities are limited in 
their ability to influence disparities that impact health outcomes. One 
commenter expressed the belief that a Facility Equity Score is 
premature, and that CMS should focus on establishing the right set of 
patient characteristics and contrasting them with meaningful clinical 
and consumer measures in order to develop a meaningful scoring 
methodology to propose in future notice and comment rulemaking. One 
commenter expressed caution that the component measures should reflect 
actual differences in care provided by ESRD facilities and not factors 
outside of those facilities' control, believing the inclusion of 
measures not much under the control of ESRD facilities will penalize 
those facilities serving a large number of ``vulnerable'' patients and 
not really speak to issues of equity in the care provided. This 
commenter recommended that measures are selected carefully to reflect 
activities and factors that are under facilities' control and then 
apply all of the standard tools of quality improvement. One commenter 
expressed its belief that the use of an imputed race/ethnicity 
methodology risks misattributing people to the wrong categories, and 
carrying that over into a facility equity score could lead to incorrect 
or misguided responses. This commenter recommended a careful, inclusive 
development process to avoid establishing processes and metrics that 
exacerbate harms and recommended a CMMI initiative to test and shape 
reporting.
    A few commenters expressed support for the production of reports to 
help facilities, patients and payers understand the disparities in 
their patient populations. A few commenters noted that many barriers 
such as anti-kickback rules and other regulations prevent facilities 
from providing additional services and supports that would help to 
address health disparities, and recommended that CMS work to find ways 
to remove these barriers. A few commenters recommended that CMS provide 
support to facilities in order to help them close gaps in health 
equity. One

[[Page 61937]]

commenter recommended that additional resources be allocated to help 
assist and support facilities in their health equity goals, such as 
taking money from ESRD QIP penalties to reward facilities that attain 
the benchmarks and also allocate funds to help low performing 
facilities improve. One commenter noted that anything that requires 
additional staff time and effort without either additional payment or 
some tangible savings elsewhere, will not be sustainable. This 
commenter gave examples of care coordination, more time in patient 
education, more frequent patient home visits, and additional electronic 
home monitoring, as potential paths to equity improvement that require 
additional funding.
    We appreciate all of the comments and interest in this topic. We 
believe that this input is very valuable in the continuing development 
of the CMS health equity quality measurement efforts. We will continue 
to take all concerns, comments, and suggestions into account for future 
development and expansion of our health equity quality measurement 
efforts.
    We also received comments on the general topic of health equity in 
the ESRD QIP.
    Comments: Many commenters expressed overall support of CMS' goals 
to advance health equity. There were a few comments regarding the need 
to further extend and specify the definition of equity provided in the 
proposed rule. Commenters also noted that equity initiatives should be 
based on existing disparities and population health goals, be mindful 
of the needs of the communities served, and work to bridge dialysis 
facilities with community-based providers. Several commenters 
recommended that CMS further investigate ways to provide outreach and 
education aimed at slowing down the progress of chronic kidney disease 
and address health disparities before dialysis is necessary. Several 
commenters encouraged CMS to be mindful about whether collection of 
additional quality measures and standardized patient assessment 
elements might increase provider burden.
    We appreciate all of the comments and interest in this topic. We 
believe that this input is very valuable in the continuing development 
of the CMS health equity quality measurement efforts. We will continue 
to take all concerns, comments, and suggestions into account for future 
development.
2. COVID-19 Vaccination Measures Request for Information
a. Background
    On January 31, 2020, the Secretary declared a PHE for the U.S. in 
response to the global outbreak of SARS-CoV-2, a novel (new) 
coronavirus that causes a disease named ``coronavirus disease 2019'' 
(COVID-19).\201\ COVID-19 is a contagious respiratory infection \202\ 
that can cause serious illness and death. Older individuals and those 
with underlying medical conditions are considered to be at higher risk 
for more serious complications from COVID-19.\203\
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    \201\ U.S. Dept of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response. (2020). 
Determination that a Public Health Emergency Exists. Available at: 
https://www.phe.gov/emergency/news/healthactions/phe/Pages/2019-nCoV.aspx.
    \202\ Centers for Disease Control and Prevention. (2020). Your 
Health: Symptoms of Coronavirus. Available at: https://www.cdc.gov/coronavirus/2019-ncov/symptoms-testing/symptoms.html.
    \203\ Ibid.
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    As of April 2, 2021, the U.S. reported over 30 million cases of 
COVID-19 and over 550,000 COVID-19 deaths.\204\ Hospitals and health 
systems saw significant surges of COVID-19 patients as community 
infection levels increased.\205\ From December 2, 2020 through January 
30, 2021, more than 100,000 Americans were in the hospital with COVID-
19 at the same time.\206\ As of September 16, 2021, the U.S. has 
reported over 41.5 million cases of COVID-19 and over 666,000 COVID-19 
deaths.\207\
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    \204\ Centers for Disease Control and Prevention. (2020). CDC 
COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
    \205\ Associated Press. Tired to the Bone. Hospitals Overwhelmed 
with Virus Cases. November 18, 2020. Accessed on December 16, 2020, 
at https://apnews.com/article/hospitals-overwhelmed-coronavirus-cases-74a1f0dc3634917a5dc13408455cd895. Also see: New York Times. 
Just how full are U.S. intensive care units? New data paints an 
alarming picture. November 18, 2020. Accessed on December 16, 2020, 
at: https://www.nytimes.com/2020/12/09/world/just-how-full-are-us-intensive-care-units-new-data-paints-an-alarming-picture.html.
    \206\ US Currently Hospitalized [verbar] The COVID Tracking 
Project. Accessed January 31, 2021 at: https://covidtracking.com/data/charts/us-currently-hospitalized.
    \207\ Centers for Disease Control and Prevention. (2021). CDC 
COVID Data Tracker. Available at: https://covid.cdc.gov/covid-data-tracker/#cases_casesper100klast7days.
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    Evidence indicates that COVID-19 primarily spreads when individuals 
are in close contact with one another.\208\ The virus is typically 
transmitted through respiratory droplets or small particles created 
when someone who is infected with the virus coughs, sneezes, sings, 
talks or breathes.\209\ Thus, the CDC advises that infections mainly 
occur through exposure to respiratory droplets when a person is in 
close contact with someone who has COVID-19.\210\ Although less common, 
COVID-19 can also spread when individuals are not in close contact if 
small droplets or particles containing the virus linger in the air 
after the person who is infected has left the space.\211\ Another means 
of less common transmission is contact with a contaminated 
surface.\212\
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    \208\ Centers for Disease Control and Prevention. (2021). How 
COVID-19 Spreads. Accessed on April 3, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \209\ Ibid.
    \210\ Ibid.
    \211\ Ibid.
    \212\ Ibid.
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    Subsequent to the publication of the proposed rule, the CDC 
confirmed that the three main ways that COVID-19 is spread are: (1) 
Breathing in air when close to an infected person who is exhaling small 
droplets and particles that contain the virus; (2) Having these small 
droplets and particles that contain virus land on the eyes, nose, or 
mouth, especially through splashes and sprays like a cough or sneeze; 
and (3) Touching eyes, nose, or mouth with hands that have the virus on 
them.\213\ According to the CDC, those at greatest risk of infection 
are persons who have had prolonged, unprotected close contact (that is, 
within 6 feet for 15 minutes or longer) with an individual with 
confirmed SARS-CoV-2 infection, regardless of whether the individual 
has symptoms.\214\ Although personal protective equipment (PPE) and 
other infection-control precautions can reduce the likelihood of 
transmission in health care settings, COVID-19 can spread between 
healthcare personnel (HCP) and patients, or from patient to patient 
given the close contact that may occur during the provision of 
care.\215\ The CDC has emphasized that health care settings can be 
high-risk places for COVID-19 exposure and transmission.\216\
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    \213\ Centers for Disease Control and Prevention. (2021). How 
COVID-19 Spreads. Accessed on July 15, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/how-covid-spreads.html.
    \214\ Centers for Disease Control and Prevention. (2021). When 
to Quarantine. Accessed on April 2, 2021 at: https://www.cdc.gov/coronavirus/2019-ncov/if-you-are-sick/quarantine.html.
    \215\ Centers for Disease Control and Prevention. (2021). 
Interim U.S. Guidance for Risk Assessment and Work Restrictions for 
Healthcare Personnel with Potential Exposure to COVID-19. Accessed 
on April 2 at: https://www.cdc.gov/coronavirus/2019-ncov/hcp/faq.html#Transmission.
    \216\ Dooling, K, McClung, M, et al. ``The Advisory Committee on 
Immunization Practices' Interim Recommendations for Allocating 
Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb 
Mortal Wkly Rep. 2020; 69(49): 1857-1859.

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[[Page 61938]]

    Vaccination is a critical part of the nation's strategy to 
effectively counter the spread of COVID-19 and ultimately help restore 
societal functioning.\217\ On December 11, 2020, FDA issued the first 
Emergency Use Authorization (EUA) for a COVID-19 vaccine in the 
U.S.\218\ Subsequently, FDA issued EUAs for additional COVID-19 
vaccines and approved a vaccine.\219\
---------------------------------------------------------------------------

    \217\ Centers for Disease Control and Prevention. (2020). COVID-
19 Vaccination Program Interim Playbook for Jurisdiction Operations. 
Accessed on April 3, 2021 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
    \218\ U.S. Food and Drug Administration. (2020). Pfizer-BioNTech 
COVID-19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/150386/download. (as reissued on September 22, 
2021)
    \219\ U.S. Food and Drug Administration. (2020). Moderna COVID-
19 Vaccine EUA Letter of Authorization. Available at https://www.fda.gov/media/144636/download (as reissued on August 12, 2021); 
U.S. Food and Drug Administration. (2021). Janssen COVID-19 Vaccine 
EUA Letter of Authorization. Available at https://www.fda.gov/media/146303/download (as reissued on June 10, 2021). FDA Approves First 
COVID-19 Vaccine, Available at https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine.
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    As part of its national strategy to address COVID-19, the Biden 
Administration stated that it would work with states and the private 
sector to execute an aggressive vaccination strategy and outlined a 
goal of administering 200 million shots in 100 days.\220\ After 
achieving this goal,\221\ the Biden Administration announced a new goal 
to administer at least one COVID-19 vaccine shot to 70 percent of the 
U.S. adult population by July 4, 2021.\222\ Although the goal of the 
U.S. government is to ensure that every American who wants to receive a 
COVID-19 vaccine can receive one, Federal agencies recommended that 
early vaccination efforts focus on those critical to the PHE response, 
including HCP providing direct care to patients with COVID-19, and 
individuals at highest risk for developing severe illness from COVID-
19.\223\ For example, the CDC's Advisory Committee on Immunization 
Practices (ACIP) recommended that HCP should be among those individuals 
prioritized to receive the initial, limited supply of the COVID-19 
vaccination, given the potential for transmission in health care 
settings and the need to preserve health care system capacity.\224\ 
Research suggests most states followed this recommendation,\225\ and 
HCP began receiving the vaccine in mid-December of 2020.\226\ Although 
the vaccination strategy for individuals at highest risk for developing 
severe illness from COVID-19, including ESRD patients, has varied from 
State to State,\227\ ACIP recommendations indicated that ESRD patients 
would be offered the COVID-19 vaccine based on their high-risk status 
as part of phase 1c.\228\
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    \220\ The White House. Remarks by President Biden on the COVID-
19 Response and the State of Vaccinations. Accessed on April 3, 2021 
at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/03/29/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations/.
    \221\ The White House. Remarks by President Biden on the COVID-
19 Response and the State of Vaccinations. Accessed on June 2, 2021 
at: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/21/remarks-by-president-biden-on-the-covid-19-response-and-the-state-of-vaccinations-2/.
    \222\ The White House. Remarks by President Biden on the COVID-
19 Response and the State of Vaccinations. Accessed on June 4, 2021, 
at: https://www.whitehouse.gov/briefing-room/statements-releases/2021/05/04/fact-sheet-president-biden-to-announce-goal-to-administer-at-least-one-vaccine-shot-to-70-of-the-u-s-adult-population-by-july-4th/.
    \223\ Health and Human Services, Department of Defense. (2020) 
From the Factory to the Frontlines: The Operation Warp Speed 
Strategy for Distributing a COVID-19 Vaccine. Accessed December 18 
at: https://www.hhs.gov/sites/default/files/strategy-for-distributing-covid-19-vaccine.pdf; Centers for Disease Control 
(2020). COVID-19 Vaccination Program Interim Playbook for 
Jurisdiction Operations. Accessed December 18 at: https://www.cdc.gov/vaccines/imz-managers/downloads/COVID-19-Vaccination-Program-Interim_Playbook.pdf.
    \224\ Dooling, K, McClung, M, et al. ``The Advisory Committee on 
Immunization Practices' Interim Recommendations for Allocating 
Initial Supplies of COVID-19 Vaccine--United States, 2020.'' Morb. 
Mortal Wkly Rep. 2020; 69(49): 1857-1859. ACIP also recommended that 
long-term care residents be prioritized to receive the vaccine, 
given their age, high levels of underlying medical conditions, and 
congregate living situations make them high risk for severe illness 
from COVID-19.
    \225\ Kates, J, Michaud, J, Tolbert, J. ``How Are States 
Prioritizing Who Will Get the COVID-19 Vaccine First? '' Kaiser 
Family Foundation. December 14, 2020. Accessed on December 16 at 
https://www.kff.org/policy-watch/how-are-states-prioritizing-who-will-get-the-covid-19-vaccine-first/.
    \226\ Associated Press. `Healing is Coming:' US Health Workers 
Start Getting Vaccine. December 15, 2020. Accessed on December 16 
at: https://apnews.com/article/us-health-workers-coronavirus-vaccine-56df745388a9fc12ae93c6f9a0d0e81f.
    \227\ Kates, J, Michaud, J, Tolbert, J. ``The COVID-19 Vaccine 
Priority Line Continues to Change as States Make Further Updates.'' 
Kaiser Family Foundation. January 21, 2021. Accessed on January 29 
at https://www.kff.org/policy-watch/the-covid-19-vaccine-priority-line-continues-to-change-as-states-make-further-updates/.
    \228\ Dooling K, Marin M, Wallace M, et al. ``The Advisory 
Committee on Immunization Practices' Updated Interim Recommendation 
for Allocation of COVID-19 Vaccine--United States, December 2020.'' 
MMWR Morb Mortal Wkly Rep 2021; 69:1657-1660. ACIP recommended that 
the COVID-19 vaccine should be offered to persons aged >=75 years 
and non-health care frontline essential workers in Phase 1b, and to 
persons aged 16-64 years with high-risk medical conditions in Phase 
1c.
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    As of July 30, 2021 the CDC reported that over 344 million doses of 
COVID-19 vaccine had been administered, and approximately 164.2 million 
people had received a complete vaccination course.\229\ President Biden 
indicated on April 6, 2021 that the U.S. has sufficient vaccine supply 
to make every adult eligible to receive a vaccine beginning April 19, 
2021.\230\ Furthermore, on March 25, 2021, the Biden Administration 
announced a new partnership with dialysis facilities to provide COVID-
19 vaccinations directly to people receiving dialysis and HCP in 
dialysis facilities.\231\ Finally, as part of the Biden 
Administration's efforts to vaccinate those who are still unvaccinated 
through increasing the number of Americans covered by vaccination 
requirements,\232\ on September 9, 2021, the Biden Administration 
announced that COVID-19 vaccination will be required of all staff 
within Medicare and Medicaid-certified facilities to protect both 
patients and HCP against COVID-19.\233\
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    \229\ Centers for Disease Control and Prevention. COVID Data 
Tracker. COVID-19 Vaccinations in the United States. Accessed June 
23, 2021 at: https://covid.cdc.gov/covid-data-tracker/#vaccinations.
    \230\ The White House. Remarks by President Biden Marking the 
150 Millionth COVID-19 Vaccine Shot. Accessed April 8, 2021 at: 
https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/04/06/remarks-by-president-biden-marking-the-150-millionth-covid-19-vaccine-shot/.
    \231\ The White House. FACT SHEET: Biden Administration 
Announces Historic $10 Billion Investment to Expand Access to COVID-
19 Vaccines and Build Vaccine Confidence in Hardest-Hit and Highest-
Risk Communities. March 25, 2021. Available at: https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/25/fact-sheet-biden-administration-announces-historic-10-billion-investment-to-expand-access-to-covid-19-vaccines-and-build-vaccine-confidence-in-hardest-hit-and-highest-risk-communities/.
    \232\ The White House. Path Out of the Pandemic: President 
Biden's COVID-19 Action Plan. Accessed on October 14, 2021. 
Available at: https://www.whitehouse.gov/covidplan/#vaccinate.
    \233\ CMS. Press Release: Biden-Harris Administration to Expand 
Vaccination Requirements for Health Care Settings. September 9, 
2021. Available at: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-expand-vaccination-requirements-health-care-settings. In order to implement this plan, CMS is working with 
the CDC to develop an Interim Final Rule with Comment Period that 
will extend emergency regulations to require vaccination among staff 
in a wide range of healthcare settings including dialysis 
facilities. This action will create a consistent standard across the 
country, while giving patients assurance of the vaccination status 
of those delivering care.
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b. COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) 
Measure
    In the CY 2022 ESRD PPS proposed rule (86 FR 36369), we stated our 
belief that it is important to incentivize and track HCP vaccination in 
dialysis facilities through quality measurement in order to protect 
health care workers, patients, and caregivers, and to help sustain the 
ability of these facilities to

[[Page 61939]]

continue serving their communities throughout the PHE and beyond. We 
recognize the importance of COVID-19 vaccination, and have finalized 
proposals to include a COVID-19 HCP vaccination measure in various pay 
for reporting programs, such as the Inpatient Psychiatric Facility 
Quality Reporting Program (86 FR 42633 through 42640), the Hospital 
Inpatient Quality Reporting Program (86 FR 45374 through 45382), the 
PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program (86 FR 
45428 through 45434), the Long-Term Care Hospital Quality Reporting 
Program (LTCH QRP) (86 FR 45438 through 45446), the Inpatient 
Rehabilitation Facility Quality Reporting Program (IRF QRP) (86 FR 
42385 through 42396), and the Skilled Nursing Facility Quality 
Reporting Program (86 FR 42480 through 42489). In the proposed rule, we 
noted that there is not a pay for reporting program under the ESRD PPS, 
however, we stated our belief that the public reporting of vaccination 
data on Dialysis Facility Compare is important and would help to inform 
patients of a facility's COVID-19 vaccination rates of HCP. Currently, 
there is a measure for HCP \234\ and another for patient COVID-19 
vaccination \235\ rates and such measures are currently reported to 
CDC's National Healthcare Safety Network via ESRD Networks. The two 
measures track the proportions of a facility's HCP and patient 
population, respectively, that have been fully vaccinated against 
COVID-19. Facilities were able to begin weekly COVID-19 vaccination 
reporting for HCP in December 2020,\236\ and were able to begin weekly 
COVID-19 vaccination reporting for patients in March 2021.\237\ When 
the proposed rule was published, we noted that 89 percent of ESRD 
facilities were reporting HCP vaccination rates and almost 95 percent 
of ESRD facilities were reporting patient vaccination rates on these 
measures. In the proposed rule (86 FR 36369), we stated that we were 
evaluating options for publicly reporting the data on official CMS 
datasets that compare the quality of care provided in Medicare-
certified dialysis facilities nationwide. We further stated that we 
were also exploring the potential future inclusion of a COVID-19 
vaccination measure to the ESRD QIP. Therefore, we sought public 
comment on adding a new measure, COVID-19 Vaccination Coverage Among 
HCP, to the ESRD QIP measure set in the next rulemaking cycle. The 
measure would assess the proportion of a facility's health care 
workforce that has been vaccinated against COVID-19.
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    \234\ https://www.cdc.gov/nhsn/hps/weekly-covid-vac/index.html.
    \235\ https://www.cdc.gov/nhsn/dialysis/pt-covid-vac/index.html.
    \236\ https://www.cdc.gov/nhsn/pdfs/hps/covidvax/weekly-covid-guidance-508.pdf.
    \237\ https://www.cdc.gov/nhsn/pdfs/dialysis/covidvax/getting-started-508.pdf.
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    HCP are at risk of carrying COVID-19 infection to patients, 
experiencing illness or death as a result of COVID-19 themselves, and 
transmitting it to their families, friends, and the general public. In 
the proposed rule (86 FR 36369), we stated our belief that facilities 
should track the level of vaccination among their HCP as part of their 
efforts to assess and reduce the risk of transmission of COVID-19 
within their facilities. HCP vaccination can potentially reduce illness 
that leads to work absence and limit disruptions to care.\238\ Data 
from influenza vaccination demonstrates that provider uptake of the 
vaccine is associated with that provider recommending vaccination to 
patients,\239\ and we stated our belief that HCP COVID-19 vaccination 
in dialysis facilities could similarly increase uptake among that 
patient population. We also stated our belief that publishing the HCP 
vaccination rates would be helpful to many patients, including those 
who are at high-risk for developing serious complications from COVID-
19, as they choose facilities from which to seek treatment. Under CMS' 
Meaningful Measures Framework, the COVID-19 measure would address the 
quality priority of ``Promoting Effective Prevention and Treatment of 
Chronic Disease'' through the Meaningful Measures Area of ``Preventive 
Care.''
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    \238\ Centers for Disease Control and Prevention. Overview of 
Influenza Vaccination among Health Care Personnel. October 2020. 
(2020) Accessed March 16, 2021 at: https://www.cdc.gov/flu/toolkit/long-term-care/why.htm.
    \239\ Measure Application Committee Coordinating Committee 
Meeting Presentation. March 15, 2021. (2021) Accessed March 16, 2021 
at: http://www.qualityforum.org/Project_Pages/MAP_Coordinating_Committee.aspx.
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c. COVID-19 Vaccination Coverage for Patients in End-Stage Renal 
Disease (ESRD) Facilities Measure
    In the CY 2022 ESRD PPS proposed rule (86 FR 36370), we stated our 
belief that it is important to encourage patient vaccination in 
dialysis facilities in order to protect health care workers, patients, 
and caregivers, and to help sustain the ability of these facilities to 
continue serving their communities throughout the PHE and beyond. 
COVID-19 can cause outbreaks in ESRD facilities, and may 
disproportionately affect ESRD patients due to the nature of the 
treatment and sharing of common spaces.\240\ Many patients treated in 
ESRD facilities have other underlying chronic conditions, and therefore 
are highly susceptible to illness and disease.\241\ Sufficient 
vaccination coverage among patients in ESRD facilities may reduce 
transmission of SARS-CoV-2, thereby protecting them from COVID-19 
mortality. Therefore, we sought public comment on adding new measure, 
COVID-19 Vaccination Coverage Among Patients, to the ESRD QIP measure 
set in future rulemaking. The measure would assess the proportion of a 
facility's patient population that has been vaccinated against COVID-
19.
---------------------------------------------------------------------------

    \240\ Verma, A., Patel, A., Tio, M., Waikar, S., ``Caring for 
Dialysis Patients in a Time of COVID-19''. Kidney Medicine, Volume 
2, Issue 6, 2020, Pages 787-792, ISSN 2590-0595. Available at 
https://doi.org/10.1016/j.xkme.2020.07.006.
    \241\ Ibid.
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    In the proposed rule, we stated our belief that facilities should 
track the level of vaccination among their patients as part of their 
efforts to assess and reduce the risk of transmission of COVID-19 
within their facilities. We also expressed our belief that publishing 
the vaccination rates would be helpful to many ESRD patients, including 
those who are at high-risk for developing serious complications from 
COVID-19, as they choose facilities from which to seek treatment. Under 
CMS' Meaningful Measures Framework, the COVID-19 measure addresses the 
quality priority of ``Promoting Effective Prevention and Treatment of 
Chronic Disease'' through the Meaningful Measures Area of ``Preventive 
Care.''
d. Review by the Measures Application Partnership and NQF
    The COVID-19 HCP vaccination measure and the COVID-19 patient 
vaccination measure were included on the publicly available ``List of 
Measures under Consideration for December 21, 2020'' (MUC List), a list 
of measures under consideration for use in various Medicare 
programs.\242\ When the Measure Applications Partnership Hospital 
Workgroup convened on January 11, 2021, it reviewed measures on the MUC 
List including the two COVID-19 vaccination measures. The Measure 
Applications Partnership Hospital Workgroup recognized that the 
proposed measures represent a promising effort to advance measurement 
for an evolving national pandemic and that it would bring value to the 
ESRD QIP measure set by

[[Page 61940]]

providing transparency about an important COVID-19 intervention to help 
prevent infections in HCP and patients.\243\ The Measure Applications 
Partnership Hospital Workgroup also stated that collecting information 
on COVID-19 vaccination coverage among HCP and ESRD patients, and 
providing feedback to facilities, will allow facilities to benchmark 
coverage rates and improve coverage in their facility. The Measure 
Applications Partnership Hospital Workgroup further noted that reducing 
rates of COVID-19 in HCP and ESRD patients may reduce transmission 
among a patient population that is highly susceptible to illness and 
disease, and also reduce instances of staff shortages due to 
illness.\244\
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    \242\ National Quality Forum. List of Measures Under 
Consideration for December 21, 2020. Accessed at: https://www.cms.gov/files/document/measures-under-consideration-list-2020-report.pdf on January 29 2021.
    \243\ Measure Applications Partnership. MAP Preliminary 
Recommendations 2020-2021. Accessed on January 24, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \244\ Ibid.
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    In its preliminary recommendations, the Measure Applications 
Partnership Hospital Workgroup did not support these two measures for 
rulemaking, subject to potential for mitigation.\245\ To mitigate its 
concerns, the Measure Applications Partnership Hospital Workgroup 
believed that both measures needed well-documented evidence, finalized 
specifications, testing, and NQF endorsement prior to 
implementation.\246\ Subsequently, the Measure Applications Partnership 
Coordinating Committee met on January 25, 2021, and reviewed the COVID-
19 Vaccination Coverage Among HCP measure and the COVID-19 Vaccination 
Coverage for Patients in ESRD Facilities Measure. In the 2020-2021 
Measure Applications Partnership Final Recommendations, Measure 
Applications Partnership offered conditional support for rulemaking 
contingent on CMS bringing the measures back to Measure Applications 
Partnership once the specifications are further refined.\247\ The 
Measure Applications Partnership specifically stated, ``the incomplete 
specifications require immediate mitigation and further development 
should continue.'' \248\ The Measure Applications Partnership further 
noted that the measures would add value to the ESRD QIP measure set by 
providing visibility into an important intervention to limit COVID-19 
infections in HCP and the ESRD patients for whom they provide 
care.\249\ CMS brought both measures back to the Measure Applications 
Partnership on March 15, 2021 to provide additional information and 
continue discussing mitigation.
---------------------------------------------------------------------------

    \245\ Ibid.
    \246\ Ibid.
    \247\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 3, 2021 at: http://www.qualityforum.org/Setting_Priorities/Partnership/Measure_Applications_Partnership.aspx.
    \248\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
    \249\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on February 23, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
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e. Request for Public Comment
    In the proposed rule, we sought public comment on potentially 
adding the two new COVID-19 vaccination measures discussed above, the 
COVID-19 vaccination measure for HCP and the COVID-19 vaccination 
measure for patients, to the ESRD QIP measure set.\250\
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    \250\ Specifications for both measures available at: https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=94650.
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    We were also interested in public comment on data collection, 
submission, and reporting for the COVID-19 vaccination measure for HCP 
and the COVID-19 vaccination measure for patients. For example, we 
stated that we were considering requiring reporting for these measures 
on an annual basis for the performance period for each calendar year 
corresponding to the associated payment year, and the reporting period 
would be January 1 through December 31 annually. Based on the measures 
currently being developed by the CDC that were submitted to the Measure 
Applications Partnership, facilities would report the measures through 
the National Healthcare Safety Network (NHSN) web-based surveillance 
system. We also sought public comment from stakeholders on other ways 
to collect data on COVID-19 vaccination rates at dialysis facilities 
for ESRD QIP purposes and their associated costs and burdens. Given the 
immediacy of the PHE for COVID-19, as well as the importance of 
continuing to monitor and make publicly available COVID-19 vaccination 
rates as the PHE ends, we stated that we anticipate rulemaking on this 
requirement in the CY 2023 rulemaking cycle.
    The comments we received and our responses are set forth below.
    Comment: Several commenters expressed support for future adoption 
of both COVID-19 vaccination measures. Several commenters expressed the 
belief that COVID-19 vaccination measures are important because they 
would help to prevent the spread of COVID-19 in a facility and would 
also help to prevent mortality due to the impact of COVID-19 on an 
immunocompromised patient population. A few commenters stated that such 
measures would help encourage COVID-19 vaccination for both staff and 
patients at ESRD facilities. One commenter noted that the nature of 
treatment sessions in the dialysis care setting may make other COVID-19 
mitigation strategies less effective.
    A few commenters expressed support for the possible adoption of 
both COVID-19 vaccination measures, noting that making such data 
publicly available would help patients make informed choices. A few 
commenters expressed support for reporting possible COVID-19 
vaccination measures through NHSN as it already does so and therefore 
would be less burdensome.
    Several commenters expressed support for tracking and reporting 
COVID-19 vaccination rates among HCPs and ESRD patients on Care Compare 
or Dialysis Facility Compare in order to help patients make informed 
decisions when choosing a dialysis facility. One commenter expressed 
support the application of a uniform reporting metric for COVID-19 
vaccination among HCPs and patients across all Medicare-covered health 
settings.
    A few commenters expressed support for all efforts to increase 
vaccination coverage among HCPs for their own safety and for patient 
safety as well. One commenter expressed its belief that all medically-
eligible HCPs should be vaccinated against COVID-19.
    A few commenters expressed support for the COVID-19 Vaccination 
among ESRD patients measure. One commenter expressed the belief that it 
may be useful for the public to know the percent of patients vaccinated 
at a facility.
    Response: We thank the commenters for their support, and will take 
commenters' feedback into consideration for future rulemaking.
    Comment: Although several commenters expressed support for 
vaccination efforts and the belief that patients and HCPs should follow 
CDC vaccination guidelines, these commenters did not support the 
inclusion of COVID-19 vaccination measures in the ESRD QIP. A few 
commenters recommended that COVID-19 vaccination measures should not be 
added to the ESRD QIP, noting the MAP's initial hesitancy to recommend 
the measures. A few commenters expressed the belief that such measures 
would not help to address vaccine hesitancy among patients and HCPs, 
and suggested that Federal agencies

[[Page 61941]]

coordinate vaccination education and outreach efforts instead. A few 
commenters expressed concern that including COVID-19 vaccination 
measures in the ESRD QIP would hold facilities accountable for 
vaccination rates of patients and HCPs, noting that the individual 
decision to get vaccinated is beyond the facility's control.
    One commenter recommended that such measures incorporate factors 
that take into account facility vaccination efforts, rather than a 
numeric threshold. One commenter expressed support for including the 
COVID-19 vaccination measures as performance measures in the ESRD QIP. 
One commenter recommended that such measures be included in the ESRD 
QIP as reporting measures.
    Response: We thank the commenters for their feedback, and will take 
this input into consideration for future rulemaking. We note that the 
MAP now recommends both COVID-19 vaccination measures for inclusion in 
the ESRD QIP.\251\ We also note that the COVID-19 vaccination measures 
that we describe in this final rule and are considering for adoption in 
future rulemaking would be reporting measures. Under these measures, 
facilities would only be required to report vaccination rates and would 
not be penalized based on the vaccination rates themselves.
---------------------------------------------------------------------------

    \251\ Measure Applications Partnership. 2020-2021 MAP Final 
Recommendations. Accessed on September 29, 2021 at: http://www.qualityforum.org/Project_Pages/MAP_Hospital_Workgroup.aspx.
---------------------------------------------------------------------------

    Comment: Several commenters expressed concern that establishing the 
specifications for such measures would be challenging due to changing 
COVID-19 vaccination guidelines and differences in regional policies, 
which may undermine the validity or reliability of a COVID-19 
vaccination measure. A few commenters requested that CMS provide more 
specific details regarding proposed vaccination measure specifications, 
including defined numerators and denominators, as well as inclusion and 
exclusion criteria.
    A few commenters expressed concern that defining the denominator 
for the COVID-19 HCP Vaccination measure will be challenging because 
many ESRD facilities are parts of larger organizations and may share 
staff who spend some time working in the ESRD unit or facility and time 
working elsewhere. One commenter requested that the possible COVID-19 
Vaccination among HCP measure limit data collection to HCPs employed by 
the dialysis organizations and only require the reporting of 
information within the facilities' purview, noting that the CDC is able 
to obtain non-clinic staff information directly from providers.
    Response: We thank the commenters for their feedback, and will take 
this input into consideration for future rulemaking. We acknowledge 
that measure specifications may evolve based on changes to COVID-19 
vaccination guidelines, and would provide more specific details 
regarding measure specifications in future rulemaking as part of our 
proposals to adopt the COVID-19 vaccination measures.
    Comment: A few commenters expressed concern that implementing such 
measures would result in staff quitting in order to avoid vaccination, 
which would in turn negatively impact patient care.
    Response: We acknowledge that staffing shortages are a national 
issue, especially for the healthcare system. However, we disagree that 
staffing shortages would impact patient safety more than unvaccinated 
HCPs. We believe that vaccination is one of the most effective tools 
right now for protecting an immunocompromised patient population that 
has particularly high mortality rates due to COVID-19 infection. We 
also note that the COVID-19 Vaccination among HCP measure that we are 
considering for future adoption would not require vaccination, but 
would rather require facilities to report vaccination rates.
    Comment: One commenter recommended that patients (such as children 
11 and under) who are not yet eligible for vaccination under an EUA or 
approval should be excluded from any vaccination measure.
    Response: The current COVID-19 Vaccination among Patients measure 
being considered for possible adoption in future rulemaking excludes 
patients who are ineligible for vaccination.
    Comment: A few commenters did not support the future inclusion of a 
COVID-19 Vaccination among Patients measure. One commenter acknowledged 
that a COVID-19 patient vaccination measure likely would marginally 
increase and sustain vaccination rates, but expressed concern that 
tying a COVID-19 patient vaccination measure to payment may have 
unintended consequences such as undermining patient autonomy and 
creating barriers to facility access for unvaccinated patients. One 
commenter did not support the COVID-19 vaccination measure for patients 
believing there is no point to collecting data that mostly reflects 
patient demographics based on vaccination status, not clinical quality. 
This commenter stated its belief that providers are already motivated 
to ensure their patients are vaccinated given the high COVID-19 
mortality rate among ESRD patients.
    Response: The COVID-19 patient vaccination measure that we are 
considering for adoption in future rulemaking is a reporting measure; 
facilities would only be required to report vaccination rates and would 
not be penalized based on actual vaccination rates. We agree that the 
COVID-19 vaccination measure for patients would collect data that 
indicates patient vaccination rates at an individual facility. However, 
we also believe that this measure would motivate providers to ensure 
their patients are vaccinated against COVID-19 and that this 
information is also relevant to patient safety since a facility's 
vaccination rates would be important for patients to know when choosing 
an individual facility for treatment.
3. Advancing to Digital Quality Measurement and the Use of Fast 
Healthcare Interoperability Resources (FHIR)
    We aim to move fully to digital quality measurement in CMS quality 
reporting and value-based purchasing programs by 2025. As part of this 
modernization of our quality measurement enterprise, we issued a 
request for information (RFI). The purpose of this RFI was to gather 
broad public input solely for planning purposes for our transition to 
digital quality measurement. Any updates to specific program 
requirements related to providing data for quality measurement and 
reporting provisions would be addressed through future rulemaking, as 
necessary. This RFI contained four parts:
     Background. This part provided information on our quality 
measurement programs and our goal to move fully to digital quality 
measurement by 2025. This part also provided a summary of other recent 
HHS policy developments that are advancing interoperability and could 
support our move towards full digital quality measurement.
     Definition of Digital Quality Measures (dQMs). This part 
provided a potential definition for dQMs. Specific requests for input 
are included in the section.
     Changes Under Consideration to Advance Digital Quality 
Measurement: Actions in Four Areas to Transition to Digital Quality 
Measures by 2025. This part introduced four possible steps that would 
enable transformation of CMS' quality measurement enterprise to be

[[Page 61942]]

fully digital by 2025. Specific requests for input are included in the 
section.
     Solicitation of Comments. This part listed all requests 
for input included in the above sections of this RFI.
a. Background
    As required by law, we implemented quality measurement programs and 
value-based purchasing programs across a broad range of inpatient, 
outpatient, and post-acute care (PAC) settings, consistent with our 
mission to improve the quality of health care for Americans through 
measurement, transparency, and increasingly, value-based purchasing. 
These quality programs are foundational for incentivizing value-based 
care, contributing to improvements in health care, enhancing patient 
outcomes, and informing consumer choice. We aim to move fully to 
digital quality measurement by 2025. We acknowledge providers within 
the various care and practice settings covered by our quality programs 
may be at different stages of readiness, and therefore, the timeline 
for achieving full digital quality measurement across our quality 
reporting programs may vary.
    We also continue to evolve the Medicare Promoting Interoperability 
Program that advances the use of certified electronic health record 
(EHR) technology, from an initial focus on electronic data capture to 
enhancing information exchange and expanding quality measurement (83 FR 
41634). However, reporting quality data via EHRs remains burdensome, 
and our current approach to quality measurement does not readily 
incorporate emerging data sources such as patient-reported outcomes 
(PRO) and patient-generated health data (PGHD).\252\ There is a need to 
streamline our approach to data collection, calculation, and reporting 
to fully leverage clinical and patient-centered information for 
measurement, improvement, and learning.
---------------------------------------------------------------------------

    \252\ What are patient generated health data: https://www.healthit.gov/topic/otherhot-topics/what-are-patient-generated-health-data.
---------------------------------------------------------------------------

    Additionally, advancements in technical standards and regulatory 
initiatives to improve interoperability of healthcare data are creating 
an opportunity to significantly improve our quality measurement 
systems. In May 2020, we finalized interoperability requirements in the 
CMS Interoperability and Patient Access final rule (85 FR 25510) to 
support beneficiary access to data held by certain payers. At the same 
time, the Office of the National Coordinator for Health Information 
Technology (ONC) finalized policies in the ONC 21st Century Cures Act 
final rule (85 FR 25642) to advance the interoperability of health IT 
as defined in section 4003 of the Cures Act, including the ``complete 
access, exchange, and use of all electronically accessible health 
information.'' Closely working with ONC, we collaboratively identified 
HL7 Fast Healthcare Interoperability Resources (FHIR[supreg]) Release 
4.0.1 as the standard to support Application Programming Interface 
(API) policies in both rules. ONC, on behalf of HHS, adopted the HL7 
FHIR Release 4.0.1 for APIs and related implementation specifications 
at 45 CFR 170.215. We believe the FHIR standard has the potential to be 
a more efficient and modular standard to enable APIs. We also believe 
this standard enables collaboration and information sharing, which is 
essential for delivering high-quality care and better outcomes at a 
lower cost. By aligning technology requirements for payers, health care 
providers, and health IT developers, HHS can advance-an interoperable 
health IT infrastructure that ensures providers and patients have 
access to health data when and where it is needed.
    In the ONC 21st Century Cures Act final rule ONC adopted a 
``Standardized API for Patient and Population Services'' certification 
criterion for health IT that requires the use of the FHIR Release 4 and 
several implementation specifications. Health IT certified to this 
criterion will offer single patient and multiple patient services that 
can be accessed by third party applications (85 FR 25742).\253\ The ONC 
21st Century Cures Act final rule also requires health IT developers 
update their certified health IT to support the U.S. Core Data for 
Interoperability (USCDI) standard.\254\ The scope of patient data 
identified in the USCDI and the data standards that support this data 
set are expected to evolve over time, starting with data specified in 
Version 1 of the USCDI. In November 2020, ONC issued an interim final 
rule with comment period extending the date when health IT developers 
must make technology meeting updated certification criteria available 
under the ONC Health IT Certification Program until December 31, 2022 
(85 FR 70064).\255\
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    \253\ Application Programming Interfaces (API) Resource Guide, 
Version 1.0. Available at: https://www.healthit.gov/sites/default/files/page/2020-11/API-Resource-Guide_v1_0.pdf.
    \254\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
    \255\ Information Blocking and the ONC Health IT Certification 
Program: Extension of Compliance Dates and Timeframes in Response to 
the Covid-19 Public Health Emergency. https://www.govinfo.gov/content/pkg/FR-2020-11-04/pdf/2020-24376.pdf.
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    The CMS Interoperability and Patient Access final rule (85 FR 
25510) and program policies build on the ONC 21st Century Cures Act 
final rule (85 FR 25642). The CMS Interoperability and Patient Access 
final rule and policies require certain payers (for example, Medicare 
Advantage organizations, Medicaid, and CHIP fee for service programs, 
Medicaid managed care plans, CHIP managed care entities, and Qualified 
Health Plan [QHP] issuers on the Federally-facilitated Exchanges 
[FFEs]) to implement and maintain a standards-based Patient Access API 
using HL7 FHIR Release 4.0.1 to make available certain data to their 
enrollees and beneficiaries (called ``patients'' in the CMS 
interoperability rule). These certain data include data concerning 
claims and encounters, with the intent to ensure access to their own 
health care information through third-party software applications. The 
rule also established new Conditions of Participation for Medicare and 
Medicaid participating hospitals, psychiatric hospitals, and critical 
access hospitals (CAHs), requiring them to send electronic 
notifications to another healthcare facility or community provider or 
practitioner when a patient is admitted, discharged, or transferred (85 
FR 25603). In the CY 2021 Physician Fee Schedule (PFS) final rule (85 
FR 84472), we finalized a policy to align the certified EHR technology 
required for use in the Promoting Interoperability programs and the 
MIPS Promoting Interoperability performance category with the updates 
to health IT certification criteria finalized in the ONC 21st Century 
Cures Act. Under this policy, eligible clinicians, MIPS eligible 
clinicians, and eligible hospitals and CAHs participating in the 
Promoting Interoperability Programs, must use technology meeting the 
updated certification criteria for performance and reporting periods 
beginning in 2023 (85 FR 84825).
    The use of APIs can also reduce long-standing barriers to quality 
measurement. Currently, health IT developers are required to implement 
individual measure specifications within their health IT product. The 
health IT developer must also accommodate how that product connects 
with the unique variety of systems within a specific care setting.\256\

[[Page 61943]]

This may be further complicated by systems which integrate a wide range 
of data schemas. This process is burdensome and costly, and it is 
difficult to reliably obtain high quality data across systems. As 
health IT developers map their health IT data to the FHIR standard and 
related implementation specifications, APIs can enable these data to be 
easily accessible for measurement or other use cases, such as care 
coordination, clinical decision support, and supporting patient access.
---------------------------------------------------------------------------

    \256\ The Office of the National Coordinator for Health 
Information Technology, Strategy on Reducing Regulatory and 
Administrative Burden Relating to the Use of Health IT and EHRs, 
Final Report (Feb. 2020). Available at: https://www.healthit.gov/sites/default/files/page/2020-02/BurdenReport_0.pdf.
---------------------------------------------------------------------------

    We believe the emerging data standardization and interoperability 
enabled by APIs will support the transition to full digital quality 
measurement by 2025, and are committed to exploring and seeking input 
on potential solutions for the transition to digital quality 
measurement as described in this RFI.
b. Definition of Digital Quality Measures
    In the proposed rule, we sought to refine the definition of digital 
quality measures (dQMs) to further operationalize our objective of 
fully transitioning to dQMs by 2025. We previously noted dQMs use 
``sources of health information that are captured and can be 
transmitted electronically and via interoperable systems'' (85 FR 
84845). In this RFI, we sought input on future elaboration that would 
define a dQM as a software that processes digital data to produce a 
measure score or measure scores. Data sources for dQMs may include 
administrative systems, electronically submitted clinical assessment 
data, case management systems, EHRs, instruments (for example, medical 
devices and wearable devices), patient portals or applications (for 
example, for collection of patient-generated health data), health 
information exchanges (HIEs) or registries, and other sources. We also 
noted that dQMs are intended to improve the patient experience 
including quality of care, improve the health of populations, and/or 
reduce costs.
    We discuss one potential approach to developing dQM software in 
section IV.G.3.c. of this final rule. In this section, we sought 
comment on the potential definition of dQMs in this RFI.
    We also sought feedback on how leveraging advances in technology 
(for example, FHIR APIs) to access and electronically transmit 
interoperable data for dQMs could reinforce other activities to support 
quality measurement and improvement (for example, the aggregation of 
data across multiple data sources, rapid-cycle feedback, and alignment 
of programmatic requirements).
    The transition to dQMs relies on advances in data standardization 
and interoperability. As providers and payers work to implement the 
required advances in interoperability over the next several years, we 
will continue to support reporting of eCQMs through CMS quality 
reporting programs and through the Promoting Interoperability 
programs.\257\ These fully digital measures continue to be important 
drivers of interoperability advancement and learning. We are currently 
re-specifying and testing these measures to use FHIR rather than the 
currently adopted Quality Data Model (QDM) in anticipation of the wider 
use of FHIR standards. We intend to apply significant components of the 
output of this work, such as the re-specified measure logic and the 
learning done through measure testing with FHIR APIs, to define and 
build future dQMs that take advantage of the expansion of standardized, 
interoperable data.
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    \257\ eCQI Resource Center, https://ecqi.healthit.gov/.
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c. Changes Under Consideration To Advance Digital Quality Measurement: 
Potential Actions in Four Areas To Transition to Digital Quality 
Measures by 2025
    Building on the advances in interoperability and learning from 
testing of FHIR-converted eCQMs, we aim to move fully to dQMs, 
originating from sources of health information that are captured and 
can be transmitted electronically via interoperable systems, by 2025.
    To enable this transformation, we are considering further 
modernizing the quality measurement enterprise in four major ways: (1) 
Leverage and advance standards for digital data and obtain all EHR data 
required for quality measures via provider FHIR-based APIs; (2) 
redesign our quality measures to be self-contained tools; (3) better 
support data aggregation; and (4) work to align measure requirements 
across our reporting programs, other Federal programs and agencies, and 
the private sector where appropriate.
    These changes would enable us to collect and utilize more timely, 
actionable, and standardized data from diverse sources and care 
settings to improve the scope and quality of data used in quality 
reporting and payment programs, reduce quality reporting burden, and 
make results available to stakeholders in a rapid-cycle fashion. Data 
collection and reporting efforts would become more efficient, supported 
by advances in interoperability and data standardization. Aggregation 
of data from multiple sources would allow assessments of costs and 
outcomes to be measured across multiple care settings for an individual 
patient or clinical conditions. We believe that aggregating data for 
measurement can incorporate a more holistic assessment of an 
individual's health and healthcare and produce the rich set of data 
needed to enable patients and caregivers to make informed decisions by 
combining data from multiple sources (for example, patient reported 
data, EHR data, and claims data) for measurement.
    Perhaps most importantly, these steps would help us deliver on the 
full promise of quality measurement and drive us toward a learning 
health system that transforms healthcare quality, safety, and 
coordination and effectively measures and achieves value-based care. 
The shift from a static to a learning health system hinges on the 
interoperability of healthcare data, and the use of standardized data. 
dQMs would leverage this interoperability to deliver on the promise of 
a learning health system wherein standards-based data sharing and 
analysis, rapid-cycle feedback, and quality measurement and incentives 
are aligned for continuous improvement in patient-centered care. 
Similarly, standardized, interoperable data used for measurement can 
also be used for other use cases, such as clinical decision support and 
care coordination and care decision support, which impacts health care 
and care quality.
    We requested comments on four potential future actions that would 
enable transformation to a fully digital quality measurement enterprise 
by 2025.
(1) Leveraging and Advancing Standards for Digital Data and Obtaining 
All EHR Data Required for Quality Measures via Provider FHIR-Based APIs
    We are considering targeting the data required for our quality 
measures that utilize EHR data to be data retrieved via FHIR-based APIs 
based on standardized, interoperable data. Utilizing standardized data 
for EHR-based measurement (based on FHIR and associated implementation 
guides) and aligning where possible with interoperability requirements 
can eliminate the data collection burden providers currently experience 
with required chart-abstracted quality measures and reduce the burden 
of reporting digital quality measure results. We can fully leverage 
this advance to adapt eCQMs and expand to other

[[Page 61944]]

dQMs through the adoption of interoperable standards across other 
digital data sources. We are considering methods and approaches to 
leverage the interoperability data requirements for APIs set by the ONC 
21st Century Cures Act final rule for certified health technology to 
support modernization of CMS quality measure reporting. As discussed 
previously, these requirements will be included in certified technology 
in future years (85 FR 84825), including availability of data included 
in the USCDI via standards-based APIs, and CMS will require clinicians 
and hospitals participating in MIPS and the Promoting Interoperability 
Programs, respectively, to transition to use of certified technology 
updated consistent with the 2015 Cures Edition Update (85 FR 84825).
    Digital data used for measurement could expand beyond data captured 
in traditional clinical settings, administrative claims data, and EHRs. 
Many important data sources are not currently captured digitally, such 
as survey and PGHD. We intend to work to innovate and broaden the 
digital data used across the quality measurement enterprise beyond the 
clinical EHR and administrative claims. Agreed upon standards for these 
data, and associated implementation guides will be important for 
interoperability and quality measurement. We will consider developing 
clear guidelines and requirements for these digital data that align 
with interoperability requirements, for example, expressing in 
standards, exposing via APIs, and incentivizing technologies that 
innovate data capture and interoperability.
    High quality data are also essential for reliable and valid 
measurement. Hence, in implementing the shift to capture all clinical 
EHR data via FHIR-based APIs, we would support efforts to strengthen 
and test the quality of the data obtained through FHIR-based APIs for 
quality measurement. We currently conduct audits of electronic data 
with functions including checks for data completeness and data 
accuracy, confirmation of proper data formatting, alignment with 
standards, and appropriate data cleaning. These functions would 
continue and be applied to dQMs and further expanded to automate the 
manual validation of the data compared to the original data source (for 
example, the medical record) where possible. Analytic advancements such 
as natural language processing, big data analytics, and artificial 
intelligence, can support this evolution. These techniques can be 
applied to validating observed patterns in data and inferences or 
conclusions drawn from associations, as data are received, to ensure 
high quality data are used for measurement.
    We sought feedback on the goal of aligning data needed for quality 
measurement with interoperability requirements and the strengths and 
limitations of this approach. We also sought feedback on the importance 
of and approaches to supporting inclusion of PGHD and other currently 
non-standardized data. We also welcomed comment on approaches for 
testing data quality and validity.
(2) Redesigning Quality Measures To Be Self-Contained Tools
    We are considering approaches for deploying quality measures to 
take advantage of standardized data and interoperability requirements 
that have expanded flexibility and functionality compared to CMS' 
current eCQMs. We are considering defining and developing dQM software 
as end-to-end measure calculation solutions that retrieve data from 
primarily FHIR resources maintained by providers, payers, CMS, and 
others; calculate measure score(s); and produce reports. In general, we 
believe to optimize the use of standardized and interoperable data, the 
software solution for dQMs should do the following:
     Have the flexibility to support calculation of 
single or multiple quality measure(s).
     Perform three functions: (i) Obtain data via 
automated queries from a broad set of digital data sources (initially 
from EHRs, and in the future from claims, PRO, and PGHD); (ii) 
calculate the measure score according to measure logic; and (iii) 
generate measure score report(s).
     Be compatible with any data source systems that 
implement standard interoperability requirements.
     Exist separately from digital data source(s) and 
respect the limitations of the functionality of those data sources.
     Be tested and updated independently of the data 
source systems.
     Operate in accordance with health information 
protection requirements under applicable laws and comply with 
governance functions for health information exchange.
     Have the flexibility to be deployed by 
individual health systems, health IT vendors, data aggregators, and 
health plans; and/or run by CMS depending on the program and measure 
needs and specifications.
     Be designed to enable easy installation for 
supplemental uses by medical professionals and other non-technical end-
users, such as local calculation of quality measure scores or quality 
improvement.
     Have the flexibility to employ current and 
evolving advanced analytic approaches such as natural language 
processing.
     Be designed to support pro-competitive practices 
for development, maintenance, and implementation and diffusion of 
quality measurement and related quality improvement and clinical tools 
through for example the use of open-source core architecture.
    We sought comment on these suggested functionalities and other 
additional functionalities that quality measure tools should ideally 
have particularly in the context of the pending availability of 
standardized and interoperable data (for example, standardized EHR data 
available via FHIR-based APIs).
    We were also interested whether and how this more open, agile 
strategy may facilitate broader engagement in quality measure 
development, the use of tools developed for measurement for local 
quality improvement, and/or the application of quality tools for 
related purposes such as public health or research.
(3) Building a Pathway to Data Aggregation in Support of Quality 
Measurement
    Using multiple sources of collected data to inform measurement 
would reduce data fragmentation (or, different pieces of data regarding 
a single patient stored in many different places). Additionally, we are 
also considering expanding and establishing policies and processes for 
data aggregation and measure calculation by third-party aggregators 
that include, but are not limited to, HIEs and clinical registries. 
Qualified Clinical Data Registries and Qualified Registries that report 
quality measures for eligible clinicians in the Merit-based Incentive 
Payment System (MIPS) program are potential examples \258\ at 42 CFR 
414.1440(b)(2)(iv) and (v) and Sec.  414.1440(c)(2)(iii) and (iv) and 
can also support measure reporting. We are considering establishing 
similar policies for third-party aggregators to maintain the integrity 
of our measure reporting process and to encourage market innovation.
---------------------------------------------------------------------------

    \258\ Calendar Year (CY) 2021 Physician Fee Schedule Final Rule: 
Finalized (New and Updated) Qualified Clinical Data Registry (QCDR) 
and Qualified Registry Policies, https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1362/QCDR%20and%20QR%20Updates%202021%20Final%20Rule%20Fact%20Sheet.pdf.
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    We sought feedback on aggregation of data from multiple sources 
being used

[[Page 61945]]

to inform measurement. We also sought feedback on the role data 
aggregators can and should play in CMS quality measure reporting in 
collaboration with providers, and how we can best facilitate and enable 
aggregation.
(4) Potential Future Alignment of Measures Across Reporting Programs, 
Federal and State Agencies, and the Private Sector
    We are committed to using policy levers and working with 
stakeholders to solve the issue of interoperable data exchange and to 
transition to full digital quality measurement. We are considering the 
future potential development and multi-staged implementation of a 
common portfolio of dQMs across our regulated programs, agencies, and 
private payers. This common portfolio would require alignment of: (1) 
Measure concepts and specifications including narrative statements, 
measure logic, and value sets, and (2) the individual data elements 
used to build these measure specifications and calculate the measure 
logic. Further, the required data elements would be limited to 
standardized, interoperable data elements to the fullest extent 
possible; hence, part of the alignment strategy will be the 
consideration and advancement of data standards and implementation 
guides for key data elements. We would coordinate closely with quality 
measure developers, Federal and State agencies, and private payers to 
develop and to maintain a cohesive dQM portfolio that meets our 
programmatic requirements and that fully aligns across Federal and 
State agencies and payers to the extent possible.
    We intend for this coordination to be ongoing and allow for 
continuous refinement to ensure quality measures remain aligned with 
evolving healthcare practices and priorities (for example, PROs, 
disparities, care coordination), and track with the transformation of 
data collection, alignment with health IT module updates including 
capabilities and standards adopted by ONC (for example, standards to 
enable APIs). This coordination would build on the principles outlined 
in HHS' National Health Quality Roadmap.\259\ It would focus on the 
quality domains of safety, timeliness, efficiency, effectiveness, 
equitability, and patient-centeredness. It would leverage several 
existing Federal and public-private efforts including our Meaningful 
Measures 2.0 Framework; the Federal Electronic Health Record 
Modernization (DoD/VA); the Agency for Healthcare Research and 
Quality's Clinical Decision Support Initiative; the Centers for Disease 
Control and Prevention's Adapting Clinical Guidelines for the Digital 
Age initiative; the Core Quality Measure Collaborative, which convenes 
stakeholders from America's Health Insurance Plans (AHIP), CMS, NQF, 
provider organizations, private payers, and consumers and develops 
consensus on quality measures for provider specialties; and the NQF-
convened Measure Applications Partnership, which recommends measures 
for use in public payment and reporting programs. We would coordinate 
with HL7's ongoing work to advance FHIR resources in critical areas to 
support patient care and measurement such as social determinants of 
health. Through this coordination, we would identify which existing 
measures could be used or evolved to be used as dQMs, in recognition of 
current healthcare practice and priorities.
---------------------------------------------------------------------------

    \259\ Department of Health and Human Services, National Health 
Quality Roadmap (May 2020). Available at: https://www.hhs.gov/sites/default/files/national-health-quality-roadmap.pdf.
---------------------------------------------------------------------------

    This multi-stakeholder, joint Federal and industry, made possible 
and enabled by the pending advances towards true interoperability, 
would yield a significantly improved quality measurement enterprise. 
The success of the dQM portfolio would be enhanced by the degree to 
which the measures achieve our programmatic requirements for measures 
as well as the requirements of other agencies and payers.
    We sought feedback on initial priority areas for the dQM portfolio 
given evolving interoperability requirements (for example, measurement 
areas, measure requirements, tools, and data standards). We also sought 
to identify opportunities to collaborate with other Federal agencies, 
states, and the private sector to adopt standards and technology-driven 
solutions to address our quality measurement priorities across sectors.
d. Solicitation of Comments
    We plan to continue working with other agencies and stakeholders to 
coordinate and to inform any potential transition to dQMs by 2025. We 
have summarized the comments to this RFI below but note that we will 
not be responding to them in this final rule. We will actively consider 
all input as we develop future regulatory proposals or future 
subregulatory policy guidance. Any updates to specific program 
requirements related to quality measurement and reporting provisions 
would be addressed through separate and future notice-and-comment 
rulemaking, as necessary.
    As noted previously, we sought input on the future development of 
the following:
     Definition of Digital Quality Measures: We 
sought feedback on the following as described in section IV.G.3.c.(2).:
    ++ Do you have feedback on the dQM definition?
    ++ Does this approach to defining and deploying dQMs to interface 
with FHIR-based APIs seem promising? We also welcomed more specific 
comments on the attributes or functions to support such an approach of 
deploying dQMs.
    We received comments on these topics.
    Comment: Several commenters expressed support for the proposed 
definition of dQM. Several commenters recommended additional clarity on 
the proposed definition of dQM, including more detail on what the 
measures would be, how they differ from current ESRD QIP measures, and 
the sources of data for those measures. One commenter recommended that 
CMS refine its definition of dQMs, focus on currently available valid 
and reliable digital data sources, and set clear and specific 
parameters for what they expect of dialysis providers during this 
transition.
    Several commenters expressed support for transitioning toward 
interoperability through dQMS to interface with FHIR-based resources. 
One commenter noted that FHIR cannot solve or improve data quality 
alone without extensive development of FHIR extensions and profiles 
noting that many ESRD-specific data elements are not part of hospital 
EHR systems because they are not part of meaningful use requirements; 
this commenter made recommendations for data elements to be included in 
future versions of United States Core Data for Interoperability 
(USCDI). One commenter recommended that CMS evaluate the progress of 
developers and providers in adopting FHIR standards to ensure that the 
adoption of FHIR standards is not cost-prohibitive or overly burdensome 
and that CMS establish a clear timeframe for adoption of FHIR 
standards, including a trial or voluntary participation period prior to 
formal adoption. One commenter recommended that CMS ensure that dQMs 
can be linked with patient-level data such as patient experience of 
care and patient-reported outcomes. One commenter expressed support for 
CMS' approach to defining and deploying dQMs on FHIR believing it has 
the potential to further enhance value-based care that puts patient 
interests as the focal point. This

[[Page 61946]]

commenter recommended that implementation of dQMs be gradual, 
transparent, and based on robust technology. The commenter also noted 
its belief that the market of software developers would very quickly be 
able to respond to the CMS request for dQMs. One commenter expressed 
agreement that data sources should include administrative systems, 
electronically submitted clinical assessment data, case management 
systems, electronic health records, instruments such as medical devices 
or wearable devices, patient portals or applications, health 
information exchanges or registries, and other sources. One commenter 
recommended that dQMs be developed using standardized data collection 
measures that enable end users to interact with quality measures in an 
interoperable and consistent format and to ensure consistency in the 
collection and data analysis. This commenter also recommended the use 
of Smart on FHIR apps using a FHIR Questionnaire to enable powerful 
data capture, reduce burden, and that would allow for the continuous 
data driven development of quality measures over time, with the 
software/hardware layers providing greater stability. One commenter 
recommended that CMS add a digital measure confirming the presence and 
accessibility of advance directive information.
    Several commenters expressed concerns about shifting to a FHIR-
based application programming interface including that the utility of 
an ESRD-specific FHIR standard outside of quality reporting to CMS is 
limited, it introduces complicating factors, the burden may outweigh 
the benefit with CMS' current focus on CROWNWeb and EQRS, it may not 
achieve the data flow intended by CMS for the dialysis industry, and 
that shifting to a new system does not make sense at this time. One 
commenter expressed caution about the adoption of FHIR noting that the 
current ESRD quality data submission process captures 90 percent of 
data electronically and recommended piloting the FHIR approach to 
ensure that FHIR improves quality reporting over and above EQRS. One 
commenter recommended that CMS consider the burden on facilities 
related to compliance, noted implementation uncertainties, and 
recommended CMS allocate resources to help with the transition to new 
data systems and processes. One commenter expressed concerns with 
transitioning the ESRD programs to another platform and recommended 
that interoperability standards should be incorporated into the EQRS. 
One commenter recommended that CMS not reinvent the wheel but rather 
continue to work with the kidney care community to address the next 
generation of quality and data policies.
    Response: We appreciate all of the comments on and interest in this 
topic. We believe that this input is very valuable in the continuing 
development of our transition to digital quality measurement in CMS 
quality reporting and value-based purchasing programs by 2025. We will 
continue to take all comments into account as we develop future 
regulatory proposals or other guidance for our digital quality 
measurement efforts.
     Changes Under Consideration To Advance Digital 
Quality Measurement: Actions in Four Areas To Transition to Digital 
Quality Measures by 2025
    ++ We sought feedback on the following as described in section 
IV.G.3.c.(1). of this final rule:

--Do you agree with the goal of aligning data needed for quality 
measurement with that required for interoperability? What are the 
strengths and limitations of this approach?
--How important is a data standardization approach that also supports 
inclusion of PGHD and other currently non-standardized data?
--What are possible approaches for testing data quality and validity?

