On June 24, 2026, the Centers for Medicare & Medicaid Services (CMS) published the Calendar Year 2027 End-Stage Renal Disease Prospective Payment System proposed rule — CMS-1846-P. This is not a routine annual update. The CY 2027 rule proposes the most significant structural changes to ESRD payment policy in years, touching dialysis base rates, phosphate binder bundling, home dialysis training payments, quality program measures, and low-volume facility adjustments all at once.
Up from $281.71 in 2026
phosphate binder bundling
+1.1% overall increase
There is also a deadline with teeth: public comments are due August 24, 2026. Nephrology practices, dialysis facilities, and RCM teams have a narrow window to review the proposals, understand the revenue impact, and submit input before these changes are finalized for January 1, 2027.
This post breaks down every significant proposal, explains what it means for your billing operations, and gives you a concrete action plan for the next two months.
Why This Rule Matters More Than Most
ESRD billing is among the most complex in all of medicine. Under the ESRD Prospective Payment System, Medicare pays dialysis facilities a single bundled per-treatment payment that covers drugs, lab services, supplies, and capital costs. The nephrologist bills separately through Monthly Capitation Payment (MCP) codes. Every change to the base rate, the bundle composition, or quality program scoring touches revenue directly — often across hundreds of claims per month.
CY 2027 proposes changes at every level of that system simultaneously. Practices that wait until November when the final rule publishes will have roughly 45 days to implement changes before January 1. Those who engage now — reading the proposals, modeling the revenue impact, and submitting comments — will be positioned to protect and optimize their revenue before the effective date.
Proposal 1: New ESRD PPS Base Rate — $299.55 Per Treatment
The most immediately significant proposal is the increase to the per-treatment bundled payment rate.
CMS proposes raising the ESRD PPS base rate from the current CY 2026 rate of $281.71 to $299.55 — an increase of $17.84 per treatment. CMS projects this will increase total Medicare payments to ESRD facilities by approximately 1.1% overall, with hospital-based facilities seeing a 2% increase and freestanding facilities seeing a 1.1% increase.
The $17.84 increase is not a simple market basket adjustment. It is composed of several overlapping factors:
A $15.96 addition to the base rate reflecting the permanent incorporation of phosphate binders into the bundle (detailed below), combined with a 1.6% market basket update, a wage index budget neutrality factor of 1.00267, and a budget neutrality factor of 0.98783 for changes to low-volume, pediatric, and home dialysis training adjustments.
What this means for your practice: For a facility running 15,000 dialysis treatments annually, a $17.84 increase per treatment translates to roughly $267,600 in additional Medicare revenue — before accounting for case mix adjustments and patient-level factors. Model this against your specific treatment volume and payer mix once the final rule publishes in November.
Proposal 2: Phosphate Binders Permanently Incorporated into the Bundle
This is the change with the most significant billing implications for day-to-day operations.
Since January 1, 2025, phosphate binders have been paid through the Transitional Drug Add-on Payment Adjustment (TDAPA) — a temporary add-on mechanism that pays separately while utilization data is collected. CMS is now proposing to end the TDAPA period for phosphate binders and permanently incorporate them into the ESRD PPS base rate at $15.96 per treatment, effective January 1, 2027.
The $15.96 figure is derived from the most recent average sales price (ASP) data for each of the six types of phosphate binders, weighted by utilization during the TDAPA period, including a 6% ASP operational cost factor.
What changes in your billing workflow:
Before 2027, phosphate binders could be tracked and claimed as TDAPA add-ons, generating a visible separate payment line. Starting January 1, 2027, that add-on disappears. The payment is folded into the base rate. Your billing team must:
Remove any TDAPA claim lines for phosphate binders for dates of service on or after January 1, 2027. Submitting TDAPA claims for phosphate binders after this date will result in claim edits or overpayment liability. Update your chargemaster and billing system to reflect that phosphate binder costs are now covered by the base rate — not separately trackable as add-ons. Ensure your pharmacy and clinical operations teams understand that the financial accountability for phosphate binder costs now sits entirely within the base rate. If drug costs exceed the $15.96 embedded in the rate, there is no additional payment mechanism.