    We received comments on these topics.
    Comments: Several commenters expressed support for the goal of 
aligning data needed with interoperability. One commenter expressed its 
belief that quality measurement data must be aligned with and based on 
tools and methods of interoperability within healthcare believing this 
is core to the achievement of value-based healthcare. This commenter 
also noted its belief that aligning the incentives for all major 
stakeholders in healthcare (patients, providers, payers, regulators) is 
key to enabling a robust healthcare system and that when quality is 
measured according to the patient through the proxy measures of 
outcomes and cost of care, having data that are interoperable among 
these stakeholders is crucial. One commenter expressed support 
conceptually for the goal of aligning data, but needed more clarity on 
the specific quality measures CMS is considering for these purposes.
    One commenter recommended approaches for standardization including 
that CMS develop: (1) Standard sets of outcomes measures only utilize 
validated PROMs as defined by ISOQOL validation guidelines; (2) 
strictly defined standard sets (standardized outcome definition 
including allowed response options, validated PROMs and defined data 
collection time points) ensures consistency in data collection and 
allow for consistent data quality checks; and (3) variables used in 
standard sets mapped to SNOMED/LOINC concepts allow for in-depth data 
validity audits. One commenter recommended that CMS establish guidance 
to ensure data security and to define roles and responsibilities 
regarding data validation and data cleaning. This commenter also noted 
that data validation and cleaning is currently managed by third party 
intermediaries and is necessary to maintain measure integrity and for 
reducing provider burden.
    One commenter expressed its concerns with standardization including 
burden on providers and questioned the value of moving from a 
standardized data format that already serves 90 percent of the dialysis 
community to an interoperability format that is standardized for data 
movement between providers beyond the dialysis industry.
    A few commenters expressed concerns with the inclusion of patient 
generated health data and other currently non-standardized data into a 
data standardized approach. One commenter noted that CMS' definition of 
patient gathered health data is overly broad. One commenter expressed 
its belief that such data elements will vary by therapeutic area and be 
difficult to standardize. One commenter expressed its belief that 
additional research is needed prior to integration of patient-generated 
health data into quality measurement believing that while the data can 
augment the overall picture of health, it can be full of bias, noise, 
and variability.
    Response: We appreciate all of the comments on and interest in this 
topic. We believe that this input is very valuable in the continuing 
development of our transition to digital quality measurement in CMS 
quality reporting and value-based purchasing programs by 2025. We will 
continue to take all comments into account as we develop future 
regulatory proposals or other guidance for our digital quality 
measurement efforts.
    ++ We sought feedback on the following as described in section 
IV.G.3.c.(2). of this final rule:

--What functionalities, described in section IV.G.3.c.(2). of this 
final rule

[[Page 61947]]

or others, should quality measure tools ideally have in the context of 
the pending availability of standardized and interoperable data (for 
example, standardized EHR data available via FHIR-based APIs)?
--How would this more open, agile strategy for end-to-end measure 
calculation facilitate broader engagement in quality measure 
development, the use of tools developed for measurement for local 
quality improvement, and/or the application of quality tools for 
related purposes such as public health or research?

    We received comments on these topics.
    Comments: One commenter recommended common measure sets that gather 
data based on standard ontologies (for example, ICD-10, SNOMED-CT) 
believing that the use of resources that enable the use of shareable, 
digital data need be part of quality measure tools. The commenter also 
noted that the use of such measure sets, such as ICHOM Standard Sets, 
are also essential when on FHIR in a fully interoperable context.
    One commenter expressed its belief that broader engagement would 
lead to incremental gains on quality measure development noting that 
CMS already provides its contracted measure developers with access to 
the CROWNWeb and EQRS data for measure development and to the community 
via USRDS, an NIH sponsored registry, and noted that FHIR API may 
provide these data in a timelier fashion than providing data files.
    One commenter noted that international experience has shown that 
open cycle work groups, developed under an agile method, leads to the 
establishment of value based healthcare in a manner that works best for 
patient outcomes, and in a manner that develops the standards in a way 
that is independent to the payment rate-setting development process, 
which can lead to better outcomes for patients and better methods for 
data collection for providers. This commenter also expressed its belief 
that making measure collection seamless through the use of standard 
ontologies and FHIR-based API apps will allow both large scale data 
collection for use in value-based healthcare initiatives and the local 
usage of data for improvement of care as well as reducing reporting 
burden.
    One commenter expressed concern that the investments and progress 
the ESRD community has made to develop the current digital quality 
framework would be reversed with the adoption of a third new digital 
quality measurement approach.
    Response: We appreciate all of the comments on and interest in this 
topic. We believe that this input is very valuable in the continuing 
development of our transition to digital quality measurement in CMS 
quality reporting and value-based purchasing programs by 2025. We will 
continue to take all comments into account as we develop future 
regulatory proposals or other guidance for our digital quality 
measurement efforts.
    ++ We sought feedback on the following as described in section 
IV.G.3.c.(3). of this final rule:

--Do you have feedback on policy considerations for aggregation of data 
from multiple sources being used to inform measurement?
--Do you have feedback on the role data aggregators can and should play 
in CMS quality measure reporting in collaboration with providers? How 
can CMS best facilitate and enable aggregation?

    We received comments on these topics.
    Comments: One commenter expressed support for CMS gathering data 
from multiple sources to inform quality measurement; however, this 
commenter also expressed caution about the use of FHIR API as the most 
appropriate digital data collection method. One commenter expressed its 
belief that CMS is best served to very early define the format in which 
they need to have the measures reported and that an open publication of 
the requested data formats and annotation, for example, a common data 
model, is the key to initiate a health market adjustment. This 
commenter recommended that CMS set forth policy that requires the 
collection of data using standardized measure sets, based on easily 
collectable data (using standard ontologies and PGHD tools), and 
transported using the FHIR interoperable transport API.
    A few commenters expressed their belief that aggregation of data 
from multiple sources is not an issue for the renal community noting 
the use of CROWNWeb, EQRS, and HIE.
    A few commenters expressed their concerns with the use of data 
aggregators. One commenter expressed its concerns that moving to an 
undefined new standard under FHIR will require significant additional 
investments from industry when such investments already have been made 
to create the highly efficient HIE and other means of electronic data 
submission. One commenter expressed its belief that there is no need 
for data aggregators for the ESRD quality program because of existing 
data standardization and availability of required data in provider EMRs 
or CMS claims data noting the successful ability of 90 percent of the 
industry to submit data electronically in a standard format via batch, 
and the remaining 10 percent to do the same via manual interface; 
however, this commenter also noted that if CMS requires data elements 
that are not able to be collected by dialysis providers then data 
aggregators may be helpful.
    Response: We appreciate all of the comments on and interest in this 
topic. We believe that this input is very valuable in the continuing 
development of our transition to digital quality measurement in CMS 
quality reporting and value-based purchasing programs by 2025. We will 
continue to take all comments into account as we develop future 
regulatory proposals or other guidance for our digital quality 
measurement efforts.
    ++ We sought feedback on the following as described in section 
IV.G.3.c.(4). of this final rule:

--What are initial priority areas for the dQM portfolio (for example, 
measurement areas, measure requirements, tools)?
--We also sought to identify opportunities to collaborate with other 
Federal agencies, states, and the private sector to adopt standards and 
technology-driven solutions to address our quality measurement 
priorities and across sectors.

    We received comments on these topics.
    Comments: One commenter recommended that the priority areas for the 
dQM portfolio be around health equity and quality measures for which 
data supports that additional access to care can improve quality 
outcomes.
    A few commenters had recommendations for CMS collaboration related 
to adopting standards and technology-driven solutions. One commenter 
recommended opportunities to collaborate with the Social Security 
Administration, Centers for Disease Control and Prevention, and the 
United Network for Organ Sharing. One commenter recommended 
collaboration with an objective, independent and patient centered non-
profit organization that collaborates with patients and healthcare 
professionals. One commenter recommended that CMS work with states and 
other Federal agencies who might require these same data elements as an 
API from EQRS then that could create benefit and reduce administrative 
burden.
    Response: We appreciate all of the comments on and interest in this 
topic.

[[Page 61948]]

We believe that this input is very valuable in the continuing 
development of our transition to digital quality measurement in CMS 
quality reporting and value-based purchasing programs by 2025. We will 
continue to take all comments into account as we develop future 
regulatory proposals or other guidance for our digital quality 
measurement efforts.

V. End-Stage Renal Disease Treatment Choices (ETC) Model

A. Background

1. Overview of the ETC Model
    As described in the Specialty Care Models final rule (85 FR 61114), 
beneficiaries with ESRD are among the most medically fragile and high-
cost populations served by the Medicare program. ESRD Beneficiaries 
require dialysis or kidney transplantation to survive, and the majority 
of ESRD Beneficiaries receiving dialysis receive hemodialysis in an 
ESRD facility. However, as described in the Specialty Care Models final 
rule, alternative renal replacement modalities to in-center 
hemodialysis, including home dialysis and kidney transplantation, are 
associated with improved clinical outcomes, better quality of life, and 
lower costs than in-center hemodialysis (85 FR 61264).
    Section 1115A of the Act authorizes the Innovation Center to test 
innovative payment and service delivery models expected to reduce 
Medicare, Medicaid, and CHIP expenditures while preserving or enhancing 
the quality of care furnished to such programs' beneficiaries. The 
purpose of the ETC Model is to test the effectiveness of adjusting 
certain Medicare payments to ESRD facilities and Managing Clinicians to 
encourage greater utilization of home dialysis and kidney 
transplantation, support beneficiary modality choice, reduce Medicare 
expenditures, and preserve or enhance the quality of care.
    The ETC Model is a mandatory payment model, as we seek to test the 
effect of payment incentives on availability and choice of treatment 
modality among a diverse group of providers and suppliers. ESRD 
facilities and Managing Clinicians are selected as ETC Participants 
based on their location in Selected Geographic Areas--a set of 30 
percent of Hospital Referral Regions (HRRs) that have been randomly 
selected to be included in the ETC Model, as well as HRRs with at least 
20 percent of component ZIP codes \260\ located in Maryland. CMS 
excludes all U.S. Territories from the Selected Geographic Areas.
---------------------------------------------------------------------------

    \260\ ZIP code\TM\ is a trademark of the United States Postal 
Service.
---------------------------------------------------------------------------

    Under the ETC Model, ETC Participants are subject to two payment 
adjustments. The first is the Home Dialysis Payment Adjustment (HDPA), 
which is an upward adjustment on certain payments made to participating 
ESRD facilities under the ESRD PPS on home dialysis claims, and an 
upward adjustment to the MCP paid to participating Managing Clinicians 
on home dialysis-related claims. The HDPA applies to claims with claim 
service dates beginning in January 1, 2021, and ending on December 31, 
2023.
    The second payment adjustment under the ETC Model is the 
Performance Payment Adjustment (PPA). For the PPA, we assess ETC 
Participants' home dialysis rate and transplant rate during a 
Measurement Year (MY), which includes 12 months of performance data. 
Each MY overlaps with the previous MY, if any, and the subsequent MY, 
if any, for a period of 6 months. Each MY has a corresponding PPA 
Period--a 6-month period which begins 6 months after the conclusion of 
the MY. We adjust certain payments for ETC Participants during the PPA 
Period based on the ETC Participant's home dialysis rate and transplant 
rate, calculated as the sum of the transplant waitlist rate and the 
living donor transplant rate, during the corresponding MY. Based on an 
ETC Participant's achievement in relation to benchmarks based on the 
home dialysis rate and transplant rate observed in Comparison 
Geographic Areas during the Benchmark Year, and the ETC Participant's 
improvement in relation to its own home dialysis rate and transplant 
rate during the Benchmark Year, we make an upward or downward 
adjustment to certain payments to the ETC Participant. The magnitude of 
the positive and negative PPAs for ETC Participants increases over the 
course of the ETC Model. These PPAs apply to claims with claim service 
dates beginning July 1, 2022, and ending June 30, 2027.
2. Summary of Proposed Changes to the ETC Model
    The proposed rule, titled ``Medicare Program; End-Stage Renal 
Disease Prospective Payment System, Payment for Renal Dialysis Services 
Furnished to Individuals With Acute Kidney Injury; End-Stage Renal 
Disease Quality Incentive Program, and End-Stage Renal Disease 
Treatment Choices Model'' (85 FR 36322 through 36437), referred to 
herein as the ``CY 2022 ESRD PPS proposed rule,'' was published in the 
Federal Register on July 9, 2021. In the CY 2022 ESRD PPS proposed 
rule, we proposed a number of policy changes to the ETC Model beginning 
for the third Measurement Year (MY3) of the Model, which begins January 
1, 2022. We proposed changes to the methodology for attributing Pre-
emptive LDT Beneficiaries to Managing Clinicians to better reflect the 
care relationship between beneficiaries who receive pre-emptive LDT 
transplants and the Managing Clinicians who provide their care. We 
proposed to include nocturnal in-center dialysis in the numerator of 
the home dialysis rate calculation for ESRD facilities not owned in 
whole or in part by a large dialysis organization (LDO) as well as 
Managing Clinicians, to incentivize additional alternative renal 
replacement modalities. In addition, we proposed to exclude 
beneficiaries who are diagnosed with and receiving treatment with 
chemotherapy or radiation for vital solid organ cancers from the 
transplant rate to align with common transplant center requirements.
    We proposed to modify the PPA achievement benchmarking methodology 
to increase achievement benchmarks by 10 percent above rates observed 
in Comparison Geographic Areas every two MYs, beginning for MY3 (2022). 
We proposed to stratify PPA achievement benchmarks based on the 
proportion of attributed beneficiaries who are dually-eligible for 
Medicare and Medicaid or receive the LIS during the MY, and to 
introduce the Health Equity Incentive to the PPA improvement scoring 
methodology, both in an effort to encourage ETC Participants to address 
disparities in renal replacement modality choice among beneficiaries 
with lower socioeconomic status. We proposed to modify the PPA 
improvement benchmarking and scoring methodology to ensure an ETC 
Participant can receive an improvement score even if its home dialysis 
rate or transplant rate was zero during the relevant Benchmark Year.
    We proposed to add processes and requirements for CMS to share 
certain model data with ETC Participants. We also proposed an 
additional programmatic waiver as necessary solely for purposes of 
allowing Managing Clinicians who are ETC participants to furnish kidney 
disease patient education services via telehealth under the ETC Model. 
In addition, we proposed to permit Managing Clinicians who are ETC 
Participants to reduce or waive beneficiary coinsurance for kidney 
disease patient education services, subject to certain requirements. In 
the CY 2022 ESRD PPS proposed rule, we stated our expectation that the 
proposed changes would continue to

[[Page 61949]]

promote the larger goals of increased renal replacement modality choice 
and are based on many of the issues we laid out in the Specialty Care 
Models final rule as issues for which CMS was considering further 
rulemaking, including updating benchmarks for ETC Participants and 
adjusting model parameters based on our implementation experience (86 
FR 36376).
3. Impact of the Changes on the ETC Model Evaluation
    As we described in the Specialty Care Models final rule, an 
evaluation of the ETC Model will be conducted in accordance with 
section 1115A(b)(4) of the Act, which requires the Secretary to 
evaluate each model tested by the Innovation Center. We noted that we 
believe an independent evaluation of the Model is necessary to 
understand the impacts of the Model on quality of care and Medicare 
program expenditures (85 FR 61345).
    In the CY 2022 ESRD PPS proposed rule (86 FR 36376), we proposed to 
update the evaluation plan presented in the Specialty Care Models final 
rule to account for all the policies in that proposed rule, if 
finalized. However, we noted that changes in the construction of the 
PPA would have no impact on the evaluation approach to analyzing the 
final PPA values. This is because the evaluation plan already includes 
a consideration of the final PPA values, rather than an evaluation of 
each step in the PPA calculation. However, we stated our expectation 
that we would conduct subgroup analyses in the evaluation to determine 
the effect of the proposed Health Equity Incentive, if finalized, in 
reducing health disparities among beneficiaries with lower 
socioeconomic status.
    As part of the detailed economic analysis included in the CY 2022 
ESRD PPS proposed rule and in section VIII.D.4 of this final rule, the 
transplant waitlist benchmarks were annually inflated by approximately 
3-percentage points growth. This was a change from the Specialty Care 
Models final rule (85 FR 61352), in which the waitlist benchmarks were 
annually inflated by approximately 2-percentage points growth observed 
during years 2017 through 2019 to project rates of growth. By 
increasing the expected effect to a 3-percentage point change, we 
improve our ability to detect such an effect at the ETC Model's current 
size. In the Specialty Care Models final rule, we stated that to detect 
a 2-percentage point increase in the transplant waitlist rate, we would 
need 30 percent of the 306 HRRs in order to detect an effect of this 
size with 80 percent power and an alpha of 0.05. Further, we stated 
that a model of this size would be large enough to detect a one and 
one-half percentage point change in the home dialysis rate (85 FR 
61280). In the CY 2022 ESRD PPS proposed rule (86 FR 36376), we 
clarified that our unadjusted power calculations show that the model 
requires 30 percent of the 306 HRRs to detect the one and one-half 
percentage point change in the home dialysis rate with 80 percent power 
and an alpha of 0.05. Given the updated expectation that the transplant 
waitlist rate is likely to increase by 3-percentage points as a result 
of the ETC Model, the power analysis shows the evaluation would also 
have sufficient sample size to detect, as statistically significant, a 
3-percentage point change in the transplant waitlist rate with 80 
percent power and an alpha of 0.05.
    We did not receive any comments regarding our proposal to update 
the evaluation plan presented in the Specialty Care Models final rule 
to account for all the policies in the CY 2022 ESRD PPS proposed rule, 
if finalized. We are therefore finalizing our proposal and will modify 
the model evaluation to analyze the impact of the policies finalized in 
this final rule.

B. Summary of the Proposed Provisions, Public Comments, Responses to 
Comments, and Finalized Policies for the ETC Model

    The CY 2022 ESRD PPS proposed rule was published in the Federal 
Register on July 9, 2021, with a comment period that ended on August 
31, 2021. In that proposed rule, we proposed to make a number of 
changes to the ETC Model, to begin January 1, 2022, as described 
previously in section I.B.4 of this rule. We received 64 timely public 
comments on our proposals, including comments from: ESRD facilities; 
national renal, nephrologist, and patient organizations; patients; 
manufacturers; health care systems; and individual clinicians, 
including nephrologists, nurses, and social workers.
    We also received comments related to issues that we did not discuss 
in the CY 2022 ESRD PPS proposed rule. These include, for example, 
comments recommending that CMS incorporate staff-assisted home dialysis 
into the ETC Model, support the training and education of home dialysis 
nurses, and including transplant providers as ETC Participants. These 
comments expressed concern over implementing home dialysis programs or 
the negative payment adjustments included in the Model. While we are 
generally not addressing those comments in this final rule, we thank 
the commenters for their input and may consider their recommendations 
in future rulemaking.
    In this final rule, we provide a summary of each proposed 
provision, a summary of the public comments received and our responses 
to them, and the policies we are finalizing for the ETC Model. These 
policies take effect January 1, 2022, unless otherwise specified.
    Comment: Many commenters supported the goals of the ETC Model. Some 
of these commenters stated that they appreciate the effort to advance 
home dialysis during the COVID-19 pandemic since dialyzing at home 
allows patients to socially distance and avoid going into hospitals or 
medical centers.
    Response: We thank the commenters for the support of the Model's 
goals.
    Comment: One commenter suggested that CMS implement the ETC Model 
nationwide in order to improve quality of care for all ESRD 
beneficiaries.
    Response: Section 1115A of the Act authorizes the Secretary to test 
payment and service delivery models intended to reduce Medicare costs 
while preserving or improving care quality that, if effective, are 
considered for expansion to the Medicare program. As noted in the 
Specialty Care Models final rule (85 FR 61280), the randomized 
selection of 30 percent of HRRs allows CMS sufficient statistical power 
to assess the effect of the ETC Model. If the test of the ETC Model 
satisfies the criteria for expansion in section 1115A(c) of the Act, 
CMS may consider expanding the duration and scope of the ETC Model, 
including on a nationwide basis.
    Comment: One commenter suggested that the ETC Model be an Advanced 
Alternative Payment Model (APM) allowing ETC Participants to be 
eligible as qualifying APM participants (QP), similar to what is 
proposed for the Radiation Oncology (RO) Model.
    Regarding the commenter's reference to the RO Model, we finalized 
our proposal that the RO Model be designed to qualify as an Advanced 
APM and MIPS APM in the Specialty Care Models final rule (85 FR 61231 
through 61238).
    Response: As noted in the Specialty Care Models final rule (85 FR 
61326), modifying the ETC Model to be an Advanced APM would subject ETC 
Participants to significant downside risk from the outset, which we 
believe would put many ETC Participants in a difficult financial 
position. As further noted in the Specialty Care Models final rule (85 
FR 61274), Managing Clinicians may simultaneously participate in the 
ETC Model and the complementary Kidney Care Choices Model, a voluntary

[[Page 61950]]

model we anticipate will meet the criteria to be an Advanced APM 
beginning in 2022.
    Comment: Several commenters urged that patients should have the 
choice of modality that works best for them, and the ETC Model should 
support patient choices.
    Response: We appreciate the commenters' feedback to support 
beneficiary choice of treatment modality. The ETC Model, as described 
in the Specialty Care Models final rule, aims to support beneficiaries 
choosing alternatives to in-center dialysis. Additionally, ETC 
Participants are subject to provisions protecting beneficiary freedom 
of choice set forth at Sec.  512.120 of our regulations, as discussed 
in the Specialty Care Models final rule (85 FR 61339).
1. Technical Clarifications
    For ESRD facilities that are ETC Participants, the ETC Model makes 
certain upward and downward adjustments to the Adjusted ESRD PPS per 
Treatment Base Rate for certain dialysis claims via the Home Dialysis 
Payment Adjustment (HDPA) and the Performance Payment Adjustment (PPA). 
The term ``Adjusted ESRD PPS per Treatment Base Rate'' is defined at 42 
CFR 512.310 as the per-treatment payment amount as defined in Sec.  
413.230 of this chapter, including patient-level adjustments and 
facility-level adjustments, and excluding any applicable training 
adjustment, add-on payment amount, outlier payment amount, TDAPA 
amount, and TPNIES amount. In the CY 2022 ESRD PPS proposed rule (86 FR 
36376), we clarified the claims that are subject to adjustment under 
the ETC Model. Specifically, as Sec.  413.230 is specific to the 
calculation of payment amounts under the ESRD PPS, we clarify that the 
HDPA and PPA do not apply to claims from ESRD facilities that are not 
paid under ESRD PPS and are instead paid through other Medicare payment 
systems.
    We are also updating the name of one of the sources of data used 
throughout the ETC Model. In the Specialty Care Models final rule, we 
specified that one source of data for the ETC Model is CROWNWeb, a data 
management system that CMS uses to collect data from ESRD facilities 
(85 FR 61317). As we explained in the CY 2022 ESRD PPS proposed rule 
(86 FR 36376), since publication of the Specialty Care Models final 
rule, CMS has replaced CROWNWeb with the End Stage Renal Disease 
Quality Reporting System (EQRS). As such, we will refer to CROWNWeb for 
data that was generated before the change to EQRS, which CMS began 
using in 2020, and EQRS for data that was generated after the change to 
EQRS.
    The following is a summary of the comments received on our 
technical clarifications related to claims subject to adjustment under 
the ETC Model and the replacement of CROWNWeb data with EQRS data and 
our responses.
    Comment: A few commenters stated that they support the technical 
clarification that the HDPA and PPA do not apply to claims from ESRD 
facilities that are not paid under ESRD PPS and are instead paid 
through other Medicare payment systems.
    Response: We appreciate commenters' support for this technical 
clarification.
    Comment: A few commenters stated that they support the technical 
clarification that the ETC Model will refer to EQRS data in place of 
CROWNWeb data.
    Response: We appreciate commenters' support for this technical 
clarification.
    Comment: A few commenters expressed concerns related to the 
challenges faced during the transition from CROWNWeb to EQRS, and 
resulting concerns over data quality.
    Response: As discussed elsewhere in this final rule, we are aware 
of concerns related to the transition from CROWNWeb to EQRS. For the 
purposes of the ETC Model, we will continue to use the best data 
available and will work with ETC Participants to address any data 
issues that arise.
2. Performance Payment Adjustment (PPA) Beneficiary Attribution for 
Living Kidney Donor Transplants
    In the Specialty Care Models final rule (85 FR 61297), we 
established that beneficiaries are attributed to Managing Clinicians 
for the purposes of calculating the home dialysis rate and transplant 
rate. For the home dialysis rate and the transplant waitlist and living 
donor kidney transplant portions of the transplant rate, as described 
in 42 CFR 512.360(c)(2)(i), an ESRD Beneficiary is generally attributed 
to the Managing Clinician with the earliest monthly capitation payment 
(MCP) claim billed during the month. If more than one Managing 
Clinician submits a claim for the MCP furnished to a single ESRD 
Beneficiary with the same earliest claim service date at the claim line 
through date for the month, the ESRD Beneficiary is randomly attributed 
to one of these Managing Clinicians.
    However, a beneficiary who receives a pre-emptive living donor 
transplant (Pre-emptive LDT Beneficiary) is not on dialysis and 
therefore cannot be attributed to a Managing Clinician using an MCP 
claim. As a result, under Sec.  512.360(c)(2)(ii), a Pre-emptive LDT 
Beneficiary is generally attributed to the Managing Clinician with whom 
the Pre-emptive LDT Beneficiary had the most claims between the start 
of the MY and the month of the transplant. If no Managing Clinician has 
had the plurality of claims for a given Pre-emptive LDT Beneficiary 
such that multiple Managing Clinicians each had the same number of 
claims for that beneficiary during the MY, the Pre-emptive LDT 
Beneficiary is attributed to the Managing Clinician associated with the 
latest claim service date during the MY up to and including the month 
of the transplant, as described in Sec.  512.360(c)(2)(ii)(A). If no 
Managing Clinician had the plurality of claims for a given Pre-emptive 
LDT Beneficiary such that multiple Managing Clinicians each had the 
same number of services for that beneficiary during the MY, and more 
than one of those Managing Clinicians had the latest claim service date 
during the MY up to and including the month of the transplant, the Pre-
emptive LDT Beneficiary is randomly attributed to one of these Managing 
Clinicians, as described in Sec.  512.360(c)(2)(ii)(B).
    As stated in the CY 2022 ESRD PPS proposed rule (86 FR 36377), upon 
further review of the beneficiary attribution methodology for living 
donor kidney transplants, we realized that an unintended consequence of 
the current attribution methodology is that Pre-emptive LDT 
Beneficiaries may be attributed to the nephrologist who manages their 
transplant, not the Managing Clinician who has seen them through the 
living donor transplant process. As stated in the CY 2022 ESRD PPS 
proposed rule, to avoid this effect, CMS believes it is necessary to 
update the attribution methodology for Pre-emptive LDT Beneficiaries. 
Living donor transplants are relatively rare events that require 
nephrologist support over time in order to inform beneficiaries of 
their transplant options and to assist them in finding a living donor. 
However, the current Pre-emptive LDT Beneficiary attribution 
methodology is based on visits from the beginning of a MY. As a result, 
if a Pre-emptive LDT Beneficiary has a transplant early in a MY, the 
beneficiary may be attributed to a transplant nephrologist who may have 
had only a single visit with the beneficiary, rather than the Managing 
Clinician who oversaw the largest share of the care that led to the 
beneficiary receiving the living donor transplant.
    As a result, we proposed to update the attribution methodology for 
Pre-emptive

[[Page 61951]]

LDT Beneficiaries to Managing Clinicians, beginning for MY3, in new 
provisions at Sec.  512.360(c)(2)(iii). Rather than attributing a Pre-
emptive LDT Beneficiary to the Managing Clinician with the plurality of 
claims from the start of the MY and the month of the transplant, 
beginning for MY3, we proposed to attribute Pre-emptive LDT 
Beneficiaries to the Managing Clinician with whom the beneficiary has 
had the most claims during the 365 days prior to the transplant date. 
Further, we proposed that if no Managing Clinician has had the most 
claims for the Pre-emptive LDT Beneficiary such that multiple Managing 
Clinicians each had the same number of claims for that beneficiary in 
the 365 days preceding the date of the transplant, the Pre-emptive LDT 
Beneficiary would be attributed to the Managing Clinician associated 
with the latest claim service date at the claim line through date 
during the 365 days preceding the date of the transplant. We proposed 
that if more than one of those Managing Clinicians had the latest claim 
service date at the claim line through date during the 365 days 
preceding the date of the transplant, the Pre-emptive LDT Beneficiary 
would be randomly attributed to one of these Managing Clinicians. We 
proposed that the Pre-emptive LDT Beneficiary would be considered 
eligible for attribution to a Managing Clinician under this proposed 
new Sec.  512.360(c)(2)(iii) if the Pre-emptive LDT Beneficiary has at 
least 1 eligible-month during the 12-month period that includes the 
month of the transplant and the 11 months prior to the transplant 
month. We proposed that an eligible month would refer to a month during 
which the Pre-emptive LDT Beneficiary not does not meet exclusion 
criteria in Sec.  512.360(b). We proposed changes for Pre-emptive LDT 
Beneficiary attribution to Managing Clinicians in order to identify and 
attribute Pre-emptive LDT Beneficiaries to the Managing Clinician who 
assisted the Beneficiary through the living donor transplant process. 
We sought comment on these proposed changes for Pre-emptive LDT 
Beneficiary attribution to Managing Clinicians beginning for MY3 in 
proposed new Sec.  512.360(c)(2)(iii).
    The following is a summary of the comments received on the proposed 
changes for Pre-emptive LDT Beneficiary attribution to Managing 
Clinicians beginning for MY3 and our responses.
    Comment: Several commenters supported our proposal to update the 
attribution methodology for Pre-emptive LDT Beneficiaries to Managing 
Clinicians to identify and attribute Pre-emptive LDT Beneficiaries to 
the Managing Clinician that assisted the Beneficiary through the living 
donor transplant process.
    Response: We appreciate the support and feedback.
    Comment: A few commenters expressed that the proposed changes to 
the attribution methodology for Pre-emptive LDT Beneficiaries would 
have a limited impact, due to the small number of Pre-emptive LDT 
Beneficiaries.
    Response: We appreciate the feedback from commenters and recognize 
the small number of Pre-emptive LDT Beneficiaries. We nonetheless 
believe it is necessary to update this methodology to ensure that those 
Pre-emptive LDT Beneficiaries are attributed to the Managing Clinician 
who oversaw the largest share of the care that led to the beneficiary 
receiving the living donor transplant to more accurately measure 
Managing Clinician performance.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.360(c)(2)(iii) 
to change Pre-emptive LDT Beneficiary attribution to Managing 
Clinicians beginning for MY3, without modification.
3. PPA Home Dialysis Rate
a. Background on Home Dialysis Rate Calculation
    A primary goal of the ETC Model is to support beneficiary modality 
choice by encouraging ETC Participants to support beneficiaries in 
selecting alternatives to in-center dialysis. Under 42 CFR 512.365(b), 
CMS includes in-center self-dialysis treatment beneficiary years in the 
numerator of the home dialysis rate. Specifically, the home dialysis 
rate for both Managing Clinicians and ESRD facilities is calculated as 
the number of dialysis treatment beneficiary years during the MY in 
which attributed beneficiaries received dialysis at home, plus one half 
of the total number of dialysis treatment beneficiary years during the 
MY in which the attributed beneficiaries received self-dialysis in 
center. As described in the Specialty Care Models final rule, we 
included self-dialysis in the home dialysis rate calculation because we 
believe in-center self-dialysis may provide a gradual transition from 
in-center to home dialysis, and provide beneficiaries with the time 
needed to get comfortable conducting dialysis by themselves, under 
medical supervision (85 FR 61306).
    The denominator for the home dialysis rate is the total dialysis 
treatment beneficiary years for attributed ESRD beneficiaries during 
the MY, as described in Sec. Sec.  512.365(b)(1)(i) and 
512.365(b)(2)(i). This includes the months during which attributed 
beneficiaries received maintenance dialysis at home or in an ESRD 
facility.
b. Nocturnal Dialysis
    Nocturnal in-center dialysis is a form of in-center dialysis 
conducted overnight for extended hours while the beneficiary is asleep. 
This dialysis is longer and slower than traditional in-center dialysis, 
can take more than 5 hours per treatment, and can be performed 3 to 7 
days a week. As this type of in-center dialysis is conducted overnight, 
it allows the beneficiary more time and flexibility to have a 
continuous job, as well as a social and family life.\261\
---------------------------------------------------------------------------

    \261\ Wilk, Adam S., Lea, Janice P. (2019). How Extended 
Hemodialysis Treatment Time Can Affect Patient Quality of Life. 
Clinical Journal of the American Society of Nephrology, 23, 479-485. 
doi:10.1111/hdi.12782.
---------------------------------------------------------------------------

    Dialysis conducted at a slower rate over a longer period of time is 
also associated with positive health impacts in comparison to 
traditional dialysis, including improved blood pressure control, better 
phosphate control, better management of anemia and bone and mineral 
metabolism, improved cardiovascular disease, increases in urea 
reduction ratio, and better beneficiary quality of life 
measures.262 263 264 265 266
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    \262\ Burton, J. and Graham-Brown, M., 2018. Nocturnal 
hemodialysis. Current Opinion in Nephrology and Hypertension, 27(6), 
pp.472-477.
    \263\ Kalim, S., Wald, R., Yan, A.T., Goldstein, M.B., Kiaii, 
M., Xu, D., . . . Perl, J. (2018). Extended duration nocturnal 
hemodialysis and changes in plasma metabolite profiles. Clinical 
Journal of the American Society of Nephrology, 13(3), 436-444. 
doi:10.2215/cjn.08790817.
    \264\ Nesrallah, G.E., Lindsay, R.M., Cuerden, M.S., Garg, A.X., 
Port, F., Austin, P.C., . . . Suri, R.S. (2012). Intensive 
hemodialysis associates with improved survival compared with 
CONVENTIONAL HEMODIALYSIS. Journal of the American Society of 
Nephrology, 23(4), 696-705. doi:10.1681/asn.2011070676.
    \265\ Wong, B., Collister, D., Muneer, M., Storie, D., Courtney, 
M., Lloyd, A., . . . Pauly, R.P. (2017). In-center nocturnal 
hemodialysis versus conventional hemodialysis: A systematic review 
of the evidence. American Journal of Kidney Diseases, 70(2), 218-
234. doi: 10.1053/j.ajkd.2017.01.047.
    \276\ Wilk, Adam S., Lea, Janice P. (2019). How Extended 
Hemodialysis Treatment Time Can Affect Patient Quality of Life. 
Clinical Journal of the American Society of Nephrology, 23, 479-485. 
doi:10.1111/hdi.12782.
    \266\ Lacson E, Diaz-Buxo J. In-center nocturnal hemodialysis 
performed thrice-weekly--a provider's perspective. Semin Dial. 2011 
Nov-Dec;24(6):668-73. doi: 10.1111/j.1525-139X.2011.00998.x. Epub 
2011 Nov 22. PMID: 22106828.
---------------------------------------------------------------------------

    In addition to the clinical benefits, nocturnal in-center dialysis 
also provides an alternative to traditional in-center dialysis for 
those beneficiaries for whom home dialysis is not an option

[[Page 61952]]

due to limited financial resources, housing insecurity, lack of social 
support, or personal preference. For example, a beneficiary 
experiencing housing insecurity may be unable to dialyze at home due to 
inability to receive and store home dialysis materials. However, that 
beneficiary could receive nocturnal in-center dialysis, thereby 
receiving the clinical benefits of a longer, slower dialysis process 
and the flexibility associated with not having to receive traditional 
in-center dialysis during the day.267 268
---------------------------------------------------------------------------

    \267\ Bugeja A, Dacouris N, Thomas A, Marticorena R, McFarlane 
P, Donnelly S, Goldstein M. In-center nocturnal hemodialysis: 
Another option in the management of chronic kidney disease. Clin J 
Am Soc Nephrol. 2009 Apr;4(4):778-83. doi: 10.2215/CJN.05221008. 
Epub 2009 Apr 1. PMID: 19339410; PMCID: PMC2666425.
    \268\ Lacson E, Diaz-Buxo J. In-center nocturnal hemodialysis 
performed thrice-weekly--a provider's perspective. Semin Dial. 2011 
Nov-Dec;24(6):668-73. doi: 10.1111/j.1525-139X.2011.00998.x. Epub 
2011 Nov 22. PMID: 22106828.
---------------------------------------------------------------------------

    While nocturnal in-center dialysis offers some of the same clinical 
and quality of life benefits as home dialysis in comparison to 
traditional in-center dialysis, use of nocturnal in-center dialysis is 
rare. Based on analyses described in the CY 2022 ESRD PPS proposed rule 
and in section VIII.D.4.e of this final rule, less than 1 percent of 
beneficiaries eligible for attribution to ETC Participants were 
receiving self-dialysis or nocturnal in-center dialysis in 2019. 
Potential limitations to nocturnal in-center dialysis utilization 
include supply factors. At present, few ESRD facilities offer nocturnal 
dialysis; in 2019, approximately 1 percent of ESRD facilities furnished 
nocturnal in-center dialysis based on our analysis of claims data. ESRD 
facilities may face staffing challenges to initiating a nocturnal 
dialysis program. Potential limitations to nocturnal in-center dialysis 
also include demand factors: Beneficiaries may be unaware of nocturnal 
in-center dialysis, or may be averse to sleeping at an ESRD facility or 
experience difficulty sleeping while receiving dialysis.\269\
---------------------------------------------------------------------------

    \269\ Ibid.
---------------------------------------------------------------------------

c. Inclusion of Nocturnal In-Center Dialysis in Home Dialysis Rate
    We proposed to modify the home dialysis rate calculation, for ETC 
Participants that are either ESRD facilities not owned in whole or in 
part by an LDO or Managing Clinicians, to include nocturnal in-center 
dialysis in the numerator beginning for MY3. As described in the CY 
2022 ESRD PPS proposed rule and previously in this section of the final 
rule, we believe this modality allows beneficiaries to continue to 
receive maintenance dialysis in an ESRD facility under medical 
supervision, but at a time of day that is more convenient for them, and 
in a manner that is associated with improved health outcomes. In 
particular, in the CY 2022 ESRD PPS proposed rule (86 FR 36378), we 
stated our belief that including nocturnal in-center dialysis in the 
home dialysis rate may improve access to alternative renal replacement 
modalities for beneficiaries who are unable to dialyze at home.
    In addition to promoting access to the benefits of additional 
alternative renal replacement modalities for ESRD Beneficiaries who may 
not be able to dialyze at home, in the CY 2022 ESRD PPS proposed rule 
we stated our belief that including nocturnal in-center dialysis in the 
calculation of the home dialysis rate offers an additional pathway to 
success for ETC Participants with more limited resources. As described 
in the Specialty Care Models final rule, we received comments that some 
ESRD facilities, particularly independent ESRD facilities or ESRD 
facilities owned by small dialysis organizations, may be unable to 
develop and maintain a home dialysis program (85 FR 61322 through 
61324). Operating a home dialysis program requires specialized staff, 
as well as upfront investment in additional equipment and 
certification. Establishing a nocturnal in-center dialysis program does 
not require additional equipment or certification, and may be more 
feasible for independent ESRD facilities or ESRD facilities owned by 
small dialysis organizations, and by extension, the Managing Clinicians 
who serve their patients.
    In the CY 2022 ESRD PPS proposed rule (86 FR 36378), we considered 
including nocturnal in-center dialysis in the numerator of the home 
dialysis rate for ESRD facilities owned in whole or in part by LDOs as 
well. However, we noted in the CY 2022 ESRD PPS proposed rule that we 
do not believe that ESRD facilities owned in whole or in part by LDOs 
face the same resource constraints in establishing a home dialysis 
program as independent ESRD facilities or ESRD facilities owned by 
small dialysis organizations. ESRD facilities owned in whole or in part 
by LDOs may be more likely to have access to a home dialysis program, 
either in the ESRD facility itself or within the network of facilities 
owned by the same parent company in that facility's aggregation group. 
ESRD facilities owned in whole or in part by LDOs may also have greater 
access to the upfront capital necessary to establish a home dialysis 
program if they do not already have, or have access to, a home dialysis 
program.
    At present, there is not a single definition of what qualifies a 
legal entity that owns ESRD facilities as an LDO. In general, 
definitions of LDO focus on the number of ESRD facilities owned by the 
legal entity. Other Innovation Center models have used such 
definitions: The Comprehensive ESRD Care (CEC) Model defined an LDO as 
a legal entity owning 200 or more ESRD facilities; the Kidney Care 
Choices (KCC) Model defines an LDO as a legal entity owning 35 or more 
ESRD facilities. Outside of Innovation Center models, definitions used 
by academic researchers vary significantly. For example, in 2015, the 
United States Renal Data System (USRDS), a national data registry 
funded by the National Institutes of Health (NIH), defined an LDO as a 
dialysis organization one that owns and operates 200 or more ESRD 
facilities.\270\ Other academic research has employed thresholds as low 
as owning 20 or more ESRD facilities and as high as owning 1,000 or 
more ESRD facilities to consider a legal entity an 
LDO.271 272 Other definitions do not focus on the number of 
ESRD facilities owned, but on the relative size of dialysis 
organizations in the market, or rather, the individual dialysis 
organizations themselves. For example, in its March 2021 report to 
Congress, the Medicare Payment Advisory Commission (MedPAC) refers to 
the two largest dialysis organizations in the country as LDOs based on 
their relative share of ESRD facilities and Medicare treatments.\273\
---------------------------------------------------------------------------

    \270\ United States Renal Data System. 2015. ``2015 Researcher's 
Guide to the USRDS Database.'' https://usrds.org/media/2219/2015_usrds_researchers_guide_15.pdf.
    \271\ Mehrotra R, Khawar O, Duong U, Fried L, Norris K, 
Nissenson A, Kalantar-Zadeh K. Ownership patterns of dialysis units 
and peritoneal dialysis in the United States: Utilization and 
outcomes. Am J Kidney Dis. 2009 Aug;54(2):289-98. doi: 10.1053/
j.ajkd.2009.01.262. Epub 2009 Apr 8. PMID: 19359081.
    \272\ Gander JC, Zhang X, Ross K, et al. Association Between 
Dialysis Facility Ownership and Access to Kidney Transplantation. 
JAMA. 2019;322(10):957-973. doi:10.1001/jama.2019.12803.
    \273\ Medicare Payment Advisory Commission. 2021. Report to the 
Congress: Medicare and the health care delivery system. Washington, 
DC: MedPAC. http://www.medpac.gov/docs/default-source/reports/mar21_medpac_report_to_the_congress_sec.pdf.
---------------------------------------------------------------------------

    Based on our review of definitions commonly used, for the purposes 
of the ETC Model we proposed to define the term ``ETC Large Dialysis 
Organization,'' abbreviated ``ETC LDO,'' as a legal entity that owns, 
in whole or in part, 500 or more ESRD facilities (86 FR 36379). Based 
on the current

[[Page 61953]]

distribution of numbers of ESRD facilities owned by dialysis 
organizations operating in the market, we stated our belief that this 
threshold is appropriate, as it differentiates the largest dialysis 
organizations, which at present own over 2,500 ESRD facilities, from 
smaller dialysis organizations, the next largest of which owns 
approximately 350 ESRD facilities. We further stated our belief that 
the difference in size represents a meaningful difference in access to 
resources necessary to establish a home dialysis program, as well as 
the likelihood that an ESRD facility's aggregation group would have at 
least one ESRD facility with a home dialysis program in the aggregation 
group. We solicited comment on our proposal to include nocturnal in-
center dialysis beneficiary years in the numerator of the home dialysis 
rate calculation only for ESRD facilities not owned in whole or in part 
by an ETC LDO, as well as our proposal to define an ETC LDO as a legal 
entity owning 500 or more ESRD facilities.
    While nocturnal in-center dialysis can potentially result in better 
patient health outcomes and savings to Medicare compared to traditional 
in-center dialysis, we acknowledged in the CY 2022 ESRD PPS proposed 
rule that its inclusion in the home dialysis rate may reduce the 
incentive for ESRD facilities not owned in whole or in part by an LDO 
to invest in a home dialysis infrastructure. We therefore proposed to 
include nocturnal in-center dialysis as one half of the total number of 
dialysis treatment beneficiary years during the MY in which the 
attributed beneficiaries received nocturnal in-center dialysis in the 
numerator of the home dialysis rate calculation for ESRD facilities not 
owned in whole or in part by an ETC LDO as well as Managing Clinicians. 
We further stated our belief that this policy would effectively balance 
the benefits of nocturnal in-center dialysis and its ability to help 
beneficiaries transition to home dialysis with the recognition that in-
center nocturnal dialysis is not home dialysis and does not have all of 
the same benefits. As described in the Specialty Care Models final 
rule, we included one half of the total number of dialysis treatment 
beneficiary years during the MY in which the attributed beneficiaries 
received self-dialysis in center in the home dialysis rate calculation 
for a similar reason (85 FR 61306).
    As such, we proposed to amend Sec.  512.365(b) such that, beginning 
for MY3, the numerator for the home dialysis rate for ESRD facilities 
not owned in whole or in part by an ETC LDO and Managing Clinicians 
would be the total number of dialysis treatment beneficiary years 
during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis at home, plus one half of the total number of 
dialysis treatment beneficiary years during the MY in which attributed 
ESRD Beneficiaries received maintenance dialysis via self-dialysis, 
plus one half of the total number of dialysis treatment beneficiary 
years during the MY in which attributed ESRD Beneficiaries received 
maintenance dialysis via in-center nocturnal dialysis. We further 
proposed to add paragraph (C) to both Sec. Sec.  512.365(b)(1)(ii) and 
512.365(b)(2)(ii) to specify that nocturnal in-center dialysis 
beneficiary years included in the numerator of the home dialysis rate 
calculation would be composed of those months during which attributed 
ESRD Beneficiaries received nocturnal in-center dialysis, such that 1-
beneficiary year is comprised of 12-beneficiary months. The months in 
which an attributed ESRD Beneficiary received nocturnal in-center 
dialysis would be identified by claims with Type of Bill 072X, where 
the type of facility code is 7 and the type of care code is 2, and with 
the modifier UJ, which specifies that a claim with Type of Bill 072X is 
for nocturnal in-center dialysis. We sought comment on these proposed 
changes to Sec.  512.365(b).
    The following is a summary of the comments received on our proposal 
to include nocturnal in-center dialysis in the home dialysis rate 
beginning for MY3 and our responses, and on the home dialysis rate in 
general.
    Comment: Several commenters expressed support for the ETC Model for 
creating incentives to increase patient choice in the modality of their 
dialysis care. A few commenters also expressed support for the Model's 
potential to close gaps in health equity by making home dialysis more 
available to previously underserved populations.
    Response: We appreciate the feedback and support from commenters.
    Comment: A commenter expressed concern that the PPA may not account 
for barriers to home dialysis such as patient socioeconomic status, 
energy and infrastructure needs, and caregiver status, and may 
inadvertently penalize the Managing Clinician if home dialysis is not a 
suitable option for the beneficiary.
    Response: As we noted in the Specialty Care Models final rule (85 
FR 61267), we recognize that there are a variety of barriers that 
prevent ESRD Beneficiaries from choosing home dialysis at present. ESRD 
facilities and Managing Clinicians are the clinical experts in dialysis 
provision in general, and in the clinical and non-clinical needs of 
individual ESRD Beneficiaries specifically. We therefore continue to 
believe that ESRD facilities and Managing Clinicians are uniquely 
positioned to assist ESRD Beneficiaries in overcoming these barriers, 
given their close care relationship to and frequent interaction with 
ESRD Beneficiaries. Therefore, we have designed the ETC Model to test 
whether outcomes-based payment adjustments for ESRD facilities and 
Managing Clinicians can maintain or improve quality and reduce costs by 
increasing rates of home dialysis, transplant waitlisting, and living 
donor transplants. The payment adjustments in the ETC Model test one 
approach to addressing existing disincentives to home dialysis and 
transplant in the current Medicare FFS payment system.
    There are several features of how we assess a Managing Clinician's 
performance on the home dialysis rate to calculate the Managing 
Clinician's PPA that address the concern about barriers that prevent 
individual ESRD Beneficiaries from choosing home dialysis. First, we 
exclude certain ESRD Beneficiaries from attribution who may not be 
suitable candidates for home dialysis or transplantation, detailed in 
Sec.  512.360(b). Second, in this final rule, we are finalizing our 
proposals to modify the Model's benchmark methodology to recognize the 
additional resources required to increase the home dialysis rate and 
transplant rate among beneficiaries who are dual-eligible or LIS 
recipients. Specifically, as described in section V.B.5.c.(2) of this 
final rule, we are finalizing our proposal to stratify achievement 
benchmarks based on dual eligible and LIS recipient status in 
recognition that socioeconomic factors impact a beneficiary's 
likelihood of dialyzing at home. Additionally, as described in section 
V.B.6.c.(2) of this final rule, we are finalizing our proposal to add a 
Health Equity Incentive to the improvement scoring methodology for ETC 
Participants who demonstrate sufficiently significant improvement on 
the home dialysis rate or transplant rate among their attributed 
beneficiaries who are dual eligible or receive the LIS between the 
Benchmark Year and the MY. Lastly, as described in section V.B.3.c of 
this final rule, we are finalizing our proposal to include partial 
credit for nocturnal in-center dialysis in the home dialysis rate, 
which may be a more accessible alternative to traditional in-center 
dialysis for ESRD Beneficiaries facing the barriers identified by the 
commenter.

[[Page 61954]]

    Comment: Several commenters expressed their support for nocturnal 
dialysis as an alternative to traditional in-center dialysis. A few 
commenters noted that nocturnal in-center dialysis is a valuable 
treatment option for beneficiaries for whom limited financial 
resources, housing insecurity, or lack of social support make electing 
home dialysis difficult, and would thereby promote health equity. A 
commenter stated that evidence exists to support nocturnal dialysis as 
an alternative to traditional in-center dialysis because it is 
associated with improved clinical markers, better sleep and fewer apnea 
events, and improved nutritional status, and because nocturnal dialysis 
creates greater opportunity for beneficiaries to hold gainful 
employment compared to traditional in-center dialysis.
    Response: We appreciate the feedback and support from the 
commenters.
    Comment: Multiple commenters expressed agreement with barriers to 
the provision of nocturnal dialysis identified in the CY 2022 ESRD PPS 
proposed rule, including supply factors and lack of patient awareness. 
Commenters also identified system-level factors that may impact an ESRD 
facility's ability to offer nocturnal dialysis, including labor and 
operational costs associated with keeping a facility open overnight and 
the need for additional equipment such as additional water systems to 
support nocturnal dialysis machines and beds or recliners to facilitate 
beneficiary sleep. One commenter also noted that beneficiaries would 
still be required to come into the ESRD facility during traditional 
hours to receive additional related services, such as nutrition 
counseling, which cannot be done while the beneficiary is asleep.
    Response: We recognize that there are a variety of barriers that 
prevent ESRD Beneficiaries from choosing nocturnal in-center dialysis 
at present. As noted previously in this section of this final rule, 
nocturnal in-center dialysis also provides an alternative to 
traditional in-center dialysis for those beneficiaries for whom home 
dialysis is not an option due to limited financial resources, housing 
insecurity, lack of social support, or personal preference. We believe 
encouraging the provision of nocturnal in-center dialysis helps to 
promote beneficiary choice of treatment modalities while mitigating 
some of the barriers beneficiaries face when considering home dialysis.
    Comment: Several commenters expressed their support for including 
nocturnal in-center dialysis beneficiary years in the numerator of the 
home dialysis rate calculation. These commenters agreed with CMS's 
position that incentivizing nocturnal in-center dialysis will create 
more patient choice and improve health outcomes, and may address 
certain socioeconomic factors that inhibit beneficiaries from selecting 
home dialysis.
    Response: We agree with commenters that including nocturnal in-
center dialysis in the home dialysis rate may improve access for 
beneficiaries who, due to their home condition, cannot dialyze at home. 
We believe that supporting patient choice in modality selection is 
vital, and we believe the ETC Model will support providers and 
suppliers in their ability to assist beneficiaries choosing renal 
replacement modalities other than traditional in-center dialysis.
    Comment: A few commenters noted that including nocturnal in-center 
dialysis in the numerator of the home dialysis rate calculation may not 
provide sufficient incentive for an ESRD facility to launch or expand a 
nocturnal in-center dialysis program due to increased labor and 
operational costs. A commenter recommended that to address these 
challenges, CMS should consider including beneficiaries that are 
referred to a nocturnal in-center dialysis program in the home dialysis 
rate numerator.
    Response: We recognize that there are a variety of barriers that 
prevent ESRD facilities from offering nocturnal in-center dialysis. 
However, we believe including nocturnal in-center dialysis in the home 
dialysis rate calculation will help promote beneficiary choice of 
treatment modalities while mitigating some of the barriers 
beneficiaries face when considering home dialysis. We are not 
considering including referrals to nocturnal in-center dialysis in the 
home dialysis rate calculation at this time. We believe the 
administrative burden associated with tracking referrals may be too 
great to implement this policy in the ETC Model; however, we may take 
this recommendation into consideration in the future.
    Comment: A few commenters expressed concern that including 
nocturnal in-center dialysis in the PPA rate may slow adoption of home 
dialysis, as nocturnal in-center dialysis allows ESRD facilities to use 
existing the existing in-center dialysis infrastructure rather than 
modifying or creating new infrastructure and processes to implement a 
home dialysis program.
    Response: A focus of the ETC Model remains promoting beneficiary 
choice of alternative treatment modalities to traditional in-center 
dialysis and improving beneficiary adoption of home dialysis. We 
believe including nocturnal in-center dialysis in the numerator of the 
home dialysis rate will effectively balance the benefits of nocturnal 
in-center dialysis and its ability to transition ESRD Beneficiaries to 
home dialysis, with the recognition that nocturnal in-center dialysis 
is not home dialysis and does not have all of the same benefits. 
Specifically, each beneficiary month for which an attributed 
beneficiary receives nocturnal in-center dialysis will contribute only 
one-half month to the numerator.
    Comment: A commenter urged CMS to further define nocturnal in-
center dialysis. The commenter stated that a Medicare manual indicates 
that nocturnal in-center dialysis should be for periods greater than 
five hours and performed while the patient is sleeping. The commenter 
further noted that this definition may allow for in-center dialysis 
conducted outside of traditional business hours to be considered 
nocturnal dialysis. The commenter recommended that CMS define nocturnal 
in-center dialysis as ``in-center hemodialysis treatments dialyzing for 
at least five hours with a treatment time beginning on one day and 
terminating after 1 a.m. on the following day'' to avoid confusion and 
consistency in billing.
    Response: As the commenter points out, nocturnal in-center dialysis 
is already defined by Medicare. Specifically, effective January 1, 
2017, nocturnal hemodialysis is identified under the ESRD PPS by the 
modifier UJ, which identifies services provided at night. The UJ 
modifier is for ESRD facilities to indicate that the treatment 
furnished is for nocturnal hemodialysis. That is, longer and slower 
hemodialysis that can be performed at home or in-facility for greater 
than 5 hours per treatment, 3 to 7 days a week. Consistent with this 
definition, as described elsewhere in this final rule, we are 
finalizing our proposal to identify months in which an attributed ESRD 
Beneficiary received nocturnal in-center dialysis by claims with Type 
of Bill 072X, where the type of facility code is 7 and the type of care 
code is 2, and with the modifier UJ, which specifies that a claim with 
Type of Bill 072X is for nocturnal in-center dialysis. As such, we do 
not believe it is necessary to further define nocturnal in-center 
dialysis in this final rule.
    Comment: A few commenters agreed with the proposal to include 
nocturnal in-center dialysis in the home dialysis rate calculation for 
Managing Clinicians and for ESRD facilities not owned in whole or in 
part by an ETC LDO.
    Response: We appreciate the commenters' support and feedback.

[[Page 61955]]

    Comment: Multiple commenters expressed opposition to the proposal 
to not include nocturnal in-center dialysis in the home dialysis rate 
for ESRD facilities owned in whole or in part by an ETC LDO. Commenters 
stated that this policy undermines the incentive to increase access to 
nocturnal in-center dialysis, as ESRD facilities owned in whole or in 
part by an ETC LDO provide approximately 75 percent of dialysis care 
nationally. A few commenters stated that excluding ESRD facilities 
owned in whole or in part by an ETC LDO from the proposal to include 
nocturnal in-center dialysis beneficiary years in the numerator of the 
home dialysis rate calculation may severely limit beneficiary access to 
the modality, especially beneficiaries in rural and high-poverty areas, 
which are majority serviced by ESRD facilities owned in whole or in 
part by an ETC LDO, as these LDOs may not expand their nocturnal in-
center dialysis capabilities without the proper incentive. Commenters 
noted that Managing Clinicians often partner with LDOs and should not 
be incentivized to refer patients to ESRD facilities not owned in whole 
or in part by an ETC LDO. Several commenters expressed concern that the 
proposed policy would arbitrarily apply different standards to ESRD 
facilities in the Model based on ownership and would set a precedent 
for future Medicare programs, and may exceed the scope of the 
Innovation Center's authority.
    Response: We agree with commenters that excluding ESRD facilities 
owned in whole or in part by an ETC LDO from the proposal to include 
nocturnal in-center dialysis in the home dialysis rate calculation 
would exclude the majority of beneficiaries from the potential benefits 
of the policy, as ESRD facilities owned in whole or in part by an ETC 
LDO provide the majority of dialysis care. We continue to recognize the 
differences in resource availability to invest in home dialysis 
programs between ESRD facilities owned in whole or in part by LDOs, and 
those ESRD facilities that are either independent or owned by small 
dialysis organizations. However, after considering the comments 
received, we now believe that it is more important to incentivize 
access to nocturnal in-center dialysis for all ESRD Beneficiaries, 
regardless of the ownership of the ESRD facility at which they dialyze. 
As such, we will not be finalizing the proposal to exclude ESRD 
facilities owned in whole or in part by an ETC LDO from the 
modification to include nocturnal in-center dialysis in the home 
dialysis rate.
    Comment: We received multiple comments from multiple smaller 
dialysis organizations, commonly referred to as non-large dialysis 
organizations (non-LDO), agreeing with the definition of an ETC LDO as 
a legal entity that owns, in whole or in part, 500 or more ESRD 
facilities. These commenters pointed out the resource differential 
faced by smaller companies from larger companies. Another commenter 
urged more changes to the ETC Model to relieve potential financial 
burden for non-LDOs such as including referrals made to nocturnal in-
center dialysis programs in the numerator of the home dialysis rate.
    Response: As described previously in this section of the final 
rule, we are not finalizing our proposal include nocturnal in-center 
dialysis in the numerator only for those ESRD facilities not owned in 
whole or in part by an ETC LDO. Therefore, we will not be finalizing a 
definition of an ETC LDO in this final rule. However, we also will not 
be updating model parameters to include referrals made to nocturnal in-
center dialysis programs in the numerator of the home dialysis rate, as 
suggested by the commenter. As stated previously in this final rule, we 
believe the administrative burden associated with tracking such 
referrals may be too great to implement in the ETC Model; however, we 
may take this recommendation into consideration in the future.
    Comment: We received comments from an LDO pointing out that the 
proposed definition of ETC LDO as a legal entity owning 500 or more 
ESRD facilities could be viewed as arbitrary, pointing out different 
definitions used across CMS and in other areas, which range from 20 
facilities to 1,000 facilities.
    Response: As we noted in the CY 2022 ESRD PPS proposed rule (85 FR 
36378), at present there is not a single definition of what qualifies 
as a legal entity that owns ESRD facilities as an LDO. CMS chose the 
proposed definition after reviewing definitions commonly used to align 
with the current distribution of numbers of ESRD facilities owned by 
dialysis organizations operating in the market. Specifically, our 
proposed definition differentiated the largest dialysis organizations, 
which at present each own over 2,500 ESRD facilities, from smaller 
dialysis organizations, the next largest of which owns under 400 ESRD 
facilities. This definition is also currently used by the Kidney Care 
Choices Model, which changed its definition of an LDO after the 
publication of the CY 2022 ESRD PPS proposed rule, such that the Kidney 
Care Choices Model now defines an LDO as a legal entity that owns, in 
whole or in part, 500 or more ESRD facilities. However, as noted above, 
we will not be finalizing a definition of an ETC LDO in this final 
rule.
    Comment: A few commenters suggested giving ETC Participants who 
refer patients to home dialysis programs credit in the home dialysis 
rate, regardless if the home dialysis program is located in the same 
HRR.
    Response: We are not considering this change at this time. As noted 
previously in this final rule, we believe the administrative burden 
associated with tracking such referrals may be too great to implement 
in the ETC Model; however, we may take this recommendation into 
consideration in the future.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to amend Sec.  512.365(b) with modification. We 
are modifying our proposal such that the numerator of the home dialysis 
rate calculation for all ESRD facilities and for Managing Clinicians 
includes one half of the total number of nocturnal in-center dialysis 
beneficiary years for attributed ESRD Beneficiaries. Therefore, we are 
modifying Sec.  512.365(b)(1)(ii) to remove references to a separate 
home dialysis rate calculation for ESRD facilities owned in whole or in 
part by an ETC LDO. Similarly, we are not finalizing the proposed ETC 
LDO definition at this time.
4. PPA Transplant Rate
a. Status of Organ Availability
    The ETC Model is designed to encourage greater rates of 
transplantation. In the proposed rule published on July 18, 2019 in the 
Federal Register titled, ``Medicare Program; Specialty Care Models to 
Improve Quality of Care and Reduce Expenditures'' (84 FR 34478), 
referred to herein as the ``Specialty Care Models proposed rule,'' CMS 
proposed to include the rate of transplants, both living and deceased 
donor transplants, in the numerator for the ETC Model's transplant 
rate. However, in the Specialty Care Models final rule, we recognized 
the limitations of supply of deceased donor organs and updated the 
transplant rate to be calculated as the sum of the transplant waitlist 
rate and the living donor transplant rate (85 FR 61310). We stated that 
though a transplant is often the best treatment for a beneficiary with 
ESRD, in light of the current shortage of deceased donor organs for 
transplant, the transplant

[[Page 61956]]

waitlist rate and living donor transplant rate are currently more 
within the control of an ETC Participant (85 FR 61309).
    However, in the Specialty Care Models final rule, we indicated our 
intent to observe the supply of deceased donor organs available for 
transplantation, with the goal of potentially modifying the transplant 
rate calculation for the future (85 FR 61309). Since the Specialty Care 
Models final rule was published on September 29, 2020, there have been 
several initiatives pursued by the Federal Government that could 
potentially have the effect of increasing the supply of both living 
donor organs and deceased donor organs.
    On September 22, 2020, the Health Resources and Services 
Administration (HRSA) published a final rule in the Federal Register 
titled ``Removing Financial Disincentives to Living Organ Donation'' 
(85 FR 59438). This rule removes financial barriers to organ donation 
by expanding the scope of reimbursable expenses incurred by living 
organ donors to include lost wages, and child-care and elder-care 
expenses incurred by a caregiver. The rule went into effect on October 
22, 2020.
    Additionally, on December 2, 2020, CMS published in the Federal 
Register a final rule titled, ``Medicare and Medicaid Programs; Organ 
Procurement Organizations Conditions for Coverage: Revisions to the 
Outcome Measure Requirements for Organ Procurement Organizations'' (85 
FR 77898), revising Conditions for Coverage (CfCs) for Organ 
Procurement Organizations (OPOs). The final rule revised the CfCs for 
OPOs in order to increase donation rates and organ transplantation 
rates and replaced the old outcome measures with new transparent, 
reliable, and objective measures. The final rule went into effect on 
March 30, 2021. The new outcome measures will be implemented for the 
recertification cycle beginning in 2022 and ending in 2026. The goals 
of this rule are complementary to the goals of the ETC Model, as the 
revised CfCs are intended to increase the supply of organs, and the ETC 
Model is designed to incentivize higher rates of transplantation.
    Finally, as described in the Specialty Care Models final rule, CMS 
is in the process of implementing the ETC Learning Collaborative (85 FR 
61346). The ETC Learning Collaborative is a voluntary learning system 
focused on increasing the availability of deceased donor kidneys for 
transplantation. The ETC Learning Collaborative works with and supports 
ETC Participants and other stakeholders required for successful kidney 
transplantation, such as transplant centers, OPOs, and large donor 
hospitals. CMS is currently in the process of jointly implementing the 
ETC Learning Collaborative with HRSA.
    We are pleased that these efforts have progressed since the 
publication of the Specialty Care Models final rule. However, given 
that these efforts are still in the implementation process, we stated 
in the CY 2022 ESRD PPS proposed rule that we do not believe it would 
be appropriate to update the transplant rate to include accountability 
for deceased donor transplants, rather than transplant waitlisting, at 
this time (86 FR 36380). We further stated that we still intend to 
update the transplant rate through future rulemaking to include 
accountability for deceased donor transplants, but we are not proposing 
to do so at this time.
    The following is a summary of the comments received on the status 
of organ availability and related topics and our responses.
    Comment: Multiple commenters expressed support for continuing to 
monitor the transplant rate for ETC Participants based on transplant 
waitlisting, rather than updating the transplant rate to include 
accountability for deceased donor transplants.
    Response: We appreciate the support and will continue to monitor 
organ supply, with the goal of eventually including accountability for 
deceased donor transplants through future rulemaking.
    Comment: One commenter stated that an artificial kidney would have 
the best outcomes for transplant recipients and supports continued 
research towards the development of an artificial kidney.
    Response: We agree that the creation of an artificial kidney could 
have clinical benefits for beneficiaries. To assist in the development 
of new technologies such as an artificial kidney, HHS is part of the 
KidneyX public-private partnership to accelerate innovation in the 
prevention, diagnosis, and treatment of kidney diseases. More 
information on the KidneyX initiative is available at kidneyx.org.
    Comment: One commenter stated that we should create a larger model 
that includes other key actors in the transplant process, including 
organ procurement organizations and transplant centers.
    Response: We appreciate the feedback and will keep it in mind as we 
think about designing future models for testing. We view the ETC Model, 
including its ETC Learning Collaborative, as complementary to other 
efforts around the Department related to increasing the number of 
transplants, including the Kidney Care Choices Model, the OPO 
Conditions for Coverage updates (85 FR 77898), and the HRSA rule on 
Removing Financial Disincentives to Living Organ Donation (85 FR 
59438). We will evaluate the ETC Model's interventions in the context 
of the effects of existing regulatory initiatives, but we may also 
consider a larger transplant model in the future.
    Comment: One commenter suggested that we measure the number of 
beneficiaries referred for transplant rather than the length of time a 
beneficiary is on the transplant waitlist.
    Response: In the Specialty Care Models final rule (85 FR 61310), we 
recognized the limitations of supply of deceased donor organs and 
updated the transplant rate to be calculated as the sum of the 
transplant waitlist rate and the living donor transplant rate. We 
selected the transplant waitlist rate specifically because inclusion on 
the waitlist was more within the control of the ETC Participant. While 
we did not discuss the possibility of referrals for transplant in the 
Specialty Care Models final rule, we believe that referrals for 
transplant is one step further removed from the actual receipt of a 
transplant relative to the beneficiary's inclusion on the transplant 
waitlist. A measure based on referrals would be operationally 
burdensome for CMS to collect and for ETC Participants to report. 
Additionally, such a measure would seem to have the potential for 
gaming, as ETC Participants could be incentivized to submit numerous 
referrals for individuals who would not qualify for inclusion on the 
transplant waitlist, or even for individuals previously denied 
inclusion. Accordingly, we are not adopting the commenter's suggestion 
at this time.
    Comment: One commenter suggested that CMS establish new metrics for 
transplant providers, under the ETC Model, similar to the CMS quality 
measures published for ESRD facilities, as transplant providers play a 
large role in transplantation. One other commenter suggested that CMS 
establish a payment adjustment for transplant personnel to conduct 
transplant-related education activities in order to provide more 
accurate details about transplant to beneficiaries.
    Response: At this time, we are not contemplating incorporating 
additional participant types, such as transplant providers, into the 
ETC Model. Accordingly, we are not adding quality measures or payment 
adjustments for transplant personnel, into the Model in this final 
rule. However, we appreciate

[[Page 61957]]

the feedback and suggestions, which we may use to inform future model 
design.
b. Beneficiary Exclusions From the Transplant Rate
    As we discussed in the Specialty Care Models final rule (85 FR 
61300), CMS received comments about excluding ESRD Beneficiaries with 
cancer from attribution to ETC Participants, as there was concern about 
treatment appropriateness. However, at that time, CMS did not have any 
evidence to suggest that this is a concern. Accordingly, we did not 
exclude beneficiaries with cancer from attribution to ETC Participants 
for purposes of calculating the home dialysis rate or the transplant 
rate in the Specialty Care Models final rule.
    Nevertheless, as described in the CY 2022 ESRD PPS proposed rule 
(86 FR 36380), after we published the Specialty Care Models final rule, 
we conducted further analysis, to determine if a difference existed in 
either the home dialysis rate or transplant rate in beneficiaries with 
cancer and beneficiaries without cancer. Using the Medicare claims data 
and input from clinical specialists in the field of nephrology, we 
found that the majority of ESRD Beneficiaries with cancer, specifically 
ESRD Beneficiaries with cancer in vital solid organs (heart, lung, 
liver, and kidney), are not considered to be eligible candidates for 
transplant. Many transplant centers do not consider these beneficiaries 
for transplant and require them to be cancer-free for a specific period 
of time prior to assessing their eligibility for transplant. This is 
true for getting on a transplant waitlist and for receiving living 
donor transplants, as a beneficiary either needs to be cancer-free or 
be in an initial stage of cancer diagnosis to be considered for 
transplant.
    In addition, we found that ESRD Beneficiaries who have a diagnosis 
of solid organ cancer for which they were receiving treatment, 
specifically radiation or chemotherapy, are less likely to be in the 
numerator of the transplant rate--so, being placed on the transplant 
waitlist or receive a living donor transplant--than ESRD Beneficiaries 
without a diagnosis of vital solid organ cancer. By contrast, we did 
not find any evidence to suggest that ESRD Beneficiaries with cancer 
had a significant difference in the home dialysis rate compared to the 
ESRD Beneficiaries without cancer.
    As noted previously, under Sec. Sec.  512.310 and 512.365(c), the 
transplant rate has two components: The transplant waitlist rate and 
the living donor transplant rate. Upon further review and analysis, 
beginning for MY3, we proposed to exclude ESRD Beneficiaries and, if 
applicable, Pre-emptive LDT Beneficiaries who have been diagnosed with 
vital solid organ cancers (heart, lung, liver, and kidney) and who are 
receiving treatment, in the form of radiation or chemotherapy, for such 
cancers from both components of the denominator of the transplant rate 
for both ESRD facilities and Managing Clinicians for the duration of 
the MY.
    Furthermore, we proposed to include a lookback period, a period of 
time prior to the MY, to appropriately identify the ESRD Beneficiaries 
and, if applicable, Pre-emptive LDT Beneficiaries with a diagnosis of 
vital solid organ cancer for which they are receiving chemotherapy or 
radiation therapy. Both a diagnosis code and a treatment code are 
necessary to appropriately identify an ESRD Beneficiary or Pre-emptive 
LDT Beneficiary with a vital solid organ cancer who is receiving 
treatment with either radiation or chemotherapy. However, through our 
analysis we have identified beneficiaries who have only a treatment 
code available during the MY and do not have a diagnosis code during 
that period. Hence, we proposed to include a lookback period of 6-
months prior to the MY, so that the appropriate diagnosis code can be 
identified for ESRD Beneficiaries and Pre-emptive LDT Beneficiaries who 
have only treatment codes available in the current MY. In the 
alternative, we considered a 12-month lookback period, but did not find 
any significant difference in the number of ESRD Beneficiaries and Pre-
emptive LDT Beneficiaries that had a diagnosis code for a vital organ 
solid cancer during a 12-month lookback period as compared to a 6-month 
lookback period.
    We proposed to identify ESRD Beneficiaries and, if applicable, Pre-
emptive LDT Beneficiaries with a diagnosis of vital solid organ cancer 
and receiving treatment with radiation or chemotherapy by using 
Medicare claims. For purposes of the transplant rate calculations, we 
proposed that an ESRD Beneficiary or Pre-emptive LDT Beneficiary would 
be considered to have a diagnosis of vital solid cancer during the MY, 
if the ESRD Beneficiary has a claim with one of the following ICD-10 
diagnosis codes:
     C22.0-C22.9 (malignant neoplasm of liver and intrahepatic 
bile ducts),
     C34.10-C34.12 (malignant neoplasm of upper lobe, bronchus 
or lung),
     C34.2 (malignant neoplasm of middle lobe, bronchus or 
lung),
     C34.30-C34.32 (malignant neoplasm of lower lobe, bronchus 
or lung),
     C34.80-C34.82 (malignant neoplasm of overlapping sites of 
bronchus and lung),
     C34.90-C34.92 (malignant neoplasm of unspecified part of 
bronchus or lung),
     C38.0 (malignant neoplasm of heart),
     C38.8 (malignant neoplasm of overlapping sites of heart, 
mediastinum and pleura),
     C46.50-C46.52 (Kaposi's sarcoma of lung),
     C64.1, C64.2, C64.9 (malignant neoplasm of kidney, except 
renal pelvis),
     C78.00-C78.02 (secondary malignant neoplasm of lung),
     C78.7 (secondary malignant neoplasm of liver and 
intrahepatic bile duct),
     C79.00-C79.02 (secondary malignant neoplasm of kidney and 
renal pelvis),
     C7A.090 (malignant carcinoid tumor of the bronchus and 
lung),
     C7A.093 (malignant carcinoid tumor of the kidney), or
     C7B.02 (secondary carcinoid tumors of liver).
    We proposed that for the purposes of the transplant rate 
calculations, an ESRD Beneficiary or Pre-emptive LDT Beneficiary would 
be considered to be receiving treatment for vital solid organ cancer 
with either chemotherapy or radiation in the MY if the ESRD Beneficiary 
or Pre-emptive LDT Beneficiary has a claim with one of the following 
codes:
     CPT[supreg] 96401-96402, 96405-96406, 96409, 96411, 96413, 
96415-96417, 96420, 96422-26423, 96425, 96440, 96446 (chemotherapy 
administration);
     CPT[supreg] 96549 (unlisted chemotherapy procedure);
     CPT[supreg] 77373 (stereotactic body radiation therapy);
     CPT[supreg] 77401-77402, 77407, 77412 (radiation treatment 
delivery);
     CPT[supreg] 77423 (high energy neutron radiation treatment 
delivery);
     CPT[supreg] 77424-77425 (Intraoperative radiation 
treatment delivery);
     CPT[supreg] 77520, 77522-77523, 77525 (proton treatment 
delivery);
     CPT[supreg] 77761-77763 (intracavitary radiation source 
application);
     CPT[supreg] 77770-77772, 77778, 77789, 77799 (clinical 
brachytherapy radiation treatment);
     CPT[supreg] 79005, 79101, 79200, 79300, 79403, 79440, 
79445, 79999 (radiopharmaceutical therapy);
     ICD-10-PCS DB020ZZ, DB021ZZ, DB022ZZ, DB023Z0, DB023ZZ,

[[Page 61958]]

DB024ZZ, DB025ZZ, DB026ZZ, DB1297Z, DB1298Z, DB1299Z, DB129BZ, DB129CZ, 
DB129YZ, DB12B6Z, DB12B7Z, DB12B8Z, DB12B9Z, DB12BB1, DB12BBZ, DB12BCZ, 
DB12BYZ, DB22DZZ, DB22HZZ, DB22JZZ, DBY27ZZ, DBY28ZZ, DBY2FZZ, DBY2KZZ 
(radiation of lung);
     ICD-10-PCS DB070ZZ, DB071ZZ, DB072ZZ, DB073Z0, DB073ZZ, 
DB074ZZ, DB075ZZ, DB076ZZ, DB1797Z, DB1798Z, DB1799Z, DB179BZ, DB179CZ, 
DB179YZ, DB17B6Z, DB17B7Z, DB17B8Z, DB17B9Z, DB17BB1, DB17BBZ, DB17BCZ, 
DB17BYZ, DB27DZZ, DB27HZZ, DB27JZZ, DBY77ZZ, DBY78ZZ, DBY7FZZ, DBY7KZZ 
(radiation of chest wall);
     ICD-10-PCS DF000ZZ, DF001ZZ, DF002ZZ, DF003Z0, DF003ZZ, 
DF004ZZ, DF005ZZ, DF006ZZ, DF1097Z, DF1098Z, DF1099Z, DF109BZ, DF109CZ, 
DF109YZ, DF10B6Z, DF10B7Z, DF10B8Z, DF10B9Z, DF10BB1, DF10BBZ, DF10BCZ, 
DF10BYZ, DF0DZZ, DF20HZZ, DF20JZZ, DFY07ZZ, DFY08ZZ, DFY0CZZ, DFY0FZZ, 
DFY0KZZ (radiation of liver);
     ICD-10-PCS DT000ZZ, DT001ZZ, DT002ZZ, DT003Z0, DT003ZZ, 
DT004ZZ, DT005ZZ, DT006ZZ, DT1097Z, DT1098Z, DT1099Z, DT109BZ, DT109CZ, 
DT109YZ, DT10B6Z, DT10B7Z, DT10B8Z, DT10B9Z, DT10BB1, DT10BBZ, DT10BCZ, 
DT10BYZ, DT20DZZ, DT20HZZ, DT20JZZ, DTY07ZZ, DTY08ZZ, DTY0CZZ, DTY0FZZ 
(radiation of kidney);
     ICD-10-PCS DW020ZZ, DW021ZZ, DW022ZZ, DW023Z0, DW023ZZ, 
DW024ZZ, DW025ZZ, DW026ZZ, DW1297Z, DW1298Z, DW1299Z, DW129BZ, DW129CZ, 
DW129YZ, DW12B6Z, DW12B7Z, DW12B8Z, DW12B9Z, DW12BB1, DW12BBZ, DW12BCZ, 
DW12BYZ, DW22DZZ, DW22HZZ, DW22JZZ, DWY27ZZ, DWY28ZZ, DWY2FZZ 
(radiation of chest); or
     ICD-10-PCS DW030ZZ, DW031ZZ, DW032ZZ, DW033Z0, DW033ZZ, 
DW034ZZ, DW035ZZ, DW036ZZ, DW1397Z, DW1398Z, DW1399Z, DW139BZ, DW139CZ, 
DW139YZ, DW13B6Z, DW13B7Z, DW13B8Z, DW13B9Z, DW13BB1, DW13BBZ, DW13BCZ, 
DB13BYZ, DW23DZZ, DW23HZZ, DW23JZZ, DWY37ZZ, DWY38ZZ, DWY3FZZ 
(radiation of abdomen).
    We sought comment on the proposal to amend Sec.  512.365(c) to 
exclude ESRD Beneficiaries and, if applicable, Pre-emptive LDT 
Beneficiaries with a diagnosis of vital solid organ cancer and 
receiving treatment with chemotherapy or radiation from the denominator 
of the transplant rate as a whole, including both the transplant 
waitlist rate component and the living donor transplant rate component, 
for the duration of the MY for both ESRD facilities and Managing 
Clinicians.
    The following is a summary of the comments received on the proposal 
to exclude ESRD beneficiaries and, if applicable, Pre-emptive LDT 
Beneficiaries, with a diagnosis of vital solid organ cancer and 
receiving treatment with chemotherapy or radiation from the denominator 
of the transplant rate for the duration of the MY, beginning for MY3, 
and our responses.
    Comment: Several commenters stated they agree with the proposal to 
exclude beneficiaries, including Pre-emptive LDT Beneficiaries, with 
vital solid organ (heart, liver, lung, and kidney) cancers from the 
denominator of the transplant rate. The majority of these commenters 
also agreed with our proposal to use a six-month lookback period to 
identify these beneficiaries.
    Response: We appreciate the commenters' support.
    Comment: Several commenters suggested that CMS exclude additional 
beneficiaries from the transplant rate based on one or more criteria. A 
few of these commenters suggested that CMS exclude beneficiaries with 
all cancers, while one of the commenters suggested specific additional 
cancers. Another commenter suggested that CMS add breast cancer to the 
list of cancer exclusions, if CMS does not exclude beneficiaries with 
all cancers. Another commenter, suggested that CMS exclude 
beneficiaries with all active malignancies.
    Response: In response to the commenters' suggestions to exclude 
beneficiaries with additional cancers, all active malignancies, or all 
cancers from the transplant rate, we recognize that transplant centers 
may vary in the cancers used to determine eligibility for transplant. 
However, having cancer may not automatically eliminate a beneficiary 
from being eligible for transplant. As noted in the proposed rule (86 
FR 36380), our internal analysis identified that ESRD Beneficiaries 
with cancer in vital solid organs (heart, kidney, liver, lung) for 
which they are receiving treatment with radiation or chemotherapy, are 
less likely to be in the numerator of the transplant rate--so being 
placed on the transplant waitlist or receiving a living donor 
transplant--than ESRD Beneficiaries without a diagnosis of vital solid 
organ cancer. As noted in the Specialty Care Models final rule (85 FR 
61301), CMS would like to encourage ETC Participants to provide home 
dialysis and transplantation for as many beneficiaries that would 
benefit from these care modalities. Accordingly, we are excluding from 
the transplant rate calculation only those beneficiaries who are 
particularly unlikely to be eligible for transplants; specifically, 
those beneficiaries with vital solid organ cancers who are receiving 
treatment through radiation or chemotherapy.
    Comment: One commenter suggested that CMS exclude all beneficiaries 
who have untreatable cardiopulmonary, cardiovascular, peripheral 
vascular disease, significant physical disability (Karnofsky Score <40 
percent), severe pulmonary issues, severe morbid obesity (BMI >50), or 
recurrent chronic infections. In addition, other commenters suggested 
that we exclude beneficiaries with end-stage Chronic Obstructive 
Pulmonary Disease (COPD) and diagnoses involving heart failure.
    Response: As noted above, transplant centers have varying criteria 
when considering a beneficiary as eligible for transplant. For 
instance, many transplant centers do not reject a beneficiary for 
transplant solely on the basis of the non-cancer conditions suggested 
by commenters. Thus, the general categorization of these conditions for 
exclusion is not appropriate. Moreover, as noted previously, CMS would 
like to encourage ETC Participants to provide home dialysis and 
transplantation for as many beneficiaries that would benefit from these 
care modalities; our ability to achieve this aim would be compromised 
were CMS to exclude too many categories of beneficiaries from the 
Model's financial calculations. Accordingly, we are not adding these 
conditions for beneficiary exclusion from the transplant rate at this 
time. Nonetheless, we will continue to consider whether any additional 
conditions should be added to the exclusion criteria for transplant 
rate through future rulemaking.
    Comment: One commenter suggested that CMS operationalize the 
exclusion of beneficiaries with cancer in vital solid organs from the 
transplant rate by using only diagnosis codes, rather than a 
combination of diagnosis codes and treatment codes, to identify such 
beneficiaries, as treatment might not have started or might not be 
appropriate.
    Response: As we noted in the CY 2022 ESRD PPS proposed rule (86 FR 
36380), we proposed to include a lookback period, a period of time 
prior to the MY, to appropriately identify beneficiaries with a 
diagnosis of a vital

[[Page 61959]]

solid organ cancer for which they are receiving treatment in light of 
internal analysis that identified beneficiaries who have a treatment 
code, but not a diagnosis code, during the MY. In order to capture the 
ESRD beneficiaries with the vital solid organ cancer diagnosis 
appropriately, we proposed to include a lookback period of 6 months. 
While we considered a 12-month lookback period, as noted in the CY 2022 
ESRD PPS proposed rule (86 FR 36380), our internal analysis did not 
identify any significant difference in the number of beneficiaries that 
had a diagnosis for a vital solid organ cancer during a 12-month 
lookback period as compared to a 6-month lookback period. In addition, 
a longer lookback period was not considered to identify diagnosis 
code(s) as the exclusion is to identify beneficiaries with active 
cancer because our internal analysis did not identify any significant 
difference in the number of beneficiaries that had a diagnosis for a 
vital solid organ cancer during a lookback period longer than 12 months 
as compared to a 6-month lookback period. We therefore decline to adopt 
the commenter's suggestion of using a 2-year lookback period to 
identify cancer diagnosis.
    In the CY 2022 ESRD PPS proposed rule (86 FR 36280), we did not 
propose a lookback period for treatment codes. However, CMS did 
previously identify beneficiaries with a diagnosis code and no 
treatment code during the MY. Given that several commenters suggested 
that CMS include a lookback period for treatment, and considering that 
a beneficiary could have ended their most recent course of treatment 
immediately prior to the start of a given MY, we are modifying our 
proposal to include a lookback period of 6-months to identify radiation 
or chemotherapy treatment codes for beneficiaries with diagnosis code 
of vital solid organ cancer during the MY, similar to the proposed 
lookback period for diagnosis codes that we are finalizing in this 
rule. We are limiting the lookback period to identify radiation or 
chemotherapy treatment code(s) to 6 months because the purpose of this 
particular exclusion is to exclude from the transplant rate 
beneficiaries who have an active cancer and are receiving treatment, as 
these beneficiaries are less likely to be placed on the transplant 
waitlist. Beneficiaries who received radiation or chemotherapy 
treatment greater than 6 months before the start of the MY are unlikely 
to be actively receiving treatment and thus do not need to be excluded 
from the transplant rate for that reason.
    After considering the comments received, we are finalizing a 6-
month lookback period, as proposed, for identifying a vital solid organ 
cancer diagnosis code for beneficiaries who have only a treatment code 
during the MY. In addition, we are adding in a 6-month lookback period 
for identifying radiation and chemotherapy treatment codes for 
beneficiaries who have only a diagnosis code during the MY.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal with modification. First, we are amending our 
regulation at Sec.  512.365(c) to exclude ESRD beneficiaries and, if 
applicable, Pre-emptive LDT Beneficiaries, who had a diagnosis of vital 
solid organ cancer and were receiving treatment with chemotherapy or 
radiation for vital solid organ cancer during the MY from the 
denominator of the transplant rate calculation, beginning for MY3. 
Second, we are making two modifications to correct the information 
included in the proposed rule (86 FR 36380-36381). Specifically, we are 
clarifying the list of ICD-10 diagnosis codes included in Sec.  
512.365(c)(1)(i)(A)(1) to replace ``C22.1-C22.9,'' with ``C22.0, C22.1, 
C22.2, C22.3, C22.4, C22.7, C22.8 and C22.9.'' The codes C22.1-C22.9 
are not sequential--that is, there is no C22.5 or C22.6--and therefore 
should not have been grouped. In addition, while we referenced C22.0 in 
the preamble of the CY 2022 ESRD PPS proposed rule, this code was left 
out of the proposed regulation text in error. C22.2 was also left out 
of the proposed regulation text in error. In addition, we are also 
modifying the list of treatment codes at Sec.  
512.365(c)(1)(i)(A)(2)(ii) to correct a typo of the ICD-10-PCS codes 
from ``DF0DZZ,'' to ``DF20DZZ,'' which refers to radiation of the 
liver. Third, we are adding a 6-month lookback period to identify 
radiation and chemotherapy treatment codes for beneficiaries who only 
have a vital solid organ cancer diagnosis code during the MY.
5. PPA Achievement Benchmarking
a. Background on Achievement Benchmarking
    Under the ETC Model, the PPA is a positive or negative adjustment 
on dialysis and dialysis-related Medicare payments, for both home 
dialysis and in-center dialysis. To calculate an ETC Participant's PPA, 
we assess ETC Participant achievement on the home dialysis rate and 
transplant rate in relation to achievement and improvement benchmarks, 
as described in 42 CFR 512.370(b) and Sec.  512.370(c), respectively. 
The Model more heavily weights achievement of results, allowing 
participating Managing Clinicians or ESRD facilities to earn up to 2 
points in the scoring methodology, as opposed to only 1.5 points for 
maximum level of improvement, as described in Sec. Sec.  512.370(b) and 
512.370(c).
    The achievement benchmarks are constructed based on the home 
dialysis rate and transplant rate observed in Comparison Geographic 
Areas during corresponding Benchmark Years. Achievement benchmarks are 
percentile based, and an ETC Participant receives the achievement 
points that correspond with its performance, at the aggregation group 
level, on the home dialysis rate and transplant rate in relation to the 
achievement benchmarks, as described in Sec.  512.370(b). Table 7 
details the achievement score scale described in Sec.  512.370(b).

[[Page 61960]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.006

    In the Specialty Care Models proposed rule, we proposed to apply 
this achievement benchmark policy only for MY1 and MY2, and stated our 
intent to increase achievement benchmarks for ETC Participants above 
the rates observed in Comparison Geographic Areas. We stated our belief 
that increasing the achievement benchmarks for future MYs, which we 
would do through subsequent rulemaking, was necessary in order to 
provide sufficient incentive for ETC Participants to increase rates of 
home dialysis and transplantation at a rate faster than would occur 
absent the ETC Model (84 FR 34556 through 34557). In the Specialty Care 
Models final rule, in response to comments, we finalized the 
applicability of the achievement benchmarks for MY1 through MY2 and for 
subsequent MYs (85 FR 61323), but reiterated our intent to establish a 
different method for establishing achievement benchmarks for future 
years of the Model through subsequent rulemaking (85 FR 61320). We 
stated our belief that future modifications to the achievement 
benchmark methodology finalized in the Specialty Care Models final rule 
would be necessary to provide sufficient incentive for ETC Participants 
to raise home dialysis and transplant rates at a rate faster than would 
occur absent the ETC Model (85 FR 61321). However, we clarified that 
while we had stated a goal of 80 percent of an ETC Participant's 
receiving home dialysis or a transplant in order to receive the maximum 
upward payment adjustment by the final MYs, we were not finalizing that 
goal in the Specialty Care Models final rule (85 FR 61321).
b. Addressing Socioeconomic Factors That Impact ETC Participant 
Achievement
    In the Specialty Care Models final rule, we acknowledged 
commenters' concerns that non-clinical factors, such as socioeconomic 
status, may impact a beneficiary's likelihood to receive home dialysis 
or transplant. We discussed commenters' suggestions to incorporate 
consideration of socioeconomic status in two elements of the ETC Model: 
(1) Beneficiary attribution; and (2) risk adjustment. However, we 
declined to exclude beneficiaries from attribution based on 
socioeconomic status. Noting the importance of not excluding these 
beneficiaries, CMS stated its intent to assess the use of various codes 
for purposes of adding any additional beneficiary exclusions from 
attribution to ETC Participants based on socioeconomic status, 
homelessness, or other social determinants of health through future 
rulemaking (85 FR 61299). We also noted that commenters' suggestions 
for ways to risk adjust the home dialysis rate based on socioeconomic 
status were a significant departure from the policy originally proposed 
(85 FR 61315).
    In the CY 2022 ESRD PPS proposed rule (86 FR 36382), we continued 
to acknowledge the impact that non-clinical factors, such as 
socioeconomic status, have on a beneficiary's likelihood to receive 
home dialysis or a transplant. Our additional analysis of Medicare 
claims data shows that beneficiaries who are dual-eligible for Medicare 
and Medicaid or receive the Medicare Low-Income Subsidy (LIS) are less 
likely than beneficiaries who are not dual-eligible and are not LIS 
recipients to dialyze at home or to receive a kidney transplant. As 
such, ETC Participants who have a higher proportion of attributed 
beneficiaries who are dual-eligible or LIS recipients may be less 
likely to achieve high home dialysis and transplant rates than ETC 
Participants who have a lower proportion of attributed beneficiaries 
who are dual-eligible or LIS recipients.
c. Achievement Benchmarking and Scoring
(1) Achievement Benchmarking and Scoring for MY3 Through MY10
    We proposed to modify the percentile-based achievement benchmarking 
methodology based on the home dialysis rate and transplant rate 
observed in Comparison Geographic Areas during the Benchmark Year as 
the basis for achievement benchmarks in MY3 through MY10 (86 FR 36382). 
Rather than using rates observed in Comparison Geographic Areas, we 
proposed to modify Sec.  512.370(b)(1) to use rates observed in 
Comparison Geographic Areas as the base for the achievement benchmarks, 
and to increase the achievement benchmarks above the Comparison 
Geographic Area rates during the Benchmark Year by 10 percent every two 
MYs, beginning for MY3. As such, we proposed that achievement 
benchmarks would be calculated by multiplying the percentile rate 
observed in Comparison Geographic Areas during the Benchmark Year by 
1.1 for MY3 and MY4, by 1.2 for MY5 and MY6, by 1.3 for MY7 and MY8, 
and by 1.4 for MY9 and MY10.
    Based on our analyses detailed in the CY 2022 ESRD PPS proposed 
rule and in section VIII.C.4 of this final rule, this proposed 
methodology for increasing benchmarks by 10 percent every two MYs would 
produce results in keeping with the initial impact estimates for the 
ETC Model, as described in the Specialty Care Models final rule (85 FR 
61353 through 61354). In the Specialty Care Models final rule, we 
estimated impacts based on projected growth rates for the home dialysis 
and transplant rates based on historical observation, projected a 1.5 
percentage point growth rate (86 FR 36383). In the CY 2022 ESRD PPS 
proposed rule and in section VIII.C.4 of this final rule, updated 
projections assume the same projected growth rate, but note that 
observed rates of increase have accelerated in more recent data. As 
such, in the CY 2022

[[Page 61961]]

ESRD PPS proposed rule we stated our belief that this rate of increase 
would be attainable for ETC Participants, as initial impact estimates 
were based on rates of increase observed on the home dialysis rate and 
transplant rate before the ETC Model began (85 FR 61353). We also noted 
that, unlike in the Specialty Care Models proposed rule (84 FR 34556), 
we were not proposing to increase achievement benchmarks such that of 
80 percent of an ETC Participant's attributed beneficiaries would need 
to be receiving home dialysis or a transplant in order for the ETC 
Participant to receive the maximum upward payment adjustment by the 
final MYs. Table 8 details the proposed scoring methodology for 
assessment of MY3 through MY10 achievement scores.
[GRAPHIC] [TIFF OMITTED] TR08NO21.007

    In the CY 2022 ESRD PPS proposed rule, we considered increasing 
achievement benchmarks by a percentage point amount, rather than by a 
percent amount, every two MYs (for example, increasing achievement 
benchmarks by 10-percentage points for MY3 and MY4, by 20-percentage 
points for MY5 and MY6, etc.). However, we stated our belief that this 
percentage point-based approach would be less flexible to and 
accommodating of variation in the underlying distributions of home 
dialysis and transplant rates than the percent-based approach we are 
proposing. We also stated our belief that this percentage point-based 
approach would add additional complexity, as we would likely need to 
develop separate percentage point amounts by which to increase 
benchmarks as the home dialysis rate and transplant rate observed in 
Comparison Geographic Areas are not sufficiently similar to expect the 
same percentage point growth rate for the two rates.
    In the CY 2022 ESRD PPS proposed rule, we also considered proposing 
to modify the Benchmark Year, such that the Benchmark Year would be a 
fixed duration (for example, July 1, 2018 through June 30, 2019), 
rather than a period of time defined in relation to the relevant MY. 
However, we determined that this approach would not account for 
aggregate changes in the home dialysis rate and transplant rate over 
time.
    In the CY 2022 ESRD PPS proposed rule we stated our belief that the 
proposed approach for increasing achievement benchmarks over the course 
of the ETC Model would balance the intent of the model design to 
increase rates of home dialysis and transplantation above what would 
have occurred in the absence of the Model with what is achievable for 
ETC Participants, based on rates of home dialysis and transplantation 
observed at the high ends of the distributions (for additional 
discussion, see 86 FR 36427). We also stated our belief that the 
proposed approach would provide

[[Page 61962]]

clarity to ETC Participants about the benchmarking methodology for the 
duration of the ETC Model while maintaining flexibility in that 
methodology to address long term trends in the home dialysis rate and 
transplant rate.
    We sought public comment on our proposal to modify the achievement 
benchmarking methodology under Sec.  512.370(b) beginning for MY3 to 
increase achievement benchmarks, and the proposal to increase 
achievement benchmarks by 10 percent every two MYs above percentile-
based rates of observed in Comparison Geographic Areas.
    The following is a summary of the comments received on our proposal 
to modify the achievement benchmarking methodology beginning for MY3 to 
increase achievement benchmarks by 10 percent every two MYs above rates 
observed in Comparison Geographic Areas, and our responses.
    Comment: Many commenters stated that they support increasing 
achievement benchmarks over the duration of the ETC Model.
    Response: We appreciate the support for increasing the PPA 
achievement benchmarks throughout the duration of the ETC Model.
    Comment: Two commenters opposed increasing achievement benchmarks 
over time. One such commenter stated that the increasing magnitude of 
the PPA, and the use of improvement scoring, collectively create a 
sufficient incentive for ETC Participants to continue to increase rates 
of home dialysis and transplant. The other such commenter stated that 
they opposed increasing achievement benchmarks over time, as doing so 
will ensure that ETC Participants cannot be successful in the ETC 
Model, resulting in payment cuts.
    Response: In response to the comment that the increasing magnitude 
of the PPA and use of improvement scoring create a sufficient incentive 
to promote continued increases in rates of home dialysis and 
transplant, we disagree that these two factors alone are sufficient. As 
such, we believe it is necessary to increase achievement benchmarks 
over the course of the ETC Model. Similarly, we disagree with the 
commenter that increasing achievement benchmarks will result in payment 
cuts for all ETC Participants. While we project that the ETC Model will 
reduce Medicare expenditures, ETC Participants can still earn positive 
payment adjustments through their performance in the Model.
    Comment: Several commenters stated that they appreciate and support 
that CMS is establishing the achievement benchmarking methodology for 
the remaining years of the Model through this rulemaking.
    Response: As stated in the Specialty Care Models final rule (85 FR 
61321), we believe that establishing changes to the achievement 
benchmarking methodologies for subsequent MYs through notice-and-
comment rulemaking is transparent and will provide sufficient notice to 
ETC Participants to plan for the updated achievement benchmarking 
methodology.
    Comment: Several commenters stated that CMS should ensure that 
achievement benchmarks are achievable for ETC Participants.
    Response: We agree that the achievement benchmarks should be 
achievable, while ensuring that there is sufficient incentive for ETC 
Participants to continue to increase rates of home dialysis and 
transplantation through the duration of the Model. As discussed in the 
CY 2022 ESRD PPS proposed rule and section V.B.5.c.(1) of this final 
rule, we believe that the achievement benchmarking methodology we are 
finalizing is achievable.
    Comment: Several commenters stated that they agree with the 
proposal to increase achievement benchmarks by 10 percent every two 
MYs. One of these commenters stated that this increase is necessary to 
sustain continued growth in the home dialysis rate and transplant rate.
    Response: We appreciate the commenters' support for increasing 
benchmarks by 10 percent every two MYs. We agree that this increase is 
necessary to sustain continued growth in rates of home dialysis and 
transplantation in the ETC Model.
    Comment: A few commenters stated that increasing the home dialysis 
rate by 10 percent is, or may be, achievable based on growth in home 
dialysis rates observed in 2019, 2020, and 2021.
    Response: We appreciate commenters' statements that a 10 percent 
increase in the home dialysis rate is or may be achievable for ETC 
Participants. We agree that a 10 percent increase is achievable for ETC 
Participants based on recent historical growth rates. Specifically, in 
the Specialty Care Models final rule (85 FR 61354), we projected a 1.5 
percentage point growth rate in the home dialysis and transplant rates. 
While the updated projections in the CY 2022 ESRD PPS proposed rule and 
in section VIII.C.4 of this final rule assume the same projected growth 
rate, initial impact estimates were based on rates of increase observed 
on the home dialysis rate and transplant rate before the ETC Model 
began and observed rates of increase have accelerated in more recent 
data.
    Comment: Several commenters stated that CMS should not increase 
achievement benchmarks by 10 percent every two MYs. Some such 
commenters stated that 10 percent is an arbitrary amount, that 10 
percent is too large, and that 10 percent is not achievable. As 
evidence that a 10 percent increase in achievement benchmarks every two 
MYs is not achievable, one such commenter pointed to the lack of growth 
in home dialysis observed as a result of the shift to the ESRD PPS 
bundled payment system in 2011, and between 2018 and 2021, and that 
transplant waitlist rates were relatively stable between 2014 and 2019. 
Another commenter, who is a dialysis provider, stated that 10 percent 
home dialysis growth is not consistent with their own growth rate over 
the past year.
    Response: We disagree with commenters that a 10 percent increase in 
the achievement benchmarks every two MYs is not attainable, as we 
believe that 10 percent is neither too large nor not achievable. We 
also disagree that a 10 percent increase is arbitrary. As stated in the 
CY 2022 ESRD PPS proposed rule and in sections V.B.5.c.(1) and 
VIII.C.5.d.(10) of this final rule, we selected 10 percent based on 
analysis of historical observations, attainability, transparency for 
ETC Participants, and the need to preserve the expectation for model 
net savings. We have also noted, as did a few commenters, that in the 
recent years these observed rates of increase in the home dialysis rate 
and transplant rate have accelerated and as such we continue to believe 
the proposed rate of increase would be attainable for ETC Participants.
    In regards to the home dialysis rate specifically, CMS acknowledges 
the lack of growth in home dialysis observed following the shift to the 
ESRD PPS bundled payment system in 2011. Indeed, as described in the 
Specialty Care Models final rule (85 FR 61273), while CMS has 
undertaken previous efforts expected to increase rates of home 
dialysis, low rates of home dialysis have persisted. Therefore, the ETC 
Model was designed to test the effectiveness of more significant 
incentives to increase rates of home dialysis by tying payment 
incentives directly to increasing rates of home dialysis. However, we 
disagree with the commenter that stated that home dialysis rates have 
not grown in recent years. Prior to the announcement of the ETC Model 
in 2019, the home dialysis rate increased by 7.9 percent among 
prevalent patients with ESRD from 2017

[[Page 61963]]

to 2018.\274\ More recently, as described in section VIII.C.5.d.(3) of 
this final rule, the aggregate home dialysis rate grew by approximately 
4 percent in CY 2020. Regarding the commenter who stated that 10 
percent was not consistent with their own historical growth rate for 
home dialysis, we have not asserted that any individual dialysis 
provider has experienced this growth rate, nor do we expect any 
individual dialysis provider's experience prior to the ETC Model to be 
representative of future potential growth in home dialysis rates for 
all ETC Participants. Instead, we have set the 10 percent increase in 
the achievement benchmark based on projected growth rates in home 
dialysis and transplant, based on historical observations, and we 
believe that a 10-percent increase will be attainable for ETC 
Participants.
---------------------------------------------------------------------------

    \274\ United States Renal Data System. 2020. 2020 Annual Data 
Report. ``Figure 1.13 Number of prevalent ESRD patneits performing 
home dialysis, 2000-2018.'' https://adr.usrds.org/2020/end-stage-renal-disease/1-incidence-prevalence-patient-characteristics-and-treatment-modalities.
---------------------------------------------------------------------------

    Regarding the transplant rate specifically, we acknowledge that the 
transplant waitlist rates were stable between 2014 and 2019, as noted 
by the commenter. However, CMS and HHS are undertaking a number of 
efforts regarding transplantation, as we described in the CY 2022 ESRD 
PPS proposed rule and in section V.B.4.a of this final rule. This 
coordinated effort around transplant availability did not exist prior 
to 2019, and we believe that this effort will facilitate increasing 
rates of transplantation during the remaining MYs of the ETC Model.
    Comment: One commenter stated that if CMS increases achievement 
benchmarks as proposed, it should do so only for ESRD facilities owned 
by LDOs, as the commenter is concerned about the ability of ESRD 
facilities not owned by LDOs to increase their home dialysis and 
transplant rates.
    Response: We disagree with the commenter that CMS should increase 
achievement benchmarks only for ESRD facilities owned by LDOs. As 
discussed in the Specialty Care Models final rule (85 FR 61284), the 
ETC Model is designed to test the effectiveness of using payment 
adjustments to maintain or improve quality while decreasing costs by 
increasing rates of home dialysis and transplants for all types of ESRD 
facilities nationally, including those owned by both large and small 
dialysis organizations. To determine if payment adjustments can achieve 
the Model's goals of increasing rates of home dialysis utilization and 
kidney transplant and, as a result, improving or maintaining the 
quality of care while reducing Medicare expenditures among all types of 
ESRD facilities, we need to test the model with ESRD facilities owned 
by all types of dialysis organizations. By extension, we believe that 
it is necessary to increase the achievement benchmarks in a consistent 
manner for all ESRD facilities participating in the ETC Model, 
regardless of type of ownership, to create the same incentives for all 
ESRD facilities to increase rates of home dialysis and transplants. 
Using the same achievement benchmarks also increases the 
generalizability of the ETC Model results.
    Comment: A few commenters stated that they agreed with the proposal 
to set achievement benchmarks in relation to rates observed in 
Comparison Geographic Areas.
    Response: We appreciate commenters' support for setting achievement 
benchmarks in relation to rates observed in Comparison Geographic 
Areas.
    Comment: Several commenters opposed setting achievement benchmarks 
in relation to rates observed in Comparison Geographic Areas. These 
commenters stated that basing benchmarks on BY rates in Comparison 
Geographic Areas may cause dialysis organizations with ESRD facilities 
to focus their resources on increasing rates in Selected Geographic 
Areas to the detriment of those in Comparison Geographic Areas. 
Similarly, these commenters, including LDOs, stated that this approach 
could create an opportunity for dialysis organizations with ESRD 
facilities in both Selected Geographic Areas and Comparison Geographic 
Areas to manipulate achievement benchmarks by keeping home dialysis and 
transplant rates artificially low in Comparison Geographic Areas. These 
commenters stated that any such gaming by dialysis organizations would 
be harmful to beneficiaries and would run counter to the intent of the 
ETC Model. Another commenter stated that this dynamic could 
disadvantage ESRD facilities not owned by LDOs, and further market 
consolidation. Several commenters stated that CMS should use 
``absolute'' or ``fixed'' benchmarks, to avoid gaming opportunities by 
dialysis organizations with ESRD facilities in both Selected Geographic 
Areas and Comparison Geographic Areas. These commenters suggested 
setting fixed benchmarks based on rates observed in Comparison 
Geographic Areas during a fixed period of time, such as Benchmark Year 
1, or based on historical rates observed in Selected Geographic Areas 
instead of Comparison Geographic Areas.
    Response: We understand commenters' concerns that entities that own 
ESRD facilities in both Selected Geographic Areas and Comparison 
Geographic Areas may choose to engage in practices that limit the 
growth of home dialysis and transplantation in Comparison Geographic 
Areas, either because they are incentivized under the Model to focus on 
Selected Geographic Areas or because they seek to manipulate or 
``game'' achievement benchmarks based on rates observed in Comparison 
Geographic Areas for financial gain.
    The purpose of the ETC Model is to test whether the Model's payment 
adjustments will change the behavior of ETC Participants to increase 
rates of home dialysis and transplantation such that quality is 
maintained or improved while costs are reduced. If the Model test 
achieves these aims, we expect ETC Participants to behave differently 
than ESRD facilities and Managing Clinicians who are not ETC 
Participants. That is, we expect ETC Participants to respond to the 
Model's incentives to increase rates of home dialysis and 
transplantation over the course of the Model.
    However, we do not expect or intend that testing the ETC Model will 
harm or disadvantage beneficiaries whose ESRD facilities and Managing 
Clinicians are not ETC Participants. First, there are a number of 
factors that mitigate the risk that ESRD facilities owned by entities 
operating in both Selected Geographic Areas and Comparison Geographic 
Areas can manipulate achievement benchmarks based on rates observed in 
Comparison Geographic Areas. For instance, organizations that own ESRD 
facilities in both Selected Geographic Areas and Comparison Geographic 
Areas do not have sole control over the rates of home dialysis, 
transplant waitlisting, or living donation in Comparison Geographic 
Areas. Each ESRD Beneficiary has a Managing Clinician who is 
responsible for managing their dialysis care, as well as other 
healthcare providers. Managing Clinicians, in particular, provide 
education about renal replacement options to ESRD Beneficiaries and 
Preemptive LDT Beneficiaries, and prescribe dialysis for ESRD 
Beneficiaries. Unlike ESRD facilities owned by organizations with ESRD 
facilities in both Selected Geographic Areas and Comparison Geographic 
Areas, few Managing Clinicians are in practices that operate in both 
Selected Geographic Areas and Comparison Geographic Areas, and as such 
are unlikely to even be able to provide differential care in different 
areas.

[[Page 61964]]

    Regarding the transplant rate in particular, we recognize that ESRD 
facilities play an important role in transplant waitlisting and living 
donor transplants. As ESRD Beneficiaries interact with their ESRD 
facility multiple times a week, ESRD facilities are well positioned to 
support beneficiaries through the transplant process. Additionally, 
ESRD facilities are required to conduct certain transplant-related 
activities for their patients, as described in 42 CFR 494.70, 494.80, 
and 494.90. However, an ESRD Beneficiary's Managing Clinician and other 
healthcare providers are equally important for supporting a beneficiary 
through the transplant process.
    Regarding the home dialysis rate in particular, while we recognize 
that certain ESRD facilities located in both Selected Geographic Areas 
and Comparison Geographic Areas--namely those owned in whole or in part 
by LDOs--provide the majority of dialysis, they are not the sole 
providers of dialysis. Smaller chains and independent ESRD facilities, 
many of which do not operate in both Selected Geographic Areas and 
Comparison Geographic Areas, provide a significant volume of dialysis 
services and are less likely to face the incentive described by 
commenters to provide differential care in different areas, for either 
resource or gaming reasons. Additionally, if the demand for home 
dialysis increases but ESRD facilities owned by organizations that 
operate in both Selected Geographic Areas and Comparison Geographic 
Areas are unable or unwilling to increase the availability of home 
dialysis in Comparison Geographic Areas, ESRD facilities owned by 
smaller chains or independent ESRD facilities may be able to increase 
supply to meet the unmet demand in those areas.
    Second, as described in the Specialty Care Models final rule (85 FR 
61320), CMS will engage in active monitoring for adverse outcomes, 
including behavior described by commenters, and we intend to make 
adjustments to the Model through subsequent rulemaking should such 
unintended consequences arise. We also note that CMS may take remedial 
action under Sec.  512.160 of our regulations if an ETC Participant 
fails to comply with any terms of the Model, including the provisions 
protecting beneficiary freedom of choice and availability of services 
under Sec.  512.120 of our regulations, or if an ETC Participant has 
taken any action that threatens the health or safety of a beneficiary 
or other patient.
    Taken together we believe that these factors, coupled with CMS's 
monitoring efforts and ability to take remedial action, mitigate the 
risk that entities that own ESRD facilities in both Selected Geographic 
Areas and Comparison Geographic areas will alter achievement benchmarks 
by manipulating rates in Comparison Geographic Areas.
    Comment: A few commenters stated that CMS should use the 
methodology used to set the performance standards under the ESRD QIP 
for setting achievement benchmarks under the ETC Model. One such 
commenter stated that the ESRD QIP performance standard setting 
methodology is preferable to the achievement benchmarking approaches 
described in the CY 2022 ESRD PPS proposed rule because it would 
continue to incentivize improved performance while not relying on rates 
observed in Comparison Geographic Areas, and is simple and familiar to 
ESRD facilities. This commenter also stated that the ESRD QIP 
methodology was preferable because it does not allow performance 
standards to decrease over time.
    Response: As stated in the Specialty Care Models final rule, we do 
not believe the ESRD QIP methodology is well suited for the ETC Model 
(85 FR 61322 through 61323). In particular, we continue to believe that 
the ESRD QIP performance standard setting methodology does not ensure 
escalating performance standards over time, which is an important 
design feature for the ETC Model. Similarly, we continue to recognize 
that, while ESRD facilities are familiar with the ESRD QIP performance 
standard setting methodology because they are already subject to it, 
Managing Clinicians are not.
    Comment: A few commenters stated that CMS should use population-
weighted achievement benchmarks, to account for variation in size among 
aggregation groups. One such commenter stated that population-weighted 
benchmarks are more appropriate because of the difference in absolute 
change necessary for larger and smaller aggregation groups to achieve 
the same relative performance. That is, relative to smaller aggregation 
groups, larger aggregation groups need to have a larger number of 
individual beneficiaries change from in-center dialysis to home 
dialysis, self-dialysis, or nocturnal in-center dialysis to increase 
their home dialysis rate; or to have a larger number of individual 
beneficiaries be waitlisted for transplant or receive a living donor 
transplant to increase their transplant rate to achieve the same level 
of performance. The commenter also stated that larger aggregation 
groups have a larger absolute impact on the number of beneficiaries who 
dialyze at home or are placed on the transplant waitlist, and therefore 
should not be compared to smaller aggregation groups who may have the 
same relative level of performance but a smaller absolute impact.
    Response: We appreciate commenters' suggestion that we use 
population-weighted benchmarks. However, we did not propose this 
approach, and we are not contemplating this change at this time.
    Additionally, we disagree with the commenter who stated that 
population-weighted benchmarks are more appropriate because larger 
aggregation groups need to increase rates of home dialysis, transplant 
waitlisting, and living donor transplants among a larger number of 
beneficiaries relative to smaller aggregation groups to achieve the 
same level of performance. We believe that that this approach would 
unfairly disadvantage smaller aggregation groups, holding them to a 
higher relative standard solely because they have fewer attributed 
beneficiary months. We also disagree that larger aggregation groups 
should be held to a lower relative standard than smaller aggregation 
groups because they have a larger absolute impact.
    Comment: One commenter opposed the negative payment adjustments 
included in the ETC Model and suggested that the Model instead have 
only positive payment adjustments.
    Response: As noted in the Specialty Care Models final rule (85 FR 
61264), the purpose of the ETC Model is to test whether the payment 
adjustments included in the Model will reduce Medicare expenditures 
while improving or maintaining quality of care. As further stated in 
the Specialty Care Models final rule (85 FR 61323), we believe that 
downside risk is a critical component of this Model in order to create 
strong incentives for behavioral change among ETC Participants, that is 
by encouraging participating Managing Clinicians and ESRD facilities to 
support beneficiaries choosing home dialysis and transplantation. We 
therefore disagree that eliminating the negative adjustments would 
provide sufficient incentive to encourage behavior change leading to 
the achievement of the goals of the Model.
    Comment: One commenter stated that, instead of increasing 
achievement benchmarks to increase rates of home dialysis and 
transplantation, CMS should instead focus on increasing participation 
in the ETC Model in more areas of the country, if the ETC Model is 
successful at increasing rates of home dialysis and transplantation.

[[Page 61965]]

    Response: As described previously in section V.A.3 of this final 
rule, the purpose of the ETC Model is to test the effectiveness of 
adjusting certain Medicare payments to ESRD facilities and Managing 
Clinicians to encourage greater utilization of home dialysis and kidney 
transplantation, support beneficiary modality choice, reduce Medicare 
expenditures, and preserve or enhance the quality of care. If the Model 
meets the criteria set forth in section 1115A(c) of the Act, we may 
consider expanding the duration and scope of the ETC Model. However, 
the Model calculates benchmarks and assesses ETC Participant 
performance against rates of home dialysis, transplant waitlisting, and 
living donor transplantation among similar Managing Clinicians or ESRD 
facilities located in Comparison Geographic Areas. A limitation on 
Model participation is therefore currently necessary to ensure there 
are sufficient comparators for these purposes.
    Comment: One commenter stated that we should update the PPA 
methodology by increasing the weight of the transplant rate to be equal 
to the home dialysis rate, or by separating out the transplant rate 
completely so that one is not dependent on the other.
    Response: As discussed in the Specialty Care Models final rule (85 
FR 61319), CMS had considered making the home dialysis rate score and 
the transplant rate score equal components of the Modality Performance 
Score (MPS) used in calculating the PPA. However, we recognized that 
transplant rates may be more difficult for ETC Participants to improve 
than home dialysis rates, due to the limited supply of organs and the 
number of other providers or suppliers that are part of the transplant 
process. For this reason, under the PPA methodology, home dialysis 
rates take a greater weight than transplant rates.
    Comment: One commenter suggested that CMS modify the Model such 
that the MPS applies only to Managing Clinicians as, by the time a 
beneficiary begins dialysis with an ESRD facility, it is too late for 
the ESRD facility to encourage pre-emptive transplant and pre-emptive 
transplant recipients will see an ESRD facility only after a transplant 
rejection.
    Response: We would like to clarify for the commenter that the MPS 
is calculated for all ETC Participants based on their home dialysis 
rate and transplant rate, in order to determine the ETC Participant's 
PPA. However, the pre-emptive transplant rate is part of the transplant 
rate calculation only for Managing Clinicians.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.370(b) to 
increase achievement benchmarks by 10 percent every two MYs above rates 
observed in Comparison Geographic Areas, as proposed.
(2) Achievement Benchmark Stratification by Dual-Eligible and Low 
Income Subsidy (LIS) Status
    We also proposed to modify Sec.  512.370(b) to stratify achievement 
benchmarks based on the proportion of beneficiary years attributed to 
the ETC Participant's aggregation group for which attributed 
beneficiaries were dually-eligible for Medicare and Medicaid or 
received the LIS, based on rates in Comparison Geographic Areas (86 FR 
36384). Under our proposal, we would create two strata with the 
cutpoint set at 50 percent of attributed beneficiary years being for 
attributed beneficiaries who were dual-eligible or received the LIS. As 
such, there would be one stratum for ETC Participants whose aggregation 
groups had 50 percent or more of their attributed beneficiary years 
during the MY for beneficiaries who were dual-eligible or received the 
LIS, based on rates in Comparison Geographic Areas for aggregation 
groups with 50 percent or more attributed beneficiary years during the 
Benchmark Year being for dual-eligible or LIS beneficiaries. There 
would be a second stratum for ETC Participants whose aggregation groups 
had less than 50 percent of their attributed beneficiary years during 
the MY for beneficiaries who were dual-eligible or received the LIS, 
based on rates in Comparison Geographic Areas for aggregation groups 
with less than 50 percent attributed beneficiary years during the 
Benchmark Year being for dual-eligible or LIS beneficiaries. We 
proposed to determine whether an attributed beneficiary was dual-
eligible or received the LIS for a given month using Medicare 
administrative data. In the CY 2022 ESRD PPS proposed rule, we stated 
our belief that this proposal would address concerns that socioeconomic 
factors may impact a beneficiary's likelihood to receive alternative 
renal replacement modalities, lowering the transplant rate and home 
dialysis rates for ETC Participants who provide services to low income 
beneficiaries. We also stated our expectation that stratifying the 
achievement benchmarks as proposed would increase home dialysis rate 
and transplant rates for such ETC Participants.
    In the CY 2022 ESRD PPS proposed rule, we considered using more 
than two strata, in order to increase the precision of the achievement 
benchmarks and the degree of similarity between ETC Participants within 
a given stratum. However, we noted that increasing the number of strata 
would decrease the number of observations within each stratum, in turn 
decreasing statistical reliability. Additionally, analysis of the 
distribution of the home dialysis rate and transplant rate demonstrates 
that the underlying distribution does not lend itself to more than two 
strata, as the distribution is not multi-modal. For this reason, we 
proposed only two strata.
    We sought public comment on our proposal to amend Sec.  512.370(b) 
to stratify achievement benchmarks based on the proportion of 
attributed beneficiary years for which attributed beneficiaries were 
dual-eligible or received the LIS, and on our proposal to create two 
strata for this purpose.
    The following is a summary of the comments received on our proposal 
to stratify achievement benchmarks based on the proportion of 
attributed beneficiary years for which attributed beneficiaries were 
dual eligible or received the LIS beginning for MY3, including our 
policy to create two strata for this purpose, and our responses.
    Comment: Two commenters expressed support for addressing 
socioeconomic factors that impact ETC Participant achievement. These 
commenters also specifically supported CMS's recognition of the two 
proposed categories of beneficiaries who are economically disadvantaged 
for this purpose, namely beneficiaries who are dual-eligible or are LIS 
recipients. Several commenters stated that they agree that 
beneficiaries who are dual eligible or LIS recipients may be less 
likely to dialyze at home or receive a kidney transplant.
    Response: We appreciate the commenters' support.
    Comment: Multiple commenters stated that they supported stratifying 
the achievement benchmarks based on the proportion of beneficiary years 
attributed to the ETC Participant's aggregation group for which 
attributed beneficiaries were dual-eligible or LIS recipients. Several 
of these commenters expressed specific reasons for their support. A few 
of these commenters expressed support for stratification because they 
agree that stratification will support the goal of not disadvantaging 
ETC Participants who treat a high proportion of socioeconomically 
disadvantaged beneficiaries. One of these commenters

[[Page 61966]]

stated that stratification addresses concerns that socioeconomic 
factors outside the ETC Participant's control may impact a 
beneficiary's likelihood to receive alternative renal replacement 
modalities.
    Response: We appreciate the commenters' support.
    Comment: One commenter indicated that while dually eligible and 
LIS-recipient beneficiaries are important groups of underserved 
beneficiaries, this proxy does not illuminate the diversity of 
underserved communities or individuals facing health disparities due to 
complex socioeconomic circumstances in the United States.
    Response: We understand that beneficiaries face challenges and 
barriers to choosing alternatives to traditional in-center dialysis in 
particular, and to accessing healthcare generally, related to their 
socioeconomic circumstances. We have recognized that there is variation 
in rates of home dialysis and transplantation by socioeconomic status. 
As discussed in the CY 2022 ESRD PPS proposed rule and in this section 
of this final rule, we know that socioeconomic status impacts the 
likelihood of a beneficiary receiving home dialysis or a transplant. In 
order to address these socioeconomic factors that impact ETC 
Participant Achievement, one of our proposals is to stratify 
achievement benchmarks based on the proportion of attributed 
beneficiaries who are dually-eligible for Medicare and Medicaid or 
receive the LIS during the MY, in recognition that beneficiaries with 
lower socioeconomic status have lower rates of home dialysis and 
transplant than those with higher socioeconomic status.
    Comment: One commenter asked that, if the Innovation Center intends 
to proceed with the proposal to stratify achievement benchmarks by the 
proportion of beneficiaries who are dual eligible or received the LIS, 
CMS should release information to the public regarding LIS 
beneficiaries so that the commenter could adequately analyze the ETC 
Model, and implement work plans to address the needs of this 
population.
    Response: We generally do not share beneficiary-identifiable data 
related to a model tested under section 1115A of the Act with 
individuals or entities who are not participants in said model. 
However, CMS data for research is available via the Research Data 
Assistance Center (ResDAC). Additional information about ResDAC is 
available at resdac.org. A variety of aggregate data is also available 
directly from CMS at data.cms.gov, including the Mapping Medicare 
Disparities Tool.
    Comment: One commenter supported any and all measures that 
incentivize care for beneficiaries who are dual-eligible or LIS 
recipients. However, this commenter expressed that the proposal to 
stratify achievement benchmarks based on the proportion of attributed 
beneficiary years for which attributed beneficiaries were dual eligible 
or received the LIS might make dual-eligible and LIS recipients feel 
pressured to try a method of care that will not be successful for them. 
This commenter stated that these patients are often not used to 
advocating for themselves, so an incentive to the providers may seem 
like a threat to the patients.
    Response: We believe that addressing disparities experienced by 
beneficiaries who are dual-eligible or LIS recipients by stratifying 
the achievement benchmarks, as proposed, will encourage ETC 
participants to decrease disparities in renal replacement modality 
choice across beneficiaries of different socioeconomic status. However, 
we are sensitive to concerns about ETC Participants exerting undue 
influence on this beneficiary population, in particular. As stated in 
the Specialty Care Models final rule, ETC Participants are prohibited 
from interfering with a beneficiary's freedom of choice or access to 
services under 42 CFR 512.120, and CMS will monitor for ETC Participant 
compliance with this requirement, including beneficiary complaints and 
appeals (85 FR 61341 through 61343).
    Comment: A few commenters expressed concern about the proposal to 
stratify benchmarks by the proportion of attributed beneficiaries who 
are dual-eligible or LIS recipients. These commenters stated that they 
believed this approach could unnecessarily set a lower bar for 
achieving access to transplant and home dialysis by conflating 
differences owing to social risk factors and true differences in 
quality of care. Two of these commenters stated that they do not 
believe patient income or dual eligible status should be a factor in 
access to home dialysis or transplant and remain concerned that 
benchmark stratification could possibly worsen inequities by reducing 
Model-specific incentives to increase access to home dialysis for all 
patients.
    Response: As discussed in the CY 2020 ESRD PPS proposed rule and in 
section V.B.6.c this final rule, we believe that stratifying 
achievement benchmarks based on the proportion of beneficiary years 
attributed to the ETC Participant's aggregation group for which 
attributed beneficiaries were dually-eligible for Medicare and Medicaid 
or received the LIS, based on rates in Comparison Geographic Areas, 
will address concerns that socioeconomic factors may impact a 
beneficiary's likelihood to receive alternative renal replacement 
modalities, lowering the transplant rate and home dialysis rates for 
ETC Participants who provide services to low income beneficiaries.
    We do not believe that stratifying benchmarks by dual eligible and 
LIS recipients would unnecessarily set a lower bar for achieving access 
to transplant and home dialysis for these individuals. Rather, as 
discussed in the CY 2020 ESRD PPS proposed rule and in section V.B.6.c 
of this final rule, we expect that stratifying the achievement 
benchmarks as proposed will increase home dialysis rate and transplant 
rates for those ETC Participants who provide services to low-income 
beneficiaries. Specifically, rather than giving ETC Participants 
permission to provide lower levels of care to beneficiaries, we believe 
this approach will enable ETC Participants to address disparities in 
renal replacement modality choice among beneficiaries who are dual-
eligible or LIS recipients by not disadvantaging them by comparing them 
to a standard set including a substantively different beneficiary 
population. While we understand that stratification would not provide a 
direct financial incentive for ETC Participants to focus on reducing 
disparities by improving the home dialysis rate and transplant rate for 
beneficiaries who are dual-eligible or receive the LIS, as ETC 
Participants who provide services to socioeconomically disadvantaged 
beneficiaries are likely to have lower home dialysis rates and 
transplant rates, stratification makes it more likely they will achieve 
a positive PPA that they can invest in caring for these beneficiaries. 
We believe ETC Participants will be able to use additional funds 
received as a result of receiving a positive PPA to improve their 
performance dialysis rates and transplant rates for all beneficiaries, 
including beneficiaries who are dual eligible and recipients of LIS.
    Comment: Several commenters indicated that they supported 
stratifying achievement benchmarks based on dual eligible and LIS 
recipient status, but suggested modifications to the proposed approach. 
Some of these commenters suggested using a different cutpoint. Of the 
commenters suggesting a different cutpoint, some suggested a higher 
cutpoint and others suggested a lower cutpoint than 50 percent of 
attributed beneficiary years being for attributed