Also changing: Outlier Policy for Drug Costs
CMS is proposing significant increases to the outlier payment thresholds, particularly for adult patients, largely driven by the projected utilization of drugs currently being paid through the TDAPA that will transition to outlier status in CY 2027. The fixed dollar loss (FDL) amount for adult patients is proposed to increase from $14.80 to $114.98, and the Medicare allowable payment (MAP) amount from $23.68 to $41.24. These increases create a higher bar before outlier payments trigger — but also reflect a larger pool of costs that qualify once the threshold is met.
| Annual Treatments | Adjustment | Status |
|---|---|---|
| Fewer than 3,000 | Highest adjuster | New tier |
| 3,000 – 3,999 | High adjuster | New tier |
| 4,000 – 4,999 | Mid-high adjuster | New tier |
| 5,000 – 5,999 | Mid adjuster | New tier |
| 6,000 – 6,999 | Low adjuster | New tier |
| 7,000 – 7,999 | Smallest adjuster | New tier |
| 8,000+ | No adjustment | Old threshold |
New rule: Facilities up to 7,999 treatments/year qualify (6 tiers). If your facility runs 4,000–7,999 treatments annually, you may now qualify for a payment adjustment you are currently not receiving.
Trade-off: Base rate reduced ~$3/treatment to fund the expansion — budget neutral overall.
Proposal 3: Low-Volume Payment Adjustment — Expanded Tiers, Higher Threshold
This is the proposal most likely to surprise small and independent nephrology practices.
CMS is proposing to raise the Low-Volume Payment Adjustment (LVPA) volume threshold from 4,000 treatments to 8,000 treatments annually, and expand the number of payment tiers from two to six. Under the proposed tiered structure:
Facilities with fewer than 3,000 median annual treatments receive the highest payment adjustment. Facilities with between 7,000 and 7,999 median annual treatments receive the smallest adjustment. The change is proposed on a budget-neutral basis, which means the base rate is reduced by approximately 1.1% (~$3 per treatment) to offset the cost of extending the LVPA to more facilities.
What this means in practice: Many facilities that currently receive no LVPA adjustment — because they fall between 4,000 and 8,000 treatments — would now qualify for a payment adjustment under the expanded tiers. This is a meaningful change for mid-sized independent dialysis facilities and nephrology practices operating single-site outpatient dialysis programs. Pull your treatment volume data now and determine where you fall in the proposed tier structure.
Proposal 4: Home Dialysis Training Add-on Payment — Major Increase
CMS proposes to increase the home and self-dialysis training add-on payment from $95.60 to $138.22 per treatment — a 44.6% increase.
Beyond the rate increase, CMS also proposes to allow the training add-on payment during the onset period — the first 120 days of ESRD dialysis — during which it is currently not available. This is a significant expansion. Patients beginning ESRD treatment are precisely the population most likely to be trained for home dialysis, yet the training add-on has been unavailable during that initial window. If finalized, this change removes a structural billing gap that has historically undercompensated training-intensive early ESRD management.
What to do: If your practice or affiliated facility is actively training patients for home dialysis or peritoneal dialysis, model the revenue uplift from both the rate increase and the onset period expansion. This could represent a meaningful revenue improvement for practices with strong home dialysis programs.
Proposal 5: ESRD Quality Incentive Program — PY 2027 and Beyond
The ESRD QIP carries real financial stakes: CMS can reduce a dialysis facility’s Medicare payments by up to 2% if its Total Performance Score falls below the minimum threshold. Understanding what is being measured — and what is being removed — directly affects compliance strategy.
Measures being removed effective PY 2027 (already finalized in the 2025 rule):
Three reporting measures are no longer required: Facility Commitment to Health Equity, Screening for Social Drivers of Health, and Screen Positive Rate for Social Drivers of Health. Your compliance and quality teams can discontinue collecting and reporting these measures for PY 2027. The In-Center Hemodialysis CAHPS (ICH CAHPS) survey has also been shortened, reducing patient burden — the survey is still scored under the same methodology, but with fewer questions.
Measures changing effective PY 2029 (proposed in this rule):
CMS proposes to replace the Hypercalcemia reporting measure with a new Hyperphosphatemia clinical measure beginning with PY 2029. This is a move from a reporting measure (which simply requires submission of data) to a clinical measure (which assesses patient outcomes). The Hyperphosphatemia measure targets cardiovascular complications, hospitalizations, and mortality driven by chronic hyperphosphatemia — directly incentivizing phosphorus management interventions including nutritional counseling, phosphate binders, and dialysis prescription adjustment.
CMS also proposes to remove the MedRec (medication reconciliation) reporting measure and the COVID-19 Vaccination Coverage among Healthcare Personnel reporting measure beginning with PY 2029.