[[Page 61967]]

beneficiaries who were dual eligible or received the LIS. One commenter 
suggesting a higher cutpoint stated that this approach would better 
enable ETC Participants serving the highest percentage of low-income 
patients to successfully perform in the ETC Model. Some commenters 
suggesting modifications had suggested using more than two strata--
including suggestions of three to ten strata--or using a sliding scale. 
Some commenters suggesting using more than two strata stated that doing 
so would provide more nuance to the PPA calculation. Generally, 
commenters suggesting alternative cutpoints or more than two strata 
stated that their suggested cutpoint or number of strata was more 
reflective of the commenters' own analysis of available data.
    Response: We appreciate the commenters support for stratifying 
achievement benchmarks. As discussed in the proposed rule and 
previously in this section of the final rule, we considered using more 
than two strata in order to increase the precision of the achievement 
benchmarks and the degree of similarity between ETC Participants within 
a given stratum. This would have required the use of additional 
cutpoints--both lower and higher than 50 percent. In response to 
suggestions that we use more than two strata, as described in the CY 
2022 ESRD PPS proposed rule and previously in this section of this 
final rule, increasing the number of strata would decrease the number 
of observations within each stratum, in turn decreasing statistical 
reliability. We continue to believe that that using more than two 
strata would decrease statistical reliability. Additionally, as 
described in the CY 2022 ESRD PPS proposed rule and in this section of 
this final rule, our analysis of the distribution of the home dialysis 
rate and transplant rate demonstrated that the underlying distribution 
does not lend itself to more than two strata, as the distribution is 
not multi-modal. In response to suggestions that we use a different 
cutpoint between strata, we believe that 50 percent is an appropriate 
cutpoint based on our analysis of the data. Based on the statistical 
properties of the underlying distribution, the 50 percent cutpoint is 
statistically appropriate, stable over time, and easily comprehendible 
to ETC Participants.
    Comment: One commenter stated that while they support 
stratification, CMS should adjust performance within each stratum to 
account for variation within the stratum.
    Response: While we recognize that there will be variation within 
each stratum, the commenter did not articulate what adjusting 
performance within each stratum should entail. Therefore, we are unable 
to respond with specificity to the suggestion that we adjust 
performance within each stratum. We continue to believe that 
stratification addresses variation in rates of home dialysis and 
transplantation for beneficiaries who are dual eligible or LIS 
recipients, but remain open to specific feedback regarding further 
adjustments for potential inclusion in future rulemaking.
    Comment: Several commenters expressed support for CMS' proposal to 
use dual eligible and LIS recipient as proxies for socioeconomic 
status. One of these commenters stated that they agree that these are 
useful metrics to identify patients who may face clinical and non-
clinical challenges to electing home dialysis or receiving a 
transplant.
    Response: We thank commenters for their support.
    Comment: A few commenters stated that they agreed with the intent 
behind, or the need for, an approach to address how socioeconomic 
factors impact beneficiaries' likelihood of receiving home dialysis or 
a kidney transplant and how that relationship impacts ETC Participants' 
performance, but stated that there may be better ways to account for 
this than stratification of the achievement benchmark. A few of these 
commenters suggested that CMS incorporate risk adjustment into the 
achievement benchmarking methodology, either instead of or in addition 
to stratification. Commenters suggesting risk adjustment stated that 
risk adjustment is more precise, because it is applied at the 
beneficiary-level, rather than the aggregate level. However, one such 
commenter acknowledged that, while they recommend risk adjustment, 
stratification may also address the same underlying issues.
    Response: We considered other approaches for accounting for how the 
socioeconomic status of an ETC Participant's attributed beneficiaries 
may impact an ETC Participant's performance. However, we did not 
contemplate using risk adjustment for this purpose. While we appreciate 
that risk adjustment accounts for factors at an individual beneficiary 
level, adopting this policy would represent a significant departure 
from our proposal and would present its own challenges. For instance, 
without sufficient protections, the use of risk adjustment can result 
in payment inaccuracies due to factors such as upcoding. In addition, 
depending on the factors being used for risk-adjustment, there may be 
limitations in the available data, as discussed below. After 
considering the comments, we continue to believe that stratification of 
achievement benchmarks based on dual eligible and LIS recipient status 
is an appropriate approach for considering socioeconomic status under 
the ETC Model.
    Comment: A few commenters recommended that CMS also consider 
incorporating additional social risk factors into the achievement 
benchmarking methodology. One such commenter acknowledged that current 
data on social determinants of health necessary to develop such a 
methodology is limited, citing Z-code data in particular, and that in 
the interim, stratification may address many of the concerns related to 
differential rates of home dialysis and transplantation between 
beneficiaries of higher and lower socioeconomic status. Another 
commenter stated that while dual eligibility and LIS recipient status 
can serve as proxies for social risk factors, this is not equivalent to 
patient-level data on individual risk factors. This commenter also 
pointed out that criteria for dual eligibility vary between states, and 
that being a LIS recipient is dependent on the beneficiary having been 
enrolled in a Part D plan.
    Response: As stated in the CY 2022 ESRD PPS proposed rule and this 
section of this final rule, we continue to acknowledge that non-
clinical factors, such as socioeconomic status, may impact a 
beneficiary's likelihood to receive home dialysis or a transplant. 
However, revising the proposed policy to include additional risk 
adjustments in the home dialysis rate based on socioeconomic status, as 
suggested by some of the commenters, would be a significant departure 
from the policy originally proposed. We also agree with the commenter 
who acknowledged the current limitations in data on individual-level 
social determinants of health. At this time, we continue to believe 
stratification using the proportion of attributed beneficiaries who are 
dual-eligible or LIS recipients is an appropriate means of considering 
socioeconomic status under the ETC Model. Moreover, while we 
acknowledge that dual eligibility and LIS recipient status may not 
capture socioeconomic status in the same way for all beneficiaries--due 
to variation between states or the necessity of being enrolled in a 
Part D plan to be an LIS recipient--as stated in the CY 2022 ESRD PPS 
proposed rule and in section V.B.5.b of this final rule, dual 
eligibility and LIS recipient status are correlated with lower rates of 
home dialysis and transplantation. As such, ETC

[[Page 61968]]

Participants who have a higher proportion of attributed beneficiaries 
who are dual eligible or LIS recipients may be less likely to achieve 
high home dialysis and transplant rates than ETC Participants who have 
a lower proportion of attributed beneficiaries who are dual-eligible or 
LIS recipients. Therefore, we believe dual eligible and LIS status are 
appropriate proxies for socioeconomic status. If Z-codes become more 
widely used and more such codes become available for use into the 
claims process, such that Z-code data becomes appropriate for use, we 
may consider incorporating such data into the ETC Model methodology 
through future rulemaking.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.370(b)(2) to 
stratify achievement benchmarks based on the proportion of attributed 
beneficiary years for which attributed beneficiaries were dual eligible 
or received the LIS beginning for MY3, and to create two strata for 
this purpose, without modification.
6. PPA Improvement Benchmarking and Scoring
a. Background on Improvement Benchmarking and Scoring
    Another part of the scoring methodology for the PPA is improvement 
scoring. We calculate an ETC Participant's improvement score under 
Sec.  512.370(c) by comparing MY performance on the home dialysis rate 
and transplant rate against past ETC Participant performance. As 
described in the Specialty Care Models final rule, the purpose of the 
improvement score is to acknowledge efforts made in practice 
transformation to improve rates of home dialysis and transplants (85 FR 
61318). The percentage improvement in the ETC Participant's MY 
performance on the home dialysis rate and the transplant rate relative 
to the Benchmark Year rate is scored as follows:

 Greater than 10 percent improvement relative to the Benchmark 
Year rate: 1.5 points
 Greater than 5 percent improvement relative to the Benchmark 
Year rate: 1 point
 Greater than 0 percent improvement relative to the Benchmark 
Year rate: 0.5 points
 Less than or equal to the Benchmark Year rate: 0 points

    However, when the Benchmark Year rate is zero, an improvement score 
for the MY cannot be calculated. This is because, when calculating 
percent change, as used in improvement scoring, the Benchmark Year rate 
is the denominator. As such, we cannot calculate percent improvement 
for an aggregation group with a rate of zero during the Benchmark Year 
because the denominator of the improvement score calculation is zero, 
and division by zero is undefined. Thus, an aggregation group in this 
situation will not receive an improvement score if the Benchmark Year 
rate is zero, even if the aggregation group has made improvements in 
the home dialysis rate and/or the transplant rate between the Benchmark 
Year and MY.
b. Incentivizing Improvement for Socioeconomically Disadvantaged 
Beneficiaries
    As described in the CY 2022 ESRD PPS proposed rule and in section 
V.B.5.b of this final rule, beneficiaries who are dual-eligible or 
receive the LIS are less likely than beneficiaries who are not dual-
eligible and do not receive the LIS to dialyze at home or receive a 
kidney transplant. As described in the CY 2022 ESRD PPS proposed rule 
and previously in this section of the final rule, we proposed to 
stratify achievement benchmarks by the proportion of attributed 
beneficiary years for beneficiaries who are dual-eligible or LIS 
recipients to avoid disadvantaging ETC Participants who provide care 
for a high proportion of these beneficiaries. However, we noted that 
the proposed stratification would not provide a direct financial 
incentive for ETC Participants to focus on reducing disparities by 
improving the home dialysis rate and transplant rate for beneficiaries 
who are dual-eligible or receive the LIS. In the CY 2022 ESRD PPS 
proposed rule, we stated our interest in creating that incentive as 
part of the ETC Model, as these beneficiaries may require additional 
support from ETC Participants to pursue home dialysis and transplant as 
alternative renal replacement modalities (86 FR 36384).
c. Changes to Improvement Benchmarking and Scoring
(1) Revised Improvement Calculation
    As described previously, when the Benchmark Year rate for an 
aggregation group is zero, the aggregation group cannot receive an 
improvement score, even if the aggregation group has made improvements 
in the home dialysis rate and transplant rate between the Benchmark 
Year and MY. To address this issue, we proposed to amend Sec.  
512.370(c)(1) to change the improvement calculation such that the 
aggregation group's Benchmark Year rate cannot be zero. Specifically, 
for MY3 through MY10, we proposed to add one beneficiary month to the 
numerator of the home dialysis rate and the transplant rate for the 
Benchmark Year rate for an ETC Participant's aggregation group 
Benchmark Year when that rate is zero (86 FR 36384). CMS did not 
propose to change the denominator of the Benchmark Year rate 
calculations because doing so would negate the purpose of 
mathematically correcting ETC Participants' improvement scoring. In the 
CY 2022 ESRD PPS proposed rule, we stated that CMS does not expect that 
adding a beneficiary month to the numerator of the Benchmark Year rate 
calculations, as proposed, would affect the improvement scoring enough 
to change the number of points awarded to the ETC Participant, and has 
the advantage that it would enable an improvement score to be 
calculated, even when the Benchmark Year rate is zero.
    The following is a summary of the comments received on our proposal 
to modify the calculation of the an ETC Participant's Benchmark Year 
home dialysis rate and transplant rate to prevent it from being zero, 
such that an improvement score can be calculated, and our responses.
    Comment: A few commenters stated that they support the proposal to 
add one beneficiary month to the numerator of the home dialysis rate 
and the transplant rate for the Benchmark Year rate for an ETC 
Participant's aggregation group Benchmark Year when that rate is zero.
    Response: We appreciate commenters' support for this proposal.
    Comment: One commenter suggested that CMS change the improvement 
scoring methodology to allow ETC Participants to attain the top tier of 
scoring--2 points--through improvement alone.
    Response: As stated in the Specialty Care Models final rule (85 FR 
61322), while we acknowledge the importance of incentivizing 
improvement over time, we do not award full points for improvement for 
consistency with other CMS programs and initiatives employing similar 
improvement scoring methodologies. Additionally, with the introduction 
of the Health Equity Incentive, as described in the CY 2022 ESRD PPS 
proposed rule and in section V.B.6.c.(2) of this final rule, ETC 
Participants are able to, beginning for MY3, attain the full 2 points 
for improvement if they demonstrate greater than 10 percent improvement 
relative to the Benchmark Year rate and earn the Health Equity 
Incentive.
    Final Rule Action: After considering public comments, we are 
finalizing our

[[Page 61969]]

proposal in our regulation at Sec.  512.370(c)(1) to add one 
beneficiary month to the numerator of the ETC Participant's Aggregation 
Group's home dialysis rate and transplant rate for the Benchmark Year 
when calculating the ETC Participant's improvement score beginning for 
MY3, without modification.
(2) Health Equity Incentive
    To incentivize ETC Participants to decrease disparities in the home 
dialysis rate and transplant rate between beneficiaries who are dual-
eligible or LIS recipients and those who are not, we proposed to add a 
Health Equity Incentive to the improvement scoring methodology (86 FR 
36385). We proposed to define the Health Equity Incentive at Sec.  
512.310 as the amount added to the ETC Participant's improvement score 
calculated as described in Sec.  512.370(c)(1) if the ETC Participant's 
aggregation group demonstrated sufficient improvement on the home 
dialysis rate or transplant rate for attributed beneficiaries who are 
dual-eligible or LIS recipients between the Benchmark Year and the MY. 
We proposed that this improvement on the home dialysis rate or 
transplant rate would be based on the performance of the ETC 
Participant's aggregation group.
    As noted in the CY 2022 ESRD PPS proposed rule and previously in 
this section of the final rule, socioeconomic factors impact a 
beneficiary's receipt of alternative renal replacement modalities. 
Beneficiaries with limited resources may require more assistance from 
ESRD facilities and Managing Clinicians to use alternative renal 
replacement modalities. In the CY 2022 ESRD PPS proposed rule, we 
stated our belief that our proposal to add a Health Equity Incentive 
would benefit these beneficiaries and improve scoring for home dialysis 
rate and transplant rate for ETC Participants that serve 
disproportionately high numbers of beneficiaries with lower 
socioeconomic status. To earn the Health Equity Incentive, ETC 
Participants would have to demonstrate sufficiently significant 
improvement on the home dialysis rate or transplant rate among their 
attributed beneficiaries who are dual eligible or receive the LIS 
between the Benchmark Year and the MY. ETC Participants who earn the 
Health Equity Incentive would receive a 0.5-point increase on their 
improvement score, thus increasing the maximum improvement score to 2 
points. In the CY 2022 ESRD PPS proposed rule, we stated our belief 
that the proposed Health Equity Incentive would benefit attributed 
beneficiaries who are dual eligible or receive the LIS, by encouraging 
ETC Participants to address disparities in access to alternative renal 
replacement modalities among these beneficiaries. We also stated our 
belief that providing this incentive for ETC Participants to increase 
their home dialysis and transplant rate among their dual eligible or 
LIS beneficiary population would ultimately reduce this disparity in 
access for the beneficiaries in question. Therefore, we stated our 
belief that this incentive to reduce socioeconomic disparities in 
access to alternative renal replacement modalities would be an 
improvement to the PPA scoring methodology.
    We proposed to amend Sec.  512.370(c) to add the Health Equity 
Incentive to the improvement scoring methodology, beginning for MY3. We 
proposed that the Health Equity Incentive would be equal to 0.5 points, 
which would be added to the ETC Participant's improvement score for the 
home dialysis rate or for the transplant rate, calculated as described 
in Sec.  512.370(c)(1), such that the maximum improvement score would 
increase from 1.5 points to 2 points for ETC Participants that earn the 
Health Equity Incentive. Therefore, for those ETC Participants that 
earn the Home Equity Incentive, we proposed that the ETC Participant's 
improvement score for the home dialysis rate and for the transplant 
rate would be the sum of the improvement score calculated as described 
in Sec.  512.370(c)(1) and the Health Equity Incentive. We noted in the 
CY 2022 ESRD PPS proposed rule that the Health Equity Incentive would 
allow ETC Participants to increase their improvement score, and thereby 
increase their payment adjustment.
    We proposed to award the Health Equity Incentive to an ETC 
Participant if the ETC Participant's aggregation group's home dialysis 
rate and/or transplant rate among attributed beneficiaries who are 
dual-eligible or LIS recipients increases by 5 or more percentage 
points from the Benchmark Year to the MY. We stated our belief in the 
CY 2022 ESRD PPS proposed rule that 5-percentage points is the correct 
threshold for awarding the Health Equity Incentive based on our 
analysis of Medicare claims. Five percentage points is one standard 
deviation above the average difference between the home dialysis rate 
and the transplant rate for attributed beneficiaries who are dual-
eligible or LIS recipients and those beneficiaries who are not dual-
eligible or LIS recipients, rounded to the nearest integer. In the CY 
2022 ESRD PPS proposed rule, we noted that we anticipate improvement in 
home dialysis and transplant rates among dual-eligible or LIS 
recipients between the MY and the Benchmark Year, but that we expect 
that attaining the proposed threshold for earning the Health Equity 
Incentive would generally require significant effort on the part of the 
ETC Participant.
    We proposed that an ESRD Beneficiary or Pre-emptive LDT Beneficiary 
would be considered to be dual-eligible or a LIS recipient for a given 
month if at any point during the month the beneficiary was dually 
eligible for Medicare and Medicaid or a LIS recipient. We proposed to 
determine whether an attributed beneficiary was dual-eligible or 
received the LIS using Medicare administrative data.
    We proposed to modify Sec.  512.370(c) such that the improvement 
benchmarking and scoring methodology for MY1 and MY2 would be specified 
at Sec.  512.370(c)(1), and the improvement benchmarking and scoring 
methodology for MY3 through MY10, described earlier, would be specified 
at Sec.  512.370(c)(2). We sought comment on the proposal to modify 
Sec.  512.370(c) accordingly.
    In the CY 2022 ESRD PPS proposed rule, we considered using a 
rolling approach to setting the threshold for earning the Health Equity 
Incentive, such that the threshold would be recalculated every other 
MY, to reflect changes in underlying disparities. Under this approach, 
we would calculate the threshold as one standard deviation above the 
average difference between the home dialysis rate and the transplant 
rate for attributed beneficiaries who are dual-eligible or LIS 
recipients and those beneficiaries who are not dual-eligible or LIS 
recipients, rounded to the nearest integer. We would calculate this 
threshold either using data from the Benchmark Year, such that ETC 
Participants would know the threshold for earning the Health Equity 
Incentive in advance of the MY, or using data from the MY, such that 
the threshold for earning the Health Equity Incentive would accurately 
reflect the magnitude of the disparity observed during the MY. However, 
we stated our belief that setting a threshold for earning the Health 
Equity Incentive applicable for all MYs, beginning for MY3, would be 
more appropriate. We noted that this approach would be in keeping with 
the intent of the proposed Health Equity Incentive, which is to provide 
ETC Participants a financial incentive to focus on decreasing the 
disparity in the home dialysis and transplant rates between 
beneficiaries who are dual-eligible or LIS recipients, and those who

[[Page 61970]]

are not. We further stated our belief that providing ETC Participants 
clear information about what they need to achieve to earn the Health 
Equity Incentive in advance would best enable them to work towards the 
goal.
    We proposed that ETC Participants in aggregation groups that fall 
below a low-volume threshold would be ineligible to earn the Health 
Equity Incentive (86 FR 36386). Specifically, we proposed that an ETC 
Participant in an aggregation group with fewer than 11 attributed 
beneficiary years comprised of months in which ESRD Beneficiaries and, 
if applicable, Pre-emptive LDT Beneficiaries are dual eligible or LIS 
recipients during either the Benchmark Year or the MY would be 
ineligible to earn the Health Equity Incentive. We selected this 
particular low-volume threshold for consistency with the low-volume 
threshold for the applicability of the PPA generally, as specified at 
Sec.  512.385. We stated our belief that it is necessary to apply a low 
volume threshold in determining whether an ETC Participant has earned 
the Home Equity Incentive to ensure statistical reliability of the home 
dialysis rate and transplant rate calculations. This statistical 
reliability provides consistency in the home dialysis rate and 
transplant rate calculations. Therefore, similar results are produced 
under consistent conditions when applying a low volume threshold to ETC 
Participants. We proposed a low-volume threshold specific to attributed 
beneficiaries who are dual-eligible or receive the LIS because whether 
an ETC Participant has earned the Health Equity Incentive is being 
assessed on this subset of attributed beneficiaries.
    We proposed to amend the Modality Performance Score (MPS) 
methodology to incorporate the Health Equity Incentive. To that end, we 
proposed to modify Sec.  512.370(d) such that the calculation of the 
MPS for MY1 and MY2 is specified at Sec.  512.370(d)(1), and the 
calculation of the MPS for MY3 through MY10 is specified at Sec.  
512.370(d)(2). We proposed that the formula for the MPS for MY3 through 
MY10 would be the following:

Modality Performance Score
 = 2 x (Higher of the home dialysis achievement or (home dialysis 
improvement score + Health Equity Bonus [dagger]))
+ (Higher of the transplant achievement or (transplant improvement 
score + Health Equity Bonus [dagger]))

    [dagger] The Health Equity Incentive is applied to the home 
dialysis improvement score or transplant improvement score only if 
earned by the ETC Participant and provided that the ETC Participant 
is not ineligible to receive the Home Equity Incentive as described 
in proposed Sec.  512.370(c)(2)(iii).

    We sought comment on our proposed definition for the Health Equity 
Incentive at Sec.  512.310 and our proposal to amend Sec.  512.370(c) 
to add the Health Equity Incentive to the improvement scoring 
methodology for the home dialysis rate and the transplant rate. We also 
sought comment on our proposal to set the threshold for earning the 
Health Equity Incentive at 5-percentage points improvement from the 
Benchmark Year to the MY.
    The following is a summary of the comments received on the proposal 
to introduce the Health Equity Incentive to the improvement scoring 
methodology beginning for MY3, and our responses.
    Comment: Many commenters expressed support for the concept of 
addressing socioeconomic disparities in access to alternative renal 
replacement modalities through the ETC Model. A few commenters 
highlighted that particular groups that tend to experience healthcare 
disparities--including patients of lower socioeconomic status and 
patients from racial and ethnic minorities--make up a significant 
portion of dialysis patients.
    Response: We appreciate the commenters' support.
    Comment: One commenter stated that the racial and ethnic 
disparities in access to home dialysis care have long existed, but that 
the COVID-19 pandemic has exacerbated them. According to the commenter, 
increased access to home dialysis modalities would give those 
historically disadvantaged patients the chance to avoid potentially 
dangerous contact with COVID-19 infected individuals by reducing visits 
to a dialysis clinic or doctor's office. The commenter stated that, for 
all of these important reasons, they strongly support CMS's efforts to 
advance home dialysis through the ETC Model.
    Response: We agree with the commenter that COVID-19 pandemic has 
highlighted one of the benefits of home dialysis--that dialyzing at 
home reduces the risk that an individual patient is exposed to COVID-19 
or other communicable diseases in the course of their dialysis care--
and we agree that beneficiaries should have equal access to this 
modality for this and other reasons.
    Comment: A few commenters expressed concerns about the impact of 
the ETC Model on health disparities. One commenter expressed concern 
about certain design aspects of the ETC Model that could have 
unintended effects that perpetuate existing kidney health disparities. 
Another commenter stated that CMS is not providing additional resources 
to ETC Participants to give extra assistance to disadvantaged patients.
    Response: We believe that the ETC Model will improve access to 
alternative renal replacement modalities, including home dialysis and 
transplantation, for all types of beneficiaries. We further believe the 
Model will not cause any unintended effects that perpetuate existing 
kidney health disparities. Indeed, with the introduction of achievement 
benchmark stratification and the Health Equity Incentive, as described 
in the CY 2022 ESRD PPS proposed rule and sections V.B.5.c.(2) and 
V.B.6.c.(2) of this final rule, respectively, we are testing ways to 
directly address socioeconomic disparities in access to alternative 
renal replacement modalities. We believe the proposed Health Equity 
Incentive, in particular, will benefit attributed beneficiaries who are 
dual eligible or receive the LIS, by encouraging ETC Participants to 
address disparities in access to alternative renal replacement 
modalities among these beneficiaries.
    Comment: The majority of commenters generally supported the Health 
Equity Incentive. Most of these commenters supported the Health Equity 
Incentive proposal without providing any additional recommendations.
    Response: We appreciate commenters' support.
    Comment: Several commenters stated that they supported creating a 
Health Equity Incentive, but indicated that it is important that the 
thresholds for earning the Health Equity Incentive are achievable for 
ETC Participants.
    Response: We agree that it is important for the thresholds for 
earning the Health Equity Incentive to be achievable for ETC 
Participants. We believe that this is the case. First, by establishing 
the thresholds for all MYs, starting for MY3, through this rulemaking, 
ETC Participants will have clear information in advance about what they 
need to achieve to earn the Health Equity Incentive to enable them to 
work towards the goal of increasing access to home dialysis and 
transplant for beneficiaries who are dual eligible and LIS recipients 
for the remaining duration of the ETC Model test. Second, as described 
in greater detail below, we are modifying our proposal such that we 
would award the Health Equity Incentive to an ETC Participant if the 
ETC Participant's aggregation group's home dialysis rate and/or 
transplant rate among attributed beneficiaries who are dual eligible or 
LIS recipients increases

[[Page 61971]]

by at least 2.5 percentage points from the Benchmark Year to the MY, 
which we believe will be a more attainable threshold for ETC 
Participants than the proposed threshold of 5 percentage points.
    Comment: Several commenters expressed specific support for our 
proposal that the Health Equity Incentive would be worth 0.5 
improvement points.
    Response: We appreciate the commenters support.
    Comment: Several commenters stated that they supported the 
introduction of the Health Equity Incentive, but recommended that we 
set a lower threshold for ETC Participants to earn the Health Equity 
Incentive. These commenters stated that they believed that a five-
percentage point increase to earn the Health Equity Incentive is too 
high, and may not be attainable for ETC Participants. A few of these 
commenters stated that setting the threshold too high would be 
discouraging--that ETC Participants would not try to increase home 
dialysis rates and transplant rats among their beneficiaries who are 
dual eligible or LIS recipients because they would not believe 
attaining a five-percentage point increase would be possible. One 
commenter stated that a lower threshold would mean that more ETC 
Participants would earn the incentive, which would result in higher 
payments and therefore more resources for those participants to support 
disadvantaged beneficiaries choosing alternative renal replacement 
modalities. One commenter stated that a 5-percentage point increase 
from year to year is likely an unachievable goal based on historic 
data. Several commenters suggested alternative methods for awarding the 
Health Equity Incentive. A few of these commenters suggested a lower 
percentage point threshold, such as 1.25-percentage points. Others 
suggested alternative methodologies, such as a percentage or percentage 
point increase over the Benchmark Year rate, or a percent increase 
instead of a percentage point increase.
    Response: We appreciate commenters' suggestions of alternative 
methods for awarding the Health Equity Incentive. We agree with 
commenters' concerns that setting the threshold for awarding the Health 
Equity Incentive too high could undermine the intent of the policy. As 
stated in the CY 2022 ESRD PPS proposed rule (86 FR 36385) and in this 
section of this final rule, 5 percentage points is equal to one 
standard deviation above the average difference between the home 
dialysis rate and the transplant rate for attributed beneficiaries who 
are dual-eligible or LIS recipients and those beneficiaries who are not 
dual-eligible or LIS recipients, rounded to the nearest integer. We 
also stated our expectation that attaining the proposed threshold for 
earning the Health Equity Incentive would generally require significant 
effort on the part of the ETC Participant. However, we are persuaded by 
the specific evidence provided by commenters that our proposed 
threshold was likely unachievable based on historic data. As such, we 
agree with commenters that we should lower the threshold for awarding 
the Health Equity Incentive.
    After considering the alternatives suggested by commenters, we 
continue to believe that a percentage-point increase is appropriate for 
awarding the Health Equity Incentive. However, rather than a 5-
percentage point increase, we believe that at 2.5-percentage point 
increase is more appropriate. Specifically, we believe that a 2.5 
percentage point threshold presents a more achievable goal than the 5-
percentage point increase described in the proposed rule. However, as 
compared to the 1.25 percentage point increase suggested by the 
commenters, we believe using a 2.5 percentage point increase as the 
threshold for earning the Health Equity Incentive will incentivize ETC 
Participants to make substantial reductions in disparities between 
their Beneficiaries who are dual eligible or LIS recipients and those 
who are not over the course of the ETC Model.
    Comment: One commenter stated that the Health Equity Incentive 
should be considered for other value-based care models.
    Response: If we adopt the Health Equity Incentive for one or more 
other models, we would do so by amending that model's governing 
documentation, which may involve notice and comment rulemaking.
    Comment: A few commenters encouraged CMS to explore and consider 
adding additional characteristics or social drivers of health 
disparities in addition to dual eligibility and LIS status as part of 
the Health Equity Incentive calculation under the ETC Model. A few of 
these commenters suggested that we do so now, and one of these 
commenters suggested that we do so pending further study and analysis. 
One commenter suggested that we include race as part of the Health 
Equity Incentive calculation.
    Response: We appreciate the suggestion that we consider including 
other factors in the Health Equity Incentive calculation under the ETC 
Model. However, we agree with the commenter who suggested that we 
consider adding additional characteristics or social drivers of health 
disparities only after further study and analysis. Thus, while we are 
only awarding the Health Equity Incentive on the basis of improvement 
among beneficiaries who are dual eligible or LIS recipients at this 
time, we may consider additional factors for the future after we 
complete research and analysis on those factors. Any additional factors 
would be incorporated through subsequent rulemaking.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.370(c) to add 
the Health Equity Incentive to the improvement scoring methodology, 
with one modification. Specifically, we are modifying our regulation at 
Sec. Sec.  512.370(c)(2)(i) and (c)(2)(ii) to change the threshold for 
earning the Health Equity Incentive from a 5-percentage point increase 
to a 2.5-percentage point increase in the ETC Participant's home 
dialysis rate and transplant rate, respectively, among attributed 
beneficiaries who are dual-eligible or LIS recipients from the 
Benchmark Year to the MY. We are also finalizing our proposed 
definition of Health Equity Incentive at Sec.  512.310 without 
modification.
7. PPA Reports and Data Sharing
a. Background on Beneficiary Attribution and Performance Reporting
    Under the ETC Model, as described in 42 CFR 512.360, CMS attributes 
ESRD Beneficiaries and, if applicable, Pre-emptive LDT Beneficiaries to 
an ETC Participant for each month during a MY based on the 
beneficiary's receipt of services during that month. CMS performs this 
attribution for a MY retrospectively, after the end of the MY. As 
described in Sec.  512.365, each ETC Participant's performance is 
assessed based on the transplant rate and home dialysis rate among the 
population of beneficiaries attributed to the ETC Participant. As 
described in 42 CFR 512.370 and 42 CFR 512.380, these rates are used to 
calculate the ETC Participant's MPS and, in turn, the ETC Participant's 
PPA. The PPA is then used to adjust certain Medicare payments of the 
ETC Participant during 6-month PPA periods, with the first PPA Period 
taking place from July 1, 2022, through December 31, 2022. As described 
in 42 CFR 512.390(a), CMS will notify each ETC Participant, in a form 
and manner determined by CMS, of the ETC Participant's attributed 
beneficiaries, MPS, and PPA for a PPA Period no later

[[Page 61972]]

than one month before the start of the applicable PPA Period.
    In order to ensure ETC Participants have timely access to these ETC 
Model reports, in the CY 2022 ESRD PPS proposed rule (86 FR 36386 
through 36391), we proposed to add a new paragraph (b) to Sec.  512.390 
to establish a process for CMS to share certain beneficiary-
identifiable and aggregate data with ETC Participants pertaining to 
their participation in the ETC Model. As we stated in the CY 2022 ESRD 
PPS proposed rule, CMS believes that ETC Participants need this data to 
successfully coordinate the care of their ESRD Beneficiaries and, if 
applicable, Pre-emptive LDT Beneficiaries; to succeed under the ETC 
Model; and to assess CMS's calculations of the individual ETC 
Participant's PPA for a given PPA Period. Specifically, we stated CMS 
believes that ETC Participants must have a clear understanding of the 
beneficiaries CMS has attributed to them under the ETC Model and how 
each attributed beneficiary has factored into the ETC Participant's 
home dialysis rate, transplant waitlist rate, and living donor 
transplant rate, to better identify care coordination and care 
management opportunities, and to have the opportunity to seek targeted 
review of CMS's calculation of the MPS. We noted that the purpose of 
the targeted review process, established under current Sec.  
512.390(b), which we would redesignate as paragraph (c), is to 
determine whether an incorrect PPA has been applied during the PPA 
Period. We stated that CMS additionally believes that timely access to 
this data is important and proposed to require CMS to make this data 
available twice a year, prior to each PPA Period in an MY.
    In the following sections of this final rule, we describe the 
process that we proposed for CMS to share and for ETC Participants to 
retrieve certain beneficiary-identifiable attribution data and 
performance data, as well as the protections that we proposed to apply 
to this data under a data sharing agreement with CMS. We also describe 
our proposed process for sharing certain aggregate, de-identified 
performance data with ETC Participants.
b. CMS Sharing of Beneficiary-Identifiable Data
    We proposed to establish a process in new Sec.  512.390(b)(1) under 
which CMS would share certain beneficiary-identifiable data with ETC 
Participants regarding their attributed beneficiaries and performance 
under the ETC Model. We proposed that, in accordance with the timing of 
the notification requirement described in Sec.  512.390(a), CMS would 
be required to make the beneficiary-identifiable data pertaining to a 
given PPA Period available for retrieval by ETC Participants no later 
than 1 month before the start of that PPA Period. The ETC Participant 
would be able to retrieve this data at any point during the relevant 
PPA Period, but, in accordance with current Sec.  512.390(b)(1), which 
would be redesignated as paragraph (c)(1), the ETC Participant would 
have 90 days from the date that CMS shares the MPS, including the data 
CMS used in calculating the MPS, to request a targeted review. We 
proposed that CMS would notify ETC Participants of the availability of 
the beneficiary-identifiable data for a relevant PPA Period and the 
process for retrieving that data, through the ETC listserv and through 
the ETC Model website, available at https://innovation.cms.gov/innovation-models/esrd-treatment-choices-model.
    Regarding the specific beneficiary-identifiable data that CMS would 
be required to share with ETC Participants, we proposed in Sec.  
512.390(b)(1)(ii)(A) to include, when available, the following data for 
each PPA Period: The ETC Participant's attributed beneficiaries' names, 
Medicare Beneficiary Identifiers (MBIs), dates of birth, dual-eligible 
status, and LIS recipient status. We stated in the CY 2022 ESRD PPS 
proposed rule that we believe that the patient's name, MBI, and date of 
birth constitute the minimum elements to enable an ETC Participant to 
properly identify an attributed beneficiary, and to confirm the 
identity of an attributed beneficiary during any communications with a 
beneficiary or a beneficiary's caregiver, as appropriate and allowable. 
In addition, we stated the ETC Participant needs to be aware of each 
attributed beneficiary's dual-eligible status and LIS recipient status 
to understand how each attributed beneficiary contributed to how CMS 
calculated the ETC Participant's Health Equity Incentive, if finalized. 
We proposed in Sec.  512.390(b)(1)(ii)(B) that this beneficiary-
identifiable data also would include, when available, data regarding 
the ETC Participant's performance under the ETC Model, including, for 
each attributed beneficiary, as applicable, the number of months the 
beneficiary was attributed to the ETC Participant, received home 
dialysis, self-dialysis, or nocturnal in-center dialysis, or was on a 
transplant waitlist; and the number of months that have passed since 
the beneficiary has received a living donor transplant, as applicable. 
We stated that we believe that sharing these data elements would help 
the ETC Participant understand and, as appropriate, seek targeted 
review of CMS's calculation of the ETC Participant's MPS, and otherwise 
understand how CMS adjusted the ETC Participant's Medicare payments by 
the PPA.
    In the CY 2022 ESRD PPS proposed rule (86 FR 36387), we stated that 
we recognized there are sensitivities surrounding the disclosure of 
individually-identifiable (beneficiary-specific) health information, 
and we noted that a number of laws place constraints on the sharing of 
individually identifiable health information. We noted that, for 
example, section 1106 of the Act generally bars the disclosure of 
information collected under the Act without consent unless a law 
(statute or regulation) permits for the disclosure. In this instance, 
the Health Insurance Portability and Accountability Act of 1996 (HIPAA) 
Privacy Rule permits this proposed disclosure of individually 
identifiable health information by us to ETC Participants if this 
proposed disclosure is required by law. We explained that under the 
HIPAA Privacy Rule, covered entities (defined as health care plans, 
health care providers that submit certain transactions electronically, 
and health care clearinghouses) are barred from using or disclosing 
protected health information (PHI) in a manner that is not explicitly 
permitted or required under the HIPAA Privacy Rule, without the 
individual's authorization. The Medicare FFS program, a ``health plan'' 
function of the Department, is subject to the HIPAA Privacy Rule 
limitations on the disclosure of PHI, without an individual's 
authorization. ETC Participants are also covered entities, provided 
they are health care providers as defined by 45 CFR 160.103 and they or 
their agents electronically engage in one or more HIPAA standard 
transactions, such as for claims, eligibility, or enrollment 
transactions.
    As we discussed in the CY 2022 ESRD PPS proposed rule, the proposed 
disclosure of ETC Model beneficiary-identifiable data would be 
permitted by the HIPAA Privacy Rule under the provisions that permit 
disclosures of PHI as ``required by law.'' Under 45 CFR 164.512(a)(1), 
a covered entity may use or disclose PHI to the extent that such use or 
disclosure is required by law and the use or disclosure complies with 
and is limited to the relevant requirements of such law.\275\ We 
proposed to establish

[[Page 61973]]

a requirement under Sec.  512.390(b)(1) for CMS to share this data with 
ETC Participants.
---------------------------------------------------------------------------

    \275\ Under 45 CFR 164.103, ``Required by law'' means ``a 
mandate contained in law that compels an entity to make a use or 
disclosure of protected health information and that is enforceable 
in a court of law.'' It includes, among other things, ``statutes or 
regulations that require the production of information, including 
statutes or regulations that require such information if payment is 
sought under a government program providing public benefits.''
---------------------------------------------------------------------------

    In the CY 2022 ESRD PPS proposed rule, we further noted that the 
Privacy Act of 1974 also places limits on agency data disclosures. The 
Privacy Act applies when Federal agencies maintain systems of records 
by which information about an individual is retrieved by use of one of 
the individual's personal identifiers (name, Social Security number, or 
any other codes or identifiers that are assigned to the individual). 
The Privacy Act generally prohibits disclosure of information from a 
system of records to any third party without the prior written consent 
of the individual to whom the records apply, 5 U.S.C. 552a(b). 
``Routine uses'' are an exception to this general principle. A routine 
use is a disclosure outside of the agency that is compatible with the 
purpose for which the data was collected. Routine uses are established 
by means of a publication in the Federal Register about the applicable 
system of records describing to whom the disclosure will be made and 
the purpose for the disclosure. We stated in the CY 2022 ESRD PPS 
proposed rule that we believe that the proposed data disclosures are 
consistent with the purposes for which the data discussed in this rule 
was collected, and thus, should not run afoul of the Privacy Act, 
provided we ensure that an appropriate Privacy Act system of records 
``routine use'' is in place prior to making any disclosures. The 
systems of records from which CMS would share data are the Medicare 
Integrated Data Repository (``IDR''), system of records number 09-70-
0571, and the Health Resources and Services Administration (``HRSA'') 
Organ Procurement and Transplantation Network (``OPTN'')/Scientific 
Registry of Transplant Recipients (``SRTR'') Data System, system of 
records number 09-15-0055.
    In the CY 2022 ESRD PPS proposed rule, we expressed that 
establishing a regulatory requirement for CMS to share the beneficiary-
identifiable data described previously would be appropriate for the ETC 
Model for several reasons. First, we stated that we believe that all 
ETC Participants not only desire but need this data to know which 
beneficiaries CMS has attributed to them (and thus is holding them 
financially accountable for such beneficiaries' individual 
contributions to the ETC Participant's performance measures described 
in 42 CFR part 512, subpart C, with the proposed modifications 
described in this proposed rule, if finalized), and for each ETC 
Participant to understand the basis by which CMS computed their MPS. 
Second, we stated that CMS believes that all ETC Participants, 
regardless of size, would have the capability of managing and 
meaningfully using the shared data. We noted that we would provide the 
data in a form and manner that CMS believes is user-friendly. In 
addition, the ETC Participant would be able to review the beneficiary-
identifiable data along with the aggregated data, which should help the 
ETC Participant understand the data CMS would share with the ETC 
Participant. Finally, we stated that CMS believes that any other 
approach to making beneficiary-identifiable data available, including 
the alternative proposal considered by CMS and described later in this 
section, would impose additional operational burdens on CMS and 
administrative burdens on both CMS and the ETC Participants without 
producing any meaningful privacy or security benefit.
    In the CY 2022 ESRD PPS proposed rule, we noted that we considered 
an alternative proposal for making beneficiary-identifiable data 
available to ETC Participants based on the data sharing policies 
currently used in many models tested under section 1115A of the Act, 
which would involve ETC Participants formally requesting the data from 
CMS before CMS could share the data. In particular, ETC Participants 
would have the opportunity to request the ``minimum necessary'' PHI for 
their own ``health care operations'' as defined in 45 CFR 164.501 and 
CMS would be permitted to disclose the requested data based on the 
HIPAA Privacy Rule provisions that permit disclosures of PHI for the 
recipient's health care operations purposes as described in 45 CFR 
164.506(c)(4). We stated that under this alternative approach, ETC 
Participants that request this information would have to attest to 
compliance with specific HIPAA requirements in addition to, or as part 
of, the data sharing agreement described in section V.B.7.b.c of the CY 
2022 ESRD PPS proposed rule and the next section of this final rule.
    In the CY 2022 ESRD PPS proposed rule, we stated that after 
considering this option, we believed that having the ETC Participant 
request the data from CMS would add steps in the process that would 
cause administrative burden for both CMS and ETC Participants, and 
operational cost and burden for CMS. We also stated that we further 
believed that adding these steps would not produce a meaningful privacy 
or security benefit based on the specific circumstances of this ETC 
Model. We noted that both this option and the proposed approach would 
require that the ETC Participant complete and sign a data sharing 
agreement, and both would allow an ETC Participant to decline receiving 
beneficiary-identifiable data by declining to complete or sign a data 
sharing agreement. As such, we stated that there would be no meaningful 
privacy or security benefits that this option would create that were 
not already realized by the proposed approach to data sharing in the 
ETC Model. We also anticipated that all ETC Participants would want and 
need, and overwhelmingly would request, the data described previously, 
would be capable of handling such data, and would take the steps 
necessary to obtain the data. In addition, we stated that under an 
alternative approach based on the HIPAA provisions for the ETC 
Participant's ``health care operations,'' CMS would only be able to 
disclose the beneficiary-identifiable data for a purpose listed in 
paragraph (1) or (2) of the definition of ``health care operations'' in 
45 CFR 164.501. However, we noted that we also believe it is crucial 
that an ETC Participant has the opportunity to understand how CMS 
calculated the ETC Participant's PPA for a PPA Period, and have the 
information needed to request a targeted review of CMS's MPS 
calculation if the ETC Participant believes CMS made an error.
    Given the policies we were proposing for data sharing, we also 
proposed to modify the title of Sec.  512.390 from ``Notification and 
targeted review'' to ``Notification, data sharing, and targeted 
review.'' We proposed this change so that the section title would more 
accurately reflect the contents of the section.
    We solicited public comment on our proposal to require, under 
proposed Sec.  512.390(b)(1), that CMS make available certain 
beneficiary-identifiable attribution and performance data for retrieval 
by ETC Participants no later than one month prior to the start of each 
PPA Period, and on our considered alternative to this proposal.
    The following is a summary of the comments received on our proposal 
to require that CMS make available certain beneficiary identifiable 
attribution and performance data for retrieval by ETC Participants no 
later than one month prior to the start of each PPA Period, and our 
responses.

[[Page 61974]]

    Comment: We received many comments in support of the need for data 
sharing under the ETC Model. One commenter asserted that it is 
essential for ETC Participants to have access to the data elements CMS 
described in the CY 2022 ESRD PPS proposed rule to allow ETC 
Participants to make informed decisions and implement changes to 
clinical processes that permit improvement over time. Another commenter 
stated that the availability of beneficiary-level data under the ETC 
Model would be helpful in caring for and providing appropriate care to 
ESRD Beneficiaries. Another commenter stated that the data CMS proposed 
to share would assist ETC Participants in establishing targeted 
interventions to increase rates of the contemplated dialysis modalities 
and transplant waitlisting, and that it would help ETC Participants 
decrease health disparities.
    Response: We thank the commenters for their support.
    Comment: One commenter expressed agreement with the expected uses 
of beneficiary-identifiable data by ETC Participants that CMS described 
in the CY 2022 ESRD PPS proposed rule, including requesting targeted 
review of the MPS calculation, care management or coordination, and 
quality improvement.
    Response: We appreciate this comment. We continue to believe that 
requesting targeted review of the MPS calculation, care management or 
coordination, and quality improvement constitute appropriate uses of 
the beneficiary-identifiable data that CMS would share with ETC 
Participants, and we are pleased this commenter agrees with these 
expected uses.
    Comment: We received some comments regarding the timing and 
frequency of data sharing under the ETC Model. Some commenters 
expressed support for our proposal to share data prior to each PPA 
Period. A few commenters proposed that CMS share data more frequently 
than proposed. A couple commenters proposed that CMS share the data 
described in the CY 2022 ESRD PPS proposed rule on a quarterly basis. 
Another commenter proposed that CMS share the data on as close to a 
real-time basis as possible, suggesting either a quarterly or a monthly 
basis. This commenter asserted that sharing data on a quarterly or 
monthly basis would help ensure that the data is not outdated, and that 
it could better help guide interventions by ETC Participants to 
increase home dialysis and transplant rates.
    A couple commenters recommended that CMS share the data on a 
monthly basis. One such commenter maintained that, for an ETC 
Participant to meaningfully track its performance, the ETC Participant 
should have access to monthly reports detailing its attributed 
beneficiary population. The same commenter also suggested that they 
anticipate that sharing data on a monthly basis would impose minimal 
burden on CMS, that such data sharing frequency would allow CMS and ETC 
Participants to address potential errors through targeted reviews on a 
smaller scale and on a rolling basis, and that more timely access to 
data would better support ETC Participants in increasing transplant 
waitlisting and monitoring their performance.
    Response: We thank the commenters for their feedback. While we 
agree, in general, that having access to more timely data would incur 
many benefits for CMS and ETC Participants alike, including the ones 
identified by commenters, we believe that the schedule we proposed for 
sharing data affords ETC Participants sufficient time to conduct the 
activities for which CMS proposed allowing the ETC Participant to use 
the data, namely: To assess CMS's calculations underlying the ETC 
Participant's MPS, and to conduct care management, care coordination, 
and quality improvement activities. In addition, we believe that 
sharing data biannually, no later than one month ahead of each PPA 
Period, gives ETC Participants sufficient opportunity to track or 
monitor their performance and otherwise increase transplant 
waitlisting. Further, as described in Sec.  512.360 of our regulations, 
CMS conducts beneficiary attribution for each month of a MY 
retrospectively after the end of each MY. Accordingly, CMS would not 
necessarily have accurate beneficiary-identifiable data to share with 
the ETC Participant on a monthly or quarterly basis to the extent that 
a beneficiary's attribution status can change during a given MY. In 
other words, CMS is unable to share accurate, final beneficiary-
identifiable data on the ETC Participant's attributed beneficiaries 
more often than biannually, after the end of the applicable MY.
    In addition, because we conduct beneficiary attribution 
retrospectively, we disagree with the commenter's suggestion that 
sharing data monthly would impose minimal burden on CMS. Sharing data 
monthly or quarterly would in effect require CMS to conduct beneficiary 
attribution monthly or quarterly, even though CMS is basing its MPS 
calculations on beneficiary attribution run only biannually, which 
would impose more than minimal burden on CMS. We similarly disagree 
with the commenter's suggestion that sharing data more frequently would 
enable CMS and ETC Participants to address potential errors through 
targeted reviews on a smaller scale and on a rolling basis. CMS did not 
propose any changes to when CMS computes the MPS or applies it to 
determine the ETC Participant's PPA. Because CMS will still be applying 
the PPA according to the schedule provided in Sec.  512.355, sharing 
data more frequently than proposed would not give CMS and ETC 
Participants the ability to address potential errors through targeted 
reviews on a smaller scale or on a rolling basis.
    For the same reasons, we disagree with the commenter's concern 
that, under CMS's proposal to share beneficiary-identifiable data prior 
to each PPA Period, the data shared would be outdated. Under Sec.  
512.365, CMS calculates the ETC Participant's MPS based on the ETC 
Participant's performance during a given MY. Any beneficiary-
identifiable data shared during an MY would not necessarily be accurate 
because a beneficiary's attribution status can change during an MY. In 
other words, to share beneficiary-identifiable data more frequently 
would require CMS to share data that is not yet final and may be 
inaccurate. Thus, unlike the data we proposed to share under Sec.  
512.390(b)(1), an ETC Participant could not use this interim data to 
assess CMS's calculation of the MPS.
    Comment: One commenter suggested that CMS make available to ETC 
Participants a list of beneficiaries who are dual-eligible or LIS 
recipients prospectively (which, in the context of the ETC Model, we 
interpret to mean in advance of the applicable MY), explaining that 
sharing such data in advance would give ETC Participants a clearer 
understanding of their patient population as it will be analyzed by 
CMS. The commenter also stated that neither the commenter nor 
healthcare providers are able to fully model the impact of CMS's 
proposal to stratify achievement benchmarks based on the proportion of 
beneficiaries who are dual-eligible or LIS recipients, as they do not 
have access to public information regarding ESRD Beneficiaries' LIS 
eligibility.
    Response: As noted previously, under Sec.  512.360, CMS conducts 
beneficiary attribution retrospectively in the ETC Model, and thus data 
on the dual eligibility and LIS recipient status of each attributed 
beneficiary will not be available for CMS to share with ETC 
Participants prospectively in advance of the MY. Any beneficiary-
identifiable

[[Page 61975]]

data we could share in advance of an MY would include at least a few 
beneficiaries that, when we conduct attribution for the MY at the end 
of that MY, would not be attributed to the ETC Participant, or at least 
not attributed to the ETC Participant for all months of the MY. Because 
we conduct beneficiary attribution monthly, attribution is subject to 
change, and the benefits that the commenter asserts could be gained by 
CMS sharing dual-eligible and LIS-eligible status data in advance of an 
MY would likely be undermined by the fact that such data may not be 
complete or accurate. In other words, CMS cannot know in advance of an 
MY which beneficiaries, or more specifically, which beneficiary-months, 
will count for the purpose of conducting attribution and calculating 
performance; we can only know this after the MY has ended. For this 
reason, we believe that limiting beneficiary-identifiable data sharing 
to after the MY, but prior to its corresponding PPA Period--in advance 
of when the ETC Participant's payments will be adjusted--best ensures 
that CMS is sharing the most accurate beneficiary-identifiable data as 
relevant to the ETC Participant's attributed beneficiaries and 
performance under the ETC Model, while providing the ETC Participant 
the opportunity to understand and, as needed, request a targeted review 
of the calculation of the MPS under Sec.  512.390(b) of our 
regulations. Finally, dual-eligibility and LIS-eligibility data shared 
prior to a PPA Period could also be viewed as prospective in nature. 
Specifically, while a beneficiary's attribution status is subject to 
change during and between MYs, such data will provide ETC Participants 
with a rough estimate of their population of attributed beneficiaries 
who are dual-eligible and LIS recipients for the upcoming MY.
    Regarding the commenter's concern that neither the commenter nor 
healthcare providers are able to fully model the impact of CMS's 
proposal to stratify achievement benchmarks based on the proportion of 
beneficiaries who are dual-eligible or LIS recipients, CMS declines to 
make beneficiary-identifiable LIS-eligibility data publicly available, 
or to share with the ETC Participant beneficiary-identifiable LIS-
eligibility data on ESRD Beneficiaries who are not attributed to the 
ETC Participant, as such policies would raise privacy concerns. If the 
commenter is instead expressing concern that there does not exist 
publicly available aggregate data regarding ESRD beneficiaries who are 
LIS-eligible, such broad data dissemination is beyond the scope of this 
rulemaking for the ETC Model.
    Comment: Several commenters provided feedback on the data elements 
CMS proposed to share with ETC Participants. One commenter expressed 
support for the data elements that CMS proposed to provide under the 
ETC Model, noting that, even without claims data, the data CMS proposed 
to provide would assist ETC Participants in establishing targeted 
interventions to increase the rates of home dialysis, self-dialysis, 
and nocturnal in-center dialysis modalities, as well as transplant 
waitlist rates. The same commenter also recommended that CMS make 
claims data available to ETC Participants, as claims data would better 
assist ETC Participants in establishing appropriate care coordination 
and quality improvement initiatives, thereby improving care for 
beneficiaries. The commenter also noted that CMS has deemed claims data 
necessary to share with participants under other models tested under 
section 1115A of the Act, and that CMS should take the same position 
here.
    Response: We agree that making certain beneficiary-identifiable 
data available under the ETC Model will help ETC Participants conduct 
care coordination and quality improvement activities, and realize the 
goals of the ETC Model of promoting beneficiary choice of renal 
replacement modality. We believe that our proposal struck the 
appropriate balance between sharing enough data to ensure that ETC 
Participants understand which beneficiaries were attributed to them 
during a given MY for purposes of care management and coordination and 
quality improvement, providing treatment to the subject beneficiary, 
and to assess CMS's calculation of the corresponding MPS, while also 
remaining sensitive to the privacy interests of attributed 
beneficiaries and sharing only the ``minimum necessary'' amount of 
beneficiary-identifiable data, as required by the HIPAA Privacy Rule, 
to support the ETC Model for the purposes we described in the CY 2022 
ESRD PPS proposed rule. In most other models tested under section 1115A 
of the Act under which CMS has made available beneficiary-identifiable 
Medicare claims data, CMS shares such data only when formally requested 
by model participants for certain ``health care operations,'' and only 
after such model participants attest to meeting specific HIPAA 
requirements, including that the particular claims data requested meet 
the ``minimum necessary'' for their respective ``health care 
operations.'' These disclosures are based on the HIPAA Privacy Rule 
provisions that permit disclosures of PHI for the recipient's health 
care operations purposes as described in 45 CFR 164.506(c)(4) and Sec.  
164.501.
    For the ETC Model, we proposed to establish a requirement under 
Sec.  512.390(b)(1) for CMS to share the beneficiary-identifiable data 
described in the CY 2022 ESRD PPS proposed rule with ETC Participants. 
Our proposal did not include a process whereby ETC Participants could 
request the beneficiary-identifiable data for their ``health care 
operations.'' As we explained in the CY 2022 ESRD PPS proposed rule (86 
FR 36388), having the ETC Participant formally request the beneficiary-
identifiable data from CMS would add steps in the process that would 
cause administrative burden for both CMS and ETC Participants, and 
operational cost and burden for CMS. We also noted that adding these 
steps would not produce a meaningful privacy or security benefit based 
on the specific circumstances of this ETC Model. We agree that Medicare 
claims data likely would help many ETC Participants' care coordination 
and quality improvement efforts. However, we do not believe, at this 
time, that making claims data available is appropriate given the nature 
of this model, which is focused on making payment adjustments related 
to relatively specific outcomes, namely increasing rates of home 
dialysis and transplant. We believe that the data elements we proposed 
to share with ETC Participants are sufficient to position ETC 
Participants to meaningfully conduct care coordination and quality 
improvement activities to increase rates of home dialysis, self-
dialysis, nocturnal in-center dialysis, and transplant waitlisting. 
Moreover, we do not believe that Medicare claims data are necessary for 
ETC Participants to assess CMS's calculations underlying the payment 
adjustments made under the ETC Model.
    Comment: One commenter recommended that CMS add the following data 
elements to the beneficiary-identifiable data that CMS would be 
required to share with ETC Participants: ``Modality attribution 
status,'' the name of the transplant center at which the beneficiary is 
listed on the transplant waitlist, and the date on which the 
beneficiary joined their respective waitlist.
    Response: We thank the commenter for this feedback. We believe our 
proposed data elements capture two of the commenter's three suggested 
data elements. Specifically, we believe our proposal to provide data on 
the number

[[Page 61976]]

of months the beneficiary was attributed to the ETC Participant, 
received home dialysis, self-dialysis, or nocturnal in-center dialysis, 
or was on a transplant waitlist; and the number of months that have 
passed since the beneficiary has received a living donor transplant, as 
applicable, sufficiently capture a beneficiary's ``modality attribution 
status'' (which we interpret to mean the dialysis modality that CMS 
understands the beneficiary to be receiving) and, even if indirectly, 
provides the date (or an approximation thereof) that the beneficiary 
was placed on a transplant waitlist.
    CMS did not propose to provide the name of the transplant center at 
which the beneficiary is listed on the transplant waitlist, and CMS 
does not believe, at this time, that it is appropriate to make such 
information available. An ETC Participant should be able to obtain such 
information from the subject beneficiary, as we anticipate that an ETC 
Participant would first talk to a beneficiary, and likely obtain the 
beneficiary's explicit consent, prior to contacting a transplant center 
on his or her behalf. That said, we may consider this suggestion for 
future rulemaking related to the ETC Model.
    Comment: One commenter suggested that CMS provide more granular 
data on attributed beneficiaries, and suggested that CMS include the 
following elements: ``Patient ID,'' ``Date (year/month),'' 
``Modality,'' and ``Status (active or not active on transplant list.''
    Response: CMS believes that its proposed data elements under Sec.  
512.390(b)(1)(ii) capture all of the elements the commenter suggested. 
CMS proposed sharing the beneficiary's name and MBI, which CMS believes 
would serve as a ``Patient ID.'' CMS also proposed sharing the number 
of months a beneficiary was attributed to the ETC Participant, home 
dialysis months, self-dialysis months, nocturnal in-center dialysis 
months, transplant waitlist months, and months following a living donor 
transplant. We believe these data elements capture the ``Date (year/
month),'' ``Modality,''modality, and ``Status (active or not active on 
transplant list'' elements suggested by the commenter. ``Date (year/
month)'' could be ascertained by the number of months a beneficiary was 
attributed to the ETC Participant; ``Modality'' could be ascertained by 
the beneficiary's data regarding home dialysis months, self-dialysis 
months, and nocturnal in-center dialysis months; and ``Status (active 
or not active on transplant list)'' could be ascertained by the 
transplant waitlist months or months following a living donor 
transplant.
    Comment: Two commenters expressed support for CMS's proposal to 
provide beneficiary-identifiable data to ETC Participants without 
establishing a process for ETC Participants to request it. Both 
commenters asserted that the approach described in the CY 2022 ESRD PPS 
proposed rule of requiring CMS by law to make available the 
beneficiary-identifiable data identified in the CY 2022 ESRD PPS 
proposed rule, rather than allowing ETC Participants to request the 
data, would decrease burden on both CMS and ETC Participants.
    Response: We thank the commenters for their support. We agree that 
the proposed approach of requiring CMS by law to make available the 
described beneficiary-identifiable data would reduce burden on both CMS 
and ETC Participants, and that it is otherwise appropriate for sharing 
beneficiary-identifiable data under the ETC Model.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to require in our regulation at Sec.  
512.390(b)(1) that CMS make available for retrieval by ETC Participants 
certain beneficiary-identifiable data no later than one month before 
the start of each PPA Period, without modification. This beneficiary-
identifiable data will include, when available: The ETC Participant's 
attributed beneficiaries' names, Medicare Beneficiary Identifiers, 
dates of birth, dual eligible status, and LIS recipient status; and 
data regarding the ETC Participant's performance under the ETC Model, 
including, for each attributed beneficiary, as applicable: The number 
of months the beneficiary was attributed to the ETC Participant, home 
dialysis months, self-dialysis months, nocturnal in-center dialysis 
months, transplant waitlist months, and month following a living donor 
transplant. As we stated in the CY 2022 ESRD PPS proposed rule, an 
appropriate Privacy Act system of records ``routine use'' will need to 
be in place prior to the disclosure of this data.
(1) Conditions for Retrieving Beneficiary-Identifiable Data
    Given the sensitive nature of the beneficiary-identifiable data 
that CMS would be required to share under our proposal, in the CY 2022 
ESRD PPS proposed rule (86 FR 36388), we proposed certain conditions 
for ETC Participants to be able to retrieve this data and certain 
protections that would govern use of the data following retrieval. 
First, we proposed that CMS would only share the beneficiary-
identifiable data on the condition that the ETC Participant observes 
all relevant statutory and regulatory provisions regarding the 
appropriate use of data and the confidentiality and privacy of 
individually identifiable health information as would apply to a 
covered entity under the HIPAA regulations and agrees to comply with 
the terms of a separate data sharing agreement. Although we stated that 
we expected ETC Participants are covered entities and must comply with 
the HIPAA regulations directly, we proposed to include this provision 
to ensure an ETC Participant would abide by those rules with respect to 
the data, even if, for example, the ETC Participant is a hybrid entity 
under HIPAA and the component requesting the data has not been 
designated as a health care component under 45 CFR 164.105. We proposed 
that the HIPAA provisions that the ETC Participant would have to 
observe would include, but would not be necessarily limited to, 
standards regarding the use and disclosure of PHI; administrative, 
physical, and technical safeguards and other security provisions; and 
breach notification.
    We proposed that, if an ETC Participant wishes to retrieve the 
beneficiary-identifiable data, the ETC Participant would be required to 
first complete, sign, and submit--and thereby agree to the terms of--a 
data sharing agreement with CMS, which we would call the ETC Data 
Sharing Agreement. We proposed that this agreement would include 
certain protections and limitations on the ETC Participant's use and 
further disclosure of the beneficiary-identifiable data, and would be 
provided in a form and manner specified by CMS, which we discussed in 
more detail in later sections of the CY 2022 ESRD PPS proposed rule and 
describe below. We also stated that this agreement would potentially 
require the ETC Participant to make certain attestations, for example, 
if required under the applicable Privacy Act system of records notice. 
We proposed that an ETC Participant that wishes to retrieve the 
beneficiary-identifiable data would be required to complete and submit 
a signed ETC Data Sharing Agreement at least annually. We stated that 
we believe that it is important for the ETC Participant to complete and 
submit a signed ETC Data Sharing Agreement at least annually so that 
CMS has up-to-date information that the ETC Participant wishes to 
retrieve the beneficiary-identifiable data, attestations (if required), 
and information on the designated data custodian(s). As described in 
greater detail in the CY 2022 ESRD PPS proposed rule (86 FR 36388--
36389),

[[Page 61977]]

we proposed that a designated data custodian would be the individual(s) 
that an ETC Participant would identify as responsible for ensuring 
compliance with all privacy and security requirements and for notifying 
CMS of any incidents relating to unauthorized disclosures of 
beneficiary-identifiable data.
    In the CY 2022 ESRD PPS proposed rule, we stated our belief that it 
is important for the ETC Participant to first complete and submit a 
signed ETC Data Sharing Agreement before it retrieves any beneficiary-
identifiable data to help protect the privacy and security of any 
beneficiary-identifiable data shared by CMS with the ETC Participant. 
As described in section V.B.7.b of the CY 2022 ESRD PPS proposed rule 
and previously in this final rule, there are important sensitivities 
surrounding the sharing of this type of individually identifiable 
health information, and CMS must ensure to the best of its ability that 
any beneficiary-identifiable data that it shares with ETC Participants 
would be further protected in an appropriate fashion.
    In the CY 2022 ESRD PPS proposed rule, we considered an alternative 
under which ETC Participants would not need to complete and submit a 
signed ETC Data Sharing Agreement, but we concluded that, if we 
proceeded with this option, we would not have adequate assurances that 
the ETC Participants would appropriately protect the privacy and 
security of the beneficiary-identifiable data that we are proposing to 
share with them. We also considered, in the CY 2022 ESRD PPS proposed 
rule, an alternative under which the ETC Participant would need to 
complete and submit a signed ETC Data Sharing Agreement only once for 
the duration of the ETC Model. However, we concluded that this 
similarly would not give CMS adequate assurances that the ETC 
Participant would protect the privacy and security of the beneficiary-
identifiable data from CMS. We concluded in the CY 2022 ESRD PPS 
proposed rule that it is critical that we have up-to-date information 
and designated data custodians, and that requiring the ETC Participant 
to submit an ETC Data Sharing Agreement at least annually would 
represent the best means of achieving this goal.
    We solicited public comment on our proposal to require, in Sec.  
512.390(b)(1)(iii), that the ETC Participant agree to comply with all 
applicable laws and the terms of the ETC Data Sharing Agreement as a 
condition of retrieving the beneficiary-identifiable data, and on our 
proposal in Sec.  512.390(b)(1)(iv) that the ETC Participant would need 
to submit the signed ETC Data Sharing Agreement at least annually if 
the ETC Participant wishes to retrieve the beneficiary-identifiable 
data.
    The following is a summary of the comments received on our 
proposals regarding the conditions for retrieving beneficiary-
identifiable data, and our responses.
    Comment: Some commenters expressed support for our proposal to 
require an ETC Participant to complete an ETC Data Sharing Agreement 
prior to CMS making the beneficiary-identifiable data described in the 
CY 2022 ESRD PPS proposed rule available to the ETC Participant. One 
such commenter noted that CMS's proposals strike a good balance between 
crucial privacy goals and ETC Participants' need to assess their 
performance under the Model. Another commenter claimed that the 
proposed process would be consistent with the process CMS followed in 
the Comprehensive ESRD Care (CEC) Model and is following in the Kidney 
Care Choices (KCC) Model Options.
    Response: We agree that requiring an ETC Participant to complete an 
ETC Data Sharing Agreement prior to CMS making the beneficiary-
identifiable data described in the CY 2022 ESRD PPS proposed rule 
available to the ETC Participant strikes an appropriate balance between 
the important goals of making ETC Participants aware of which 
beneficiaries CMS has attributed to them and enabling ETC Participants 
to understand the basis by which CMS computed their MPS, while 
protecting the privacy interests of attributed beneficiaries. We 
clarify, however, that the process CMS followed in the CEC Model and is 
following in the KCC Model Options is different from the process CMS 
proposed for the ETC Model. In the CEC Model CMS offered model 
participants the opportunity to request beneficiary-identifiable data 
for their ``health care operations,'' in accordance with HIPAA Privacy 
Rule provisions at 45 CFR 164.506(c)(4), contingent upon the 
participants making certain attestations and agreeing to certain 
privacy and security protections as part of the participation 
agreements for those models. CMS is taking this same approach with the 
KCC Model Options. For the ETC Model, we proposed that CMS would be 
required by law to provide certain beneficiary-identifiable data to ETC 
Participants, in accordance with the HIPAA Privacy Rule provisions at 
45 CFR 164.512(a), contingent upon the ETC Participant annually signing 
an ETC Data Sharing Agreement.
    Comment: One commenter expressed specific support for CMS's 
proposal to require an ETC Participant to complete an ETC Data Sharing 
Agreement on an annual basis. A couple of commenters recommended that 
CMS require the ETC Participant to complete an ETC Data Sharing 
Agreement only once during the Model. One such commenter further 
suggested that CMS require an ETC Participant to complete a subsequent 
ETC Data Sharing Agreement if material changes occur requiring a new 
agreement, rather than requiring an ETC Participant to complete an ETC 
Data Sharing Agreement annually. This commenter stated that this 
approach would align with the approach the Innovation Center takes in 
certain other alternative payment models, and that annual completion of 
an ETC Data Sharing Agreement would be overly burdensome for ETC 
Participants.
    Response: We believe that it is appropriate to require the ETC 
Participant to complete an ETC Data Sharing Agreement on an annual 
basis. It is critical that CMS guarantees, to the best of its ability, 
that it always has an up-to-date, completed ETC Data Sharing Agreement 
from each ETC Participant that wishes to obtain the beneficiary-
identifiable data CMS described in the CY 2022 ESRD PPS proposed rule. 
We believe that requiring the ETC Participant to complete an ETC Data 
Sharing Agreement annually, rather than only when material changes 
occur, would better ensure that CMS achieves this goal. Even if CMS 
were to articulate specific elements of what constitutes a ``material 
change,'' such a policy would require that an ETC Participant 
appropriately identify when such a change as occurred and timely notify 
CMS, and would require CMS to conduct additional monitoring and 
outreach activities to ensure compliance. Such an approach imposes 
additional and substantial burden on CMS in the context of the ETC 
Model, which includes approximately 7,000 ETC Participants, and this 
burden is disproportionate to the burden imposed on ETC Participants by 
completing an ETC Data Sharing Form annually. We believe that requiring 
the ETC Participant to complete an ETC Data Sharing Agreement annually 
strikes a reasonable balance between ensuring, to the extent possible, 
that CMS has up-to-date information, while minimizing the 
administrative burden imposed on a given ETC Participant in completing 
the form.
    While CMS has not required the annual completion of a data sharing 
agreement in every alternative payment model, the ETC Model importantly

[[Page 61978]]

differs from other section 1115A models insofar as participation in the 
ETC Model changes in a different way than other models. ESRD facilities 
and Managing Clinicians located in a Selected Geographic Area are 
required to participate in the ETC Model under Sec.  512.325(a). As 
such, participation in the ETC Model can fluctuate between MYs when 
ESRD facilities or Managing Clinicians move in or out of a Selected 
Geographic Area. This element of the ETC Model differs from many 
voluntary section 1115A models, such as the CEC Model or Primary Care 
First, where individuals or entities apply to participate, and accepted 
individuals or entities continue to participate until the section 1115A 
model ends or the participant or CMS terminates the participation 
agreement. The potential fluctuation in participation between MYs 
creates a need for CMS to require the ETC Participant to complete a 
data sharing agreement more frequently than it permits or requires in 
other section 1115A models, and we believe that requiring an ETC 
Participant to complete the data sharing agreement annually is 
sufficiently frequent to ensure that CMS has up-to-date data sharing 
agreements in place.
    In addition, other alternative payment models generally provide, 
within their respective participation agreements, terms and conditions 
relating to data protection, uses and disclosures, retention, and 
destruction, and those participation agreements are often amended, 
which typically requires model participants to complete new data 
request and attestation forms during the model's performance period. 
Our CY 2022 ESRD PPS proposed rule indicated that the specific terms 
relating to privacy, security, data retention, breach notification, and 
data destruction, which are found for other section 1115A models in the 
models', governing documentation would be found in the ETC Data Sharing 
Agreement, and we believe it is important that ETC Participants review 
these terms at least once a year, including in completing an annual ETC 
Data Sharing Agreement.
    In addition, the ETC Model includes a larger number of participants 
than many other section 1115A models; as described in the Specialty 
Care Models final rule, this larger scale is necessary to obtain the 
minimum sample size needed to produce robust and reliable evaluation 
results (85 FR 61280). With so many participants receiving beneficiary-
identifiable data, CMS believes that the privacy interests of 
beneficiaries would be best protected by requiring the ETC Participant 
to complete an ETC Data Sharing Agreement annually, helping CMS to 
ensure that the ETC Data Sharing Agreement submitted by an ETC 
Participant is reasonably up-to-date. Moreover, CMS believes that 
completing an ETC Data Sharing Agreement represents a low burden for an 
ETC Participant. As discussed later in this final rule, the ETC Data 
Sharing Agreement form will be available on the same web-based platform 
as the beneficiary-identifiable and aggregate data, which the ETC 
Participant likely would be accessing at least twice a year to obtain 
data when available at least 30 days prior to a PPA Period.
    Comment: One commenter recommended that CMS follow its approach in 
the Kidney Care Choices Model of requiring, in the commenter's words, 
``eligible signatories for the ETC Data Sharing Agreement.''
    Response: We thank the commenter for this feedback. We agree that 
it is important that the individual who signs the ETC Data Sharing 
Agreement has the authority to bind the ETC Participant to its terms 
and conditions. We believe this is standard for any binding agreement, 
and thus we do not believe we must specify this in our regulations.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.390(b)(1)(iii) 
and Sec.  512.390(b)(1)(iv) to require that the ETC Participant observe 
all applicable laws regarding the appropriate use of data and the 
confidentiality and privacy of individually identifiable health 
information as would apply to a covered entity under the HIPAA 
regulations, and agree to comply with the terms of the ETC Data Sharing 
Agreement, to be signed at least annually, as a condition of receiving 
the beneficiary identifiable data, with one modification. Specifically, 
we are making a technical change at Sec.  512.390(b)(1)(iii) to replace 
the phrase ``HIPAA regulations'' with ``regulations found at 45 CFR 
parts 160 and 164 promulgated under the Health Insurance Portability 
and Accountability Act of 1996 (HIPAA), as amended'' to clarify the 
applicable regulations, as the regulations initially promulgated under 
HIPAA have been amended by the Health Information Technology for 
Economic and Clinical Health (HITECH) Act, and may be amended by other 
statutes in the future.
(2) Content of ETC Data Sharing Agreement Provisions for Beneficiary-
Identifiable Data
    We proposed in new Sec.  512.390(b)(iv) that, under the ETC Data 
Sharing Agreement, ETC Participants would agree to certain terms, 
namely: (1) To comply with the requirements for use and disclosure of 
this beneficiary-identifiable data that are imposed on covered entities 
by the HIPAA regulations and the requirements of the ETC Model set 
forth in 42 CFR part 512; (2) to comply with additional privacy, 
security, and breach notification requirements to be specified by CMS 
in the ETC Data Sharing Agreement; (3) to contractually bind each 
downstream recipient of the beneficiary-identifiable data that is a 
business associate of the ETC Participant or performs a similar 
function for the ETC Participant, to the same terms and conditions to 
which the ETC Participant is itself bound in its data sharing agreement 
with CMS as a condition of the downstream recipient's receipt of the 
beneficiary-identifiable data retrieved by the ETC Participant under 
the ETC Model; and (4) that if the ETC Participant misuses or discloses 
the beneficiary-identifiable data in a manner that violates any 
applicable statutory or regulatory requirements or that is otherwise 
non-compliant with the provisions of the ETC Data Sharing Agreement, 
the ETC Participant would no longer be eligible to retrieve the 
beneficiary-identifiable data and may be subject to additional 
sanctions and penalties available under the law. In the CY 2022 ESRD 
PPS proposed rule (86 FR 36389), we stated that we believe these terms 
for sharing beneficiary-identifiable data with ETC Participants are 
appropriate and important, as CMS must ensure to the best of its 
ability that any beneficiary-identifiable data that it shares with ETC 
Participants would be further protected by the ETC Participant, and any 
business associates of the ETC Participant, in an appropriate fashion. 
We stated that we believe that these proposals would allow CMS to 
accomplish that.
    CMS solicited public comment on the additional privacy, security, 
breach notification, and other requirements that we would include in 
the ETC Data Sharing Agreement. As we noted in the CY 2022 ESRD PPS 
proposed rule, CMS has these types of agreements in place as part of 
the governing documents of other models tested under section 1115A of 
the Act and in the Medicare Shared Savings Program. In these 
agreements, CMS typically requires the identification of data 
custodian(s) and imposes certain requirements related to 
administrative, physical, and technical safeguards relating to data 
storage and transmission; limitations on further use and disclosure of 
the data; procedures for responding to data incidents and breaches; and 
data destruction and

[[Page 61979]]

retention. We proposed that these provisions would be imposed in 
addition to any restrictions required by law, such as those provided in 
the HIPAA privacy, security, and breach notification regulations. We 
additionally proposed that these provisions would not prohibit the ETC 
Participant from making any disclosure of the data otherwise required 
by law.
    We noted in the CY 2022 ESRD PPS proposed rule that we were 
considering limiting the use of beneficiary-identifiable data for 
specific purposes, either alone or in combination. We noted that, for 
example, in the ETC Data Sharing Agreement, CMS considered imposing 
limits on how the ETC Participant may use the beneficiary-identifiable 
data without prior written authorization from CMS to specific purposes, 
such as assessing CMS's calculation of the MPS for a given PPA Period, 
the ETC Participant's clinical care or ``treatment'' (as that term is 
defined at 45 CFR 164.501) of an attributed beneficiary, and certain 
``health care operations'' (as that term is defined at 45 CFR 164.501) 
of the ETC Participant. As noted previously in the CY 2022 ESRD PPS 
proposed rule and this final rule, CMS believes that ETC Participants 
would require this data to be able to request a targeted review of 
CMS's calculation of the MPS as it relates to a given PPA Period, as 
understanding and being able to seek review of CMS's calculation of the 
MPS, and thus the reason CMS adjusted the ETC Participant's Medicare 
payments in the manner it did, is critical for the ETC Model. In the CY 
2022 ESRD PPS proposed rule, we noted that importantly, there is no 
other source of this information outside of CMS. In addition to 
potentially limiting use to reviewing how CMS calculated the ETC 
Participant's MPS, we stated in the CY 2022 ESRD PPS proposed rule that 
we were considering limiting, in the ETC Data Sharing Agreement, use of 
the beneficiary-identifiable data without prior written authorization 
from CMS to use for clinical treatment purposes. We stated our belief 
that this beneficiary-identifiable data would be important in helping 
the ETC Participant determine which of its ESRD Beneficiaries are not 
on the transplant waitlist or have not received a living donor 
transplant, to inform how the ETC Participant engages in clinical care 
of the subject ESRD Beneficiary.
    In addition to the previous two uses, we stated in the CY 2022 ESRD 
PPS proposed rule that we also were considering limiting, in the ETC 
Data Sharing Agreement, the ETC Participant's use of the beneficiary-
identifiable data without prior written authorization from CMS to care 
management and coordination, quality improvement activities, and 
provider incentive design and implementation, to the extent these 
activities would constitute ``health care operations'' that fall within 
the first and second paragraphs of the definition of that phrase under 
the HIPAA Privacy Rule (45 CFR 164.501). As it relates to case 
management and coordination and quality improvement activities, we 
stated in the CY 2022 ESRD PPS proposed rule that CMS believes that 
this beneficiary-identifiable data would help the ETC Participant to 
conduct the important task of identifying which ESRD Beneficiaries are 
not currently on the transplant waitlist and thus better enable the ETC 
Participant to engage those beneficiaries, as clinically appropriate, 
about the process of signing up for the transplant waitlist, thereby 
improving the ETC Participant's performance on the transplant waitlist 
rate, and increasing the likelihood that the subject ESRD Beneficiaries 
would receive a transplant. In addition, we noted our belief that 
sharing this data with the ETC Participant would help the ETC 
Participant to conduct the important task of identifying which ESRD 
Beneficiaries are receiving dialysis in-center, and to consider whether 
furnishing kidney disease patient education services or otherwise 
making such beneficiaries aware of the possibility of receiving home 
dialysis, self-dialysis, or nocturnal in-center dialysis, as clinically 
appropriate in the ESRD Beneficiary's individual situation.
    We sought public comment on how an ETC Participant might need to, 
and want to, use the beneficiary-identifiable data retrieved from CMS 
under the ETC Model to accomplish the goals of the ETC Model in 
accordance with applicable law.
    We also sought public comment on what further disclosures of the 
beneficiary-identifiable data might be appropriate to permit or 
prohibit under the ETC Data Sharing Agreement. For example, we stated 
in the CY 2022 ESRD PPS proposed rule that CMS considered prohibiting, 
in the ETC Data Sharing Agreement, any further disclosure, not 
otherwise required by law, of the beneficiary-identifiable data 
described previously in this section of the CY 2022 ESRD PPS proposed 
rule to anyone who is not a HIPAA covered entity or business associate, 
as defined in 45 CFR 160.103, or to an individual practitioner in a 
treatment relationship with the subject ESRD Beneficiary or Pre-emptive 
LDT Beneficiary, or that practitioner's business associates. Such a 
prohibition would be similar to that imposed by CMS in other models 
tested under section 1115A of the Act in which CMS shares beneficiary-
identifiable data with model participants. In the alternative, we 
noted, CMS also considered including more restrictive prohibitions in 
the ETC Data Sharing Agreement, which would limit further discloses to 
only some, one, or none of the categories of individuals or entities 
described above.
    We explained in the CY 2022 ESRD PPS proposed rule that we 
considered all of these possibilities because there exist important 
legal and policy limitations on the sharing of the beneficiary-
identifiable data discussed previously in the CY 2022 ESRD PPS proposed 
rule, and CMS must consider carefully the ways in which and reasons for 
which we would provide access to this data for purposes of the ETC 
Model. We stated that we believe that some ETC Participants may require 
the assistance of business associates, such as contractors, to perform 
data analytics or other functions using this beneficiary-identifiable 
data to support the ETC Participant's review of CMS's MPS calculations, 
care management and coordination, quality improvement activities, or 
clinical treatment of attributed beneficiaries. We further noted that 
we believe that this beneficiary-identifiable data may be helpful for 
any HIPAA covered entities who are in a treatment relationship with the 
subject ESRD Beneficiary or Pre-emptive LDT Beneficiary.
    We sought public comment on how an ETC Participant might need to, 
and want to, disclose the beneficiary-identifiable data to other 
individuals and entities to accomplish the goals of the ETC Model, in 
accordance with applicable law.
    Under our proposal, the ETC Data Sharing Agreement would include 
other provisions, including requirements regarding data security, 
retention, destruction, and breach notification. For example, we 
considered including, in the ETC Data Sharing Agreement, a requirement 
that the ETC Participant designate one or more data custodians who 
would be responsible for ensuring compliance with the privacy, security 
and breach notification requirements for the data set forth in the ETC 
Data Sharing Agreement; various security requirements like those found 
in other models tested under section 1115A of the Act, but no less 
restrictive than those provided in the relevant Privacy Act system of 
records notices; how and when beneficiary-identifiable data could be 
retained by the ETC Participant or its downstream recipients of the

[[Page 61980]]

beneficiary-identifiable data; procedures for notifying CMS of any 
breach or other incident relating to the unauthorized disclosure of 
beneficiary-identifiable data; and provisions relating to destruction 
of the data. We noted that these are only examples, and are not the 
only terms CMS would potentially include in the ETC Data Sharing 
Agreement.
    We solicited public comment on this proposal that CMS, by adding 
Sec.  512.390(b)(1)(iv)(B), would impose certain requirements in the 
ETC Data Sharing Agreement related to privacy, security, data 
retention, breach notification, and data destruction.
    Finally, as described previously in section V.B.7.b(2) of this 
final rule, we proposed, at Sec.  512.390(b)(1)(iv)(D), that the ETC 
Data Sharing Agreement would include a term providing that if the ETC 
Participant misuses or discloses the beneficiary-identifiable data in a 
manner that violates any applicable statutory or regulatory 
requirements or that is otherwise non-compliant with the provisions of 
the ETC Data Sharing Agreement, the ETC Participant would no longer be 
eligible to retrieve beneficiary-identifiable data under proposed Sec.  
512.390(b)(1)(i) and may be subject to additional sanctions and 
penalties available under law. We also proposed to make conforming 
amendments to 42 CFR 512.160. Section 512.160(b) outlines the remedial 
actions available under the RO Model and ETC Model, and paragraph 
(b)(8), in particular provides that, if CMS determines that one or more 
grounds for remedial action specified in Sec.  512.160(a) has taken 
place, CMS may discontinue the provision of data sharing and reports to 
the model participant. We proposed to add a new Sec.  512.160(a)(9) to 
specify that, for the ETC Model only, CMS may take remedial action if 
the model participant misuses or discloses the beneficiary-identifiable 
data in a manner that violates any applicable statutory or regulatory 
requirements or that is otherwise non-compliant with the provisions of 
the applicable data sharing agreement. We noted that this proposed 
change would align the regulatory provision on remedial action with the 
remedial action we would include in the ETC Data Sharing Agreement.
    We solicited public comment on this proposal, to prohibit the ETC 
Participant from obtaining beneficiary-identifiable data pertaining to 
the ETC Model if the ETC Participant fails to comply with applicable 
laws and regulations, the terms of the ETC Model, or the ETC Data 
Sharing Agreement.
    The following is a summary of the comments received on additional 
privacy, security, breach notification, and other requirements that we 
proposed to include in the ETC Data Sharing Agreement, and our 
responses.
    Comment: One commenter expressed general support for having strong 
safeguards to protect sensitive beneficiary information and to ensure 
the data's appropriate use.
    Response: We appreciate this comment. We agree that it is critical 
that any data sharing policy we finalize for the ETC Model have strong 
safeguards designed to protect sensitive beneficiary information and to 
ensure, to the best of our ability, the appropriate use of the data by 
ETC Participants and their downstream users.
    Comment: One commenter expressed support for allowing an ETC 
Participant to disclose the beneficiary-identifiable data shared by CMS 
under the ETC Model with other covered entities in a treatment 
relationship with ESRD Beneficiaries, and with the ETC Participant's 
business associates. The commenter noted that this proposal would allow 
the data to be used in quality improvement activities by ETC 
Participants, and that many clinicians partner with third-party data 
vendors as business associates under the HIPAA rules, since such 
vendors have expertise in the field of data analytics and in analyzing 
trends and identifying areas for quality improvement.
    Response: CMS agrees that it is appropriate to allow an ETC 
Participant to disclose the beneficiary-identifiable data shared by CMS 
under the ETC Model with other covered entities in a treatment 
relationship with ESRD Beneficiaries, to help ensure that other covered 
entities who furnish care to ESRD Beneficiaries have the benefit of 
this important information related to the subject beneficiary's kidney 
care. In addition, CMS agrees that many clinicians contract with third 
parties for analytics support, and that such support can assist 
clinicians in conducting quality improvement activities. As we describe 
later in this section of the final rule, CMS is finalizing a data 
sharing policy that will allow an ETC Participant to disclose the 
beneficiary-identifiable data shared by CMS under the ETC Model with a 
business associate of the ETC Participant, so long as the ETC 
Participant contractually binds the business associate to the same 
terms and conditions to which the ETC Participant is itself bound in 
its ETC Data Sharing Agreement with CMS as a condition of the business 
associate's receipt of the beneficiary-identifiable data. The policy we 
are finalizing places limits on the ETC Participant's further 
disclosures of the beneficiary-identifiable data shared by CMS. 
Specifically, the policy we are finalizing requires that any non-
covered entity with whom the ETC Participant discloses beneficiary-
identifiable data made available to the ETC Participant under the ETC 
Model must be a business associate of the ETC Participant--and cannot 
be a downstream recipient who is neither a covered entity nor a 
business associate of the ETC Participant--except as otherwise required 
by law. CMS is making this modification because it believes that 
limiting downstream recipients of beneficiary-identifiable data shared 
under the ETC Model to those who have a business associate agreement in 
place with the ETC Participant, and that business associate agreement 
adopts the terms required under this regulation, will best safeguard 
the privacy and security interests of beneficiaries.
    Comment: One commenter expressed support for the data shared to be 
protected by existing Federal privacy and confidentiality laws, but 
requested that CMS clarify the differences between the privacy 
protections required under the ETC Model and those required by HIPAA.
    Response: It is critical to clarify that the policies we are 
finalizing in this section of the final rule are for the ETC Model only 
and are not intended to modify the HIPAA Privacy Rule or change 
existing legal obligations under the HIPAA Privacy Rule or other 
privacy laws. By finalizing our proposal in this final rule, we are 
establishing a requirement under Sec.  512.390(b)(1) for CMS to share 
beneficiary-identifiable data in a manner that is consistent with the 
HIPAA Privacy Rule, 45 CFR 164.512(a). We are also establishing 
additional protections for the beneficiary-identifiable data shared 
with ETC Participants under the ETC Model that they must, in turn, 
impose on any business associates. These additional requirements and 
safeguards include, but are not limited to, the annual completion and 
submission of an ETC Data Sharing Agreement; specific instructions 
relating to breach notification and data retention and destruction; and 
the identification of one or more data custodians who will be 
responsible for ensuring compliance with the privacy, security, and 
breach notification requirements set forth in the ETC Data Sharing 
Agreement. Further, under our final policy, we are placing additional 
limits on how the ETC Participant may use and further disclose the 
beneficiary-identifiable identifiable data received from CMS under the 
ETC

[[Page 61981]]

Model, beyond what may otherwise be permitted under the HIPAA Privacy 
Rule. In particular, ETC Participants will be limited to using and 
further disclosing the beneficiary-identifiable data under the ETC 
Model for the following purposes (other than disclosures otherwise 
required by law), without obtaining prior written permission from CMS: 
The ETC Participant's ``health care operations'' that fall within the 
first and second paragraphs of the definition of that phrase under the 
HIPAA Privacy Rule (45 CFR 164.501), to the extent they relate to care 
management and coordination, quality improvement activities, and 
provider incentive design and implementation; for clinical care or 
``treatment'' (as that term is defined in 45 CFR 164.501) of the 
subject beneficiary; and for assessing CMS's calculations underlying 
the MPS for the relevant PPA Period. We believe these uses and bases 
for further disclosure represent the only appropriate uses and bases 
for further disclosure for the beneficiary-identifiable data made 
available to the ETC Participant under the Model, and the only 
appropriate uses for business associates to whom the ETC Participant 
discloses such data, for the reasons we provide below in response to 
other comments.
    Comment: One commenter recommended that CMS not impose additional 
restrictions on data sharing beyond those required by the HIPAA Privacy 
Rule, and asserted that an ETC Participant should be able to use the 
beneficiary-identifiable data for the same ``treatment'' and ``health 
care operations'' activities permitted under HIPAA. Another commenter 
similarly suggested that CMS not impose additional limitations on an 
ETC Participant's use or further disclosure of the beneficiary-
identifiable data beyond those imposed by existing law, and 
additionally recommended that CMS not require the ETC Participant to 
obtain permission from CMS or another agency prior to any permitted 
data use.
    Response: We agree that an ETC Participant should be able to use 
the beneficiary-identifiable data made available by CMS under the ETC 
Model for the ``treatment'' (as that term is defined in 45 CFR 164.501) 
of the subject beneficiary, and we are finalizing our proposal to allow 
an ETC Participant to use such data for treatment. We believe it is 
important that an ETC Participant be able to use such data to inform 
their direct care of the beneficiary, especially as it relates to 
discussing renal replacement modalities and transplantation.
    The definition of ``health care operations'' in the HIPAA Privacy 
Rule at 45 CFR 164.501 covers a broad array of activities, most of 
which we believe are not relevant or necessary for purposes of the ETC 
Participant's performance in the Model. For example, an ETC Participant 
would not need to perform ``underwriting, enrollment, premium rating, 
and other activities related to the creation, renewal, or replacement 
of a contract of health insurance or health benefits[,]'' as described 
in the third paragraph of the definition. In addition, other uses and 
disclosures generally allowed under HIPAA without obtaining individual 
authorization, such as ``payment,'' are not relevant to the ETC 
Participant's performance in the Model. To appropriately safeguard the 
beneficiary-identifiable data, we will limit the permitted uses and 
further disclosures of the PHI shared under the ETC Model to the ETC 
Participant's ``health care operations'' that fall within the first and 
second paragraphs of the definition of that phrase under the HIPAA 
Privacy Rule (45 CFR 164.501), to the extent they relate to care 
management and coordination, quality improvement activities, and 
provider incentive design and implementation; treatment of the subject 
beneficiary; assessing CMS's calculations of the ETC Participant's MPS; 
and as otherwise required by law. In addition, under our final policy, 
we will permit the ETC Participant to use and further disclose 
beneficiary-identifiable retrieved under the ETC Model for assessing 
CMS's calculations underlying the MPS, which sufficiently covers the 
ETC Participant's need to use such data for ``[b]usiness planning and 
development'' as permitted under the fifth paragraph of the ``health 
care operations'' definition.
    Moreover, we agree that it is not desirable to require an ETC 
Participant to obtain permission from CMS or another agency prior to 
engaging in any particular use or further disclosure of the 
beneficiary-identifiable data. Once the ETC Participant has completed 
its annual ETC Data Sharing Agreement, we do not expect the ETC 
Participant will need to obtain additional permission from CMS or 
another agency to use or further disclose the beneficiary-identifiable 
data in the ways we describe in this final rule or will describe in the 
ETC Data Sharing Agreement, or that CMS may otherwise authorize in 
writing.
    Comment: One commenter recommended that CMS implement a warning 
system prior to deeming an ETC Participant ineligible to retrieve 
beneficiary-identifiable data under the ETC Model, because without 
access to the beneficiary-identifiable data that CMS proposed to make 
available to ETC Participants under the Model, an ETC Participant would 
be unable to identify its dual-eligible or LIS-eligible beneficiaries, 
or trends in the data for the purpose of conducting quality 
improvement. The commenter additionally asserted that rendering an ETC 
Participant ineligible to retrieve such data would lead to a decrease 
in the quality of care provided, negatively affecting both ETC 
Participants and attributed beneficiaries. The commenter further 
suggested that an instance of noncompliance with the relevant 
requirements under the proposed regulation at Sec.  512.390(b) or the 
ETC Data Sharing Agreement could arise due to an inadvertent error.
    Response: We thank the commenter for this feedback. As we noted in 
the CY 2022 ESRD PPS proposed rule and in this section of this final 
rule, there are important sensitivities surrounding the sharing of this 
type of individually identifiable health information, and we must 
ensure to the best of our ability that any beneficiary-identifiable 
data shared with ETC Participants would be further protected in an 
appropriate fashion. Further, errors or other conduct resulting in the 
improper disclosure of beneficiary-identifiable data, inadvertent or 
otherwise, threaten the privacy interests of attributed beneficiaries. 
However, we also understand that not every improper use, disclosure, or 
other handling of beneficiary-identifiable data shared under the ETC 
Model would equally threaten the privacy interests of attributed 
beneficiaries. We agree with the commenter that we should retain a 
level of discretion in responding to instances of noncompliance.
    However, we disagree that we should implement an explicit warning 
system prior to deeming an ETC Participant ineligible to retrieve 
beneficiary-identifiable data under the ETC Model. If CMS believed that 
a given instance of noncompliance warranted a warning, CMS would have 
discretion under Sec.  512.160 to impose various remedial actions, 
including but not limited to notifying the ETC Participant of the 
violation. We also have the discretion under Sec.  512.160 to require 
the ETC Participant to provide additional information to CMS or its 
designees; subject the model participant to additional monitoring, 
auditing, or both; or to require the ETC Participant to submit a 
corrective action plan. In other words, CMS already has the authority 
impose remedial actions less severe than discontinuing data sharing, if 
CMS

[[Page 61982]]

determines the situation so warranted, without implementing an explicit 
warning system that would impose burden and limit CMS's discretion. 
Accordingly, we decline to implement an explicit warning system prior 
to deeming an ETC Participant ineligible to retrieve beneficiary-
identifiable data under the Model.
    Instead, we are finalizing Sec.  512.390(b)(1)(iv)(D) with a 
modification to grant CMS more discretion in determining whether an ETC 
Participant's misuse or improper disclosure of beneficiary-identifiable 
data warrants CMS deeming an ETC Participant ineligible to retrieve 
beneficiary-identifiable data during performance of the Model. Under 
this modification, CMS may deem an ETC Participant ineligible to 
retrieve such data for any amount of time, meaning it could be for the 
entire period of the Model or for a shorter time, or CMS could impose a 
lesser remedial action. This language would better align with our 
proposal to add a new Sec.  512.160(a)(9) to specify that, for the ETC 
Model only, CMS may take remedial action under Sec.  512.160(b) if CMS 
determines that the model participant misuses or discloses the 
beneficiary-identifiable data in a manner that violates any applicable 
statutory or regulatory requirements or that is otherwise non-compliant 
with the provisions of the applicable data sharing agreement.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.390(b)(iv)(A)-
(D) related to additional privacy, security, breach notification, and 
other requirements that we would include in the ETC Data Sharing 
Agreement, with modification. First, we are modifying our proposal at 
Sec.  512.397(b)(iv)(C) to remove language related to downstream 
recipients who perform a similar function or service to that of a 
business associate, to clarify that the ETC Participant may only 
further disclose beneficiary-identifiable data made available under the 
ETC Model to business associates of the ETC Participant. Second, we are 
modifying our proposed policy that an ETC Participant that misuses or 
discloses the beneficiary-identifiable data retrieved under the ETC 
Model in a manner that violates any applicable statutory or regulatory 
requirements, or that is otherwise noncompliant with the provisions of 
the ETC Data Sharing Agreement, would be automatically ineligible to 
retrieve beneficiary-identifiable data under the ETC Model. Instead, we 
are finalizing a policy that would give CMS discretion to take 
appropriate remedial action in the instance that an ETC Participant 
engages in such misuse or improper disclosure. Specifically, we are 
modifying the proposed language at Sec.  512.390(b)(1)(iv)(D) to 
provide that, if an ETC Participant wishes to retrieve the beneficiary 
identifiable data specified in Sec.  512.390(b)(1)(ii), the ETC 
Participant agrees, in signing and completing the ETC Data Sharing 
Agreement, that if the ETC Participant misuses or discloses the 
beneficiary-identifiable data in a manner that violates any applicable 
statutory or regulatory requirements, or that is otherwise non-
compliant with the provisions of the data sharing agreement, CMS may 
deem the ETC Participant ineligible to retrieve the beneficiary-
identifiable data under Sec.  512.390(b)(1)(i) for any amount of time, 
and the ETC Participant may be subject to additional sanctions and 
penalties available under the law. We are otherwise finalizing our 
proposal to include privacy, security, breach notification, and other 
requirements in the ETC Data Sharing Agreement.
(3) Process for Retrieving the ETC Data Sharing Agreement and 
Beneficiary-Identifiable Data
    In the CY 2022 ESRD PPS proposed rule (86 FR 36390), we proposed 
that we would make the ETC Data Sharing Agreement and beneficiary-
identifiable data available in a form and manner specified by CMS. We 
stated that we expected to provide a web-based platform for ETC 
Participants to use to retrieve the beneficiary-identifiable data. We 
noted that CMS would provide ETC Participants further information about 
this web-based platform through the ETC listserv and the ETC Model 
website at a date to be determined by CMS, but at least 1 month before 
the first PPA Period begins on June 1, 2022. We also stated that we 
expect that CMS would notify ETC Participants of each opportunity to 
retrieve a new set of beneficiary-identifiable data and the process for 
accessing the web-based platform to receive the data through the ETC 
listserv and on the ETC Model website. Under this proposal, the ETC 
Participant would be required to use the form and manner specified by 
CMS (which we expect will be a web-based platform) to retrieve the 
data. We proposed that if the ETC Participant did not use the form and 
manner specified by CMS or did not agree to the ETC Data Sharing 
Agreement, the ETC Participant would be unable to retrieve the 
beneficiary-identifiable data described previously in this section of 
the CY 2022 ESRD PPS proposed rule. We proposed that ETC Participants 
would be permitted to retrieve this data at any point during the 
relevant PPA Period. In the CY 2022 ESRD PPS proposed rule, we 
considered establishing certain periods of time within a PPA Period 
during which the ETC Participant would be able to retrieve the data, 
but we concluded that permitting the ETC Participant to obtain the data 
at any point during the relevant PPA Period would be relatively 
operationally low-burden for CMS while providing additional flexibility 
to the ETC Participant.
    We stated that we believe that it is important that the ETC 
Participant complete and submit its signed ETC Data Sharing Agreement, 
and retrieve the beneficiary-identifiable data, in the same form and 
manner (which we expect to be a web-based platform).
    In the alternative, we considered providing the beneficiary-
identifiable data to ETC Participants via paper mail rather than 
through a web-based platform, but we concluded that making the data 
available through a web-based platform would reduce administrative 
burden on both CMS and the ETC Participants. We also concluded that 
making this beneficiary-identifiable data available through a web-based 
platform would allow CMS to provide the data in a manner that is more 
secure than if CMS were to make the data available through paper mail. 
As we explained in the CY 2022 ESRD PPS proposed rule, by using a web-
based platform, to be further described by CMS through the ETC listserv 
and the ETC Model website, CMS would help ensure that only authorized 
users would be able to obtain the data, and would be able to implement 
a two-factor authentication to help ensure that no one other than an 
ETC Participant would have access to the data. In addition, we 
concluded that it would be more efficient to provide the ETC Data 
Sharing Agreement and the beneficiary-identifiable data itself through 
the same form and manner (which we expect to be a web-based platform), 
rather than using two different processes and that using a web-based 
platform would be more efficient than paper mail. For these reasons, we 
stated that we believe the best option would be for us to use only the 
web-based platform both for providing the ETC Data Sharing Agreement 
and for sharing data pertaining to the ETC Model.
    We solicited public comment on our proposal to require the ETC 
Participant to complete and submit a signed ETC Data Sharing Agreement 
before the ETC Participant could retrieve the beneficiary-identifiable 
data, and on our

[[Page 61983]]

proposal that the ETC Participant would be required to retrieve the 
beneficiary-identifiable data in the same form and manner as the ETC 
Participant receives and submits the ETC Data Sharing Agreement. We 
also solicited comment regarding our expectation that we will use a 
web-based platform, rather than paper mail, for these purposes.
    The following is a summary of the comments received on our proposed 
process for retrieving the ETC Data Sharing Agreement and beneficiary-
identifiable data, and our responses.
    Comment: Two commenters expressed support for CMS making the 
beneficiary-identifiable data available to the ETC Participant via a 
web-based platform. One such commenter expressed opposition to the 
alternative process that CMS considered; namely, to share the 
beneficiary-identifiable data via paper mail, as data sent via paper 
mail would be inconvenient to both CMS and ETC Participants. The 
commenter also stated that sharing the beneficiary-identifiable data by 
paper mail would increase the risk of the data being viewed by the 
wrong parties, and that mailing data would be contradictory to CMS's 
initiatives promoting interoperability.
    Response: We agree that a web-based platform is an appropriate 
process for sharing beneficiary-identifiable data in the ETC Model, and 
is a more appropriate process than sharing such data through paper 
mail. We believe, as we expressed in the CY 2022 ESRD PPS proposed 
rule, that making the data available through a web-based platform would 
reduce administrative burden on both CMS and ETC Participants, and that 
a web-based platform would be more secure than making the data 
available through paper mail. We agree with the commenter's concern 
that sharing data via paper mail would increase the risk of a data 
breach compared to sharing data via a web-based platform. While we do 
not believe sharing data via paper mail would necessarily contradict 
CMS's efforts promoting interoperability, we do believe that sharing 
data via paper mail would make it more burdensome for ETC Participants 
to ingest the data in a software that could exchange information with 
other healthcare providers or suppliers, or business associates, as 
appropriate.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.390(b) that an 
ETC Participant must obtain an ETC Data Sharing Agreement, sign and 
complete an ETC Data Sharing Agreement, and retrieve beneficiary 
identifiable data all in a form and manner to be specified by CMS, 
without modification. As stated in the CY 2022 ESRD PPS proposed rule, 
we expect that ``form and manner'' will be via a web-based platform, 
and CMS will provide ETC Participants further information about this 
web-based platform via the ETC listserv and ETC Model website at least 
one month before the first PPA Period begins on June 1, 2022.
e. CMS Sharing of Aggregate Data
    In addition to the proposed process for sharing beneficiary-
identifiable data described previously in this section, we proposed in 
Sec.  512.390(b)(2) that CMS would make available certain aggregate 
data for retrieval by the ETC Participant, in a form and manner to be 
specified by CMS, no later than one month before each PPA Period. We 
proposed that this aggregate performance data, would include, when 
available, the following information for each PPA Period, de-identified 
in accordance with 45 CFR 164.514(b): The ETC Participant's performance 
scores on the home dialysis rate, transplant waitlist rate, living 
donor transplant rate, and, if finalized, Health Equity Incentive; the 
ETC Participant's aggregation group's scores on the home dialysis rate, 
transplant waitlist rate, living donor transplant rate, and, if 
finalized, Health Equity Incentive; information on how the ETC 
Participant's and ETC Participant's aggregation group's scores relate 
to the achievement benchmark and improvement benchmark (that is, 
whether the ETC Participant met or exceeded the threshold for each such 
benchmark); and the ETC Participant's MPS and PPA for the corresponding 
PPA Period. We stated in the CY 2022 ESRD PPS proposed rule (86 FR 
36391) that we believe sharing this aggregate, de-identified data with 
the ETC Participant would be important to help the ETC Participant 
better understand its performance in the ETC Model relative to its 
aggregation group and to the achievement and improvement benchmarks 
against which CMS is measuring the ETC Participant's performance. We 
stated that whereas the beneficiary-identifiable data described 
previously in the CY 2022 ESRD PPS proposed rule and this section of 
the final rule would indicate which ESRD Beneficiaries and, if 
applicable, Pre-emptive LDT Beneficiaries the ETC Participant could 
devote greater resources to, CMS believes this aggregate, de-identified 
data would better enable the ETC Participant to see which performance 
rates the ETC Participant might need to improve to more generally 
improve its performance under the ETC Model.
    We proposed that CMS would make this data available to the ETC 
Participant for retrieval in a form and manner to be specified by CMS 
no less than one month prior to each PPA Period. We stated that we 
expected that CMS would make this data available to the ETC Participant 
on the same web-based platform on which CMS would be providing the 
beneficiary-identifiable data described previously in this section. We 
proposed that the ETC Participant would be required to use the form and 
manner specified by CMS to retrieve this aggregate data, but would not 
have to agree to the ETC Data Sharing Agreement to retrieve this 
aggregated data, as it is not beneficiary-identifiable. We noted our 
belief that using a web-based platform for sharing this aggregate data 
would be appropriate for the same reasons it would be appropriate for 
sharing the beneficiary-identifiable data. By using a web-based 
platform, CMS would help ensure that only authorized users would be 
able to obtain the data, and would be able to implement a two-factor 
authentication to help ensure that no one other than an ETC Participant 
would have access to the data. In addition, we stated, because CMS 
would be providing the ETC Data Sharing Agreement and beneficiary-
identifiable data on the same web-based platform, we believe it would 
be convenient for the ETC Participant if CMS shared the aggregate data 
on the same web-based platform.
    In the alternative, we considered sending this aggregate data to 
the ETC Participant via paper mail. However, CMS concluded in the CY 
2022 ESRD PPS proposed rule that it would be more convenient to the ETC 
Participant to retrieve this data from a web-based platform rather than 
via paper mail, and that sending this data via paper mail would 
represent significant administrative and operational burdens for CMS.
    We solicited public comment on our proposal to share aggregate data 
generally, to share aggregated data in the same form and manner we are 
proposing to use for sharing beneficiary-identifiable data. We also 
solicited public comment on our expectation to use a web-based platform 
for this purpose, as well as our considered alternative to share the 
aggregate data via paper mail.
    The following is a summary of the comments received on our proposed 
process for sharing aggregate data, and our responses.
    Comment: Some commenters expressed support for our proposal to

[[Page 61984]]

share aggregate data. One such commenter stated that aggregate data 
will help an ETC Participant determine its previous rates for different 
dialysis modalities, and allow the ETC Participant to focus on 
increasing rates of the dialysis modalities measured for payment 
adjustments under the ETC Model. The commenter further noted that 
without knowledge of the ETC Participant's current rates on the 
different modalities, the ETC Participant would have difficulty 
understanding when the ETC Participant's actions have resulted in 
positive change. Another commenter noted that many small ETC 
Participants may lack the resources to perform detailed analytics with 
the beneficiary-identifiable data, and that the proposed aggregate data 
would thus be helpful for such ETC Participants. The same commenter 
additionally noted that the proposed aggregate data would be useful for 
ETC Participants that can and do perform detailed analytics with the 
beneficiary-identifiable data to help validate the results of such 
analytics.
    Response: We agree that sharing the aggregate data, as proposed, 
would prove helpful for ETC Participants, regardless of the individual 
ETC Participant's analytics capacity. We also agree that such data can 
be used to compare the ETC Participant's previous home dialysis and 
transplant rates, and performance with current rates and performance, 
and thus can help signal to the ETC Participants when interventions are 
producing positive results.
    Comment: One commenter expressed support for our proposal to not 
require the ETC Participant to sign an ETC Data Sharing Agreement to 
obtain aggregate data from CMS.
    Response: We agree; we do not believe an ETC Data Sharing Agreement 
is necessary to protect the aggregate data because it will be fully de-
identified in accordance with HIPAA requirements under 45 CFR 
164.514(b) and will not contain any beneficiary-identifiable data.
    Comment: One commenter recommended that CMS make available 
aggregate comparative data to ETC Participants quarterly to allow an 
ETC Participant to assess where it stands on its home dialysis rate and 
transplant rate in terms of ranking relative to other ETC Participants' 
performance.
    Response: We appreciate this comment. For the same reason that we 
are not making beneficiary-identifiable data available on a more 
frequent cadence as discussed in section V.B.7.b of this final rule, we 
are not making aggregate data available on a more frequent cadence. 
Specifically, we believe that the proposed schedule for sharing 
aggregate data affords the ETC Participant sufficient time to derive 
benefit, such as monitoring the ETC Participant's performance over the 
course of the ETC Model from the aggregate data. Further, as described 
in Sec.  512.360, CMS conducts beneficiary attribution for each month 
retrospectively after the end of each MY, at which time CMS calculates 
the ETC Participant's MPS. Accordingly, CMS would not have aggregate 
data to share with the ETC Participant on a quarterly basis; CMS is 
unable to share aggregate data on the ETC Participant's performance 
more often than biannually, after the end of the applicable MY.
    In addition, we do not believe it is necessary for CMS to release 
aggregate comparative data to ETC Participants at this time. As 
described in Sec.  512.370(b), to assess the ETC Participant's 
achievement score, CMS assesses the ETC Participant performance at the 
aggregation group level against benchmarks constructed among 
aggregation groups of ESRD facilities and Managing Clinicians located 
in Comparison Geographic Areas during the Benchmark Year. The 
beneficiary-identifiable data we proposed to share includes the ETC 
Participant's MPS, and the aggregate data we proposed to share includes 
information on how the ETC Participant's and the ETC Participant's 
aggregation group's scores relate to the achievement benchmark and 
improvement benchmark. In this way, the data CMS is already planning to 
share will provide the ETC Participant with insight into how the ETC 
Participant and the ETC Participant's aggregation group performed 
relative to other health care providers in the corresponding Comparison 
Geographic Area during the applicable Benchmark Year.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.390(b)(2) to 
share aggregate data and to specify the aggregate data that CMS would 
share and the process by which CMS would make available and the ETC 
Participant would obtain such aggregate data, without modification. 
Specifically, we are finalizing our proposal to require CMS to share 
make aggregate data available for retrieval by the ETC Participant, in 
a form and manner to be specified by CMS, no later than one month 
before each PPA Period. This de-identified data includes, when 
available, the ETC Participant's performance scores on the home 
dialysis rate, transplant waitlist rate, living donor transplant rate, 
and the Health Equity Incentive; the ETC Participant's aggregation 
group's scores on the home dialysis rate, transplant waitlist rate, and 
living donor transplant rate, and the Health Equity Incentive; 
information on how the ETC Participant's and ETC Participant's 
aggregation group's scores relate to the achievement benchmark and 
improvement benchmark; and the ETC Participant's MPS and PPA for the 
corresponding PPA Period.
8. Medicare Waivers and Additional Flexibilities
a. Background on Kidney Disease Patient Education Services Waiver
    Pursuant to section 1861(ggg)(1) of the Act and Sec.  410.48 of our 
regulations, Medicare Part B covers outpatient, face-to-face kidney 
disease patient education services provided by certain qualified 
persons to beneficiaries with Stage IV chronic kidney disease. As noted 
in the Specialty Care Models final rule, kidney disease patient 
education services play an important role in educating patients about 
their kidney disease and to help them make informed decisions on the 
appropriate type of care and/or dialysis needed for them (85 FR 61337). 
In addition, we noted in the Specialty Care Models final rule that 
kidney disease patient education services are designed to educate and 
inform beneficiaries about the effects of kidney disease, their options 
for transplantation, dialysis modalities, and vascular access (85 FR 
61337). Because kidney disease patient education services have been 
infrequently billed, we found it necessary for purposes of testing the 
ETC Model to waive select requirements of kidney disease patient 
education services authorized in section 1861(ggg)(1) of the Act and in 
the implementing regulation at 42 CFR 410.48. Specifically, to broaden 
the availability of kidney disease patient education services under the 
ETC Model, we have used our authority under section 1115A(d) of the Act 
to waive certain requirements for individuals and entities that furnish 
and bill for kidney disease patient education services. We codified 
these waivers at Sec.  512.397(b). These include waivers to allow more 
types of beneficiaries to have access to kidney disease patient 
education services, as well as greater flexibility in how the kidney 
disease patient education services are performed. For instance, CMS 
waived the requirement that kidney disease patient education services 
are covered only for Stage IV chronic kidney disease (CKD) patients to 
permit beneficiaries to receive kidney disease patient education

[[Page 61985]]

services if they are diagnosed with CKD Stage V or are in the first 6 
months of starting dialysis to receive the benefit. CMS also waived the 
requirements in section 1861(ggg)(2)(A)(i) of the Act and Sec.  
410.48(a) and (c)(2)(i) of the applicable regulations pertaining to the 
definition of ``qualified person'' such that registered dieticians/
nutrition professionals, licensed clinical social workers, or a clinic/
group practice may furnish kidney disease patient education services 
under the direction of, and incident to the services of a Managing 
Clinician who is an ETC Participant.
    Finally, CMS waived two requirements relating to the content of 
kidney disease patient education services furnished to a beneficiary. 
CMS waived the requirement under Sec.  410.48(d)(1) of our regulations 
that the content of kidney disease patient education services include 
the management of co-morbidities, including delaying the need for 
dialysis, when such services are furnished to beneficiaries with CKD 
Stage V or ESRD, unless such content is relevant for the beneficiary. 
In addition, CMS waived the requirement under Sec.  410.48(d)(5)(iii) 
of our regulations that an outcomes assessment designed to measure 
beneficiary knowledge about chronic kidney disease and its treatment be 
performed during one of the kidney disease patient education services, 
requiring instead that such outcomes assessment is performed within 1 
month of the final kidney disease patient education services session 
furnished by qualified staff.
b. Kidney Disease Patient Education Services Telehealth Waiver and 
Additional Flexibilities
    Many changes took place in 2020 and early 2021 due to the COVID-19 
PHE. Legislation enacted to address the PHE for COVID-19 provided the 
Secretary with new authorities under section 1135(b)(8) of the Act to 
waive or modify Medicare telehealth payment requirements during the PHE 
for COVID-19. We established several flexibilities to accommodate these 
changes in the delivery of care. Through waiver authority under section 
1135(b)(8) of the Act, in response to the PHE for COVID-19, we 
temporarily waived the geographic and site of service originating site 
restrictions in section 1834(m)(4)(C) of the Act. For example, CMS 
waived the rural area requirement at section 1834(m) of the Act to 
allow for telehealth services, including kidney disease patient 
education services that can be furnished via telehealth, to be 
furnished to beneficiaries in any geographic area, regardless of 
location and in their homes, for the duration of the PHE. These waivers 
are set to terminate at the end of the COVID-19 PHE.
    In the CY 2022 ESRD PPS proposed rule, we stated that we believe 
that, once the PHE ends, these waivers removing the geographic and site 
of service originating site restrictions for kidney disease patient 
education services furnished via telehealth would be necessary solely 
for purposes of testing the ETC Model (86 FR 36392). Except under very 
limited circumstances, under section 1834(m) of the Act and its 
implementing regulations, the originating site where the beneficiary is 
located at the time a telehealth service is furnished is limited to 
certain, mostly rural, geographic locations and a site of service that 
is one of certain types of health care facilities. We also stated our 
belief that allowing qualified staff to furnish kidney disease patient 
education services via telehealth, regardless of the beneficiary's 
geographic area or the site of the beneficiary, and regardless of the 
site of service of the practitioner, would increase access to kidney 
disease patient education services for a few reasons. First, some 
beneficiaries may not have access to reliable transportation, 
especially those beneficiaries who suffered economically during the 
ongoing PHE, but may have access to the technology necessary for 
practitioners to furnish kidney disease patient education services. 
Moreover, some beneficiaries, even those with reliable transportation, 
may be more comfortable receiving kidney disease patient education 
services via telehealth rather than appearing in person after over a 
year of social distancing, even when it becomes safe according to 
Federal guidance for such beneficiaries to enter physical spaces with 
other individuals. We noted that this is especially likely to be the 
case for instances in which a practitioner would furnish kidney disease 
patient education services in a group session rather than an individual 
session. We further noted that increasing access to kidney disease 
patient education services is consistent with one of the main goals of 
the ETC Model, insofar as we believe that education, as delivered 
through kidney disease patient education services, helps improve 
beneficiary choice of dialysis modality.
    In addition, we stated that we believe that removing beneficiary 
cost barriers for kidney disease patient education services would be 
helpful. As we demonstrate below in this final rule, there is a 
significant relationship between household income or poverty status and 
kidney disease, and removing or mitigating cost barriers to access to 
kidney disease patient education services would likely increase the 
number of beneficiaries who would be willing to receive kidney disease 
patient education services.
    We therefore proposed that, starting in MY3, kidney disease patient 
education services may be furnished to certain beneficiaries via 
telehealth in a manner that is more flexible than that required under 
existing telehealth requirements. In addition, we proposed to permit 
the reduction or waiver of coinsurance for the kidney disease patient 
education services, starting in MY3.
(1) Kidney Disease Patient Education Services Telehealth Waiver
    CMS proposed to amend Sec.  512.397 to add a waiver of certain 
telehealth requirements to provide qualified staff, as we proposed to 
define for purposes of the ETC Model at Sec.  512.310 as described 
below, the flexibility to furnish kidney disease patient education 
services via telehealth for the reasons described above (86 FR 36392). 
Specifically, we proposed to waive the geographic and site of service 
originating site requirements in sections 1834(m)(4)(B) and 
1834(m)(4)(C) of the Act, and in our regulations at 42 CFR 410.78(b)(3) 
and (4), for kidney disease patient education services furnished via 
telehealth. We stated, in the CY 2022 ESRD PPS proposed rule, that we 
believe the kidney disease patient education services telehealth waiver 
would allow more Medicare beneficiaries to receive kidney disease 
patient education services via telehealth by removing the originating 
site restrictions, thus allowing for the beneficiary to be located 
anywhere, and including at a site not specified in Sec.  410.78(b)(3) 
of our regulations; and by allowing for the beneficiary to be located 
outside of a rural area. We also proposed to waive the requirement in 
section 1834(m)(2)(B) of the Act and 42 CFR 414.65(b) such that CMS 
would not pay an originating site facility fee for kidney disease 
patient education services furnished via telehealth to a beneficiary at 
a site not specified in Sec.  410.78(b)(3) of our regulations under 
this proposed waiver, if finalized. However, we did not propose to 
waive the requirement under section 1834(m)(1) of the Act and 42 CFR 
410.78(b) that telehealth services be furnished via an ``interactive 
telecommunications system,'' as that term is defined in Sec.  
410.78(a)(3) to mean multimedia communications equipment

[[Page 61986]]

that includes, at a minimum, audio and video equipment permitting two-
way, real-time interactive communication between the patient and 
distant site physician or practitioner. Accordingly, we proposed that 
we would continue to require that the kidney disease patient education 
services furnished via telehealth be provided through an interactive 
telecommunications system; audio-only telehealth services would not be 
permitted.
    We proposed that kidney disease patient education services could be 
furnished via telehealth only by qualified staff. We noted, in the CY 
2022 ESRD PPS proposed rule, that we used the terms ``clinical staff'' 
and ``qualified staff'' in the Specialty Care Models final rule, but 
did not provide definitions of these terms. For clarity, we proposed to 
define ``clinical staff'' and ``qualified staff'' in 42 CFR 512.310. We 
proposed to define ``clinical staff'' to mean a licensed social worker 
or registered dietician/nutrition professional who furnishes services 
for which payment may be made under the physician fee schedule under 
the direction of and incident to the services of the Managing Clinician 
who is an ETC Participant. We proposed to define the term clinical 
staff in this manner to describe those clinicians who are authorized to 
furnish kidney disease patient education services only pursuant to the 
waiver specified at Sec.  512.390(b)(1)--namely licensed social workers 
and registered dieticians/nutrition professionals. The remaining 
clinicians currently specified in Sec.  512.390(b)(1)--doctors, 
physician assistants, nurse practitioners, and clinical nurse 
specialists--fall within the existing definition of qualified person at 
42 CFR 410.48(a). We therefore proposed to define ``qualified staff'' 
to mean both clinical staff and any qualified person (as defined at 
Sec.  410.48(a) of our regulations) who is an ETC Participant.
    We sought comment on our proposal to waive the originating site 
requirements for telehealth services to allow qualified staff to 
furnish kidney disease patient education services via telehealth to a 
beneficiary regardless of where the beneficiary is geographically 
located such that kidney disease patient education services could be 
furnished via telehealth regardless of the beneficiary's location, 
including at a site not specified in Sec.  410.78(b)(3) of our 
regulations. We further sought comment on our proposal to waive the 
originating site facility fee requirements such that CMS would not pay 
an originating site facility fee for kidney disease patient education 
services furnished via telehealth to a beneficiary at a site not 
specified in Sec.  410.78(b)(3) of our regulations.
    The following is a summary of the comments received on our proposed 
definitions of ``qualified staff'' and ``clinical staff,'' as well as 
our proposal to waive certain requirements for furnishing kidney 
disease patient education services such that they can be furnished via 
telehealth, and our responses.
    Comment: A few commenters expressed support for the proposed 
definitions of ``clinical staff'' and ``qualified staff.'' One such 
commenter reasoned that these definitions would provide clarity on 
which clinicians are authorized to furnish kidney disease patient 
education services pursuant to the waivers implemented in the ETC 
Model.
    Response: We agree that the proposed definitions of ``clinical 
staff'' and ``qualified staff'' add clarity regarding the types of 
staff authorized to furnish kidney disease patient education services 
under the ETC Model waivers implemented in Sec.  512.397(b) of our 
regulations.
    Comment: Many commenters expressed support for the use of 
telehealth in general, noting that telehealth is particularly good for 
kidney patients, especially kidney patients who live in rural areas or 
otherwise face barriers to accessing care. In addition, many commenters 
expressed support for the specific telehealth waiver in the CY 2022 
ESRD PPS proposed rule. Two such commenters reasoned that the proposed 
telehealth waiver would materially increase attributed beneficiaries' 
access to kidney disease patient education services. A few commenters 
who expressed support reasoned that the proposed telehealth waiver 
would address some barriers to access such services for attributed 
beneficiaries, such as lack of reliable transportation, lack of 
childcare, inability to take time away from work, and other 
socioeconomic barriers, and would afford attributed beneficiaries the 
choice to receive kidney disease patient education services in a 
location of their choice. Several commenters referenced the positive 
experience with and benefits of increased access to telehealth during 
the PHE. A few commenters expressed support for the proposed telehealth 
waiver because they believed it would increase the utilization of 
kidney disease patient education services, which they deem an important 
benefit.
    One commenter expressed support for the proposed telehealth waiver 
because they believe it will both allow more beneficiaries to receive 
kidney disease patient education services and advance health equity. 
Another commenter expressed support for the proposed telehealth waiver 
because they believe it would help address the challenge of increasing 
rates of kidney disease in rural areas.
    Response: We appreciate the comments and support. We agree with the 
reasons cited by commenters in support of telehealth generally and the 
proposed telehealth waiver specifically. However, because the COVID-19 
PHE and the section 1135(b)(8) waiver of geographic and site of service 
restrictions for telehealth originating sites in section 1834(m)(4)(C) 
of the Act are still ongoing, as described in greater detail below, we 
are modifying our proposal such that the proposed ETC telehealth waiver 
policy will apply beginning upon the expiration of the COVID-19 PHE, 
rather than beginning in MY3 as proposed.
    Comment: One commenter expressed support for CMS's proposal to 
waive the requirements in Section 1834(m)(2)(B) of the Act and 42 CFR 
414.65(b) so that CMS does not pay an originating site facility fee for 
kidney disease patient education services furnished via telehealth at a 
site not specified in Sec.  410.78(b)(3) of our regulations.
    Response: We appreciate the commenter's support.
    Comment: One commenter expressed opposition to CMS's proposal to 
waive the originating site fee when telehealth services are offered 
under the ETC Model's telehealth waiver for kidney disease patient 
education services furnished via telehealth at a site not specified in 
Sec.  410.78(b)(3) of our regulations. The commenter stated that the 
originating site fee was not waived for telehealth services furnished 
under the section 1135(b)(8) telehealth waiver in effect during the 
COVID PHE. The commenter also stated that the inclusion of the 
originating site fee provides an incentive for ETC Participants to 
offer kidney disease patient education services via telehealth to a 
broader population. The commenter further noted that, consistent with 
the proposed incentives to increase access to alternative renal 
replacement modalities for dual-eligible and LIS-eligible beneficiaries 
under the ETC Model, allowing ETC Participants to receive the 
originating site fee for services furnished under the Model's 
telehealth waivers could assist in increasing access to kidney disease 
patient education services for dual-eligible and LIS-eligible 
beneficiaries.
    Response: While we appreciate the comment, we respectfully 
disagree.

[[Page 61987]]

First, to clarify, CMS did not propose to waive the originating site 
fee altogether when telehealth services are offered under the ETC 
Model's telehealth waiver for kidney disease patient education 
services. That is, CMS will still pay the originating site facility fee 
when kidney disease patient education services are furnished via 
telehealth at a site specified in Sec.  410.78(b)(3) of our 
regulations. This is true even if the originating site is located in a 
geographic area not described in Sec.  410.78(b)(4) of our regulations, 
as we have waived the geographic requirements in Sec.  410.78(b)(4) for 
purposes of kidney disease patient education services furnished by 
qualified staff via telehealth in accordance with this section, 
regardless of the location of the beneficiary or qualified staff.
    Second, while our proposal to implement a telehealth waiver under 
the ETC Model was informed by the section 1135(b)(8) telehealth waiver 
in effect during the COVID PHE, our proposed waiver was designed 
specifically for purposes of the ETC Model. We do not believe it is 
appropriate, under the ETC Model, for CMS to pay an originating site 
facility fee to an ETC Participant when an ETC Participant furnishes 
kidney disease patient education services to a beneficiary via 
telehealth at a site not specified in Sec.  410.78(b)(3) of our 
regulations. We anticipate that when an ETC Participant is furnishing 
kidney disease patient education services to a beneficiary via 
telehealth at an originating site not specified in Sec.  410.78(b)(3), 
the site will be the home of a beneficiary, or caregiver, family 
member, or friend of the beneficiary, or otherwise at a site not 
maintained by the ETC Participant. We believe this because, relative to 
many other Medicare services, renal replacement therapy (in particular 
home dialysis) require the involvement of a caregiver and other family 
and friends for support, both directly in assisting the beneficiary in 
learning how to perform home dialysis, and indirectly in preparing a 
beneficiary's residence for home dialysis (such as ensuring that there 
is adequate space available for equipment).
    When an ETC Participant is furnishing kidney disease patient 
education services to a beneficiary via telehealth at an originating 
site not specified in Sec.  410.78(b)(3), the ETC Participant is 
generally not providing administrative, clinical support, or overhead 
for the site where the beneficiary is located. Not paying an 
originating site facility fee under these circumstances is consistent 
with Medicare payment policy generally, as CMS does not pay an 
originating site facility fee for telehealth services furnished at an 
originating site that is the home of an individual.
    While CMS does pay the originating site facility fee if the 
originating site is a patient's home that has been made provider-based 
to a hospital during the COVID-19 PHE, such a site is not technically 
considered the patient's home. Additionally, this policy was adopted in 
recognition of the changes in practice patterns adopted during the PHE 
for infection control purposes. CMS clarified that, during the COVID-
PHE, if applicable requirements are met, a patient's home may be 
considered a provider-based department of a hospital (HOPD) in 
recognition that when a physician or other practitioner who ordinarily 
practices in the HOPD furnishes a telehealth service to a patient who 
is located in the home, the hospital would often still provide some 
administrative and technical support for the service (85 FR 27565). We 
do not believe this policy is appropriate for the ETC Model, as the ETC 
Model's telehealth waiver will not become effective until the COVID-19 
PHE expires, as described elsewhere in this final rule.
    Third, for calendar year 2021, the payment amount for the 
originating site facility fee is 80% of $27.02, or $21.62. It is 
possible (and indeed, we hope that) the telehealth waiver will increase 
clinically appropriate furnishing of kidney disease patient education 
services. We are concerned that paying the originating site facility 
fee for services furnished via telehealth at an originating site not 
specified in Sec.  410.78(b)(3) would likely represent too large an 
impact on the ETC Model's savings estimates, potentially jeopardizing 
our ability to continue to test the model. In addition, we are 
concerned that permitting the originating site facility fee for kidney 
disease patient education services furnished via telehealth to a 
beneficiary at a site not specified in Sec.  410.78(b)(3) of our 
regulations would increase the 20 percent coinsurance owed by a 
beneficiary when not reduced or waived by an ETC Participant pursuant 
to Sec.  512.390(c). The increased coinsurance obligation may dissuade 
a beneficiary from accessing this important service.
    For these reasons, we are finalizing our proposed waiver of the 
requirement in section 1834(m)(2)(B) of the Act and 42 CFR 414.65(b) 
such that CMS will not pay an originating site facility fee for kidney 
disease patient education services furnished via telehealth to a 
beneficiary at a site not specified in Sec.  410.78(b)(3) of our 
regulations.
    Comment: One commenter expressed support for CMS's proposal to not 
waive the requirement under section 1834(m)(1) of the Act and 42 CFR 
410.78(b) that telehealth services be furnished via an ``interactive 
telecommunications system,'' as that term is defined in Sec.  
410.78(a)(3) to mean multimedia communications equipment that includes, 
at a minimum, audio and video equipment permitting two-way, real-time 
interactive communication between the patient and distant site 
physician or practitioner.
    Response: We agree that it is appropriate to continue to require 
that kidney disease patient education services furnished via telehealth 
be provided through an interactive telecommunications system, such that 
audio-only telehealth services are not permitted. We are concerned that 
audio-only kidney disease patient education services would not be 
effective in meaningfully educating beneficiaries on kidney disease 
given the complexity of the subject matter. We believe it is important 
that telehealth kidney disease patient education services include, or 
at least have the opportunity to include, images, demonstrations, and 
other visual cues to most effectively accomplish the objectives of 
kidney disease patient education services.
    Comment: A few commenters expressed concern regarding our proposal 
to not waive the requirement under section 1834(m)(1) of the Act and 42 
CFR 410.78(b) that telehealth services be furnished via an interactive 
telecommunications system, and recommended that CMS allow the provision 
of audio-only telehealth services for kidney disease patient education 
services. Two such commenters reasoned that not every beneficiary has 
access to interactive telecommunications systems, and one of whom 
further suggested that requiring the use of video systems would 
preclude those beneficiaries who may most need access to kidney disease 
patient education services from benefiting from the proposed telehealth 
waiver.
    The same commenter additionally suggested that CMS should give ETC 
Participants the opportunity to determine how many beneficiaries would 
take advantage of audio-only kidney disease patient education services 
sessions to allow CMS to determine whether such services would 
represent an effective method of providing beneficiary education. 
Another commenter suggested that allowing audio-only telehealth 
services

[[Page 61988]]

for kidney disease patient education services would align with other 
proposed changes to the ETC Model, which, the commenter points out, 
include a significant focus on health equity.
    Response: We do not believe waiving the requirement that telehealth 
services be furnished via an interactive telecommunications system is 
necessary to test the ETC Model, either Model-wide or on an ETC 
Participant-specific basis. We believe that the telehealth waiver, as 
proposed, will accomplish the goal of increasing access to kidney 
disease patient education services, and we are interested in learning 
whether this goal is realized through this particular proposed waiver. 
While we share the concerns raised by commenters that not every 
beneficiary has access to an interactive telecommunications system, we 
are also concerned that audio-only kidney disease patient education 
services would not be effective in meaningfully educating beneficiaries 
on kidney disease. As such, we do not agree, at this time, that 
allowing audio-only telehealth services for kidney disease patient 
education services would align with CMS's focus on health equity 
insofar as such a policy may result in beneficiaries of lesser means 
systematically receiving lower quality kidney education. However, CMS 
will monitor the extent to which there are barriers in access to 
interactive telecommunciations systems among attributed beneficiaries. 
Based on our experience testing this telehealth waiver in the ETC 
Model, we may consider waiving the requirement that telehealth services 
be furnished via an interactive telehealth communications system, or 
other waivers or initiatives necessary to mitigate or eliminate 
barriers to accessing interactive telehealth communications systems, at 
a later time, either as part of the ETC Model test or in another 
initiative.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal in our regulation at Sec.  512.397(b)(5) to 
waive geographic and site of service originating site requirements in 
section 1834(m)(4)(B) and 1834(m)(4)(C) of the Act and Sec.  
410.78(b)(3) and (4) of our regulations for the purposes of kidney 
disease patient education services furnished by qualified staff via 
telehealth in accordance with Sec.  512.397, regardless of the location 
of the beneficiary or qualified staff, and the requirement in section 
1834(m)(2)(B) of the Act and Sec.  414.65(b) of our regulations that 
CMS pay a facility fee to the originating site with respect to 
telehealth services furnished to a beneficiary in accordance with Sec.  
512.397 at an originating site that is not one of the locations 
specified in Sec.  410.78(b)(3), with modification. Specifically, we 
are modifying our proposed regulatory text at Sec.  512.397(b)(5) to 
change the date on which these waivers become effective. We are 
modifying both instances of the phrase, ``Beginning January 1, 2022,'' 
proposed in Sec.  512.397(b)(5) to the phrase ``Beginning the upon the 
expiration of the Public Health Emergency (PHE) for the COVID-19 
pandemic[.]''
(2) Kidney Disease Patient Education Services Beneficiary Coinsurance 
Waiver
    Available data and scholarly research suggest that there is a 
significant relationship between socioeconomic status and prevalence of 
CKD. For example, evidence suggests that CKD is more prevalent among 
individuals with lower income.\276\ In addition, at least one study 
suggests that as an individual's CKD severity increases (for example, 
from CKD III to CKD IV), the likelihood of the CKD patient falling into 
poverty increases.\277\ In light of this research, we stated in the CY 
2022 ESRD PPS proposed rule that CMS believes that cost represents a 
meaningful barrier for beneficiaries in accessing kidney disease 
patient education services (86 FR 36393). While we also stated that 
there does not appear to be any research that explicitly investigates 
to what extent cost barriers preclude access to kidney disease patient 
education services, the identified relationship between household 
income or poverty status and prevalence of CKD suggests that cost is an 
important factor when considering a beneficiary's access to kidney 
disease patient education services.
---------------------------------------------------------------------------

    \276\ Table 1.2 in United States Renal Data System, 2020 Annual 
Report, Chronic Kidney Disease: Chapter 1, CKD in the General 
Population, available at https://adr.usrds.org/2020/chronic-kidney-disease/1-ckd-in-the-general-population (indicating that the 
prevalence of CKD in those above the poverty line is 14.4 percent 
while the prevalence of CKD in those below the poverty line is 17.4 
percent. See also McClellan, W.M., et al., Poverty and Racial 
Disparities in Kidney Disease: The REGARDS Study, Am. J Nephrol, 
2010, Volume 32, Issue 1, pages 38-46, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2914392/ (providing data 
suggesting that lower household income is associated with higher 
prevalence of CKD).
    \277\ Morton, R.L, et al., Impact of CKD on Household Income, 
Kidney International Reports, Volume 3, Issue 3, 2018, pages 610-
618, available at https://www.sciencedirect.com/science/article/pii/S2468024917304795?via%3Dihub.
---------------------------------------------------------------------------

    Under section 1833 of the Act, the amounts paid by Medicare for 
kidney disease patient education services are equal to 80 percent of 
the applicable payment amount; beneficiaries are thus subject to a 20 
percent coinsurance for kidney disease patient education services. 
Kidney disease patient education services can be billed under G0420 for 
an individual session, or under G0421 for a group session. The current 
national unadjusted payment for G0420 under the CY 2021 Physician Fee 
Schedule is $114.10; for G0421, it is $27.22. As such, a beneficiary 
would be required to pay $22.82 for an individual session of kidney 
disease patient education services or $5.44 for kidney disease patient 
education services furnished to a group, which may be higher or lower 
depending on certain factors, such as the geographic location of the 
beneficiary. Medicare covers up to six kidney disease patient education 
services for an individual beneficiary during that beneficiary's 
lifetime, meaning that a beneficiary may be required to pay $136.92 if 
six individual kidney disease patient education services are clinically 
appropriate for that beneficiary, or $32.64 if six group kidney disease 
patient education services are clinically appropriate for that 
beneficiary.
    In the CY 2022 ESRD PPS proposed rule, we stated that we believe 
that it is necessary, for purposes of testing the ETC Model, to permit 
ETC Participants the flexibility to reduce or waive the 20 percent 
coinsurance requirement for kidney disease patient education services. 
We also stated that we believe this patient incentive would increase 
the provision of kidney disease patient education services to 
beneficiaries, given the relationship between income or poverty and 
prevalence of CKD, and the relationship between kidney disease patient 
education services and progression of CKD. In the CY 2022 ESRD PPS 
proposed rule, we stated that CMS had determined that, if this proposal 
were finalized, this CMS-sponsored patient incentive would advance the 
ETC Model's goal of increasing access to kidney disease patient 
education services, and to making beneficiaries more aware of their 
choices in preparing for kidney treatment, including the choice of 
receiving home dialysis, self-dialysis, or nocturnal in-center 
dialysis, rather than traditional in-center dialysis.
    Accordingly, we proposed at Sec.  512.397(c) to permit, beginning 
January 1, 2022, ETC Participants to reduce or waive the beneficiary 
coinsurance obligations for kidney disease patient education services 
furnished to an eligible beneficiary who does not have secondary 
insurance on the date the kidney disease patient education services are 
furnished if

[[Page 61989]]

certain conditions are satisfied. We refer to this patient incentive 
herein as the ``kidney disease patient education services coinsurance 
patient incentive.'' We stated in the CY 2022 ESRD PPS proposed rule 
that we expected to make a determination that the anti-kickback statute 
safe harbor for CMS-sponsored model patient incentives (42 CFR 
1001.952(ii)(2)) would be available to protect cost-sharing support 
that is furnished in compliance with ETC Model requirements with 
respect to kidney disease patient education services. We noted that if 
CMS were to make such a determination, the safe harbor for CMS-
sponsored model patient incentives would protect an ETC Participant, as 
that term is defined at Sec.  512.310, who offers a reduction or waiver 
of coinsurance for kidney disease patient education services to 
beneficiaries who are eligible to receive kidney disease patient 
education services, including those eligible pursuant to the waiver 
described in Sec.  512.397(b)(2), and who do not have secondary 
insurance on the date that the kidney disease patient education 
services were furnished.
    We proposed that the kidney disease patient education services 
coinsurance patient incentive would be available to the ETC Participant 
for kidney disease patient education services furnished by an 
individual or entity who is qualified staff. We stated that this 
proposal would align with the individuals who may furnish kidney 
disease patient education services under Sec.  512.397(b) of this 
subpart, which are we replacing in its entirety to standardize certain 
terms and add clarity, as described in greater detail in the CY 2022 
ESRD PPS proposed rule and in section VIII.b.3 of this final rule.
    We proposed to limit the kidney disease patient education services 
coinsurance patient incentive to beneficiaries who do not have 
secondary insurance, because secondary insurance typically provides 
cost-sharing support of the type CMS proposed in the CY 2022 ESRD PPS 
proposed rule. In the CY 2022 ESRD PPS proposed rule, we stated that we 
also believe that limiting the kidney disease patient education 
services coinsurance patient incentive to beneficiaries without 
secondary insurance would better ensure that only beneficiaries who 
need cost-sharing support would receive it, rather than permitting 
cost-sharing support for all beneficiaries for whom kidney disease 
patient education services are clinically appropriate.
    We also proposed that the kidney disease patient education services 
coinsurance patient incentive would be available only for kidney 
disease patient education services that were furnished in compliance 
with the applicable provisions of Sec.  410.48 of our regulations, 
which includes a requirement that a beneficiary obtain a referral from 
the physician (as defined in section 1861(r)(1) of the Act) managing 
the beneficiary's kidney condition in order for the beneficiary to be 
eligible to receive kidney disease patient education services. We 
proposed to include this requirement because we waived some but not all 
provisions of Sec.  410.48, and because, as stated in the CY 2022 ESRD 
PPS proposed rule, we believe that the requirement that the beneficiary 
receive a referral from their physician is important for ensuring that 
kidney disease patient education services are furnished only to 
beneficiaries for whom it is clinically appropriate.
    We proposed that such coinsurance support would be permitted for 
the kidney disease patient education services offered either in-person 
or via telehealth, and that it would be permitted for both individual 
sessions and group sessions. However, in the CY 2022 ESRD PPS proposed 
rule we considered limiting the coinsurance support to kidney disease 
patient education services that are furnished to an individual 
beneficiary, rather than allowing the coinsurance support for such 
services furnished either individually or to a group. We noted that the 
cost burden on beneficiaries who receive kidney disease patient 
education services in a group setting is much lower than it is on 
beneficiaries who receive kidney disease patient education services 
individually. However, as we stated in the CY 2022 ESRD PPS proposed 
rule, we are concerned that any cost barrier to kidney disease patient 
education services, even if low, represents a meaningful barrier to 
some beneficiaries who would otherwise elect to receive such services. 
We solicited comments on this issue.
    We proposed that an ETC Participant that offers coinsurance support 
for kidney disease patient education services would be required to 
maintain records of certain information. Specifically, we proposed that 
an ETC Participant that offers the kidney disease patient education 
services coinsurance patient incentive would be required to maintain 
records of the following: The identity of the qualified staff who 
furnished the kidney disease patient education services for which the 
coinsurance was reduced or waived; the date the kidney disease patient 
education services coinsurance patient incentive was provided; the 
identity of the beneficiary to whom the kidney disease patient 
education services coinsurance patient incentive was provided; evidence 
that the beneficiary who received the kidney disease patient education 
services coinsurance patient incentive was eligible to receive the 
kidney disease patient education services and did not have secondary 
insurance; and the amount of the kidney disease patient education 
services coinsurance patient incentive reduced or waived by the ETC 
Participant. We proposed to require an ETC Participant that offers this 
kidney disease patient education services coinsurance patient incentive 
to maintain and provide the government with access to these records in 
accordance with 42 CFR 512.135(b) and (c).
    We further proposed in proposed 42 CFR 512.160(b)(6)(ii) that, for 
the ETC Model only, CMS could suspend or terminate the ability of an 
ETC Participant to offer the kidney disease patient education services 
coinsurance patient incentive if CMS determined that any grounds for 
remedial action exist pursuant to Sec.  512.160(a).
    We stated in the CY 2022 ESRD PPS proposed rule that, in lieu of a 
waiver of certain fraud and abuse provisions in sections 1128A and 
1128B of the Act, CMS may determine that the anti-kickback statute safe 
harbor CMS-sponsored model patient incentives (42 CFR 1001.952(ii)(2)) 
is available to protect the reduction or waiver of coinsurance for 
kidney disease patient education services permitted under the ETC Model 
final rule, if issued. We stated in the CY 2022 ESRD PPS proposed rule 
that we expect to determine that the CMS-sponsored model safe harbor 
will be available to protect the reduction or waiver of coinsurance 
that satisfies the requirements of such safe harbor and the provisions 
of proposed Sec.  512.397(c)(1). We proposed that, if we make this 
determination, we would specify in regulation text at Sec.  
512.397(c)(4) that the safe harbor is available.
    We also considered, in the CY 2022 ESRD PPS proposed rule, 
prohibiting on an ESRD facility or other entity from providing 
qualified staff or the ETC Participant with financial support to enable 
such qualified staff or ETC Participant to provide the kidney disease 
patient education services coinsurance patient incentive. As we stated 
in the CY 2022 ESRD PPS proposed rule, CMS is concerned that permitting 
such financial support may encourage unlawful or abusive

[[Page 61990]]

arrangements designed to induce or reward referrals for Federal health 
care program business. We solicited comments on whether this 
prohibition is necessary to safeguard against fraud and abuse or if 
other laws effectively provide sufficient protection.
    We also considered waiving Medicare payment requirements such that 
CMS would pay the full amount of the kidney disease patient education 
services furnished to a beneficiary who does not have secondary 
insurance, rather than just 80 percent of the amount. Under section 
1115A(d)(1) of the Act, the Secretary may waive such requirements of 
titles XI and XVIII and of sections 1902(a)(1), 1902(a)(13), 
1903(m)(2)(A)(iii) of the Act, and certain provisions of section 1934 
of the Act as may be necessary solely for purposes of carrying out 
section 1115A of the Act respect to testing models described in section 
1115A(b) of the Act. As we stated in the CY 2022 ESRD PPS proposed 
rule, this is the authority under which we would waive such Medicare 
payment requirements. We stated that, under such a policy, Medicare 
would pay 100 percent of the payment amount for kidney disease patient 
education services furnished by Managing Clinicians who are ETC 
Participants to beneficiaries who do not have secondary insurance, and 
such beneficiaries would have no cost-sharing obligation for that 
benefit. However, in the CY 2022 ESRD PPS proposed rule, we determined 
that this policy would likely represent too large an impact to the ETC 
Model's savings estimates, and thus would potentially jeopardize our 
ability to continue to test the ETC Model, if such a policy were 
finalized.
    Given the proposed policies related to programmatic waivers and 
additional flexibilities available under the ETC Model, we proposed to 
modify the title of Sec.  512.397 from ``ETC Model Medicare program 
waivers'' to ``ETC Model Medicare program waivers and additional 
flexibilities.'' We proposed this change so that the section title 
would more accurately reflect the contents of the section if our 
proposed kidney disease patient education services coinsurance patient 
incentive is finalized.
    We solicited public comments on our proposal to allow qualified 
staff, as we proposed to define the term under Sec.  512.310, to offer 
coinsurance support for kidney disease patient education services to 
beneficiaries who are eligible for such services, including those 
eligible under Sec.  512.397(b)(2), and who do not have secondary 
insurance on the date the kidney disease patient education services are 
furnished. We also solicited comment on our proposal to require the ETC 
Participant to maintain and provide the government with access to 
records regarding the use of the kidney disease patient education 
services coinsurance patient incentive.
    The following is a summary of the comments received on our proposal 
to allow qualified staff to offer coinsurance support for kidney 
disease patient education services to beneficiaries who do not have 
secondary insurance and our responses.
    Comment: Many commenters expressed that cost is a barrier for at 
least some beneficiaries in accessing kidney disease patient education 
services.
    We also received many comments expressing support for our proposal 
to allow an ETC Participant to reduce or waive a beneficiary's 
coinsurance for kidney disease patient education services furnished by 
qualified staff, in accordance with Sec.  512.397(b)(1), under the ETC 
Model. One commenter expressed support for the proposal noting that 
many kidney patients have limited resources, and may choose to forgo 
education to dedicate such resources to obtaining medications and 
medical care. Another commenter similarly expressed support because 
they believe the proposed coinsurance patient incentive would increase 
access to kidney disease patient education services by removing cost 
barriers. Yet another commenter expressed support for the proposal, 
noting that coinsurance payments can burden beneficiaries, particularly 
those in the most underserved communities. The same commenter also 
expressed a belief that the proposal will advance the ETC Model's goal 
of increasing access to kidney disease patient education services, and 
of making beneficiaries more aware of their choices in preparing for 
kidney treatment, including the choice to receive home dialysis, self-
dialysis, or nocturnal in-center dialysis, rather than traditional in-
center dialysis.
    Response: We agree with the reasons the commenters provided for 
their support, which is why we proposed and are now finalizing a policy 
allowing an ETC Participant to reduce or waive a beneficiary's 
coinsurance for kidney disease patient education services furnished by 
qualified staff, in accordance with Sec.  512.397(b)(1), under the ETC 
Model.
    Comment: A few commenters expressed opposition to our proposal to 
limit the proposed coinsurance patient incentive to beneficiaries 
without secondary insurance. One such commenter expressed that offering 
the coinsurance patient incentive to more beneficiaries would improve 
uptake of kidney disease patient education services, which is important 
given both the historically low percentage of eligible beneficiaries 
who have been provided kidney disease patient education services, and 
the important of pre-dialysis education to help beneficiaries make 
informed treatment decisions. Another commenter stated that, unless CMS 
can guarantee that Medicaid would cover the coinsurance amount for 
dually-eligible beneficiaries, the coinsurance patient incentive should 
be broadened to cover dual-eligible and LIS-eligible beneficiaries, 
reasoning that such a proposal would ensure these groups' access to 
appropriate education.
    Response: We proposed to restrict the coinsurance patient incentive 
to only those beneficiaries without secondary insurance because 
secondary insurance typically covers this type of cost sharing. That 
is, providing cost sharing support would be redundant for beneficiaries 
with secondary coverage. Because a beneficiary's secondary insurance 
will likely cover cost sharing for kidney disease patient education 
services, we believe our proposed policy would generally succeed in 
increasing access to beneficiaries by removing cost barriers for those 
who are obligated to pay cost sharing because it is not covered by 
their insurance. However, the commenter who expressed concern that 
Medicaid may not necessarily provide cost-sharing support for kidney 
disease patient education services raises an important point.
    Medicaid will not necessarily cover the coinsurance amount for 
dual-eligible beneficiaries' kidney disease patient education services, 
because not all Medicare Savings Programs cover Medicare coinsurance 
and Medicaid coverage of cost sharing generally varies by State. In 
some states, Medicaid would cover the cost sharing for kidney disease 
patient education services, while in other states it would not. In 
light of this State variation, and to further our stated goal of 
providing cost sharing support to beneficiaries who are obligated to 
pay cost sharing because it is not covered by their insurance, we are 
finalizing a policy that restricts the coinsurance patient incentive to 
only those beneficiaries without secondary insurance that provides cost 
sharing support for kidney disease patient education services.
    Comment: Two commenters suggested that CMS include both individual 
and group kidney disease patient education services sessions in the 
coinsurance patient incentive. One such commenter

[[Page 61991]]

reasoned that, while group kidney disease patient education services 
sessions have minimal costs, even nominal costs can quickly add up for 
beneficiaries with a chronic condition, especially for beneficiaries 
with kidney disease, who often see multiple providers and fill multiple 
prescriptions each month.
    Response: We agree with the commenters that, even if the 
coinsurance amount for group kidney disease patient education services 
sessions is minimal, these costs can indeed present meaningful barriers 
to some beneficiaries, including the beneficiaries with multiple 
chronic conditions and beneficiaries with kidney disease. In light of 
these comments, we are finalizing our proposed kidney disease patient 
education services coinsurance patient incentive policy to permit cost 
sharing support for individual or group kidney disease patient 
education services sessions alike.
    Comment: A few commenters requested clarification relating to our 
statement in the CY 2022 ESRD PPS proposed rule that we are considering 
prohibiting an ESRD facility or other entity from providing the ETC 
Participant with qualified staff or financial support that the ETC 
Participant would use in furnishing kidney disease patient education 
services and the proposed cost sharing support. Two such commenters 
requested clarification specifically on whether ESRD facilities or 
other entities could enter into arrangements with ETC Participants to 
provide certain services at fair market value, and proposed that CMS 
permit such arrangements so long as the services were indeed provided 
at fair market value. These commenters reasoned that ESRD facilities 
sometimes provide physician practices with clinical staff under a 
personal services or other similar arrangement that complies with the 
Anti-Kickback Statute, the physician self-referral law, and other 
requirements. The commenters noted that such arrangements often occur 
when the dialysis facility maintains staff with pertinent expertise, 
such as expertise with educating patients about chronic kidney disease. 
These comments expressed a belief that a dialysis facility providing 
staffing at fair market value would not constitute providing 
``financial support'' as CMS expressed concern about in the CY 2022 
ESRD PPS proposed rule, so long as the arrangement complies with all 
applicable fraud and abuse requirements.
    Another commenter asserted that the CY 2022 ESRD PPS proposed rule 
did not clarify whether CMS is considering prohibiting ESRD facilities 
from providing qualified staff to ETC Participants without 
compensation, or whether CMS is considering prohibiting dialysis 
facilities from entering into a payment contract with ETC Participants 
to provide such services. The commenter expressed the belief that 
providing staff without compensation would be inappropriate and 
inconsistent with current fraud and abuse laws, but suggested that a 
prohibition on contractual payment arrangements between dialysis 
facilities and ETC Participants for the purpose of providing qualified 
staff to deliver kidney disease patient education services runs counter 
to CMS's goals in proposing the kidney disease patient education 
services coinsurance patient incentive. The commenter expressed the 
belief that current fraud and abuse rules, combined with the 
requirements CMS currently imposes relating to kidney disease patient 
education services, offer sufficient protection against potentially 
problematic arrangements.
    Response: We thank the commenters for their feedback and 
information. We understand that ESRD facilities and other entities 
sometimes enter into arrangements with clinicians or other parties to 
provide certain services. We recognize that some ETC Participants may 
wish to furnish kidney disease patient education services using staff 
or other resources furnished under a contractual arrangement with an 
ESRD facility or other entity. We are concerned, however, that even if 
such arrangements are structured to comply with all applicable fraud 
and abuse laws, they could nevertheless result in program abuse. 
Specifically, such arrangements could operate to circumvent the 
statutory prohibition against dialysis facilities furnishing kidney 
disease patient education services. For example, the staff or resources 
furnished to the ETC Participant from an ESRD facility or related 
entity could be used to market a specific ESRD facility or chain of 
ESRD facilities to beneficiaries who may need to choose a dialysis 
facility in the future.
    We do not believe ETC Participants should obtain safe harbor 
protection for the reduction or waiver of cost-sharing on kidney 
disease patient education services if such services were furnished by 
personnel leased from an ESRD facility or related entity. Accordingly, 
we are adding a provision at Sec.  512.397(c)(1)(ii) to require that 
the qualified staff furnishing the kidney disease patient education 
services for which an ETC Participant reduces or waives cost sharing 
must not be leased from or otherwise provided by an ESRD facility or 
related entity. For purposes of this provision, a related entity would 
include any entity that is directly or indirectly owned in whole or in 
part by an ESRD facility. We believe this aligns with the statutory 
intent to prohibit ESRD facilities from furnishing kidney disease 
patient education services.
    Comment: Two commenters advocated that CMS should prohibit ESRD 
facilities from effectively making up the financial difference an ETC 
Participant would experience by waiving or reducing a beneficiary's 
coinsurance amount for kidney disease patient education services. One 
commenter recommended that CMS not finalize a prohibition on an ESRD 
facility or other entity from providing financial support to enable ETC 
Participants to reduce or eliminate cost sharing for kidney disease 
patient education services. This commenter believed that such financial 
support arrangements should be permitted as long as they comply with 
all applicable law.
    Response: We agree that ESRD facilities should not be permitted to 
pay ETC Participants in an effort to offset the financial impact of the 
ETC Participant's lost cost-sharing revenues. We question whether the 
receipt of any such remuneration could comply with applicable fraud and 
abuse laws. Such arrangements, including those in which an entity other 
than an ESRD facility reimburses the ETC Participant for lost cost-
sharing revenues, could result in inappropriate referrals of Federal 
health care program business, patient steering, corruption of medical 
judgment, and other abuses. Indeed, the receipt of any such 
remuneration could implicate and potentially violate the Federal Anti-
Kickback statute (42 U.S.C. 1320a-7b(b)), and by extension the False 
Claims Act (31 U.S.C. 3729-3733 and 42 U.S.C. 1320a-7b(g)).
    Moreover, we do not believe that permitting such arrangements is 
necessary to test the model. We are testing a narrowly-tailored 
exception to the usual prohibition against the reduction or waiver of 
beneficiary cost-sharing obligations. Permitting any individual or 
entity other than the ETC Participant to finance cost-sharing support 
is beyond the scope of the policy we are testing. Accordingly, we are 
persuaded that safe harbor protection for cost-sharing support 
furnished by ETC Participants to beneficiaries for kidney disease 
patient education services should be contingent

[[Page 61992]]

on the ETC Participant bearing the full cost of the copayment reduction 
or waiver. That is, the copayment reduction or waiver may not be 
financed by a third party, including but not limited to an ESRD 
facility or related entity. Therefore, we are finalizing at Sec.  
512.397(c)(1)(v) a new safeguard that requires the ETC Participant to 
bear the full cost of any cost-sharing reduction or waiver for kidney 
disease patient education services.
    We note that we did not propose and are not finalizing any 
provision that would offer safe harbor protection for any arrangement 
between an ETC Participant and an ESRD facility or other entity. Under 
this final rule, the only arrangements that may qualify for protection 
under the safe harbor for CMS-sponsored model patient incentives are 
arrangements between the ETC Participant and the beneficiary for whom 
the ETC Participant reduced or waived the kidney disease patient 
education services coinsurance amount, provided that the arrangements 
comply with the requirements of the safe harbor as set forth at 42 CFR 
1001.952(ii)(2) and the provisions of 512.397(c)(1).
    Comment: Several commenters, including some commenters who 
expressed support for CMS's proposed coinsurance patient incentive 
policy, suggested that CMS instead waive Medicare payment requirements 
such that CMS would pay the full amount of the kidney disease patient 
education services furnished to a beneficiary who does not have 
secondary insurance, rather than just 80 percent of the amount. One 
such commenter expressed concern that ETC Participants will not have 
the financial resources to forgo all or a portion of a beneficiary's 
coinsurance and will therefore be unable to use the flexibility 
afforded under this patient incentive to reduce the financial burden of 
beneficiaries. Two such commenters expressed concern that while waiving 
coinsurance would serve to increase beneficiary use of kidney disease 
patient education services, ETC Participants and their qualified staff 
may lack willingness to provide kidney disease patient education 
services at a rate that, according to the commenters, would not 
adequately cover their costs, and that this would diminish the 
availability of kidney disease education to beneficiaries. Further, 
these commenters suggested that CMS providing the full payment amount 
for kidney disease patient education services would alleviate CMS's 
stated concern that the proposed coinsurance patient incentive could 
incentivize improper financial assistance from ESRD facilities and 
other entities. These commenters suggested that, to counterbalance 
CMS's stated concern that such payment waivers would result in 
additional Medicare costs under the ETC Model, CMS could exclude the 20 
percent coinsurance amounts that CMS would cover under this alternative 
proposal from ETC cost calculations during the ETC Model period to 
determine whether this limited additional investment results in 
improved beneficiary quality of care and an overall cost of care 
reduction. Two commenters stated that CMS should pay the full amount of 
the kidney disease patient education services furnished to a 
beneficiary who does not have secondary insurance because, according to 
the commenters, the requirements needed to qualify for the coinsurance 
patient incentive are overly onerous and may present an additional 
barrier to access to kidney disease patient education services.
    Response: We considered this alternative policy in the CY 2022 ESRD 
PPS proposed rule, but concluded that it would represent too large an 
impact to the ETC Model's potential savings (86 FR 36394-36395). We 
believe that the policy we are finalizing, wherein an ETC Participant 
may reduce or waive cost sharing for kidney disease patient education 
services, strikes the appropriate balance in providing a new tool for 
ETC Participants to engage beneficiaries while also helping support the 
success of the Model. While a policy under which Medicare pays the full 
amount of the kidney disease patient education services amount, rather 
than 80 percent of the amount, may result in the highest number of 
beneficiaries receiving kidney disease patient education services, we 
believe that the kidney disease patient education services coinsurance 
patient incentive will result in more beneficiaries receiving kidney 
disease patient education services compared to the status quo, and will 
do so without detracting from the savings estimates of the ETC Model.
    Moreover, we disagree with the commenters who suggested that CMS 
could exclude the 20 percent coinsurance payment paid by CMS from the 
Model's cost calculations. We cannot exclude the 20 percent coinsurance 
payment paid by CMS from the Model's cost calculations. If we 
implemented the payment waiver as recommended by the commenters, CMS 
would need to account for these costs when determining the Model's 
overall impact on Medicare program expenditures. However, CMS may 
consider implementing a payment waiver like the alternative we 
considered in the CY 2022 ESRD PPS proposed rule in a future model or 
initiative to determine whether such an investment results in improved 
beneficiary quality of care and an overall cost of care reduction.
    Finally, we understand the commenters' concern that the proposed 
kidney disease patient education services coinsurance patient incentive 
imposes an administrative burden on ETC Participants who choose to 
furnish the patient incentive, but we believe that the benefits of 
reducing cost barriers to kidney disease patient education services 
through furnishing the kidney disease patient education services 
coinsurance patient incentive will outweigh this administrative burden. 
Commenters have expressed that beneficiaries who undergo kidney disease 
education are more likely to choose home dialysis, and to the extent 
this is the case, an ETC Participant that furnishes the coinsurance 
patient incentive might recover the direct and indirect 
(administrative) costs associated with cost-sharing waivers for such 
services if the ETC Participant qualifies for a positive PPA. In 
addition, while we agree that the alternative policy considered in the 
CY 2022 ESRD PPS proposed rule would alleviate the fraud and abuse 
concerns we articulated in that rule, we have concluded that existing 
law and the safeguards finalized in this rule provide sufficient 
protection against such fraud and abuse.
    Final Rule Action: After considering public comments, we are 
finalizing with modification our proposal to add Sec.  512.397(c) 
regarding an ETC Participant's ability to reduce or waive the 20 
percent coinsurance obligation for kidney disease patient education 
services. Specifically, we are adding Sec.  512.390(c)(1), which 
permits ETC Participants to reduce or waive beneficiary cost sharing 
for kidney disease patient education services furnished on or after 
January 1, 2022 if the following conditions are satisfied: (i) The 
individual or entity that furnished the kidney disease patient 
education services is qualified staff; (ii) the qualified staff are not 
leased from or otherwise provided by an ESRD facility or related 
entity; (iii) the kidney disease patient education services were 
furnished to a beneficiary described in Sec.  410.48(b) or Sec.  
512.397(b)(2) who did not have secondary insurance that provides cost-
sharing support for kidney disease patient education services on the 
date the services were furnished; (iv) the kidney disease patient 
education services were furnished in compliance with the applicable 
provisions of Sec.  410.48 and Sec.  512.397(b); and (v) the

[[Page 61993]]

ETC Participant bears the full cost of the waiver or reduction of the 
20 percent coinsurance requirement under section 1833 of the Act and 
such reduction or waiver is not financed by a third party, including 
but not limited to an ESRD facility or related entity.
    Under new Sec.  512.397(c)(2), we are finalizing with modification 
our proposed requirements regarding documentation retention and 
government access to records regarding the reduction or waiver of 
beneficiary cost-sharing obligations for kidney disease patient 
education services furnished under the ETC model. Specifically, we are 
modifying Sec.  512.397(c)(2)(iii) to read, ``Evidence that the 
beneficiary who received the kidney disease patient education services 
coinsurance waiver was eligible to receive the kidney disease patient 
education services under the ETC Model and did not have secondary 
insurance that provides cost-sharing support for kidney disease patient 
education services on the date the services were furnished.''
    Lastly, we are finalizing without change our proposal to include at 
Sec.  512.397(c)(3) a provision stating that the Federal anti-kickback 
statute safe harbor for CMS-sponsored model patient incentives is 
available to protect kidney disease patient education coinsurance 
waivers that satisfy the requirements of such safe harbor and the 
conditions set forth in Sec.  512.397(c)(1).
(3) Revising Language Providing Other ETC Model Medicare Program 
Waivers
    We proposed to revise Sec.  512.397(b)(1) through (4) in their 
entirety to accomplish a few goals (86 FR 36395). First, we proposed to 
make conforming changes throughout Sec.  512.397(b) to the manner in 
which CMS discusses kidney disease patient education services. 
Currently, Sec.  512.397(b) includes references to ``KDE services,'' 
``the KDE benefit,'' ``KDE sessions,'' and, simply, ``KDE.'' CMS would 
change all of these references to ``kidney disease patient education 
services'' for clarity and to conform with the term used elsewhere in 
our regulations.
    In addition, we proposed to make conforming changes through Sec.  
512.397(b) to the manner in which CMS discusses the individuals who are 
permitted to furnish kidney disease patient education services under 
the ETC model programmatic waivers. Specifically, as discussed 
previously, CMS proposed to add definitions for ``clinical staff'' and 
``qualified staff'' in the CY 2022 ESRD PPS proposed rule, as CMS 
believes clarifying how CMS discusses these individuals in Sec.  
512.397(b) will enhance clarity. Finally, we proposed to remove the 
``clinic/group practice'' from the list of individuals or entities that 
are permitted to furnished kidney disease patient education services 
under the ETC Model programmatic waivers, and to remove the waiver of 
42 CFR 410.48(c)(2)(i) from Sec.  512.397(b)(1) of this part. We stated 
in the CY 2022 ESRD PPS proposed rule that we believe that its 
inclusion of clinic/group practices previously was in error, and we 
noted that a clinic/group practice is not able to furnish or bill for 
kidney disease patient education services under existing law and that 
CMS did not intend for the waiver described in Sec.  512.397(b) to 
permit anyone other than a clinician to furnish kidney disease patient 
education services. Because the waiver of the requirements under 42 CFR 
410.48(c)(2)(i) was implemented only to broaden the ``qualified 
person'' that could furnish kidney disease patient education services 
pursuant to Sec.  512.397(b)(1) to include a clinic/group practice, we 
proposed to remove references to 42 CFR 410.48(c)(2)(i) in Sec.  
512.397(b)(1) of this part.
    We solicited public comments on these proposed changes to Sec.  
512.397(b) to make conforming and clarifying changes to the manner in 
which CMS discusses kidney disease patient education services and the 
individuals who are permitted to furnish kidney disease patient 
education services under the ETC Model waivers described in Sec.  
512.397(b), and to our proposed removal of ``clinic/group practice'' 
from the list of individuals or entities who may, under the ETC Model 
waivers described in Sec.  512.397(b), furnish kidney disease patient 
education services.
    CMS did not receive any comments regarding the proposed conforming 
and clarifying changes to Sec.  512.397(b) of our regulations. However, 
we did receive some comments suggesting that CMS make additional 
changes to the kidney disease patient education services waivers in 
Sec.  512.397(b). The following is a summary of those comments and our 
responses.
    Comment: We received a few comments asking CMS to further increase 
the scope of the kidney disease patient education services waivers, 
specifically in order to allow additional clinicians and healthcare 
sites to furnish kidney disease patient education services, including 
ESRD facilities, home dialysis nurses, and Certified Nephrology Nurses 
(CNNs).
    Response: While we understand the commenters' interest in 
increasing even further the types of clinicians and entities that may 
furnish kidney disease patient education services under the ETC Model, 
we believe that our current policy provides sufficient flexibility to 
test the Model. Accordingly, we are not updating Sec.  512.397(b) at 
this time to add additional types of clinicians and entities that may 
furnish kidney disease patient education services under the Model.
    Comment: We received several comments urging CMS not to grant a 
waiver to allow ESRD facilities to be able to bill for kidney disease 
patient education services, due to concerns about potential quality of 
education and the entrenchment of the existing dialysis market 
structure.
    Response: We do not believe that a waiver of the requirement 
preventing ESRD facilities from billing for kidney disease patient 
education services is necessary for testing the model. ESRD facilities 
are already required to provide information to beneficiaries about 
their treatment modality options in the ESRD facility conditions for 
coverage at Sec.  494.70(a)(7) and to develop and implement a plan of 
care that addresses the patient's modality of care, at Sec.  
494.90(a)(7), and the costs for doing so are already included in the 
payment for the ESRD PPS bundled payment. Accordingly, we are not 
modifying Sec.  512.397(b) to permit ESRD facilities to furnish kidney 
disease patient education services under the Model at this time.
    Comment: We received a few comments expressing concern about the 
quality of education that beneficiaries receive as part of kidney 
disease patient education services and urging that CMS create 
accredited curricula to ensure consistent education.
    Response: We appreciate this feedback and are monitoring 
utilization of kidney disease patient education services to see 
potential effects on care. We believe that the required content for 
kidney disease patient education services, as set forth in 42 CFR 
410.48(d), shows the minimum of what must be covered but urge 
interested stakeholders to consider creating a curriculum that could be 
used by Managing Clinicians and other qualified staff to administer 
kidney disease patient education services.
    Comment: A few commenters suggested that CMS use its waiver 
authority to authorize referrals for kidney disease patient education 
services issued by nurse practitioners. Two such commenters also 
proposed that CMS use its waiver authority to additionally authorize 
physician assistants and clinical nurse specialists

[[Page 61994]]

to issue referrals for kidney disease patient education services.
    Response: As required under 42 CFR 410.48(b)(2), Medicare Part B 
covers kidney disease patient education services only if the 
beneficiary obtains a referral from the physician managing the 
beneficiary's kidney condition. We did not consider issuing a waiver to 
broaden the categories of clinicians who could issue referrals for 
kidney disease patient education services in the CY 2022 ESRD PPS 
proposed rule. Moreover, we currently have no evidence to suggest that 
the waiver suggested by the commenters would be necessary solely for 
purposes of testing the model, as would be required to issue such a 
waiver under section 1115A(d)(1) of the Act. In addition, we do not 
currently have, and no commenter provided, evidence that broadening the 
categories of clinicians who could issue a referral for kidney disease 
patient education services would continue to ensure clinical 
appropriateness. As such, we will continue to require that the 
physician managing the beneficiary's kidney condition refer a 
beneficiary for kidney disease patient education services in order for 
Medicare to pay for such services as required under 42 CFR 
410.48(b)(2). However, we will continue to consider the commenters' 
suggestions, and we may consider broadening the categories of 
clinicians who may issue a referral for kidney disease patient 
education services in future rulemaking.
    Final Rule Action: After considering public comments, we are 
finalizing our proposal to make conforming and clarifying changes to 
our regulation at Sec.  512.397(b), without modification. After 
considering public comments, we will not be altering the curriculum for 
kidney disease patient education services or allowing any additional 
types of Medicare providers or suppliers to furnish and bill kidney 
disease patient education services beyond clinical staff and qualified 
staff at this time.

C. Requests for Information on Topics Relevant to the ETC Model

1. Peritoneal Dialysis Catheter Placement--Request for Information 
(RFI)
    Through the CY 2022 ESRD PPS proposed rule (86 FR 36395), we sought 
input on how we can test and use Medicare payment policy, under the ETC 
Model, to promote placement of PD catheters. Specifically, we sought 
feedback on the following questions:
    a. What are the key barriers to increased placement of PD 
catheters?
    b. How can CMS promote placement of PD catheters in a more timely 
manner?
    c. Should the Innovation Center use its authority to test 
alternative payment structures to address the barriers to PD catheter 
placement as a part of the ETC Model? If so, why and how?
    For the complete discussion of this RFI, see the CY 2022 ESRD PPS 
proposed rule, 86 FR 39395 through 39396.
    Comments: Commenters expressed general concern that CMS continues 
to address barriers to home dialysis one provider type at a time rather 
than holistically as an extended series of barriers and decision points 
that patients face beginning when they are in earlier stages of kidney 
disease.
    Most commenters agreed with the main barriers to PD catheter 
placement described in the RFI, including the lack of availability of 
hospital-based catheter insertion teams to perform PD catheter 
placements, lack of appropriate operating room time, and a lack of 
training on PD catheter placement for vascular surgeons. But the 
commenters suggested additional barriers for CMS's consideration.
    First, commenters noted that the COVID-19 pandemic has limited the 
ability of health care providers to perform elective procedures on a 
timely basis. According to the commenters, hospital operating rooms 
effectively halted PD catheter implantation in many hospitals for 
several months. Rural facilities were particularly hit because these 
communities rely on surgeons who travel in from larger communities and 
have limited availability. One commenter noted that incentivizing, or 
disincentivizing, providers through payment changes or Innovation 
Center models would not fix the core issue for rural dialysis 
facilities unless there are enough scheduled patients to make a trip 
financially feasible. This commenter suggested that as an alternative, 
CMS should consider methods to reduce the prevalence of ESRD in the 
long term with a specific focus on rural areas. While this approach may 
not create immediate savings, reducing the rate of ESRD would 
significantly benefit CMS in the years to come.
    A commenter noted that many of the candidates for prospective PD 
catheter placement are either not yet eligible for Medicare or are 
uninsured, and that there is little incentive for hospitals or other 
facility settings to address the lack of availability of vascular 
surgeons to perform PD catheter placements, lack of appropriate 
operating room time, and a lack of training on PD catheter placement 
for vascular surgeons. Another commenter noted a concern regarding the 
number of physicians trained to perform PD catheter placement as many 
of the more experienced PD catheter physician providers are in the 
later stages of their careers and there are not replacement providers 
in the pipeline when they retire.
    The majority of commenters mentioned the largest barrier for PD 
catheter placement is low reimbursement, making it difficult to 
encourage new surgeons and other physicians to become adept at PD 
catheter implantation. One commenter specifically mentioned that many 
of the standalone vascular access centers have closed because of the 
reduction of CMS payments to vascular access surgeons. Unlike the 
transplant surgeons, who may be incentivized to increase rates of 
transplantation through increased revenue resulting directly from 
increasing the number of transplants performed, there are no other 
direct or indirect incentives for vascular surgeons or vascular access 
centers to increase rates of, PD catheter placements that can work 
outside the model to address these concerns. Accordingly, commenters 
suggested that it would be appropriate to create a separate PD catheter 
placement incentive under the ETC Model.
    As the ETC Model currently seeks to change payment incentives only 
for ETC Participants (ESRD facilities and Managing Clinicians in 
Selected Geographic Areas) and, doesn't provide direct incentives for 
vascular access surgeons to work with ETC Participants, commenters 
strongly urged CMS to thoughtfully consider to what extent ETC 
Participants can influence increased rates of PD catheter placement. 
Despite the importance of dialysis access procedures to patients, 
commenters noted that ETC Participants currently have little influence 
on surgeons and hospitals performing dialysis access procedures in a 
fee-for-service structure. This factor limits the ability of ETC 
Participants to increase home dialysis utilization, which is contingent 
on timely and high-quality PD catheter placement. Commenters also urged 
CMS to consider establishing an incentive payment of at least $360.62 
to surgeons and other access specialists in the ETC Model to achieve 
this goal.
    Several commenters suggested that a voluntary track or option could 
be added to the ETC Model under which ETC Participants would receive a 
payment increase per PD placement (of at least an additional $360.62 
per PD catheter procedure) to equalize the

[[Page 61995]]

reimbursement between PD catheter insertion and vascular placement 
within the Model. A voluntary track would allow participants to opt-in 
to further test broader and more comprehensive incentive payments. This 
track would allow for comparison of rates of PD catheter placement 
within and outside the model, to evaluate whether the payment increase 
within the Model increased the rate of PD catheter placement. Others 
didn't think the incentive could be tested in the current model because 
ETC Participants have no ability to influence the behavior of surgeons 
or interventionalists who place PD catheters. However, these commenters 
noted they would be supportive of the incentive in another context.
    Several commenters suggested that the Innovation Center should 
pilot bonus or increased payments for PD catheter placement outside of 
the ESRD PPS and MCP. These commenters recommended that the Innovation 
Center consider testing a bonus incentive payment for vascular 
surgeons, hospitals, and surgical centers that would increase 
reimbursement for PD catheter placement commensurate with reimbursement 
provided for AV Fistula reimbursement. According to the commenters, 
this incentive payment should not be budget neutral to the ESRD PPS or 
the MCP, but instead should be viewed in the broader context of 
physician, hospital, and outpatient surgical center reimbursement 
systems.
    Other commenters suggested financial options with less detail. One 
commenter suggested that CMS can encourage the placement of PD 
catheters by not only maintaining the reimbursement levels for office 
based placed catheters but increasing the reimbursement to levels that 
are on par with Ambulatory Surgery Center settings. Another commenter 
suggested paying PD catheter placement over time--that is, adding 
longevity payments so the surgeon gets payments for patients staying on 
PD at 90 days and 180 days--to align interests across nephrologists and 
PD providers. Another commenter suggested a bonus payment per 
diagnostic related group (DRG) of new ESRD dialysis starts in the 
hospital who are leaving with a PD catheter, including urgent PD. 
Lastly, another commenter suggested that PD catheter placement be 
designed as an urgent procedure to be prioritized by the hospital under 
emergent procedures.
    There were also several comments related to use of Innovation 
Center authority. The first such comment suggested that CMS propose 
including as ETC Participants those surgeons who bill for dialysis 
vascular access procedures including PD catheter placement identified 
based on certain CPT codes (for example, 36818, 36819, 36820, 36821, 
36825, 36830, 36831, 36832, 36833, 36838, 49324, 49418, 49421). 
According to the commenter, including these surgeons in the model would 
provide an incentive for the surgeons to partner with other providers 
to ensure the timely placement, repair, and revision of vascular 
accesses for patients with ESRD. The second such comment had concerns 
with RVUs in the PFS and suggested the Innovation Center has authority 
to supplement, beyond the PFS, payments to surgeons that increase 
access to and availability of procedures that are ``gateways.'' Another 
such comment urged the Innovation Center to address PD catheter 
placement and consider possible alternate payment structures such as 
retroactive payment for successful placement of PD catheters that are 
proven to have been successful over time or establishment of a bonus 
structure similar to the Kidney Transplant Bonus under the KCC Model; 
the commenter also suggested that such innovations should include 
pediatric patients. The same commenter also urged CMS to not exclude 
pediatric patients from innovative policies to promote PD catheter 
placement.
    Response: We plan to continue working with other agencies and 
stakeholders to coordinate and to inform our decisions regarding the 
potential for incorporating peritoneal dialysis into the ETC Model and 
any related quality measurement and reporting requirements. While we 
stated that we would not be responding to specific comments submitted 
in response to this RFI in the CY 2022 ESRD PPS final rule, we will 
actively consider all input as we continue testing the ETC Model. Any 
updates to specific program requirements related to peritoneal dialysis 
and quality measurement and reporting provisions would be addressed 
through separate and future notice-and-comment rulemaking, as 
necessary.
2. Beneficiary Experience Measure--Request for Information
    While a beneficiary experience measure is not currently included in 
the ETC Model, in the CY 2022 ESRD PPS proposed rule (86 FR 36396), we 
sought comment on the inclusion of a measure to capture the beneficiary 
experience of home dialysis care. We invited public comment on any 
aspect of a patient experience measure. We noted that questions to 
consider include the following:
    a. What domains of a patient experience of care with home dialysis 
would be the most useful to assess and why?
    b. Would you prefer the measure to be newly developed or an update 
to an existing measure? If an update, which existing measure should be 
updated?
    c. How would a patient experience measure be best used to further 
the purpose of the ETC Model?
    d. How should CMS use a patient experience measure to assess the 
quality of care of beneficiaries?
    e. How should CMS use a patient experience measure to incentivize 
improved quality of care in the ETC Model and/or for other CMS 
programs?
    CMS also considered publishing the quality outcomes for the ETC 
Model. We invited public comment on any aspect of reporting quality 
data, and specifically sought input on the following:
    f. What is the frequency with which CMS should disseminate the 
results?
    g. What should be the unit of analysis for the reporting data?
    For the complete discussion of this RFI, see the CY 2022 ESRD PPS 
proposed rule, 86 FR 39396.
    Comments: Commenters were appreciative that CMS solicited feedback 
and there was overwhelming support for inclusion of a measure assessing 
beneficiary experience on home dialysis in the ETC Model. In general, 
the commenters thought the inclusion of a measure to assess beneficiary 
perceptions of the care they receive would be useful to inform changes 
that can improve the patient's health and well-being. Commenters 
concurred with CMS that the current ICH CAHPS is not sufficient to 
capture the beneficiary experience of home dialysis patients and 
strongly encouraged CMS to work with the kidney community to develop a 
useful measure that is endorsed by the National Quality Forum (NQF).
    A few commenters continued to recommend that CMS continue to 
develop and improve the ICH CAHPS, with a particular focus on adding a 
home dialysis survey to allow the patient experience to be compared 
across settings.
    However, more commenters recommended that the agency not update an 
existing measure, such as ICH CAHPS or the Patient Activation Measure 
(PAM), and instead develop an entirely new instrument and include 
questions that are most meaningful to patients. A commenter noted that 
measuring the patient experience of dialysis in a home setting includes 
components of in-center dialysis, home

[[Page 61996]]

health, and home medical equipment, in addition to topics that are 
unique to this care setting and patient population. No existing survey 
touches on all aspects of this distinctive experience. Commenters asked 
CMS to consider including topics specific to dialysis care at home, 
such as patient training on equipment, supplies, and safety, and 
communication with and access to the patient's care team. According to 
commenters, CMS could convene a Technical Expert Panel (TEP) to develop 
and test a tool to measure the patient voice in their treatment with 
home dialysis that would include satisfaction, patient activation, 
quality of life and economic impact of the treatment at home.
    Several commenters commented there are already private-sector 
efforts to develop a survey tool to measure home dialysis patient 
experience. Commenters encouraged CMS to work closely with these 
efforts, and to actively support the psychometric testing and 
validation necessary to ensure that there is a valid and reliable 
instrument that can be utilized broadly across providers in assessing 
the experience of home dialysis patients. Commenters specifically 
mentioned that any Innovation Center effort should complement and not 
replicate potential efforts to leverage the Home Dialysis Care 
Experience (Home-DCE) instrument developed and initially tested by the 
University of Washington. Commenters further expressed hope that this 
measure will eventually be tested more broadly and be submitted to NQF 
for endorsement and use in the CMS ESRD QIP.
    Several commenters mentioned that the survey response rate for ICH 
CAHPS has declined significantly in recent years. Therefore, the 
commenters recommended that any patient experience measure CMS uses 
should impose minimal burden on patients and providers. In addition, 
commenters noted that there is a critical need to develop and implement 
a patient experience tool that does not further health inequities. 
Lastly, commenters recommended that any home dialysis patient 
experience measure CMS implements should be relevant to other CMS 
programs, such as the ESRD QIP.
    Some commenters suggested that a new measure should address the 
following areas: Ease of use of their modality/device; patient/provider 
burden in self administration or helping support a loved one; sense of 
support from the care team.; sense of respect and value from the care 
team; and communication with the care team. One commenter recommended 
including three specific questions in a new home dialysis patient 
experience measure. The first is ``if the patient previously received 
in-center dialysis, does the patient have better quality of life on 
home dialysis?'' The second is ``is the patient on home dialysis more 
able to engage in activities of daily living (ADLs)?'' The final 
question is ``are dialysis facility staff supportive for patients on 
home dialysis?''
    Some commenters suggested additional mandatory measures in the ETC 
Model. Commenters suggested an advance care planning measure 
specifically because it is critical for patients and clinicians to 
define goals of care. Commenters also suggested measures regarding 
palliative care access and utilization because there is mounting 
evidence that ESRD patients who have access to or are enrolled in 
palliative care programs have better outcomes and have more support for 
treatment choices. Lastly, commenters suggested a measure specific to 
timely and appropriate referral to hospice to encourage timely and 
appropriate referral to hospice. The commenters recommended that this 
measure should also provide documentation of include evidence of goals 
of care and advance care planning.
    With regard to reporting quality outcomes, commenters supported 
transparency for beneficiaries attributed to ETC Participants. 
Commenters suggested that reporting of quality outcomes occur annually 
in order to be consistent with the ESRD QIP timeline. Commenters also 
recommended the quality outcomes be available via a website, as well as 
posted at each facility in the ETC Participant's aggregation group. 
Specifically, because the ETC Model is focused on aggregation at the 
HRR level, commenters recommended that the data should be at that 
aggregated level rather than at the individual ETC Participant level.
    Response: We appreciate all the comments and interest in this topic 
and believe that this input is very valuable in the continuing 
development of the quality measurement efforts for the ETC Model. We 
will continue to take all concerns, comments, and suggestions into 
consideration.

VI. Requests for Information

A. Informing Payment Reform Under the ESRD PPS

    Over the last several years, CMS, in conjunction with its 
contractor, has been conducting research, including holding three 
technical expert panels (TEPs), to explore possible improvements to the 
ESRD payment model. Additionally, in the CY 2020 ESRD PPS proposed rule 
(84 FR 38398 through 38400), CMS invited further comment on a number of 
topics, including expanding the outlier policy to include composite 
rate drugs, laboratory tests and supplies; reporting the length of each 
dialysis session directly on the ESRD claim; patient characteristics 
which contribute significantly to the cost of dialysis care; and 
improving the quality of facility-level data as reflected in the 
Medicare cost report. Stakeholders have asked CMS to explore a refined 
case-mix adjustment model for the ESRD PPS, stating that the existing 
case mix adjustors may not correlate well with the current cost of 
dialysis treatment.
    Accordingly, in the CY 2022 ESRD PPS proposed rule (86 FR 36398 
through 36409), CMS included a detailed request for information (RFI) 
on several topics in order to inform payment reform under the ESRD PPS. 
Those topics included six focal areas: (1) The LVPA payment 
methodology; (2) calculations for the case-mix adjustment; (3) the 
calculation for the outlier payment adjustment; (4) the current 
pediatric dialysis payment model; (5) modifications to the pediatric, 
the ESRD PPS and the hospital cost report; and (6) payment for home 
dialysis for Medicare beneficiaries with acute kidney injury. For each 
topic, we provided background information, reviewed current issues and 
stakeholder concerns, described suggestions that we received, and 
included specific requests for information. Although we are not 
presenting that information again in this final rule, we refer readers 
to the complete discussion in the CY 2022 ESRD PPS proposed rule, 86 FR 
36396 through 36409.
    We received numerous public comments in response to our RFI on 
payment reform under the ESRD PPS, including from large, small, and 
non-profit dialysis organizations; an advocacy organization; a 
coalition of dialysis organizations; a large non-profit health system; 
an independent commenter; and MedPAC. A high level description of these 
comments is included below. We will provide more detailed information 
about the commenters' recommendations in a future posting on the CMS 
website located at the following link: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Educational_Resources.

[[Page 61997]]

1. Calculation of the Low-Volume Payment Adjustment (LVPA)
    Of the fourteen responses to the LVPA RFI, all commenters supported 
either eliminating or revising the current LVPA or rural adjustment. 
One small dialysis organization within a large non-profit health system 
responded that they are reliant upon the LVPA and the rural adjustment, 
and support both adjustments, albeit with modifications. Several 
commenters agreed with MedPAC's suggestion for the low volume and 
isolated (LVI) adjustment. Several commenters opposed the census tract 
methodology with some stating that it is complex and lacks 
transparency.
2. Calculation of the Case-Mix Adjustments
    In response to the RFI for current case-mix methodology, several 
commenters recommended changes or removal of the case-mix adjusters, 
including refinement of the age and weight (BSA and BMI) adjustments 
and removal of the comorbidity adjustments, based on declining 
frequency of claims containing comorbidities. Commenters expressed 
their belief that the comorbidity categories no longer protect 
beneficiary access and no longer correlate with increased costs. 
Numerous commenters expressed support for the current onset of dialysis 
adjustment. Most commenters did not support the collection of time on 
machine data on claims or cost reports to allocate composite rate 
costs. MedPAC recommended that CMS develop a one-equation regression 
model in place of the current two-equation model currently used as the 
basis for the ESRD PPS.
3. Calculation of the Outlier Adjustment
    In response to the current RFI for the calculation of the outlier 
payment adjustment, several commenters recommended changes to the 
outlier policy, expressing concerns about the current outlier policy 
because it continues to achieve less than the target amount of outlier 
payments equal to 1.0 percent of total PPS payments. They suggested 
various strategies for addressing the outlier policy, including 
reducing the outlier threshold, and excluding TDAPA and TPNIES payments 
in the outlier calculation methodology. Several commenters supported 
the use of the FDL trend using historical utilization data. Commenters 
also recommended the creation of a mechanism to return unpaid outlier 
amounts to the ESRD PPS.
4. Calculation of the Pediatric Dialysis Payment Adjustment
    In the response to RFI for calculation of pediatric dialysis 
payment adjustment, all the commenters expressed that the total costs 
of ESRD care delivered to pediatric dialysis patients are not covered 
by the current ESRD bundled payment and existing pediatric multipliers. 
Several commenters stated that they did not believe that using duration 
of treatment is a valid proxy for composite rate costs. Some commenters 
recommended that a combination of age, weight and pediatric-specific 
comorbidities be used as a proxy for composite rate costs for pediatric 
patients. A few commenters recommended streamlining the reporting for 
claims and cost reports.
5. Modifying the Pediatric Dialysis, ESRD PPS and Hospital Cost Reports
    In the responses to RFI for modifying the pediatric cost report, 
commenters supported updating the pediatric cost report to allow 
facilities to include costs that cannot be currently reported on the 
cost report. Specific recommendations included breakdown of patient age 
groups, pediatric-specific dialysis supplies, additional overhead at 
hospital outpatient dialysis facilities, psychosocial support, 
specialized pharmacy needs and costs unique to the pediatric population 
for home dialysis.
    Several commenters noted that, despite best efforts to educate 
reporting and billing staff, hospitals often triage their cost 
reporting obligations, focusing on those that affect payment over those 
that do not; they stated that this is particularly true with pediatric 
dialysis costs. In order to improve reporting, the commenters 
recommended streamlining the reporting required and making it more 
consistent with reporting required from the State Medicaid programs or 
the private payers.
    In the responses to RFI for modifying the ESRD PPS and Hospital 
Cost Reports, we received input from ten commenters consisting of 
large, small, and non-profit dialysis organizations; an advocacy 
organization; a coalition of dialysis organizations; a large non-profit 
health system; an independent commenter; and MedPAC. All the commenters 
expressed support for making improvements to the cost report that will 
streamline reporting and improve accuracy of information collected that 
informs payment policy. Additionally, commenters recommended CMS 
consider modifying hospital cost report reporting instructions to 
ensure complete, consistent, and accurate data reporting as well as 
make timely updates to reflect changes to payment policies, including 
the TDAPA and TPNIES. These commenters cautioned CMS that prior to 
making changes, CMS should weigh the burden of data collection against 
the benefit to the system in collecting it.
6. Modifying Site of Services Provided to Medicare Beneficiaries With 
Acute Kidney Injury (AKI)
    The responses to the RFI for modifying site of service provided to 
Medicare beneficiaries included numerous requests to allow payment for 
home dialysis for patients with AKI. Of the 16 total comments received 
on this topic, 15 discussed modification of the site of service 
requirements, with commenters supporting payment for AKI patients 
receiving dialysis in home settings, including skilled nursing 
facilities. Several commenters favored modification of the site of 
service requirements in concert with payment of home dialysis for AKI 
patients when deemed appropriate by health care providers.
7. CMS Response to Public Comments
    We appreciate the public input and comments on suggested 
refinements to the ESRD PPS in response to our RFI in the CY 2022 ESRD 
PPS proposed rule. We will take all of these comments into 
consideration for possible future rulemaking.

VII. Collection of Information Requirements

A. Legislative Requirement for Solicitation of Comments

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection requirement 
should be approved by OMB, the Paperwork Reduction Act of 1995 (44 
U.S.C. 3506(c)(2)(A)) requires that we solicit comment on the following 
issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We solicited public comment on each of these issues for the 
following sections

[[Page 61998]]

of this document that contain information collection requirements 
(ICRs):

B. Requirements in Regulation Text

    In sections V through V.B of this final rule, we are revising the 
regulatory text for the ETC Model. However, the changes do not impose 
any new information collection requirements.

C. Additional Information Collection Requirements

    This final rule does not impose any new information collection 
requirements in the regulation text, as specified above. However, there 
are changes in some currently approved information collections. The 
following is a discussion of these information collections.
1. ESRD QIP--Wage Estimates (OMB Control Numbers 0938-1289 and 0938-
1340)
    To derive wages estimates, we used data from the U.S. Bureau of 
Labor Statistics' May 2020 National Occupational Employment and Wage 
Estimates. In the CY 2016 ESRD PPS final rule (80 FR 69069), we stated 
that it was reasonable to assume that Medical Records and Health 
Information Technicians, who are responsible for organizing and 
managing health information data, are the individuals tasked with 
submitting measure data to CROWNWeb (now EQRS) and NHSN, as well as 
compiling and submitting patient records for the purpose of data 
validation studies, rather than a Registered Nurse, whose duties are 
centered on providing and coordinating care for patients. We stated 
that the median hourly wage of a Medical Records and Health Information 
Technician is $21.20 per hour.\278\ We also stated that fringe benefit 
and overhead are calculated at 100 percent. Therefore, using these 
assumptions, we estimated an hourly labor cost of $42.40 as the basis 
of the wage estimates for all collections of information calculations 
in the ESRD QIP. We adjusted these employee hourly wage estimates by a 
factor of 100 percent to reflect current HHS department-wide guidance 
on estimating the cost of fringe benefits and overhead. We stated that 
these are necessarily rough adjustments, both because fringe benefits 
and overhead costs vary significantly from employer to employer and 
because methods of estimating these costs vary widely from study to 
study. Nonetheless, we stated that there is no practical alternative 
and we believe that these are reasonable estimation methods.
---------------------------------------------------------------------------

    \278\ https://www.bls.gov/oes/current/oes292098.htm. Accessed on 
June 7, 2021.
---------------------------------------------------------------------------

    We used this updated wage estimate, along with updated facility and 
patient counts to re-estimate the total information collection burden 
in the ESRD QIP for PY 2024 that we discussed in the CY 2021 ESRD QIP 
final rule (85 FR 71473 through 71474) and to estimate the total 
information collection burden in the ESRD QIP for PY 2025. We provided 
the re-estimated information collection burden associated with the PY 
2024 ESRD QIP and the newly estimated information collection burden 
associated with the PY 2025 ESRD QIP in section VII.C.3 of the proposed 
rule.
2. Estimated Burden Associated With the Data Validation Requirements 
for PY 2024 and PY 2025 (OMB Control Numbers 0938-1289 and 0938-1340)
    In the CY 2020 ESRD PPS final rule, we finalized a policy to adopt 
the CROWNWeb data validation methodology that we previously adopted for 
the PY 2016 ESRD QIP as the methodology we would use to validate 
CROWNWeb data for all payment years, beginning with PY 2021 (83 FR 
57001 through 57002). Although, as noted in section IV.B.2. of the 
proposed rule, we are now using EQRS to report data that was previously 
reported in CROWNWeb, the data validation methodology remains the same. 
Under this methodology, 300 facilities are selected each year to submit 
10 records to CMS, and we reimburse these facilities for the costs 
associated with copying and mailing the requested records. The burden 
associated with these validation requirements is the time and effort 
necessary to submit the requested records to a CMS contractor. In the 
proposed rule, we updated these estimates using a newly available wage 
estimate of a Medical Records and Health Information Technician. In the 
CY 2020 ESRD PPS final rule, we estimated that it would take each 
facility approximately 2.5 hours to comply with this requirement. If 
300 facilities are asked to submit records, we estimated that the total 
combined annual burden for these facilities would be 750 hours (300 
facilities x 2.5 hours). Since we anticipate that Medical Records and 
Health Information Technicians or similar administrative staff would 
submit these data, we estimate that the aggregate cost of the EQRS data 
validation each year would be approximately $31,800 (750 hours x 
$42.40), or an annual total of approximately $106.00 ($31,800/300 
facilities) per facility in the sample. The burden cost increase 
associated with these requirements will be revised in the information 
collection request (OMB control number 0938-1289).
    In the CY 2021 ESRD PPS final rule, we finalized our policy to 
reduce the number of records that a facility selected to participate in 
the NHSN data validation must submit to a CMS contractor, beginning 
with PY 2023 (85 FR 71471 through 71472). Under this finalized policy, 
a facility is required to submit records for 20 patients across any two 
quarters of the year, instead of 20 records for each of the first two 
quarters of the year. The burden associated with this policy is the 
time and effort necessary to submit the requested records to a CMS 
contractor. Applying our policy to reduce the number of records 
required from each facility participating in the NHSN validation, we 
estimated that it would take each facility approximately 5 hours to 
comply with this requirement. If 300 facilities are asked to submit 
records each year, we estimated that the total combined annual burden 
hours for these facilities per year would be 1,500 hours (300 
facilities x 5 hours). Since we anticipate that Medical Records and 
Health Information Technicians or similar staff would submit these 
data, using the newly available wage estimate of a Medical Records and 
Health Information Technician, we estimate that the aggregate cost of 
the NHSN data validation each year would be approximately $63,600 
(1,500 hours x $42.40), or a total of approximately $212 ($63,600/300 
facilities) per facility in the sample. While the burden hours estimate 
will not change, the burden cost updates associated with these 
requirements will be revised in the information collection request (OMB 
control number 0938-1340).
3. EQRS Reporting Requirements for PY 2024 and PY 2025 (OMB Control 
Number 0938-1289)
    To determine the burden associated with the EQRS reporting 
requirements (previously known as the CROWNWeb reporting requirements), 
we look at the total number of patients nationally, the number of data 
elements per patient-year that the facility would be required to submit 
to EQRS for each measure, the amount of time required for data entry, 
the estimated wage plus benefits applicable to the individuals within 
facilities who are most likely to be entering data into EQRS, and the 
number of facilities submitting data to EQRS. In the CY 2021 ESRD PPS 
final rule, we estimated that the burden associated with CROWNWeb (now

[[Page 61999]]

EQRS) reporting requirements for the PY 2024 ESRD QIP was approximately 
$208 million (85 FR 71400).
    As discussed in section IV.C. and section IV.D. of this final rule, 
we are finalizing our proposed measure suppressions that would apply 
for PY 2022 and updates to the scoring methodology and payment 
reductions for the PY 2022 ESRD QIP. In the proposed rule, we also 
announced an extension of EQRS reporting requirements for facilities 
due to systems issues. However, we believe that none of the policies 
finalized in this final rule would affect our estimates of the annual 
burden associated with the Program's information collection 
requirements, as facilities are still expected to continue to collect 
measure data during this time period. We are not finalizing any changes 
that would affect the burden associated with EQRS reporting 
requirements for PY 2024 or PY 2025. However, we have re-calculated the 
burden estimate for PY 2024 using updated estimates of the total number 
of dialysis facilities, the total number of patients nationally, and 
wages for Medical Records and Health Information Technicians or similar 
staff as well as a refined estimate of the number of hours needed to 
complete data entry for EQRS reporting. Consistent with our approach in 
the CY 2021 ESRD PPS final rule (85 FR 71474), in the proposed rule we 
estimated that the amount of time required to submit measure data to 
EQRS was 2.5 minutes per element and did not use a rounded estimate of 
the time needed to complete data entry for EQRS reporting. We are 
further updating these estimates in this final rule. There are 229 data 
elements for 532,931 patients across 7,717 facilities. At 2.5 minutes 
per element, this yields approximately 658.94 hours per facility. 
Therefore, the PY 2024 burden is 5,085,050 hours (658.94 hours x 7,717 
facilities). Using the wage estimate of a Medical Records and Health 
Information Technician, we estimate that the PY 2024 total burden cost 
is approximately $215 million (5,085,050 hours x $42.40). There is no 
net incremental burden change from PY 2024 to PY 2025 because we are 
not changing the reporting requirements for PY 2025.

VIII. Regulatory Impact Analysis

A. Impact Analysis

1. Introduction
    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980; Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), and the Congressional Review Act (5 U.S.C. 801(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). Based on our estimates, OMB's Office of Information and 
Regulatory Affairs has determined that this rulemaking is 
``economically significant'' as measured by the $100 million threshold, 
and hence also a major rule under Subtitle E of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (also known as the 
Congressional Review Act). Accordingly, we have prepared a Regulatory 
Impact Analysis that to the best of our ability presents the costs and 
benefits of the rulemaking. We solicit comments on the regulatory 
impact analysis provided.
2. Statement of Need
a. ESRD PPS
    As required by section 1881(b)(14) of the Social Security Act (the 
Act), as added by section 153(b) of the Medicare Improvements for 
Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275). Section 
1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA, and 
amended by section 3401(h) of the Patient Protection and Affordable 
Care Act (the Affordable Care Act) (Pub. L. 111-148), established that 
beginning calendar year (CY) 2012, and each subsequent year, the 
Secretary of the Department of Health and Human Services (the 
Secretary) shall annually increase payment amounts by an ESRD market 
basket increase factor, reduced by the productivity adjustment 
described in section 1886(b)(3)(B)(xi)(II) of the Act.
    This rule finalizes updates to the ESRD PPS for CY 2022, as 
required by section 1881(b)(14)(F) of the Act. The routine updates 
include the CY 2022 wage index values, the wage index budget-neutrality 
adjustment factor, and outlier payment threshold amounts. Failure to 
publish this final rule will result in ESRD facilities not receiving 
appropriate payments in CY 2022 for renal dialysis services furnished 
to ESRD beneficiaries, as required by section 1881(b)(14)(F) of the 
Act.
b. AKI
    This rule also finalizes updates to the payment for renal dialysis 
services furnished by ESRD facilities to individuals with AKI, as 
required by section 1834(r) of the Act, as added by section 808(b) of 
the Trade Preferences Extension Act of 2015 (TPEA) (Pub. L. 114-27) 
enacted on June 29, 2015. Failure to publish this final rule will 
result in ESRD facilities not receiving appropriate payments in CY 2022 
for renal dialysis services furnished to patients with AKI in 
accordance with section 1834(r) of the Act.
c. ESRD QIP
    Section 1881(h)(1) of the Act requires a payment reduction of up to 
2 percent for eligible dialysis facilities that do not meet or exceed 
the mTPS established with respect to performance standards for the ESRD 
QIP each year. This final rule finalizes updates for the ESRD QIP, 
including the adoption of a measure suppression policy and the 
suppression of several ESRD QIP measures under that measure suppression 
policy, updates regarding the scoring methodology and payment 
reductions for the PY 2022 ESRD QIP, an update to the SHR measure, and 
an update to the PY 2024 performance standards.
d. ETC Model
    The ETC Model is a mandatory Medicare payment model tested under 
the authority of section 1115A of the

[[Page 62000]]

Act, which authorizes the Innovation Center to test innovative payment 
and service delivery models expected to reduce Medicare, Medicaid, and 
CHIP expenditures while preserving or enhancing the quality of care 
furnished to the beneficiaries of such programs.
    This final rule will refine the methodology for setting and 
updating achievement and improvement benchmarks for participating ESRD 
facilities and Managing Clinicians serving the ESRD population over the 
remaining years of the ETC Model, among other changes. As described in 
detail in section V.B of this final rule, we believe it is necessary to 
adopt certain changes to the ETC Model. Notwithstanding the changes, we 
continue to anticipate improvement in quality of care for beneficiaries 
and reduced expenditures under the ETC Model inasmuch as the Model is 
designed to create incentives for Managing Clinicians and ESRD 
facilities to support beneficiaries, along with their families and 
caregivers, in choosing the optimal kidney replacement modality.

B. Overall Impact

1. ESRD PPS
    We estimate that the final revisions to the ESRD PPS will result in 
an increase of approximately $290 million in payments to ESRD 
facilities in CY 2022, which includes the amount associated with 
updates to the outlier thresholds, payment rate update, updates to the 
wage index, and TPNIES payment.
2. AKI
    We estimate that the updates to the AKI payment rate will result in 
an increase of approximately $1 million in payments to ESRD facilities 
in CY 2022.

C. Detailed Economic Analysis

    In this section, we discuss the anticipated benefits, costs, and 
transfers associated with the changes in this final rule. Additionally, 
we estimate the total regulatory review costs associated with reading 
and interpreting this final rule.
1. Benefits for ESRD PPS and AKI
    Under the CY 2022 ESRD PPS and AKI payment, ESRD facilities will 
continue to receive payment for renal dialysis services furnished to 
Medicare beneficiaries under a case-mix adjusted PPS. We continue to 
expect that making prospective payments to ESRD facilities will enhance 
the efficiency of the Medicare program. Additionally, we expect that 
updating ESRD PPS and AKI payments by 1.9 percent based on the final CY 
2022 ESRD PPS market basket update less the final CY 2022 productivity 
adjustment will improve or maintain beneficiary access to high quality 
care by ensuring that payment rates reflect the best available data on 
the resources involved in delivering renal dialysis services.
2. Costs
a. ESRD PPS and AKI
    We do not anticipate the provisions of this final rule regarding 
ESRD PPS and AKI rates-setting will create additional cost or burden to 
ESRD facilities.
b. ESRD QIP
    For PY 2024 and PY 2025, we have re-estimated the costs associated 
with the information collection requirements under the ESRD QIP with 
updated estimates of the total number of dialysis facilities. We note 
that the estimated total number of patients nationally, wages for 
Medical Records and Health Information Technicians or similar staff, 
and the estimated number of hours needed to complete data entry for 
EQRS reporting are the same as they were in the proposed rule. We have 
made no changes to our methodology for calculating the annual burden 
associated with the information collection requirements for the EQRS 
validation study (previously known as the CROWNWeb validation study), 
the NHSN validation study, and EQRS reporting. As discussed in section 
IV.C. and section IV.D. of this final rule, we are finalizing our 
proposed measure suppressions that would apply for PY 2022 and updates 
to the scoring methodology and payment reductions for the PY 2022 ESRD 
QIP. We also announced an extension of EQRS reporting requirements for 
facilities due to systems issues in the proposed rule. However, we 
believe that none of the policies finalized in this final rule would 
affect our estimates of the annual burden associated with the Program's 
information collection requirements, as facilities are still expected 
to continue to collect measure data during this time period.
    We also finalized the payment reduction scale using more recent 
data for the measures in the ESRD QIP measure set. We estimate 
approximately $215 million in information collection burden, which 
includes the cost of complying with this rule, and an additional $17 
million in estimated payment reductions across all facilities for PY 
2024.
    For PY 2025, we estimate that the proposed revisions to the ESRD 
QIP would result in $215 million in information collection burden, and 
$17 million in estimated payment reductions across all facilities, for 
an impact of $232 million as a result of the policies we have 
previously finalized and the policies we have finalized in this final 
rule.
c. ETC Model
    We estimate that the changes to the ETC Model will increase the 
Model's projected direct savings from payment adjustments alone by $5 
million over the duration of the Model. We estimate that the Model will 
generate $28 million in direct savings related to payment adjustments 
over 6.5 years with the adopted changes, and would generate $23 million 
in savings in the absence of the finalized changes.
3. Transfers for ESRD PPS and AKI
    We estimate that the finalized updates to the ESRD PPS and AKI 
payment rate will result in a total in increase of approximately $290 
million in payments to ESRD facilities in CY 2022, which includes the 
amount associated with updates to the outlier thresholds, and updates 
to the wage index. This estimate includes an increase of approximately 
$1 million in payments to ESRD facilities in CY 2022 due to the 
finalized updates to the AKI payment rate, of which approximately 20 
percent is increased beneficiary co-insurance payments. We estimate 
approximately $230 million in transfers from the Federal Government to 
ESRD facilities due to increased Medicare program payments and 
approximately $60 million in transfers from beneficiaries to ESRD 
facilities due to increased beneficiary co-insurance payments as a 
result of this final rule.
4. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this final rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on this year's proposed rule will be the number of reviewers 
of this final rule. We acknowledge that this assumption may understate 
or overstate the costs of reviewing this rule. It is possible that not 
all commenters reviewed this year's rule in detail, and it is possible 
that some reviewers chose not to comment on the proposed rule. For 
these reasons, we thought that the number of past commenters would be a 
fair estimate of the number of reviewers of this rule. We welcome any 
comments on the approach in estimating the number of entities, which 
will review

[[Page 62001]]

this final rule. We also recognize that different types of entities are 
in many cases affected by mutually exclusive sections of this final 
rule, and therefore for the purposes of our estimate we assume that 
each reviewer reads approximately 50 percent of the rule. We seek 
comments on this assumption.
    Using the May, 2020 mean (average) wage information from the BLS 
for medical and health service managers (Code 11-9111), we estimate 
that the cost of reviewing this rule is $114.24 per hour, including 
overhead and fringe benefits https://www.bls.gov/oes/current/oes119111.htm. Assuming an average reading speed of 250 words per 
minute, we estimate that it will take approximately 300 minutes (5 
hours) for the staff to review half of this final rule, which is 
approximately 75,000 words. For each entity that reviews the rule, the 
estimated cost is $571.20 (5 hours x $114.24). Therefore, we estimate 
that the total cost of reviewing this regulation is $163,363.20 
($571.20 x 286).
5. Impact Statement and Table
a. CY 2022 End-Stage Renal Disease Prospective Payment System
(1) Effects on ESRD Facilities
    To understand the impact of the changes affecting payments to 
different categories of ESRD facilities, it is necessary to compare 
estimated payments in CY 2021 to estimated payments in CY 2022. To 
estimate the impact among various types of ESRD facilities, it is 
imperative that the estimates of payments in CY 2021 and CY 2022 
contain similar inputs.
    Therefore, we simulated payments only for those ESRD facilities for 
which we are able to calculate both current payments and new payments.
    For this final rule, we used CY 2020 data from the Part A and Part 
B Common Working Files as of February 12, 2021, as a basis for Medicare 
dialysis treatments and payments under the ESRD PPS. We updated the 
2020 claims to 2021 and 2022 using various updates. The updates to the 
ESRD PPS base rate are described in section II.B.1.d of this final 
rule. Table 9 shows the impact of the estimated CY 2022 ESRD PPS 
payments compared to estimated payments to ESRD facilities in CY 2021.
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BILLING CODE 4120-01-C
    Column A of the impact table indicates the number of ESRD 
facilities for each impact category and column B indicates the number 
of dialysis treatments (in millions). The overall effect of the changes 
to the outlier payment policy described in section II.B.1.c of this 
final rule is shown in column C. For CY 2022, the impact on all ESRD 
facilities as a result of the changes to the outlier payment policy 
will be a 0.6 percent increase in estimated payments. All ESRD 
facilities are anticipated to experience a positive effect in their 
estimated CY 2022 payments as a result of the outlier policy changes.
    Column D shows the effect of the annual update to the wage index, 
as described in section II.B.1.b of this final rule. That is, this 
column reflects the update from the CY 2021 ESRD PPS wage index using 
2018 OMB delineations as finalized in the CY 2021 ESRD PPS final rule, 
with a basis of the FY 2022 pre-floor, pre-reclassified IPPS hospital 
wage index data in a budget neutral manner. The total impact of this 
change is 0.0 percent; however, there are distributional effects of the 
change among different categories of ESRD facilities. The categories of 
types of facilities in the impact table show changes in estimated 
payments ranging from a 0.7 percent decrease to a 0.5 percent increase 
due to the annual update to the ESRD PPS wage index.
    Column E shows the effect of the final CY 2022 ESRD PPS payment 
rate update as described in section II.B.1.a of this final rule. The 
ESRD PPS payment rate update is 1.9 percent, which reflects the ESRDB 
market basket percentage increase factor for CY 2022 of 2.4 percent and 
the productivity adjustment of 0.5 percent.
    Column F reflects the overall impact, that is, the effects of the 
outlier policy changes, the updated wage index, and the payment rate 
update. We expect that overall ESRD facilities will experience a 2.5 
percent increase in estimated payments in CY 2022. The categories of 
types of facilities in the impact table show impacts ranging from a 1.6 
percent increase to a 3.3 percent increase in their CY 2022 estimated 
payments.
(2) Effects on Other Providers
    Under the ESRD PPS, Medicare pays ESRD facilities a single bundled 
payment for renal dialysis services, which may have been separately 
paid to other providers (for example, laboratories, durable medical 
equipment suppliers, and pharmacies) by Medicare prior to the 
implementation of the ESRD PPS. Therefore, in CY 2022, we estimate that 
the ESRD PPS will have zero impact on these other providers.
(3) Effects on the Medicare Program
    We estimate that Medicare spending (total Medicare program 
payments) for ESRD facilities in CY 2022 will be approximately $8.8 
billion. This estimate considers a projected decrease in fee-for-
service Medicare dialysis beneficiary enrollment of 5.8 percent in CY 
2022.
(4) Effects on Medicare Beneficiaries
    Under the ESRD PPS, beneficiaries are responsible for paying 20 
percent of the ESRD PPS payment amount. As a result of the projected 
2.5 percent overall increase in the CY 2022 ESRD PPS payment amounts, 
we estimate that there will be an increase in beneficiary co-insurance 
payments of 2.5 percent in CY 2022, which translates to approximately 
$60 million.
(5) Alternatives Considered
CY 2022 Impacts: 2019 Versus 2020 Claims Data
    Each year CMS uses the latest available ESRD claims to update the 
outlier threshold, budget neutrality factor, and payment rates. Due to 
the COVID-19 PHE, we compared the impact of using CY 2019 claims 
against CY 2020 claims to determine if there was any substantial 
difference in the results that would justify potentially deviating from 
our longstanding policy to use the latest available data. Analysis 
suggested that ESRD utilization did not change substantially during the 
pandemic, likely due to the patients' vulnerability and need for these 
services. Consequently, we finalized our proposal to use the CY 2020 
data because it does not negatively impact ESRD facilities and keeps 
with our longstanding policy to make updates using the latest available 
ESRD claims data (86 FR 36414).
Transitional Add-On Payment Adjustment for New and Innovative Equipment 
and Supplies (TPNIES) Application: The Tablo[supreg] System--Home 
Dialysis Machine
    As discussed in section II.C.1.a. of the preamble of this final 
rule, we are approving 1 technology for TPNIES for CY 2022, the 
Tablo[supreg] System. We have provided an estimated impact for the 
purposes of the Regulatory Impact Analysis, as follows. A Tablo[supreg] 
System that was priced at $40,000 and amortized over 5 useful life 
years using straight line depreciation would equal $8,000 per year 
($40,000/5 = $8,000). Sixty-five percent of the annual cost would equal 
$5,200 per year ($8,000 * .65 = $5,200 per year). The pre-adjusted per 
treatment payment amount would equal $33.33 per treatment ($5,200/156 = 
$33.33 per treatment). The TPNIES amount would therefore equal an 
estimated $23.92 per treatment ($33.33-the CY 2022 average per 
treatment offset amount of $9.50 = $23.83).
    Based on February 2021 Shared Systems Data, there were 
approximately 6,600 Medicare beneficiaries receiving home hemodialysis 
treatment. If we estimated that this entire population were to use the 
Tablo[supreg] System in CY2022, there would be 1,029,600 treatments 
(6,600 Medicare beneficiaries * 156 treatments per year = 1,029,600 
treatments). Applying the estimated $23.83 per treatment TPNIES amount 
to the estimated 1,029,600 treatments would result in approximately $25 
million in spending ($23.83 * 1,029,600 = $24,535,368). If, for 
example, 1 percent of this population were to use the Tablo[supreg] 
System in CY 2022, there would be 10,296 treatments (66 Medicare 
beneficiaries * 156 treatments per year = 10,296 treatments). Applying 
the $23.83 per treatment TPNIES amount to the 10,296 treatments would 
result in approximately $246,280 in

[[Page 62004]]

spending ($23.83 * 10,296 = $245,354). We believe that 10 percent of 
this population is a more reasonable estimate. If the estimated 10 
percent were to use the Tablo[supreg] System in CY 2022, there would be 
102,960 treatments (660 Medicare beneficiaries * 156 treatments per 
year = 102,960 treatments). Applying the estimated $23.83 per treatment 
TPNIES amount to the 102,960 treatments would result in approximately 
$2.5 million in spending ($23.83 * 102,960 = $2,453,537), of which, 
approximately $490,000 would be attributed to beneficiary coinsurance 
amounts.
b. Payment for Renal Dialysis Services Furnished to Individuals With 
AKI
(1) Effects on ESRD Facilities
    To understand the impact of the changes affecting payments to 
different categories of ESRD facilities for renal dialysis services 
furnished to individuals with AKI, it is necessary to compare estimated 
payments in CY 2021 to estimated payments in CY 2022. To estimate the 
impact among various types of ESRD facilities for renal dialysis 
services furnished to individuals with AKI, it is imperative that the 
estimates of payments in CY 2021 and CY 2022 contain similar inputs. 
Therefore, we simulated payments only for those ESRD facilities for 
which we are able to calculate both current payments and new payments.
    For this final rule, we used CY 2020 data from the Part A and Part 
B Common Working Files as of February 12, 2021, as a basis for Medicare 
for renal dialysis services furnished to individuals with AKI. We 
updated the 2020 claims to 2021 and 2022 using various updates. The 
updates to the AKI payment amount are described in section III.B of 
this final rule. Table 10 shows the impact of the estimated CY 2022 
payments for renal dialysis services furnished to individuals with AKI 
compared to estimated payments for renal dialysis services furnished to 
individuals with AKI in CY 2021.
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BILLING CODE 4120-01-C
    Column A of the impact table indicates the number of ESRD 
facilities for each impact category and column B indicates the number 
of AKI dialysis

[[Page 62006]]

treatments (in thousands). Column C shows the effect of the final CY 
2022 wage indices. Column D shows the effect of the CY 2022 ESRD PPS 
payment rate update. The ESRD PPS payment rate update is 1.9 percent, 
which reflects the ESRDB market basket percentage increase factor for 
CY 2022 of 2.4 percent and the productivity adjustment of 0.5 percent.
    Column E reflects the overall impact, that is, the effects of the 
updated wage index and the payment rate update. We expect that overall 
ESRD facilities will experience a 1.9 percent increase in estimated 
payments in CY 2022. The categories of types of facilities in the 
impact table show impacts ranging from an increase of 0.0 percent to 
2.5 percent in their CY 2022 estimated payments.
(2) Effects on Other Providers
    Under section 1834(r) of the Act, as added by section 808(b) of 
TPEA, we are updating the payment rate for renal dialysis services 
furnished by ESRD facilities to beneficiaries with AKI. The only two 
Medicare providers and suppliers authorized to provide these outpatient 
renal dialysis services are hospital outpatient departments and ESRD 
facilities. The patient and his or her physician make the decision 
about where the renal dialysis services are furnished. Therefore, this 
change will have zero impact on other Medicare providers.
(3) Effects on the Medicare Program
    We estimate approximately $60 million will be paid to ESRD 
facilities in CY 2022 as a result of patients with AKI receiving renal 
dialysis services in the ESRD facility at the lower ESRD PPS base rate 
versus receiving those services only in the hospital outpatient setting 
and paid under the outpatient prospective payment system, where 
services were required to be administered prior to the TPEA.
(4) Effects on Medicare Beneficiaries
    Currently, beneficiaries have a 20 percent co-insurance obligation 
when they receive AKI dialysis in the hospital outpatient setting. When 
these services are furnished in an ESRD facility, the patients will 
continue to be responsible for a 20 percent coinsurance. Because the 
AKI dialysis payment rate paid to ESRD facilities is lower than the 
outpatient hospital PPS's payment amount, we expect beneficiaries to 
pay less co-insurance when AKI dialysis is furnished by ESRD 
facilities.
(5) Alternatives Considered
    As we discussed in the CY 2017 ESRD PPS proposed rule (81 FR 
42870), we considered adjusting the AKI payment rate by including the 
ESRD PPS case-mix adjustments, and other adjustments at section 
1881(b)(14)(D) of the Act, as well as not paying separately for AKI 
specific drugs and laboratory tests. We ultimately determined that 
treatment for AKI is substantially different from treatment for ESRD 
and the case-mix adjustments applied to ESRD patients may not be 
applicable to AKI patients and as such, including those policies and 
adjustment is inappropriate. We continue to monitor utilization and 
trends of items and services furnished to individuals with AKI for 
purposes of refining the payment rate in the future. This monitoring 
will assist us in developing knowledgeable, data-driven proposals.
c. ESRD QIP
(a). Effects of the PY 2022 ESRD QIP on ESRD Facilities
    The ESRD QIP is intended to prevent reductions in the quality of 
ESRD dialysis facility services provided to beneficiaries. Although the 
general methodology that we use to determine a facility's TPS is 
described in our regulations at 42 CFR 413.178(e), we are finalizing 
our proposal to codify special scoring policies for PY 2022 at 42 CFR 
413.178(h). Under these finalized regulations, we will calculate 
measure rates for all measures but will not calculate achievement and 
improvement points for any measures. We will also not calculate or 
award a TPS for any facility. Finally, we will not reduce payment to 
any facility for PY 2022.
    We believe there will be no effects of the PY 2022 ESRD QIP on ESRD 
Facilities resulting from these finalized policies because no 
facilities will receive a TPS or payment reductions for PY 2022.
(b). Effects of the PY 2024 ESRD QIP on ESRD Facilities
    Any reductions in the ESRD PPS payments as a result of a facility's 
performance under the PY 2024 ESRD QIP will apply to the ESRD PPS 
payments made to the facility for services furnished in CY 2024, as 
codified in our regulations at 42 CFR 413.177.
    For the PY 2024 ESRD QIP, we estimate that, of the 7,717 dialysis 
facilities (including those not receiving a TPS) enrolled in Medicare, 
approximately 24.3 percent or 1,788 of the facilities that have 
sufficient data to calculate a TPS would receive a payment reduction 
for PY 2024. We are presenting an estimate for the PY 2024 ESRD QIP to 
update the estimated impact that was provided in the CY 2021 ESRD PPS 
final rule (85 FR 71481 through 71483). As a result of our finalized 
policies, the total estimated payment reductions for all the 1,788 
facilities expected to receive a payment reduction in PY 2024 would 
decrease from $18,247,083.76 to approximately $17,104,030.59. 
Facilities that do not receive a TPS do not receive a payment 
reduction.
    Table 11 shows the overall estimated distribution of payment 
reductions resulting from the PY 2024 ESRD QIP.
[GRAPHIC] [TIFF OMITTED] TR08NO21.011

    To estimate whether a facility would receive a payment reduction 
for PY 2024, we scored each facility on achievement and improvement on 
several clinical measures we have previously finalized and for which 
there

[[Page 62007]]

were available data from EQRS and Medicare claims. Payment reduction 
estimates are calculated using the most recent data available 
(specified in Table 12) in accordance with the policies finalized in 
this final rule. Measures used for the simulation are shown in Table 
12. 
[GRAPHIC] [TIFF OMITTED] TR08NO21.012

    For all measures except the SHR clinical measure, the Standardized 
Readmission Ratio (SRR) clinical measure, and the STrR reporting 
measure, measures with less than 11 patients for a facility were not 
included in that facility's TPS. For the SHR clinical measure and the 
SRR clinical measure, facilities were required to have at least 5 
patient-years at risk and 11 index discharges, respectively, in order 
to be included in the facility's TPS. For the STrR reporting measure, 
facilities were required to have at least 10 patient-years at risk in 
order to be included in the facility's TPS. Each facility's TPS was 
compared to an estimated mTPS and an estimated payment reduction table 
that were consistent with the finalized polices outlined in sections 
IV.E. and IV.F. of this final rule. Facility reporting measure scores 
were estimated using available data from CY 2019. Facilities were 
required to have at least one measure in at least two domains to 
receive a TPS.
    To estimate the total payment reductions in PY 2024 for each 
facility resulting from this final rule, we multiplied the total 
Medicare payments to the facility during the 1-year period between 
January 2019 and December 2019 by the facility's estimated payment 
reduction percentage expected under the ESRD QIP, yielding a total 
payment reduction amount for each facility.
    Table 13 shows the estimated impact of the finalized ESRD QIP 
payment reductions to all ESRD facilities for PY 2024. The table also 
details the distribution of ESRD facilities by size (both among 
facilities considered to be small entities and by number of treatments 
per facility), geography (both rural and urban and by region), and 
facility type (hospital based and freestanding facilities). Given that 
the performance period used for these calculations differs from the 
performance period we are using for the PY 2024 ESRD QIP, the actual 
impact of the PY 2024 ESRD QIP may vary significantly from the values 
provided here.
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BILLING CODE 4120-01-C
(c). Effects of the PY 2025 ESRD QIP on ESRD Facilities
    For the PY 2025 ESRD QIP, we estimate that, of the 7,717 dialysis 
facilities (including those not receiving a TPS) enrolled in Medicare, 
approximately 24.3 percent or 1,788 of the facilities that have 
sufficient data to calculate a TPS would receive a payment reduction 
for PY 2025. The total payment reductions for all the 1,788 facilities 
expected to receive a payment reduction is approximately 
$17,104,030.59. Facilities that do not receive a TPS do not receive a 
payment reduction. Table 14 shows the overall estimated distribution of 
payment reductions resulting from the PY 2025 ESRD QIP.

[[Page 62009]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.014

    To estimate whether a facility would receive a payment reduction in 
PY 2025, we scored each facility on achievement and improvement on 
several clinical measures we have previously finalized and for which 
there were available data from EQRS and Medicare claims. Payment 
reduction estimates were calculated using the most recent data 
available (specified in Table 14) in accordance with the policies 
finalized in this final rule. Measures used for the simulation are 
shown in Table 15.
[GRAPHIC] [TIFF OMITTED] TR08NO21.015

    For all measures except the SHR clinical measure, the SRR clinical 
measure, and the STrR reporting measure, measures with less than 11 
patients for a facility were not included in that facility's TPS. For 
SHR and SRR, facilities were required to have at least 5 patient-years 
at risk and 11 index discharges, respectively, in order to be included 
in the facility's TPS. For the STrR reporting measure, facilities were 
required to have at least 10 patient-years at risk in order to be 
included in the facility's TPS. Each facility's TPS was compared to an 
estimated mTPS and an estimated payment reduction table that 
incorporates the policies outlined in section IV.E. and IV.F. of this 
final rule. Facility reporting measure scores were estimated using 
available data from CY 2019. Facilities were required to have at least 
one measure in at least two domains to receive a TPS.
    To estimate the total payment reductions in PY 2025 for each 
facility resulting from this proposed rule, we multiplied the total 
Medicare payments to the facility during the 1-year period between 
January 2019 and December 2019 by the facility's estimated payment 
reduction percentage expected under the ESRD QIP, yielding a total 
payment reduction amount for each facility.
    Table 16 shows the estimated impact of the finalized ESRD QIP 
payment reductions to all ESRD facilities for PY 2025. The table 
details the distribution of ESRD facilities by size (both among 
facilities considered to be small entities and by number of treatments 
per facility), geography (both rural and urban and by region), and 
facility type (hospital based and freestanding facilities). Given that 
the performance period used for these calculations differs from the 
performance period we are using for the PY 2025 ESRD QIP, the actual 
impact of the PY 2025 ESRD QIP may vary significantly from the values 
provided here.
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BILLING CODE 4120-01-C
(d). Effects on Other Providers
    The ESRD QIP is applicable to dialysis facilities. We are aware 
that several of our measures impact other providers. For example, with 
the introduction of the SRR clinical measure in PY 2017 and the SHR 
clinical measure in PY 2020, we anticipate that hospitals may 
experience financial savings as dialysis facilities work to reduce the 
number of unplanned readmissions and hospitalizations. We are exploring 
various methods to assess the impact these measures have on hospitals 
and other facilities, such as through the impacts of the Hospital 
Readmissions Reduction Program and the Hospital-Acquired Condition 
Reduction Program, and we intend to continue examining the interactions 
between our quality programs to the greatest extent feasible.
(e). Effects on the Medicare Program
    For PY 2025, we estimate that the ESRD QIP would contribute 
approximately $17,104,030.59 in Medicare savings. For comparison, Table 
17 shows the payment reductions that we estimate will be applied by the 
ESRD QIP from PY 2018 through PY 2025. This includes our finalized PY 
2022 scoring and payment proposals as described in section IV.D. of 
this final rule.

[[Page 62011]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.017

(f). Effects on Medicare Beneficiaries
---------------------------------------------------------------------------

    \279\ As discussed in section IV.D of this final rule, we are 
finalizing our proposed special scoring methodology and payment 
policy for PY 2022. Under this policy, we will not apply any payment 
reductions to ESRD facilities for PY 2022.
---------------------------------------------------------------------------

    The ESRD QIP is applicable to dialysis facilities. Since the 
Program's inception, there is evidence on improved performance on ESRD 
QIP measures. As we stated in the CY 2018 ESRD PPS final rule, one 
objective measure we can examine to demonstrate the improved quality of 
care over time is the improvement of performance standards (82 FR 
50795). As the ESRD QIP has refined its measure set and as facilities 
have gained experience with the measures included in the Program, 
performance standards have generally continued to rise. We view this as 
evidence that facility performance (and therefore the quality of care 
provided to Medicare beneficiaries) is objectively improving. We are in 
the process of monitoring and evaluating trends in the quality and cost 
of care for patients under the ESRD QIP, incorporating both existing 
measures and new measures as they are implemented in the Program. We 
will provide additional information about the impact of the ESRD QIP on 
beneficiaries as we learn more. However, in future years we are 
interested in examining these impacts through the analysis of available 
data from our existing measures.
(g). Alternatives Considered
    In section IV.D. of this final rule, we are finalizing a special 
rule to modify the scoring methodology such that no facility will 
receive a payment reduction for PY 2022. Under this special rule for PY 
2022, we will calculate measure rates for all measures for that payment 
year, but will not use those measure rates to generate an achievement 
or improvement score, domain scores, or a TPS. We considered retaining 
our current scoring policy for PY 2022. However, we concluded that this 
was not feasible because of the EQRS system issues described in section 
IV.B.2., and additionally, due to the impact of the COVID-19 PHE on 
some of the PY 2022 ESRD QIP measures, as described more fully in 
section IV.C. of this final rule. This approach will help to ensure 
that a facility would not be penalized due to extraordinary 
circumstances beyond the facility's control.
d. ETC Model
(1). Overview
    Under the ESRD PPS under Medicare Part B, a single per-treatment 
payment is made to an ESRD facility for all of the renal dialysis 
services defined in section 1881(b)(14)(B) of the Act and furnished to 
individuals for the treatment of ESRD in the ESRD facility or in a 
patient's home. Under the Physician Fee Schedule, medical management of 
an ESRD beneficiary receiving dialysis by a physician or other 
practitioner is paid through the MCP. The ETC Model is a mandatory 
payment model designed to test payment adjustments to certain dialysis 
and dialysis-related payments, as discussed in the Specialty Care 
Models final rule (85 FR 6114), for ESRD facilities and for Managing 
Clinicians for claims with dates of service from January 1, 2021 to 
June 30, 2027. The requirements for the ETC Model are set forth in 42 
CFR part 512, subpart C. The changes in this final rule (discussed in 
detail in section V.B of this final rule) will impact model payment 
adjustments for PPA Period 3, starting in July 1, 2023.
    Under the current ETC Model, there are two payment adjustments 
designed to increase rates of home dialysis and kidney transplant 
waitlisting through financial incentives. The HDPA is an upward payment 
adjustment on certain home dialysis claims for ESRD facilities, as 
described in the final rule in Sec. Sec.  512.340 and 512.350, and to 
certain home dialysis-related claims for Managing Clinicians, as 
described in the final rule in Sec. Sec.  512.345 and 512.350, during 
the initial 3 years of the ETC Model.
    The PPA is an upward or downward payment adjustment on certain 
dialysis and dialysis-related claims submitted by ETC Participants, as 
described in the final rule in Sec. Sec.  512.375(a) and 512.380 for 
ESRD facilities and Sec. Sec.  512.375(b) and 512.380 for Managing 
Clinicians, which will apply to claims with claim service dates 
beginning on July 1, 2022 and increase in magnitude over the duration 
of the Model. We will assess each ETC Participant's home dialysis rate, 
as described in the final rule in Sec.  512.365(b), and ETC transplant 
waitlist rate, as described in Sec.  512.365(c), for each Measurement 
Year (MY). The ETC Participant's transplant waitlist rate, will be 
aggregated, as described in Sec.  512.365(e), and the ETC Participant's 
home dialysis rate will be aggregated, as described in Sec.  
512.365(e). The ETC Participant will receive a Modality Performance 
Score (MPS) based on the weighted sum of the higher of the ETC 
Participant's achievement score or improvement score for the home 
dialysis rate and the higher of the ETC Participant's achievement score 
or improvement score for the transplant waitlist rate, as described in 
Sec.  512.370(d).
    For MY1 and MY2 (January 1, 2021 through July 6, 2022), the 
achievement scores will be calculated in relation to a set of 
benchmarks based on the historical rates of home dialysis and inclusion 
on the transplant waitlist among ESRD facilities and Managing 
Clinicians located in Comparison Geographic Areas. The improvement 
scores will be calculated in relation to a set of benchmarks based on 
the ETC Participant's own historical performance. The ETC Participant's 
MPS for a MY will determine the magnitude of its PPA during the 
corresponding 6-month PPA Period, which will begin 6 months after the 
end of the MY. An ETC Participant's MPS will be updated on a rolling 
basis every 6 months.
    As mentioned in section IV.C.2.b(1) of the Specialty Care Models 
final rule (85 FR 61351), the intention was to increase achievement 
benchmarks over time through subsequent notice and

[[Page 62012]]

comment rulemaking. In the CY 2022 ESRD PPS proposed rule, the changes 
listed with bullets were proposed for MY3 (beginning January 1, 2022) 
through the final MY of ETC Model (MY10).
     Include nocturnal in-center dialysis in the home dialysis 
rate calculation for Managing Clinicians and ESRD facilities not owned 
in whole or in part by an ETC LDO.
     Modify the PPA achievement benchmarking methodology:
    ++Stratify the home dialysis and transplant rate benchmark by the 
proportion of beneficiaries who are dual-eligible for Medicare and 
Medicaid, or, receive the Low-Income Subsidy (LIS), resulting in two 
strata.
    ++Increase the home dialysis and transplant rate benchmarks by 10 
percent for each MY couplet (that is, 1.10 for MY3 and MY4, 1.20 for 
MY5 and MY6, 1.30 for MY7 and MY8, and 1.40 for MY9 and MY10).
     Modify the PPA improvement benchmarking methodology:
    ++Health Equity Incentive: Participants can earn 0.5 improvement 
points in addition to their improvement score for a 5 percentage point 
increase in the home dialysis rate or transplant rate among dual 
eligible or LIS recipient beneficiaries.
    ++Modify improvement calculation to ensure that the Benchmark Year 
rate cannot be zero, such that improvement is calculable for all 
participants.
    In this final rule, we finalized all of the changes proposed in the 
CY 2022 ESRD PPS proposed rule, with certain modifications. The two 
such modifications most likely to affect the impact estimate for the 
ETC Model are:
     Modify the home dialysis rate calculation by including 
nocturnal dialysis in the numerator of the home dialysis rate 
calculation for all ESRD facilities, rather than only those ESRD 
facilities not owned in whole or in part by an ETC LDO.
     Modify the methodology for the Health Equity Incentive by 
reducing the threshold to earn the additional 0.5 improvement points 
from a 5-percentage point increase to a 2.5-percentage point increase 
from the Benchmark Year to the MY.
    More detail on these changes are provided in sections V.B.3.c and 
V.B.6.c.(2) of this final rule. The ETC Model is not a total cost of 
care model. ETC Participants will still bill FFS Medicare, and items 
and services not subject to the ETC Model's payment adjustments will 
continue to be paid as they will in the absence of the Model.
(2). Data and Methods
    A stochastic simulation was created to estimate the financial 
impacts of the changes to the ETC Model relative to baseline 
expenditures, where baseline expenditures were defined as data from CYs 
2018 and 2019 without the changes applied. The simulation relied upon 
statistical assumptions derived from retrospectively constructed ESRD 
facilities' and Managing Clinicians' Medicare dialysis claims, 
transplant claims, and transplant waitlist data reported during 2018 
and 2019, the most recent years with complete data available. Both 
datasets and the risk-adjustment methodologies for the ETC Model were 
developed by the CMS Office of the Actuary (OACT).
    The ESRD facilities and Managing Clinicians datasets were 
restricted to the following eligibility criteria. Beneficiaries must be 
residing in the United States, 18 years of age or older, and enrolled 
in Medicare Part B. Beneficiaries enrolled in Medicare Advantage or 
other cost or Medicare managed care plans, who have elected hospice, 
are receiving dialysis for acute kidney injury (AKI) only, with a 
diagnosis of dementia, who are receiving dialysis in a nursing 
facility, or reside in a skilled nursing facility were excluded. In 
addition, beneficiaries who have a diagnosis of and are receiving 
treatment with chemotherapy or radiation for a vital solid organ cancer 
were excluded from the transplant rate calculations. Diagnosis of a 
vital solid organ cancer was defined as a beneficiary that had a claim 
with any of 39 ICD-10-CM codes ranging from C22.0 through C79.02. 
Treatment of a vital solid organ cancer was defined as a beneficiary 
with a claim with any of 2,087 radiation administration ICD-10-PCS 
codes, 19 chemotherapy administration CPT codes, or 41 radiation 
administration CPT codes. Last, the HRR was matched to the claim 
service facility ZIP Code\TM\ or the rendering physician ZIP Code for 
ESRD facility and Managing Clinician, respectively.\280\
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    \280\ ZIP Code is a trademark owned by the United States Postal 
Service.
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    For the modeling exercise used to estimate changes in payment to 
providers and suppliers and the resulting savings to Medicare, OACT 
maintained the previous method to identify ESRD facilities with common 
ownership, the low-volume exclusion threshold, and the aggregation 
assumptions as CMS is not making changes to these model policies. To 
clarify OACT's methodology, the ESRD facilities' data were aggregated 
to the CMS Certification Number (CCN) level for beneficiaries on 
dialysis identified by outpatient claims with Type of Bill 072X to 
capture all dialysis services furnished at or through ESRD facilities. 
Beneficiaries receiving home dialysis services were defined as 
condition codes 74 and 76 (Sec.  512.340). Condition code 75 was 
removed from the home dialysis definition because that billing code is 
no longer in use. Condition code 80 was removed because we want to 
exclude beneficiaries who received home dialysis furnished in a SNF or 
nursing facility. Beneficiaries receiving in-center dialysis services 
were defined using condition code 71. Two new variables were created: 
In-center self-dialysis, condition code 72 (Sec.  512.365) and in-
center nocturnal dialysis, based on any of the claims' lines 1-5 HCPCS 
codes equal to the ``UJ'' modifier. Self-care in training and ESRD 
self-care retraining, condition codes 73 and 87, respectively, were 
only included in the denominator for the home dialysis rate 
calculation. For consistency with the exclusion in Sec.  512.385(a), 
after grouping within each HRR, aggregated ESRD facilities with less 
than 132 total attributed beneficiary months during a given MY were 
excluded. When constructing benchmarks, for consistency with the 
methodology for aggregating performance for purposes of the PPA 
calculation, we aggregated all ESRD facilities owned in whole or in 
part by the same dialysis organization located in the same HRR.
    The Managing Clinicians' performance data were aggregated to the 
Tax Identification Number (TIN) level (for group practices) and the 
individual National Provider Identifier (NPI) level (for solo 
practitioners). For purposes of calculating the home dialysis rate, 
beneficiaries on home dialysis were identified using outpatient claims 
with CPT[supreg] codes 90965 and 90966 (Sec.  512.345). Beneficiaries 
receiving in-center dialysis were identified by outpatient claims with 
CPT[supreg] codes 90957, 90958, 90959, 90960, 90961, and 90962 (Sec.  
512.360). Last, following the low-volume threshold described in Sec.  
512.385(b), after grouping within each HRR, Managing Clinicians with 
less than 132 total attributed beneficiary months during a given MY 
were excluded.
    The Scientific Registry of Transplant Recipients (SRTR) transplant 
waitlist data were obtained from the Center for Clinical Standards and 
Quality (CCSQ). To construct the transplant waitlist rate, the 
numerator was based on per-patient counts and included every addition 
to the waitlist for a patient in any past year. The waitlist counts for 
the

[[Page 62013]]

numerator included waitlists for kidney transplants, alone or with 
another organ, active and inactive records, multi-organ listings, and 
patients that have subsequently been removed from the waitlist. The 
denominator was a unique count of prevalent dialysis patients as of the 
end of the year. Only patients on dialysis as of December 31st for the 
selected year were included. Facility attribution was based on the 
facility the patient was admitted to on the last day of the year.
    For MY1 and MY2, the home dialysis score and transplant score for 
the PPA were calculated using the following methodology for the ESRD 
facilities and Managing Clinicians. ETC Participant behavior for each 
year was simulated by adjusting the ETC Participant's baseline home 
dialysis (or transplant) rate for a simulated statistical fluctuation 
and then summing with the assumed increase in home dialysis (or 
transplant) rate multiplied by a randomly generated improvement scalar. 
The achievement and improvement scores were assigned by comparing the 
ETC Participant's simulated home dialysis (or transplant) rate for the 
MY to the percentile distribution of home dialysis (or transplant) 
rates in the prior year. Last, the MPS was calculated using the 
weighted sum of the higher of the achievement or improvement score for 
the home dialysis rate and the transplant waitlist rate. The home 
dialysis rate constituted two-thirds of the MPS, and the transplant 
rate one-third of the MPS.
    For MY3 through MY10, the home dialysis rate calculation accounts 
for modifications in this final rule compared to the CY 2022 ESRD PPS 
proposed rule. The revisions include changing the numerator for the 
home dialysis rate from the home dialysis beneficiary months to the 
home dialysis beneficiary months + 0.5 (in-center self-dialysis 
beneficiary months) + 0.5* (nocturnal in-center dialysis beneficiary 
months), such that 1-beneficiary year is comprised of 12-beneficiary 
months for all ETC Participants.
    The number of beneficiaries on in-center self-dialysis who met the 
eligibility criteria for the ETC Model was very small, ranging from 102 
to 277 over the period 2012-2019 and decreasing 89.9 percent to 22 
beneficiaries in 2020 (based on preliminary 2020 data at CMS). With 
such a small sample size, the growth rate vacillated significantly. In 
addition, the in-center nocturnal dialysis UJ modifier code did not 
become effective until January 1, 2017; therefore, there were 
insufficient data to generate growth rate assumptions. The in-center 
nocturnal dialysis beneficiary growth rate decreased by 91.3 percent in 
2020. As a solution to these data limitations, to simulate the impact 
of incorporating in-center self-dialysis and in-center nocturnal 
dialysis for the purpose of the savings to Medicare estimate, the 
simulation assumed any given ESRD facility or Managing Clinician will 
have a one percent chance of receiving an increased achievement score 
due to this policy.
    The overall process for generating achievement and improvement 
scoring followed modeling from section VI.C.2 of the Specialty Care 
Models final rule (85 FR 61352), with the exception of the following 
changes proposed in the CY 2022 ESRD PPS proposed rule, which we are 
finalizing in this final rule.
    Beginning for MY3 and beyond, the achievement benchmarking 
methodology included two modifications. First, the home dialysis rate 
and transplant waitlist rate benchmarks were increased by a total of 10 
percent relative to ESRD facilities and Managing Clinicians not 
selected for participation, every two MYs. To clarify, no changes to 
the achievement benchmarking methodology were made to MYs 1 and 2. The 
latter MY couplets' achievement benchmarking included the following 
preset benchmark updates:
     MYs 3 and 4: Comparison Geographic Area percentiles*1.10,
     MYs 5 and 6: Comparison Geographic Area percentiles*1.20,
     MYs 7 and 8: Comparison Geographic Area percentiles*1.30, 
and
     MYs 9 and 10: Comparison Geographic Area percentiles*1.40.
    The percentiles represented the 30th, 50th, 75th, and 90th 
percentile of the home dialysis rate and transplant rate for ESRD 
facilities and Managing Clinicians not selected for participation. The 
preset benchmark updates method provides greater certainty to ETC 
Participants than the rolling updates described in section IV.C.2.b(3) 
of the Specialty Care Models final rule (85 FR 61353).
    Second, we incorporated two proxies for socioeconomic status, dual 
eligibility status or receipt of the Low Income Subsidy (LIS), as part 
of the achievement benchmarking starting for MY3 and beyond. Dual 
eligibility status was defined as a Medicare beneficiary with any of 
the following full-time dual type codes: 02 = Eligible is entitled to 
Medicare Qualified Medicare Beneficiary (QMB) and Medicaid coverage 
including prescription drugs, 04 = Eligible is entitled to Medicare 
Specified Low-Income Medicare Beneficiary (SLMB) and Medicaid coverage 
including prescription drugs, or 08 = Eligible is entitled to Medicare 
Other dual eligible with Medicaid coverage including prescription 
drugs. Separately, a yes/no indicator was created for any beneficiary 
that was either deemed or determined by the Social Security 
Administration (SSA) to be receiving the LIS. The home dialysis rate 
and transplant waitlist rate achievement benchmarks were then 
stratified by the proportion of attributed beneficiaries who are dual-
eligible or receive the LIS. Two strata were created with a cutpoint of 
approximately 50 percent for participants with any dual-eligible or LIS 
recipient beneficiaries and those who do not have beneficiaries meeting 
these two socioeconomic status proxies.
    Third, a Health Equity Incentive was added to improvement scoring 
starting in MY3. For the purpose of the estimates in this Regulatory 
Impact Analysis, we incorporated a random variable to simulate each ETC 
Participant's baseline variation and behavioral improvement for each 
MY. If the participant's simulated improvement behavior in MY3 through 
MY10 was greater than 2.5 percent, then the participant received a 0.5-
point increase on their improvement score, allowing for a maximum of 
2.0 total points. The threshold for receiving the Health Equity 
Incentive was reduced from the 5-percentage point threshold proposed in 
the CY 2022 ESRD PPS proposed rule to a 2.5-percentage point threshold 
in this final rule.
    For all MYs, the transplant waitlist benchmarks were annually 
inflated by approximately 3-percentage points growth. This was a 
modification from section VI.C.2 of the Specialty Care Models final 
rule (85 FR 61352), where the waitlist benchmarks were annually 
inflated by approximately 2-percentage points growth observed during 
years 2017 through 2019 in the CCSQ data, to project rates of growth. 
The additional 1 percentage point growth in this final rule was 
included to account for uncertainty from the COVID-19 PHE disruption 
and section 17006 of the 21st Century Cures Act (Cures Act) (Pub. L. 
114-255), which amended the Act to increase enrollment options for 
individuals with ESRD into Medicare Advantage. To clarify, applying the 
3-percentage point annual growth from the median transplant waitlist 
rate across HRR condensed facilities grew from 8 percent in 2017 to 11 
percent in 2018 to 14 percent in 2019 (that is, not a growth rate of 
1.03 percent per year).
    To assess the impact of the COVID-19 PHE on the kidney transplant 
waitlist, we analyzed data from the

[[Page 62014]]

United Network for Organ Sharing (UNOS).\281\ The UNOS data suggest 
that the number of new patients added to the kidney transplant waitlist 
steadily decreased between the weeks of March 15, 2020 through May 10, 
2020, when between 16 to 81 percent of patients listed on the weekly 
kidney transplant waitlist became inactive due to COVID-19 precautions. 
During July through December 2020, the number of new patients added to 
the kidney transplant waitlist increased to near pre-pandemic levels 
with an average of less than 3 percent of patients listed as inactive 
due to COVID-19. Anomalous dips in the number of new patients added to 
the kidney transplant waitlist were observed during the weeks of 
November 22, 2020 and December 27, 2020, which correspond with Federal 
holidays in addition to a period that Americans were asked to social 
distance to slow the spread of COVID-19. Continuing into the first 
quarter of 2021, new additions to the kidney transplant waitlist 
remained at approximately pre-pandemic rates. Therefore, we assume that 
the number of new patients added to the waitlist will not decrease as a 
result of the pandemic and the linear 2-percentage point growth rate 
for the transplant waitlist calculated using years 2017 through 2019 
CCSQ data remains a reasonable assumption for baseline growth going 
forward. In the final rule, we also included a 1 percent increase to 
the standard error to account for a new variation assumption to address 
how year-over-year changes could fluctuate at the ESRD facility or 
Managing Clinician level, which was potentially exacerbated by the 
exclusion criteria (that is, residents of a nursing facility, receiving 
dialysis in a skilled nursing facility, dialysis for AKI only) applied 
to the updated model data source used for estimates in this final rule.
---------------------------------------------------------------------------

    \281\ UNOS. 2021. COVID-19 and Solid Organ Transplants. 
Transplant and Waitlist Data Visualizations. https://unos.org/covid/.
---------------------------------------------------------------------------

    No changes were made to the payment structure for the HDPA 
calculation in the final rule (Sec.  512.350). As such, the HDPA was 
calculated using the home dialysis and home dialysis-related payments 
adjusted by decreasing amounts (3, 2, and 1 percent) during each of the 
first 3 years of the Model.
    The kidney disease patient education services utilization and cost 
data were identified by HCPCS codes G0420 and G0421, to capture face-
to-face individual and group training sessions for chronic kidney 
disease beneficiaries on treatment modalities. The home dialysis 
training costs for incident beneficiaries on home dialysis for 
Continuous Ambulatory Peritoneal Dialysis (CAPD) or Continuous Cycler-
Assisted Peritoneal Dialysis (CCPD) were defined using CPT[supreg] 
codes 90989 and 90993 for complete and incomplete training sessions, 
respectively.
    Data from CY 2019 were used to project baseline expenditures (that 
is, expenditures before the proposed changes were applied) and the 
traditional FFS payment system billing patterns were assumed to 
continue under current law.
(3). Medicare Estimate--Primary Specification, Assume Preset Benchmark 
Updates
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[[Page 62015]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.018

[GRAPHIC] [TIFF OMITTED] TR08NO21.019

BILLING CODE 4120-01-C
    Table 18 summarizes the estimated impact of the ETC Model when 
assuming preset benchmark updates where the achievement benchmarks for 
each year are set using the average of the home dialysis rates for year 
t-1 and year t-2 for the HRRs randomly selected for participation in 
the ETC Model. We estimate the Medicare program will save a net total 
of $43 million from the PPA and HDPA between January 1, 2021 and June 
30, 2027, less $15 million in increased training and education 
expenditures. Therefore, the net impact to Medicare spending is 
estimated to be $28 million in savings. In Table 18 and Table 19, 
negative spending reflects a reduction in Medicare spending, while 
positive spending reflects an increase. The results for both tables 
were generated from an average of 400 simulations under the assumption 
that benchmarks are rolled forward with a 1.5-year lag.
    Table 19 is provided to isolate the total impact of the changes in 
this final rule for years 2023 going forward by calculating the 
difference from our final estimates in Table 18 less totals from the

[[Page 62016]]

estimates reported in Table 18 of the CY 2022 ESRD PPS proposed rule 
(86 FR 36425) that used the same years of data, but without the changes 
from the CY 2022 ESRD PPS proposed rule to this final rule. To clarify, 
the CY 2022 ESRD PPS proposed rule estimates are not the estimates 
reported in Table 19 of the Specialty Care Models final rule (85 FR 
61354); the final rule used data from CYs 2016 and 2017 and this final 
rule used the most recent data available, from CYs 2018 and 2019. There 
was no impact reported in years 2021 and 2022 since the payment 
adjustments were not effective until MY3. In addition, the changes did 
not apply to the HDPA or the Kidney Disease Patient Education Services 
Costs and HD Training Costs. As expected, Table 19 shows that the 
changes had a small effect on Medicare savings; a reduction of $10 
million in savings for the net impact to Medicare spending over the 
4.5-year period can be attributed to the changes in this final rule 
from the CY 2022 ESRD PPS proposed rule.
    As was the case in the Specialty Care Models final rule (85 FR 
61353), the projections do not include the Part B premium revenue 
offset because the payment adjustments under the ETC Model will not 
affect beneficiary cost-sharing. Any potential effects on Medicare 
Advantage capitation payments were also excluded from the projections. 
This approach is consistent with how CMS has previously conveyed the 
primary FFS effects anticipated for an uncertain model without also 
assessing the potential impact on Medicare Advantage rates.
    Returning to Table 18, as anticipated, the expected Medicare 
program savings were driven by the net effect of the Facility PPA; a 
reduction in Medicare spending of $65 million over the period from July 
1, 2022 through June 30, 2027. In comparison, the net effect of the 
Clinician PPA was only $8 million in Medicare savings. This estimate 
was based on an empirical study of historical home dialysis utilization 
and transplant waitlist rates for Medicare FFS beneficiaries that CMS 
virtually attributed to ESRD facilities and to Managing Clinicians 
based on the plurality of associated spending at the beneficiary level. 
We analyzed the base variation in those facility/practice level 
measures and simulated the effect of the payment policy assuming 
providers and suppliers respond by marginally increasing their share of 
patients utilizing home dialysis. Random variables were used to vary 
the effectiveness that individual providers and suppliers might show in 
such progression over time and to simulate the level of year-to-year 
variation already noted in the base multi-year data that was analyzed. 
The uncertainty in the projection was illustrated in sections 
VII.C.2.b.(3)(a) and VII.C.2.b.(3)(b) of the Specialty Care Models 
final rule (85 FR 61354), respectively, through alternate scenarios 
assuming that the benchmarks against which ETC Participants are 
measured were to not be updated. In those sensitivity analyses, we 
analyzed a modified version of the model that included a fixed 
benchmark for the home dialysis and transplant waitlist rates as well 
as a separate sensitivity analysis that assumed a rolling benchmark for 
the home dialysis rate and a fixed benchmark for the transplant 
waitlist rate.
    For this final rule, we are continuing with the approach applied in 
the CY 2022 ESRD PPS proposed rule by modeling a preset benchmark 
growth rate in this rule but continue to incorporate sensitivity to a 
range of potential behavioral changes for the home dialysis rate and 
transplant waitlist rate for ETC facilities and Managing Clinicians 
assumed to participate in the model. Kidney disease patient education 
services on treatment modalities and home dialysis (HD) training for 
incident dialysis beneficiaries are relatively small outlays and were 
projected to represent only relatively modest increases in Medicare 
spending each year.
    The key assumptions underlying the impact estimate are that each 
aggregation group's share of total maintenance dialysis provided in the 
home setting was assumed to grow by up to an assumed maximum growth 
averaging 3-percentage points per year. Factors underlying this 
assumption about the home dialysis growth rate include: known 
limitations that may prevent patients from being able to dialyze at 
home, such as certain common disease types that make peritoneal 
dialysis impractical (for example, obesity); current equipment and 
staffing constraints; and the likelihood that a patient new to 
maintenance dialysis starts dialysis at home compared to the likelihood 
that a current dialysis patient who dialyzes in center switches to 
dialysis at home. In any given trial of the simulation, the maximum 
growth rate was chosen from a uniform distribution of 0 to 5-percentage 
points per year. Preliminary data from CMS show that the growth rate 
for home dialysis was 3.9 percent in CY 2020 for beneficiaries meeting 
the eligibility criteria for the ETC Model. This growth rate is within 
range to what was observed prior to the establishment of the Advancing 
American Kidney Health initiative in 2019 and it also shows that the 
COVID-19 PHE did not cause the home dialysis growth assumption to 
become invalid. The 3-percentage point per year average max growth rate 
will, in effect, move the average market peritoneal dialysis rate 
(about 10 percent) to the highest market baseline peritoneal dialysis 
rate (for example, Bend, Oregon HRR at about 25 percent), which we 
believe is a reasonable upper bound on growth over the duration of the 
ETC Model for the purposes of this actuarial model.
    Aggregation groups were assumed to achieve anywhere from zero to 
100 percent of such maximum growth in any given year. Thus, the average 
projected growth for the share of maintenance dialysis provided in the 
home was 1.5-percentage points per year (expressed as the percentage of 
total dialysis). In contrast, we do not include an official assumption 
that the overall number of kidney transplants will increase and provide 
justification for this assumption in sections VI.C.2.b.(4) and 
VI.C.2.b.(5) of the Specialty Care Models final rule (85 FR 61355). 
However, as part of the sensitivity analysis for the savings 
calculations for the model, we laid out a different savings scenario if 
the ETC Learning Collaborative described in VI.C.2.b.(6) of the 
Specialty Care Models final rule (85 FR 61355) were to be successful in 
decreasing the discard rate of deceased donor kidneys and increasing 
the utilization rate of deceased donor kidneys that have been 
retrieved.
(4). Sensitivity Analysis: Medicare Savings Estimate--Results for the 
10th and 90th Percentiles
    Using the primary specification for the Medicare estimate with 
preset benchmark updates for home dialysis and transplant waitlist 
rates, we compared the results for the top 10th and 90th percentiles of 
the 400 individual simulations to the average of all simulation results 
reported in Table 18. Since the impact on Medicare spending for the ETC 
Model using the present benchmark updates is estimated to be in savings 
rather than losses, the top 10th and 90th percentiles represent the 
most optimistic and conservative projections, respectively. The overall 
net PPA and HDPA for the top 10th and 90th percentiles using the 
present benchmark updates method are $102 million in savings and $9 
million in losses (encompassing the mean estimate of $43 million in 
savings in Table 18). The overall uncertainty of the impact of the 
model is further illustrated in Table 19, the change from the CY 2022 
ESRD

[[Page 62017]]

PPS proposed rule, where the mean $10 million dollars in savings 
reported for the Overall PPA Net & HDPA has $64 million in savings and 
$97 million in losses, for the top 10th and 90th percentiles, 
respectively.
(5). Effects on the Home Dialysis Rate
    The two changes in this final rule have the potential to increase 
ETC Participants' home dialysis rate, therefore reducing the overall 
savings to Medicare estimate. First, this final rule modifies the home 
dialysis rate equation by adding 0.5 multiplied by the sum of the self-
dialysis beneficiary months and the in-center nocturnal dialysis 
beneficiary months to the numerator such that 1-beneficiary year is 
comprised of 12-beneficiary months for Managing Clinicians and all ESRD 
facilities, regardless of ownership.
    However, less than 1 percent of beneficiaries eligible for 
attribution into the ETC Model were receiving either self-dialysis or 
nocturnal in-center dialysis in CY 2019. In addition, in CY 2020, the 
annual growth rate decreased by 89.9 and 91.3 percent for beneficiaries 
receiving self-dialysis or in-center nocturnal dialysis, respectively. 
The sharp decline in these dialysis modalities is potentially in 
response to the COVID-19 pandemic. The low historical take-up for self-
dialysis and shortage of historical years for in-center nocturnal 
dialysis (that is, a nocturnal dialysis claims line instruction became 
effective in 2017) result in these modifications having an 
insignificant impact on the savings to Medicare.
    The second change in this final rule that has the potential to 
generate higher PPA scores for a limited subset of providers and 
therefore a small negative impact on estimated savings for the Model is 
the Health Equity Incentive. The Health Equity Incentive proposed in 
the CY 2022 ESRD PPS proposed rule (86 FR 36427) would have rewarded 
ETC Participants with an additional 0.5 points to their improvement 
score who improved the home dialysis rate (or transplant rate) among 
their attributed beneficiaries who are dual eligible or receive the LIS 
by at least 5 percentage points between the Benchmark Year to the MY. 
In this final rule, the threshold to earn the 0.5 improvement points 
was reduced to a 2.5-percentage point increase from the Benchmark Year 
to the MY. The $10 million decrease in the savings to Medicare estimate 
in this final rule relative to the CY 2022 ESRD PPS proposed rule was 
primarily due to the change in the Health Equity Incentive threshold.
(6). Effects on Kidney Transplantation
    Kidney transplantation is considered the optimal treatment for most 
ESRD beneficiaries. The PPA includes a one-third weight on the ESRD 
facilities' or Managing Clinician's transplant waitlist rate, with the 
ultimate goal of increasing the rate of kidney transplantation. 
However, the changes in this final rule do not impact our decision in 
the CY 2022 ESRD PPS proposed rule or the Specialty Care Models final 
rule to not include an assumption that the overall number of kidney 
transplants will increase. The number of ESRD patients on the kidney 
transplant waitlist has for many years far exceeded the annual number 
of transplants performed. Transplantation rates have not increased to 
meet such demand because of the limited supply of deceased donor 
kidneys. The U.S. Renal Data System \282\ reported 22,393 kidney 
transplants in 2018 compared to a kidney transplant waiting list \283\ 
of over 98,000. Refer to section VI.C.2.b(4) in the Specialty Care 
Models final rule (85 FR 61355) for a detailed justification for our 
assumption that the overall number of kidney transplants will not 
increase in response to ESRD facilities and Managing Clinicians 
participating in the ETC Model.
---------------------------------------------------------------------------

    \282\ United States Renal Data System. 2020. ``ADR Reference 
Table E6 Renal Transplants by Donor Type.'' https://adr.usrds.org/2020/reference-tables.
    \283\ Organ Procurement and Transplantation Network. 2021. 
``Current US Waiting List, Overall by Organ.'' https://optn.transplant.hrsa.gov/data/view-data-reports/national-data/#.
---------------------------------------------------------------------------

(7). Effects of the Transplant Rate
    The ETC Model continues to include the transplant rate described in 
the Specialty Care Models final rule (Sec.  512.365).
    The change in this final rule that has the potential to generate 
higher scores for a limited subset of ETC Participants and therefore a 
small reduction in the estimated savings for the Model relative to the 
CY 2022 ESRD PPS proposed rule is the modification to the Health Equity 
Incentive threshold. By lowering the threshold for earning the Health 
Equity Incentive threshold in this final rule relative to the threshold 
proposed in the CY 2022 ESRD PPS proposed rule, more ETC Participants 
have the potential to earn the additional 0.5 points to their 
improvement score.
(8). Effects on Kidney Disease Patient Education Services and HD 
Training Add-Ons
    The changes to the ETC Model finalized in this final rule relative 
to the Specialty Care Models final rule do not impact the findings 
reported for the effects of the ETC Model on the Kidney Disease Patient 
education services and HD training add-ons described in section 
VI.C.2.b(6) in the Specialty Care Models final rule (85 FR 61356-57).
(9). Effects on Medicare Beneficiaries
    The changes in this final rule relative to the CY 2022 ESRD PPS 
proposed rule could incentivize ESRD facilities and Managing Clinicians 
serving dual eligible or LIS recipient Medicare beneficiaries to 
potentially improve access to care for those beneficiaries. The final 
rule's changes could also marginally improve uptake of the in-center 
nocturnal dialysis treatment modality since this dialysis method was 
not directly incentivized (that is, accounted for in the home dialysis 
rate for all ESRD facilities) under the ETC Model. The changes made to 
the final rule may have marginally increased uptake of in-center 
nocturnal dialysis for ESRD facilities owned in whole or in part by an 
ETC LDO relative to the CY 2022 ESRD PPS proposed rule, which had 
proposed to exclude ESRD facilities owned in whole or in part by an ETC 
LDO from the in-center nocturnal dialysis policy.
    As noted in section VI.C.3.B of the Specialty Care Models final 
rule (85 FR 61357), we continue to anticipate that the ETC Model will 
have a negligible impact on the cost to beneficiaries receiving 
dialysis. Under current policy, Medicare FFS beneficiaries are 
generally responsible for 20 percent of the allowed charge for services 
furnished by providers and suppliers. This policy will remain the same 
for most beneficiaries under the ETC Model. However, we will waive 
certain requirements of title XVIII of the Act as necessary to test the 
PPA and HDPA under the ETC Model and to hold beneficiaries harmless 
from any effect of these payment adjustments on cost sharing. In 
addition, the Medicare beneficiary's quality of life has the potential 
to improve if the beneficiary elects to have home dialysis, or 
nocturnal in-center dialysis, as opposed to in-center dialysis. Studies 
have found that home dialysis patients experienced improved quality of 
life as a result of their ability to continue regular work schedules or 
life plans;[thinsp]as well as better overall, physical, and 
psychological health in comparison to other dialysis options.
(10). Alternatives Considered
    Throughout this final rule, we have identified our policies and 
alternatives that we have considered, and provided information as to 
the likely effects of

[[Page 62018]]

these alternatives and the rationale for each of our policies.
    This final rule addresses a model specific to ESRD. It provides 
descriptions of the requirements that we will waive, identifies the 
performance metrics and payment adjustments to be tested, and presents 
rationales for our changes, and where relevant, alternatives that we 
considered. We carefully considered the alternatives to this final 
rule, including the degree that benchmark targets should be 
prospectively updated to provide greater transparency to ETC 
Participants while preserving the expectation for model net savings for 
the program. For context related to alternatives previously considered 
when establishing the ETC Model we refer readers to the Specialty Cares 
Models final rule (85 FR 61114) for more information on policy-related 
stakeholder comments, our responses to those comments, and statements 
of final policy preceding the limited modifications proposed here.

D. Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in Table 20, we have prepared an accounting statement showing 
the classification of the transfers and costs associated with the 
various provisions of this final rule.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR08NO21.020

BILLING CODE 4120-01-C
    In accordance with the provisions of Executive Order 12866, this 
final rule was reviewed by the Office of Management and Budget.

E. Regulatory Flexibility Act Analysis (RFA)

    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
options for regulatory relief of small entities, if a rule has a 
significant impact on a substantial number of small entities. For 
purposes of the RFA, small entities include small businesses, nonprofit 
organizations, and small governmental jurisdictions. Approximately 11 
percent of ESRD dialysis facilities are considered small entities 
according to the Small Business Administration's (SBA) size standards, 
which classifies small businesses as those dialysis facilities having 
total revenues of less than $41.5 million in any 1 year. Individuals 
and states are not included in the definitions of a small entity. For 
more information on SBA's size standards, see the Small Business 
Administration's website at http://www.sba.gov/content/small-business-size-standards (Kidney Dialysis Centers are listed as 621492 with a 
size standard of $41.5 million).
    When viewed as individual entities, as opposed to being a part of a 
LDO, there are approximately 1,295 (~17 percent of total number of ESRD 
facilities) ESRD facilities that provide fewer than 4,000 treatments 
per year. With a low volume payment adjustment, each facility generates 
revenue from dialysis treatments of ~$1.26 million per year per 
facility. This is shown in the Table 21.
BILLING CODE 4120-01-C

[[Page 62019]]

[GRAPHIC] [TIFF OMITTED] TR08NO21.021

BILLING CODE 4120-01-C
    We do not believe ESRD facilities are operated by small government 
entities such as counties or towns with populations of 50,000 or less, 
and therefore, they are not enumerated or included in this estimated 
RFA analysis. Individuals and states are not included in the definition 
of a small entity.
    For purposes of the RFA, we estimate that approximately 11 percent 
of ESRD facilities are small entities as that term is used in the RFA 
(which includes small businesses, nonprofit organizations, and small 
governmental jurisdictions). This amount is based on the number of ESRD 
facilities shown in the ownership category in Table 9. Using the 
definitions in this ownership category, we consider 515 facilities that 
are independent and 378 facilities that are shown as hospital-based to 
be small entities. The ESRD facilities that are owned and operated by 
LDOs and regional chains would have total revenues of more than $41.5 
million in any year when the total revenues for all locations are 
combined for each business (LDO or regional chain), and are not, 
therefore, included as small entities.
    For the ESRD PPS updates proposed in this rule, a hospital-based 
ESRD facility (as defined by type of ownership, not by type of dialysis 
facility) is estimated to receive a 1.3 percent increase in payments 
for CY 2022. An independent facility (as defined by ownership type) is 
estimated to receive a 1.1 percent increase in payments for CY 2022.
    For AKI dialysis, we are unable to estimate whether patients would 
go to ESRD facilities, however, we have estimated there is a potential 
for $52 million in payment for AKI dialysis treatments that could 
potentially be furnished in ESRD facilities.
    For the ESRD QIP, we estimate that of the 1,788 ESRD facilities 
expected to receive a payment reduction as a result of their 
performance on the PY 2024 ESRD QIP, 331 are ESRD small entity 
facilities. We present these findings in Table 11 (``Estimated 
Distribution of PY 2024 ESRD QIP Payment Reductions'') and Table 13 
(``Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY 
2024'').
    For ETC Model, this final rule includes as ETC Participants 
Managing Clinicians and ESRD facilities required to participate in the 
Model pursuant to Sec.  512.325(a). We assume for the purposes of the 
regulatory impact analysis that the great majority of Managing 
Clinicians are small entities and that the greater majority of ESRD 
facilities are not small entities. Throughout the final rule we 
describe how the adjustments to certain payments for dialysis services 
and dialysis-related services furnished to ESRD beneficiaries may 
affect Managing Clinicians and ESRD facilities participating in the ETC 
Model. The great majority of Managing Clinicians are small entities by 
meeting the SBA definition of a small business (having minimum revenues 
of less than $8 million to $41.5 million in any 1 year, varying by type 
of provider and highest for hospitals) with a minimum threshold for 
small business size of $41.5 million (https://www.sba.gov/document/support--table-size-standards http://www.sba.gov/content/small-businesssize-standards). The great majority of ESRD facilities are not 
small entities, as they are owned, partially or entirely by entities 
that do not meet the SBA definition of small entities.
    The HDPA in the ETC Model is a positive adjustment on payments for 
specified home dialysis and home dialysis-related services. The PPA in 
the ETC Model, which includes both positive and negative adjustments on 
payments for dialysis services and dialysis-related services, excludes 
aggregation groups with fewer than 132 attributed beneficiary-months 
during the relevant year.
    The aggregation methodology groups ESRD facilities owned in whole 
or in part by the same dialysis organization within a Selected 
Geographic Area and Managing Clinicians billing under the same TIN 
within a Selected Geographic Area. This aggregation policy increases 
the number of beneficiary months, and thus statistical reliability, of 
the ETC Participant's home dialysis and transplant rate for ESRD 
facilities that are owned in whole or in part by the same dialysis 
organization and for Managing Clinicians that share a TIN with other 
Managing Clinicians.
    Taken together, the low volume threshold exclusions and aggregation 
policies previously described, coupled with the fact that the ETC Model 
will affect Medicare payment only for select services furnished to 
Medicare FFS beneficiaries; we have determined that the provisions of 
the final rule will not have a significant impact on spending for a 
substantial number of small entities (defined as greater than 5 percent 
impact).
    Therefore, the Secretary has determined that this final rule will 
not have a significant economic impact on a substantial number of small 
entities. The economic impact assessment is based on estimated Medicare 
payments (revenues) and HHS's practice in interpreting the RFA is to 
consider effects economically ``significant'' only if greater than 5 
percent of providers reach a threshold of 3 to 5 percent or more of 
total revenue or total costs.
    In addition, section 1102(b) of the Act requires us to prepare a 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is

[[Page 62020]]

located outside of a metropolitan statistical area and has fewer than 
100 beds. We do not believe this final rule will have a significant 
impact on operations of a substantial number of small rural hospitals 
because most dialysis facilities are freestanding. While there are 122 
rural hospital-based dialysis facilities, we do not know how many of 
them are based at hospitals with fewer than 100 beds. However, overall, 
the 122 rural hospital-based dialysis facilities will experience an 
estimated 1.0 percent increase in payments.
    Therefore, the Secretary has determined that this final rule will 
not have a significant impact on the operations of a substantial number 
of small rural hospitals.

F. Unfunded Mandates Reform Act Analysis (UMRA)

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2021, that 
threshold is approximately $158 million. This final rule does not 
mandate any requirements for State, local, or tribal governments in the 
aggregate, or by the private sector. Moreover, HHS interprets UMRA as 
applying only to unfunded mandates. We do not interpret Medicare 
payment rules as being unfunded mandates, but simply as conditions for 
the receipt of payments from the Federal Government for providing 
services that meet Federal standards. This interpretation applies 
whether the facilities or providers are private, State, local, or 
tribal.

G. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has federalism 
implications. We have reviewed this final rule under the threshold 
criteria of Executive Order 13132, Federalism, and have determined that 
it will not have substantial direct effects on the rights, roles, and 
responsibilities of states, local or Tribal governments.

H. Congressional Review Act

    This final rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress 
and the Comptroller General for review.

IX. Files Available to the Public via the Internet

    The Addenda for the annual ESRD PPS proposed and final rulemakings 
will no longer appear in the Federal Register. Instead, the Addenda 
will be available only through the internet and is posted on the CMS 
website at http://www.cms.gov/ESRDPayment/PAY/list.asp. In addition to 
the Addenda, limited data set files are available for purchase at 
http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/EndStageRenalDiseaseSystemFile.html. Readers who 
experience any problems accessing the Addenda or LDS files, should 
contact [email protected].
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on October 28, 2021.

List of Subjects

42 CFR Part 413

    Diseases, Health facilities, Medicare, Puerto Rico, Reporting and 
recordkeeping requirements.

42 CFR Part 512

    Administrative practice and procedure, Health facilities, Medicare, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as follows:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT 
RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY 
INJURY DIALYSIS

0
1. The authority citation for part 413 continues to read as follows:

     Authority:  42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 
1395l(a), (i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 
1395ww.


0
2. Section 413.177 is amended by revising paragraph (a) introductory 
text to read as follows:


Sec.  413.177   Quality incentive program payment.

    (a) With respect to renal dialysis services as defined under Sec.  
413.171, except for those renal dialysis services furnished during 
payment year 2022, in the case of an ESRD facility that does not earn 
enough points under the program described at Sec.  413.178 to meet or 
exceed the minimum total performance score (as defined at Sec.  
413.178(a)(8)) established by CMS for a payment year (as defined at 
Sec.  413.178(a)(10)), payments otherwise made to the facility under 
Sec.  413.230 for renal dialysis services during the payment year will 
be reduced by up to 2 percent as follows:
* * * * *

0
3. Section 413.178 is amended by adding paragraph (h) to read as 
follows:


Sec.  413.178   ESRD quality incentive program.

* * * * *
    (h) Special rule for payment year 2022. (1) CMS will calculate a 
measure rate for all measures specified by CMS under paragraph (c) of 
this section for the PY 2022 ESRD QIP but will not score facility 
performance on any of those measures or calculate a TPS for any 
facility under paragraph (e) of this section.
    (2) CMS will not establish a mTPS for PY 2022.

PART 512--RADIATION ONCOLOGY MODEL AND END STAGE RENAL DISEASE 
TREATMENT CHOICES MODEL

0
4. The authority citation for part 512 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1315(a), and 1395hh.


0
5. Section 512.160 is amended by adding paragraph (a)(9) and revising 
paragraph (b)(6) to read as follows:


Sec.  512.160  Remedial action.

    (a) * * *
    (9) For the ETC Model only, has misused or disclosed the 
beneficiary-identifiable data in a manner that violates any applicable 
statutory or regulatory requirements or that is otherwise non-compliant 
with the provisions of the applicable data sharing agreement.
    (b) * * *
    (6) In the ETC Model only:
    (i) Terminate the ETC Participant from the ETC Model.
    (ii) Suspend or terminate the ability of the ETC Participant, 
pursuant to Sec.  512.397(c), to reduce or waive the coinsurance for 
kidney disease patient education services.
* * * * *

0
6. Section 512.310 is amended by adding definitions for ``Clinical 
staff'', ``Health Equity Incentive'', and

[[Page 62021]]

``Qualified staff'' in alphabetical order to read as follows:


Sec.  512.310  Definitions.

* * * * *
    Clinical staff means a licensed social worker or registered 
dietician/nutrition professional who furnishes services for which 
payment may be made under the physician fee schedule under the 
direction of and incident to the services of the Managing Clinician who 
is an ETC Participant.
* * * * *
    Health Equity Incentive means the amount added to the ETC 
Participant's improvement score, calculated as described in Sec.  
512.370(c)(1), if the ETC Participant's aggregation group demonstrated 
sufficient improvement on the home dialysis rate or transplant rate for 
attributed beneficiaries who are dual eligible or Medicare Low Income 
Subsidy (LIS) recipients between the Benchmark Year and the MY.
* * * * *
    Qualified staff means both clinical staff and any qualified person 
(as defined at Sec.  410.48(a) of this chapter) who is an ETC 
Participant.
* * * * *

0
7. Section 512.360 is amended by revising paragraph (c)(2)(ii) 
introductory text and adding paragraph (c)(2)(iii) to read as follows:


Sec.  512.360  Beneficiary population and attribution.

* * * * *
    (c) * * *
    (2) * * *
    (ii) For MY1 and MY2, a Pre-emptive LDT Beneficiary who is not 
excluded based on the criteria in paragraph (b) of this section is 
attributed to the Managing Clinician with whom the beneficiary has had 
the most claims between the start of the MY and the month in which the 
beneficiary received the transplant for all months between the start of 
the MY and the month of the transplant.
* * * * *
    (iii) For MY3 through MY10, a Pre-emptive LDT Beneficiary who is 
not excluded based on the criteria in paragraph (b) of this section is 
attributed to the Managing Clinician who submitted the most claims for 
services furnished to the beneficiary in the 365 days preceding the 
date in which the beneficiary received the transplant.
    (A) If no Managing Clinician has had the most claims for a given 
Pre-emptive LDT Beneficiary such that multiple Managing Clinicians each 
had the same number of claims for that beneficiary in the 365 days 
preceding the date of the transplant, the Pre-emptive LDT Beneficiary 
is attributed to the Managing Clinician associated with the latest 
claim service date at the claim line through date during the 365 days 
preceding the date of the transplant.
    (B) If no Managing Clinician had the most claims for a given Pre-
emptive LDT Beneficiary such that multiple Managing Clinicians each had 
the same number of claims for that beneficiary in the 365 days 
preceding the date of the transplant, and more than one of those 
Managing Clinicians had the latest claim service date at the claim line 
through date during the 365 days preceding the date of the transplant, 
the Pre-emptive LDT Beneficiary is randomly attributed to one of these 
Managing Clinicians.
    (C) The Pre-emptive LDT Beneficiary is considered eligible for 
attribution under this paragraph (c)(2)(iii) if the Pre-emptive LDT 
Beneficiary has at least 1-eligible month during the 12-month period 
that includes the month of the transplant and the 11 months prior to 
the month of the transplant. An eligible month refers to a month during 
which the Pre-emptive LDT Beneficiary not does not meet exclusion 
criteria in paragraph (b) of this section.

0
8. Section 512.365 is amended by revising paragraphs (b)(1)(ii), 
(b)(2)(ii), (c)(1)(i)(A), (c)(1)(ii)(A), (c)(2)(i)(A), and 
(c)(2)(ii)(A)(1) and (2) to read as follows:


Sec.  512.365  Performance assessment.

* * * * *
    (b) * * *
    (1) * * *
    (ii) For MY1 and MY2, the numerator is the total number of home 
dialysis treatment beneficiary years plus one half the total number of 
self dialysis treatment beneficiary years for attributed ESRD 
Beneficiaries during the MY. For MY3 through MY10, the numerator is the 
total number of home dialysis treatment beneficiary years, plus one 
half the total number of self dialysis treatment beneficiary years, 
plus one half the total number of nocturnal in center dialysis 
beneficiary years for attributed ESRD Beneficiaries during the MY.
    (A) Home dialysis treatment beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received maintenance dialysis at home, such that 1-
beneficiary year is comprised of 12-beneficiary months. Months in which 
an attributed ESRD Beneficiary received maintenance dialysis at home 
are identified by claims with Type of Bill 072X and condition codes 74 
or 76.
    (B) Self dialysis treatment beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received self dialysis in center, such that 1-beneficiary 
year is comprised of 12-beneficiary months. Months in which an 
attributed ESRD Beneficiary received self dialysis are identified by 
claims with Type of Bill 072X and condition code 72.
    (C) Nocturnal in center dialysis beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received nocturnal in center dialysis, such that 1-
beneficiary year is comprised of 12-beneficiary months. Months in which 
an attributed ESRD Beneficiary received nocturnal in center dialysis 
are identified by claims with Type of Bill 072X and modifier UJ.
* * * * *
    (2) * * *
    (ii) For MY1 and MY2, the numerator is the total number of home 
dialysis treatment beneficiary years for attributed ESRD Beneficiaries 
during the MY plus one half the total number of self dialysis treatment 
beneficiary years. For MY3 through MY10, the numerator is the total 
number of home dialysis treatment beneficiary years, plus one half the 
total number of self dialysis treatment beneficiary years, plus one 
half the total number of nocturnal in center dialysis beneficiary years 
for attributed ESRD Beneficiaries during the MY.
    (A) Home dialysis treatment beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received maintenance dialysis at home, such that 1-
beneficiary year is comprised of 12-beneficiary months. Months in which 
an attributed ESRD Beneficiary received maintenance dialysis at home 
are identified by claims with CPT codes 90965 or 90966.
    (B) Self-dialysis treatment beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received self dialysis in center, such that 1-beneficiary 
year is comprised of 12-beneficiary months. Months in which an 
attributed ESRD Beneficiary received self dialysis are identified by 
claims with Type of Bill 072X and condition code 72.
    (C) Nocturnal in center dialysis beneficiary years included in the 
numerator are composed of those months during which attributed ESRD 
Beneficiaries received nocturnal in center dialysis, such that 1-
beneficiary year is comprised of 12-beneficiary

[[Page 62022]]

months. Months in which an attributed ESRD Beneficiary received 
nocturnal in center dialysis are identified by claims with Type of Bill 
072X and modifier UJ.
* * * * *
    (c) * * *
    (1) * * *
    (i) * * *
    (A) The denominator is the total dialysis treatment beneficiary 
years for attributed ESRD Beneficiaries during the MY. Dialysis 
treatment beneficiary years included in the denominator are composed of 
those months during which an attributed ESRD beneficiary received 
maintenance dialysis at home or in an ESRD facility, such that 1-
beneficiary year is comprised of 12-beneficiary months. For MY1 and 
MY2, months during which an attributed ESRD Beneficiary received 
maintenance dialysis are identified by claims with Type of Bill 072X, 
excluding claims for beneficiaries who were 75 years of age or older at 
any point during the month. For MY3 through MY10, months during which 
an attributed ESRD Beneficiary received maintenance dialysis are 
identified by claims with Type of Bill 072X, excluding claims for 
beneficiaries who were 75 years of age or older at any point during the 
month, or had a vital solid organ cancer diagnosis and were receiving 
treatment with chemotherapy or radiation for vital solid organ cancer 
during the MY.
    (1) An attributed ESRD Beneficiary had a diagnosis of vital solid 
organ cancer in an MY if the beneficiary had any of the following 
diagnosis codes on any claim during the MY or the 6 months prior to the 
start of the MY: C22.0, C22.1, C22.2, C22.3, C22.4, C22.7, C22.8, 
C22.9, C34.10-C34.12, C34.2, C34.30-C34.32, C34.80-C34.82, C34.90-
C34.92, C38.0, C38.8, C46.50-C46.52, C64.1, C64.2, C64.2, C78.00-
C78.02, C78.7, C79.00-C79.02, C7A.090, C7A.093, or C7B.02.
    (2) An attributed ESRD Beneficiary received treatment with 
chemotherapy or radiation for vital solid organ cancer during the MY if 
the beneficiary had a claim with any of the following procedure codes 
on any claim during the MY or the 6 months prior to the start of the 
MY:
    (i) CPT[supreg] 96401-96402, 96405-96406, 96409, 96411, 96413, 
96415-96417, 96420, 96422-26423, 96425, 96440, 96446, 96549, 77373, 
77401-77402, 77407, 77412, 77423, 77424-77425, 77520, 77522-77523, 
77525, 77761-77763, 77770-77772, 77778, 77789, 77799, 79005, 79101, 
79200, 79300, 79403, 79440, 79445, 79999.
    (ii) ICD-10-PCS[supreg] DB020ZZ, DB021ZZ, DB022ZZ, DB023Z0, 
DB023ZZ, DB024ZZ, DB025ZZ, DB026ZZ, DB1297Z, DB1298Z, DB1299Z, DB129BZ, 
DB129CZ, DB129YZ, DB12B6Z, DB12B7Z, DB12B8Z, DB12B9Z, DB12BB1, DB12BBZ, 
DB12BCZ, DB12BYZ, DB22DZZ, DB22HZZ, DB22JZZ, DBY27ZZ, DBY28ZZ, DBY2FZZ, 
DBY2KZZ, DB070ZZ, DB071ZZ, DB072ZZ, DB073Z0, DB073ZZ, DB074ZZ, DB075ZZ, 
DB076ZZ, DB1797Z, DB1798Z, DB1799Z, DB179BZ, DB179CZ, DB179YZ, DB17B6Z, 
DB17B7Z, DB17B8Z, DB17B9Z, DB17BB1, DB17BBZ, DB17BCZ, DB17BYZ, DB27DZZ, 
DB27HZZ, DB27JZZ, DBY77ZZ, DBY78ZZ, DBY7FZZ, DBY7KZZ, DF000ZZ, DF001ZZ, 
DF002ZZ, DF003Z0, DF003ZZ, DF004ZZ, DF005ZZ, DF006ZZ, DF1097Z, DF1098Z, 
DF1099Z, DF109BZ, DF109CZ, DF109YZ, DF10B6Z, DF10B7Z, DF10B8Z, DF10B9Z, 
DF10BB1, DF10BBZ, DF10BCZ, DF10BYZ, DF20DZZ, DF20HZZ, DF20JZZ, DFY07ZZ, 
DFY08ZZ, DFY0CZZ, DFY0FZZ, DFY0KZZ, DT000ZZ, DT001ZZ, DT002ZZ, DT003Z0, 
DT003ZZ, DT004ZZ, DT005ZZ, DT006ZZ, DT1097Z, DT1098Z, DT1099Z, DT109BZ, 
DT109CZ, DT109YZ, DT10B6Z, DT10B7Z, DT10B8Z, DT10B9Z, DT10BB1, DT10BBZ, 
DT10BCZ, DT10BYZ, DT20DZZ, DT20HZZ, DT20JZZ, DTY07ZZ, DTY08ZZ, DTY0CZZ, 
DTY0FZZ, DW020ZZ, DW021ZZ, DW022ZZ, DW023Z0, DW023ZZ, DW024ZZ, DW025ZZ, 
DW026ZZ, DW1297Z, DW1298Z, DW1299Z, DW129BZ, DW129CZ, DW129YZ, DW12B6Z, 
DW12B7Z, DW12B8Z, DW12B9Z, DW12BB1, DW12BBZ, DW12BCZ, DW12BYZ, DW22DZZ, 
DW22HZZ, DW22JZZ, DWY27ZZ, DWY28ZZ, DWY2FZZ, DW030ZZ, DW031ZZ, DW032ZZ, 
DW033Z0, DW033ZZ, DW034ZZ, DW035ZZ, DW036ZZ, DW1397Z, DW1398Z, DW1399Z, 
DW139BZ, DW139CZ, DW139YZ, DW13B6Z, DW13B7Z, DW13B8Z, DW13B9Z, DW13BB1, 
DW13BBZ, DW13BCZ, DB13BYZ, DW23DZZ, DW23HZZ, DW23JZZ, DWY37ZZ, DWY38ZZ, 
DWY3FZZ, DW050ZZ, DW051ZZ, DW052ZZ, DW053Z0, DW053ZZ, DW054ZZ, DW055ZZ, 
DW056ZZ, DWY57ZZ, DWY58ZZ, DWY5FZZ, DWY5GDZ, DWY5GFZ, DWY5GGZ, DWY5GHZ, 
DWY5GYZ.
* * * * *
    (ii) * * *
    (A) The denominator is the total dialysis treatment beneficiary 
years for attributed ESRD Beneficiaries during the MY. Dialysis 
treatment beneficiary years included in the denominator are composed of 
those months during which an attributed ESRD Beneficiary received 
maintenance dialysis at home or in an ESRD facility, such that 1-
beneficiary year is comprised of 12-beneficiary months. For MY1 and 
MY2, months during which an attributed ESRD Beneficiary received 
maintenance dialysis are identified by claims with Type of Bill 072X, 
excluding claims for beneficiaries who were 75 years of age or older at 
any point during the month. For MY3 through MY10, months during which 
an attributed ESRD Beneficiary received maintenance dialysis are 
identified by claims with Type of Bill 072X, excluding claims for 
beneficiaries who were 75 years of age or older at any point during the 
month, or had a vital solid organ cancer diagnosis and were receiving 
treatment with chemotherapy or radiation for vital solid organ cancer 
during the MY. Months in which an attributed ESRD Beneficiary had a 
diagnosis of vital solid organ cancer are identified as described in 
paragraph (c)(1)(i)(A)(1) of this section. Months in which an 
attributed ESRD Beneficiary received treatment with chemotherapy or 
radiation for vital solid organ cancer are identified as described in 
paragraph (c)(1)(i)(A)(2) of this section.
* * * * *
    (2) * * *
    (i) * * *
    (A) The denominator is the total dialysis treatment beneficiary 
years for attributed ESRD Beneficiaries during the MY. Dialysis 
treatment beneficiary years included in the denominator are composed of 
those months during which an attributed ESRD Beneficiary received 
maintenance dialysis at home or in an ESRD facility, such that 1-
beneficiary year is comprised of 12-beneficiary months. For MY1 and 
MY2, months during which an attributed ESRD Beneficiary received 
maintenance dialysis are identified by claims with CPT codes 90957, 
90958, 90959, 90960, 90961, 90962, 90965, or 90966, excluding claims 
for beneficiaries who were 75 years of age or older at any point during 
the month. For MY3 through MY10, months during which an attributed ESRD 
Beneficiary received maintenance dialysis are identified by claims with 
CPT codes 90957, 90958, 90959, 90960, 90961, 90962, 90965, or 90966, 
excluding claims for beneficiaries who were 75 years of age or older at 
any point during the month, or had a vital solid organ cancer diagnosis 
and were receiving treatment with chemotherapy or radiation for vital 
solid organ cancer during the MY. Months in which an attributed ESRD

[[Page 62023]]

Beneficiary had a diagnosis of vital solid organ cancer are identified 
as described in paragraph (c)(1)(i)(A)(1) of this section. Months in 
which an attributed ESRD Beneficiary received treatment with 
chemotherapy or radiation for vital solid organ cancer are identified 
as described in paragraph (c)(1)(i)(A)(2) of this section.
* * * * *
    (ii) * * *
    (A) * * *
    (1) Dialysis treatment beneficiary years included in the 
denominator are composed of those months during which an attributed 
ESRD Beneficiary received maintenance dialysis at home or in an ESRD 
facility, such that 1-beneficiary year is comprised of 12-beneficiary 
months. For MY1 and MY2, months during which an attributed ESRD 
Beneficiary received maintenance dialysis are identified by claims with 
CPT codes 90957, 90958, 90959, 90960, 90961, 90962, 90965, or 90966, 
excluding claims for beneficiaries who were 75 years of age or older at 
any point during the month. For MY3 through MY10, months during which 
an attributed ESRD Beneficiary received maintenance dialysis are 
identified by claims with CPT codes 90957, 90958, 90959, 90960, 90961, 
90962, 90965, or 90966, excluding claims for beneficiaries who were 75 
years of age or older at any point during the month, or had a vital 
solid organ cancer diagnosis and were receiving treatment with 
chemotherapy or radiation for vital solid organ cancer during the MY. 
Months in which an attributed ESRD Beneficiary had a vital solid organ 
cancer diagnosis are identified as described in paragraph 
(c)(1)(i)(A)(1) of this section. Months in which an attributed ESRD 
Beneficiary received treatment with chemotherapy or radiation for vital 
solid organ cancer are identified as described in paragraph 
(c)(1)(i)(A)(2) of this section.
    (2) MY1 and MY2, Pre-emptive LDT beneficiary years included in the 
denominator are composed of those months during which a Pre-emptive LDT 
Beneficiary is attributed to a Managing Clinician, from the beginning 
of the MY up to and including the month of the living donor transplant. 
For MY3 through MY10, Pre-emptive LDT beneficiary years included in the 
denominator are composed of those months during which a Pre-emptive LDT 
Beneficiary is attributed to a Managing Clinician, from the beginning 
of the MY up to and including the month of the living donor transplant, 
excluding beneficiaries who had a vital solid organ cancer diagnosis 
and were receiving treatment with chemotherapy or radiation for vital 
solid organ cancer during the MY. Months in which an attributed ESRD 
Beneficiary had a vital solid organ cancer diagnosis are identified as 
described in paragraph (c)(1)(i)(A)(1) of this section. Months in which 
an attributed ESRD Beneficiary received treatment with chemotherapy or 
radiation for vital solid organ cancer are identified as described in 
paragraph (c)(1)(i)(A)(2) of this section. Pre-emptive LDT 
Beneficiaries are identified using information about living donor 
transplants from the SRTR Database and Medicare claims data.
* * * * *

0
9. Section 512.370 is amended by revising paragraphs (b), (c), and (d) 
to read as follows:


Sec.  512.370   Benchmarking and scoring.

* * * * *
    (b) Achievement scoring. CMS assesses ETC Participant performance 
at the aggregation group level on the home dialysis rate and transplant 
rate against achievement benchmarks constructed based on the home 
dialysis rate and transplant rate among aggregation groups of ESRD 
facilities and Managing Clinicians located in Comparison Geographic 
Areas during the Benchmark Year. Achievement benchmarks are calculated 
as described in paragraph (b)(1) of this section and, for MY3 through 
MY10, are stratified as described in paragraph (b)(2) of this section.
    (1) Achievement benchmarks. CMS uses the following scoring 
methodology to assess an ETC Participant's achievement score.

      Table 1 to Sec.   512.370(b)(1)--ETC Model Schedule of PPA Achievment Benchmarks by Measurement Year
----------------------------------------------------------------------------------------------------------------
         MY1 and MY2              MY3 and MY4       MY5 and MY6       MY7 and MY8      MY9 and MY10      Points
----------------------------------------------------------------------------------------------------------------
90th+ Percentile of benchmark  1.1 * (90th+      1.2 * (90th+      1.3 * (90th+      1.4 * (90th+              2
 rates for Comparison           Percentile of     Percentile of     Percentile of     Percentile of
 Geographic Areas during the    benchmark rates   benchmark rates   benchmark rates   benchmark rates
 Benchmark Year.                for Comparison    for Comparison    for Comparison    for Comparison
                                Geographic        Geographic        Geographic        Geographic
                                Areas during      Areas during      Areas during      Areas during
                                the Benchmark     the Benchmark     the Benchmark     the Benchmark
                                Year).            Year).            Year).            Year).
75th+ Percentile of benchmark  1.1 * (75th+      1.2 * (75th+      1.3 * (75th+      1.4 * (75th+            1.5
 rates for Comparison           Percentile of     Percentile of     Percentile of     Percentile of
 Geographic Areas during the    benchmark rates   benchmark rates   benchmark rates   benchmark rates
 Benchmark Year.                for Comparison    for Comparison    for Comparison    for Comparison
                                Geographic        Geographic        Geographic        Geographic
                                Areas during      Areas during      Areas during      Areas during
                                the.              the Benchmark     the Benchmark     the Benchmark
                               Benchmark Year).   Year).            Year).            Year).
50th+ Percentile of benchmark  1.1 * (50th+      1.2 * (50th+      1.3 * (50th+      1.4 * (50th+              1
 rates for Comparison           Percentile of     Percentile of     Percentile of     Percentile of
 Geographic Areas during the    benchmark rates   benchmark rates   benchmark rates   benchmark rates
 Benchmark Year.                for Comparison    for Comparison    for Comparison    for Comparison
                                Geographic        Geographic        Geographic        Geographic
                                Areas during      Areas during      Areas during      Areas during
                                the Benchmark     the Benchmark     the Benchmark     the Benchmark
                                Year).            Year).            Year).            Year).
30th+ Percentile of benchmark  1.1 * (30th+      1.2 * (30th+      1.3 * (30th+      1.4 * (30th+            0.5
 rates for Comparison           Percentile of     Percentile of     Percentile of     Percentile of
 Geographic Areas during the    benchmark rates   benchmark rates   benchmark rates   benchmark rates
 Benchmark Year.                for Comparison    for Comparison    for Comparison    for Comparison
                                Geographic        Geographic        Geographic        Geographic
                                Areas during      Areas during      Areas during      Areas during
                                the Benchmark     the Benchmark     the Benchmark     the Benchmark
                                Year).            Year).            Year).            Year).
<30th Percentile of benchmark  1.1 * (<30th      1.2 * (<30th      1.3 * (<30th      1.4 * (<30th              0
 rates for Comparison           Percentile of     Percentile of     Percentile of     Percentile of
 Geographic Areas during the    benchmark rates   benchmark rates   benchmark rates   benchmark rates
 Benchmark Year.                for Comparison    for Comparison    for Comparison    for Comparison
                                Geographic        Geographic        Geographic        Geographic
                                Areas during      Areas during      Areas during      Areas during
                                the Benchmark     the Benchmark     the Benchmark     the Benchmark
                                Year).            Year).            Year).            Year).
----------------------------------------------------------------------------------------------------------------

    (2) Stratifying achievement benchmarks. For MY3 through MY10, CMS 
stratifies achievement benchmarks based on the proportion of 
beneficiary years attributed to the aggregation group for which 
attributed beneficiaries are dual eligible or LIS recipients during the 
MY. An ESRD Beneficiary or Pre-emptive LDT Beneficiary is considered to 
be dual eligible or a LIS recipient for a given month if at any point 
during the month the beneficiary was dual eligible

[[Page 62024]]

or an LIS recipient based on Medicare administrative data. CMS 
stratifies the achievement benchmarks into the following two strata:
    (i) Stratum 1: 50 percent or more of attributed beneficiary years 
during the MY are for beneficiaries who are dual eligible or LIS 
recipients.
    (ii) Stratum 2: Less than 50 percent of attributed beneficiary 
years during the MY are for beneficiaries who are dual eligible or LIS 
recipients.
    (c) Improvement scoring. CMS assesses ETC Participant improvement 
on the home dialysis rate and transplant rate against benchmarks 
constructed based on the ETC Participant's aggregation group's 
historical performance on the home dialysis rate and transplant rate 
during the Benchmark Year to calculate the ETC Participant's 
improvement score, as specified in paragraph (c)(1) of this section. 
For MY3 through MY10, CMS assesses ETC Participant improvement on the 
home dialysis rate and transplant rate for ESRD Beneficiaries and, if 
applicable, Pre-emptive LDT Beneficiaries, who are dual eligible or LIS 
recipients to determine whether to add the Health Equity Incentive to 
the ETC Participant's improvement score, as specified in paragraph 
(c)(2) of this section.
    (1) Improvement score calculation. CMS uses the following scoring 
methodology to assess an ETC Participant's improvement score.
    (i) Greater than 10 percent improvement relative to the Benchmark 
Year rate: 1.5 points
    (ii) Greater than 5 percent improvement relative to the Benchmark 
Year rate: 1 point
    (iii) Greater than 0 percent improvement relative to the Benchmark 
Year rate: 0.5 points
    (iv) Less than or equal to the Benchmark Year rate: 0 points
    (v) For MY3 through MY10, when calculating improvement benchmarks 
constructed based on the ETC Participant's aggregation group's 
historical performance on the home dialysis rate and transplant rate 
during the Benchmark Year, CMS adds one beneficiary month to the 
numerator of the home dialysis rate and adds one beneficiary month to 
the numerator of the transplant rate, such that the Benchmark Year 
rates cannot be equal to zero.
    (2) Health Equity Incentive. CMS calculates the ETC Participant's 
aggregation group's home dialysis rate and transplant rate as specified 
in Sec. Sec.  512.365(b) and 512.365(c), respectively, using only 
attributed beneficiary years comprised of months during the MY in which 
ESRD Beneficiaries and, if applicable, Pre-emptive LDT Beneficiaries, 
are dual eligible or LIS recipients. CMS also calculates the threshold 
for earning the Health Equity Incentive based on the ETC Participant's 
aggregation group's historical performance on the home dialysis rate 
and transplant rate during the Benchmark Year, using only attributed 
beneficiary years comprised of months during the Benchmark Year in 
which ESRD Beneficiaries and, if applicable, Pre-emptive LDT 
Beneficiaries, are dual eligible or LIS recipients. An ESRD Beneficiary 
or Pre-emptive LDT Beneficiary is considered to be dual eligible or a 
LIS recipient for a given month if at any point during the month the 
beneficiary was dual eligible or a LIS recipient. CMS determines 
whether a beneficiary was dual eligible or a LIS recipient based on 
Medicare administrative data.
    (i) The ETC Participant earns the Health Equity Incentive for the 
home dialysis rate improvement score if the home dialysis rate for the 
MY, calculated as specified in this paragraph (c)(2), is at least 2.5-
percentage points higher than the home dialysis rate for the Benchmark 
Year, calculated as specified in this paragraph (c)(2). If the ETC 
Participant earns the Health Equity Incentive for the home dialysis 
rate improvement score, CMS adds 0.5 points to the ETC Participant's 
home dialysis rate improvement score, calculated as specified in 
paragraph (c)(1) of this section, unless the ETC Participant is 
ineligible to receive the Home Equity Incentive as specified in 
paragraph (c)(2)(iii) of this section.
    (ii) The ETC Participant earns the Health Equity Incentive for the 
transplant rate improvement score if the home dialysis rate for the MY, 
calculated as specified in this paragraph (c)(2), is at least 2.5-
percentage points higher than the transplant rate for the Benchmark 
Year, calculated as specified in this paragraph (c)(2). If the ETC 
Participant earns the Health Equity Incentive for the transplant rate 
improvement score, CMS adds 0.5 points to the ETC Participant's 
transplant rate improvement score, calculated as specified in paragraph 
(c)(1) of this section, unless the ETC Participant is ineligible to 
receive the Home Equity Incentive as specified in paragraph (c)(2)(iii) 
of this section.
    (iii) An ETC Participant in an aggregation group with fewer than 
11-attributed beneficiary years comprised of months in which ESRD 
Beneficiaries and, if applicable, Pre-emptive LDT Beneficiaries, are 
dual eligible or LIS recipients, during either the Benchmark Year or 
the MY is ineligible to earn the Health Equity Incentive.
    (d) Modality Performance Score. (1) For MY1 and MY2, CMS calculates 
the ETC Participant's MPS as the higher of ETC Participant's 
achievement score or improvement score for the home dialysis rate, 
together with the higher of the ETC Participant's achievement score or 
improvement score for the transplant rate, weighted such that the ETC 
Participant's score for the home dialysis rate constitutes \2/3\ of the 
MPS and the ETC Participant's score for the transplant rate constitutes 
\1/3\ of the MPS. CMS uses the following formula to calculate the ETC 
Participant's MPS for MY1 and MY2:

Modality Performance Score = 2 x (Higher of the home dialysis 
achievement or improvement score) + (Higher of the transplant 
achievement or improvement score)

    (2) For MY3 through MY10, CMS calculates the ETC Participant's MPS 
as the higher of the ETC Participant's achievement score for the home 
dialysis rate or the sum of the ETC Participant's improvement score for 
the home dialysis rate calculated as specified in paragraph (c)(1) of 
this section and, if applicable, the Health Equity Incentive, 
calculated as described in paragraph (c)(2)(i) of this section, 
together with the higher of the ETC Participant's achievement score for 
the transplant rate or the sum of the ETC Participant's improvement 
score for the transplant rate calculated as specified in paragraph 
(c)(1) of this section and, if applicable, the Heath Equity Incentive, 
calculated as described in paragraph (c)(2)(ii) of this section, 
weighted such that the ETC Participant's score for the home dialysis 
rate constitutes \2/3\ of the MPS and the ETC Participant's score for 
the transplant rate constitutes \1/3\ of the MPS. CMS uses the 
following formula to calculate the ETC Participant's MPS for MY3 
through MY10:

Modality Performance Score = 2 x (Higher of the home dialysis 
achievement or (home dialysis improvement score + Health Equity Bonus 
[dagger])) + (Higher of the transplant achievement or (transplant 
improvement score + Health Equity Bonus[dagger]))

[dagger] The Health Equity Incentive is applied to the home dialysis 
improvement score or transplant improvement score only if earned by the 
ETC Participant.

0
10. Section 512.390 is amended by revising the section heading, 
redesignating paragraph (b) as (c) and adding new paragraph (b).
    The revision and addition read as follows:

[[Page 62025]]

Sec.  512.390   Notification, data sharing, and targeted review.

* * * * *
    (b) Data sharing with ETC Participants. CMS shares certain 
beneficiary-identifiable data as described in paragraph (b)(1) of this 
section and certain aggregate data as described in paragraph (b)(2) of 
this section with ETC Participants regarding their attributed 
beneficiaries and performance under the ETC Model.
    (1) Beneficiary-identifiable data. CMS shares beneficiary-
identifiable data with ETC Participants as follows:
    (i) CMS will make available certain beneficiary-identifiable data 
for retrieval by ETC Participants no later than one month before the 
start of each PPA Period, in a form and manner specified by CMS. ETC 
Participants may retrieve this data at any point during the relevant 
PPA Period.
    (ii) This beneficiary-identifiable data includes, when available, 
the following information for each PPA Period:
    (A) The ETC Participant's attributed beneficiaries' names, Medicare 
Beneficiary Identifiers, dates of birth, dual eligible status, and LIS 
recipient status.
    (B) Data regarding the ETC Participant's performance under the ETC 
Model, including, for each attributed beneficiary, as applicable: the 
number of months the beneficiary was attributed to the ETC Participant, 
home dialysis months, self-dialysis months, nocturnal in-center 
dialysis months, transplant waitlist months, and months following a 
living donor transplant.
    (iii) CMS shares this beneficiary-identifiable data on the 
condition that the ETC Participants observe all relevant statutory and 
regulatory provisions regarding the appropriate use of data and the 
confidentiality and privacy of individually identifiable health 
information as would apply to a covered entity under the regulations 
found at 45 CFR parts 160 and 164 promulgated under the Health 
Insurance Portability and Accountability Act of 1996 (HIPAA), as 
amended, and comply with the terms of the data sharing agreement 
described in paragraph (b)(1)(iv) of this section.
    (iv) If an ETC Participant wishes to retrieve the beneficiary-
identifiable data specified in paragraph (b)(1)(ii) of this section, 
the ETC Participant must complete and submit, on at least an annual 
basis, a signed data sharing agreement, to be provided in a form and 
manner specified by CMS, under which the ETC Participant agrees:
    (A) To comply with the requirements for use and disclosure of this 
beneficiary-identifiable data that are imposed on covered entities by 
the HIPAA regulations and the requirements of the ETC Model set forth 
in this part.
    (B) To comply with additional privacy, security, breach 
notification, and data retention requirements specified by CMS in the 
data sharing agreement.
    (C) To contractually bind each downstream recipient of the 
beneficiary-identifiable data that is a business associate of the ETC 
Participant to the same terms and conditions to which the ETC 
Participant is itself bound in its data sharing agreement with CMS as a 
condition of the business associate's receipt of the beneficiary-
identifiable data retrieved by the ETC Participant under the ETC Model.
    (D) That if the ETC Participant misuses or discloses the 
beneficiary-identifiable data in a manner that violates any applicable 
statutory or regulatory requirements or that is otherwise non-compliant 
with the provisions of the data sharing agreement, CMS may deem the ETC 
Participant ineligible to retrieve beneficiary-identifiable data under 
paragraph (b)(1)(i) of this section for any amount of time, and the ETC 
Participant may be subject to additional sanctions and penalties 
available under the law.
    (2) Aggregate data. CMS shares aggregate performance data with ETC 
Participants as follows:
    (i) CMS will make available certain aggregate data for retrieval by 
the ETC Participant, in a form and manner to be specified by CMS, no 
later than one month before each PPA Period.
    (ii) This aggregate data includes, when available, the following 
information for each PPA Period, de-identified in accordance with 45 
CFR 164.514(b):
    (A) The ETC Participant's performance scores on the home dialysis 
rate, transplant waitlist rate, living donor transplant rate, and the 
Health Equity Incentive.
    (B) The ETC Participant's aggregation group's scores on the home 
dialysis rate, transplant waitlist rate, and living donor transplant 
rate, and the Health Equity Incentive.
    (C) Information on how the ETC Participant's and ETC Participant's 
aggregation group's scores relate to the achievement benchmark and 
improvement benchmark.
    (D) The ETC Participant's MPS and PPA for the corresponding PPA 
Period.
* * * * *

0
11. Section 512.397 is amended by revising the section heading and 
paragraph (b) and adding paragraph (c) to read as follows:


Sec.  512.397  ETC Model Medicare program waivers and additional 
flexibilities.

* * * * *
    (b) CMS waives the following requirements of title XVIII of the Act 
solely for purposes of testing the ETC Model:
    (1) CMS waives the requirement under section 1861(ggg)(2)(A)(i) of 
the Act and Sec.  410.48(a) of this chapter that only doctors, 
physician assistants, nurse practitioners, and clinical nurse 
specialists can furnish kidney disease patient education services to 
allow kidney disease patient education services to be provided by 
clinical staff (as defined at Sec.  512.310) under the direction of and 
incident to the services of the Managing Clinician who is an ETC 
Participant. The kidney disease patient education services may be 
furnished only by qualified staff (as defined at Sec.  512.310).
    (2) CMS waives the requirement that kidney disease patient 
education services are covered only for Stage IV chronic kidney disease 
(CKD) patients under section 1861(ggg)(1)(A) of the Act and Sec.  
410.48(b)(1) of this chapter to permit beneficiaries diagnosed with CKD 
Stage V or within the first 6 months of starting dialysis to receive 
kidney disease patient education services.
    (3) CMS waives the requirement that the content of kidney disease 
patient education services include the management of co-morbidities, 
including for the purpose of delaying the need for dialysis, under 
Sec.  410.48(d)(1) of this chapter when such services are furnished to 
beneficiaries with CKD Stage V or ESRD, unless such content is relevant 
for the beneficiary.
    (4) CMS waives the requirement that an outcomes assessment designed 
to measure beneficiary knowledge about CKD and its treatment be 
performed as part of a kidney disease patient education service under 
Sec.  410.48(d)(5)(iii) of this chapter, provided that such outcomes 
assessment is performed by qualified staff within one month of the 
final kidney disease patient education service.
    (5) Beginning the upon the expiration of the Public Health 
Emergency (PHE) for the COVID-19 pandemic, CMS waives the geographic 
and site of service originating site requirements in sections 
1834(m)(4)(B) and 1834(m)(4)(C) of the Act and Sec.  410.78(b)(3) and 
(4) of this chapter for purposes of kidney disease patient education 
services furnished by qualified staff via telehealth in accordance with 
this section, regardless of the location of the beneficiary or

[[Page 62026]]

qualified staff. Beginning the upon the expiration of the Public Health 
Emergency (PHE) for the COVID-19 pandemic, CMS also waives the 
requirement in section 1834(m)(2)(B) of the Act and Sec.  414.65(b) of 
this chapter that CMS pay a facility fee to the originating site with 
respect to telehealth services furnished to a beneficiary in accordance 
with this section at an originating site that is not one of the 
locations specified in Sec.  410.78(b)(3) of this chapter.
    (c)(1) For kidney disease patient education services furnished on 
or after January 1, 2022, an ETC Participant may reduce or waive the 20 
percent coinsurance requirement under section 1833 of the Act if all of 
the following conditions are satisfied:
    (i) The individual or entity that furnished the kidney disease 
patient education services is qualified staff.
    (ii) The qualified staff are not leased from or otherwise provided 
by an ESRD facility or related entity.
    (iii) The kidney disease patient education services were furnished 
to a beneficiary described in Sec.  410.48(b) or Sec.  512.397(b)(2) 
who did not have secondary insurance that provides cost-sharing support 
for kidney disease patient education services on the date the services 
were furnished.
    (iv) The kidney disease patient education services were furnished 
in compliance with the applicable provisions of Sec.  410.48 and Sec.  
512.397(b).
    (v) The ETC Participant bears the full cost of the reduction or 
waiver of the 20 percent coinsurance requirement under section 1833 of 
the Act. The reduction or waiver of the 20 percent coinsurance 
requirement under section 1833 of the Act shall not be financed by a 
third party, including but not limited to an ESRD facility or related 
entity.
    (2) The ETC Participant must maintain and provide the government 
with access to records of the following information in accordance with 
Sec.  512.135(b) and (c):
    (i) The identity of the qualified staff who furnished the kidney 
disease patient education services for which the coinsurance was 
reduced or waived and the date such services were furnished.
    (ii) The identity of the beneficiary who received the kidney 
disease patient education services for which the coinsurance was 
reduced or waived.
    (iii) Evidence that the beneficiary who received the kidney disease 
patient education services coinsurance waiver was eligible to receive 
the kidney disease patient education services under the ETC Model and 
did not have secondary insurance that provides cost-sharing support for 
kidney disease patient education services.
    (iv) The amount of the kidney disease patient education coinsurance 
reduction or waiver provided by the ETC Participant.
    (3) The Federal anti-kickback statute safe harbor for CMS-sponsored 
model patient incentives (42 CFR 1001.952(ii)(2)) is available to 
protect the kidney disease patient education coinsurance waivers that 
satisfy the requirements of such safe harbor and paragraph (c)(1) of 
this section.

    Dated: October 28, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-23907 Filed 10-29-21; 4:15 pm]
 BILLING CODE 4120-01-P