New QIP Measure Domain and Weight Updates:
CMS proposes updates to the measure domains and to the domain and measure weights used to calculate the total performance score. These weight adjustments can shift which measures most heavily influence your payment reduction risk — review your current performance across all active measures and model the impact of the proposed weight changes on your TPS.
Kt/V Measure Transition (effective PY 2027 — already finalized):
The current Kt/V Dialysis Adequacy Comprehensive clinical measure is being replaced with a Kt/V Dialysis Adequacy measure topic comprised of four individual measures: adult hemodialysis, adult peritoneal dialysis, pediatric hemodialysis, and pediatric peritoneal dialysis. This granular approach means your QIP scoring is no longer averaged across modalities — each modality must meet its own target. Practices with strong hemodialysis outcomes but weaker peritoneal dialysis performance will see this unbundling reflected directly in their TPS.
Proposal 6: AKI Dialysis Payment Rate Update
For nephrology practices managing patients with Acute Kidney Injury who require dialysis, CMS proposes to align the AKI dialysis payment rate with the new ESRD PPS base rate — $299.55 per treatment effective January 1, 2027. The home dialysis training add-on payment expansion also applies to AKI dialysis training payments.
The MCP Billing Foundation: Don’t Let the Rule Overshadow the Basics
While the proposed rule commands attention, the most significant ongoing revenue leak in nephrology billing has nothing to do with the new proposals. It is the Monthly Capitation Payment (MCP) coding error that compounds across hundreds of claims every month.
The MCP code structure for adult patients (age 20 and older) works as follows:
90960 — 4 or more face-to-face physician visits in the month
90961 — 2 to 3 face-to-face physician visits in the month
90962 — 1 face-to-face physician visit in the month
The single most common and most expensive billing error in nephrology is billing 90960 when the clinical team documented only 2 or 3 visits — or billing 90961 when only 1 visit is documented. The payer’s claim edit fires automatically. The claim denies or downcodes. And unlike most denial types, a downcode from 90960 to 90961 cannot be recovered after the month closes without a valid clinical documentation correction — which creates compliance risk.
Every month you bill the wrong MCP code is a month you cannot recover. The fix is operational: require billing staff to verify the documented face-to-face visit count before selecting the MCP code, and implement a monthly pre-bill audit for every dialysis patient on your roster.
For pediatric patients (under 20), MCP codes run from 90951 through 90959 based on age group and visit count. The same visit documentation rule applies.
Also important: When a dialysis patient is seen for a condition completely unrelated to ESRD — an acute infection, uncontrolled hypertension, or an acute cardiac event — a separate E/M visit can be billed alongside the MCP code using Modifier 25 to indicate a significant, separately identifiable service. This is a legitimate and commonly missed revenue opportunity. The key is documentation: the E/M note must clearly separate the unrelated condition from the ESRD management work. If the documentation blurs the two, the payer will bundle the E/M into the MCP payment.
| Code | Adult Visits/Month | Approx. Payment |
|---|---|---|
| 90960 | 4 or more face-to-face visits | Highest |
| 90961 | 2–3 face-to-face visits | Mid |
| 90962 | 1 face-to-face visit | Lowest |
ICD-10 Coding Precision: The Foundation of Every ESRD Claim
No amount of rate update tracking compensates for diagnosis coding that fails to establish medical necessity. ESRD billing rests on two ICD-10 rules that must be applied correctly on every claim:
N18.6 must be paired with Z99.2 for dialysis-dependent patients. N18.6 alone — without the Z99.2 dialysis dependence status code — leaves medical necessity incomplete and creates audit exposure. Do not submit N18.6 without Z99.2 on dialysis claims.
Combination codes must be used when the clinical relationship is established. When a patient has ESRD alongside diabetic nephropathy (E11.65 or E10.65), hypertensive CKD (I12.x or I13.x), or anemia in CKD (D63.1), the combination code must reflect those relationships. Using N18.6 alone when an established combination code exists is a coding deficiency that payers and auditors flag during review.
CKD staging must reflect current GFR documentation. Practices that pull default diagnosis codes from old encounters without reviewing current clinical status will submit claims with inaccurate diagnoses. Code to the most specific stage the current GFR value supports — N18.31 (Stage 3a, GFR 45–59), N18.32 (Stage 3b, GFR 30–44), N18.4 (Stage 4, GFR 15–29), or N18.5 (Stage 5, GFR <15 not yet on dialysis).
2026
- Review the proposed rule for provisions affecting your facility’s treatment volume, payer mix, and drug costs
- Submit comments at federalregister.gov/documents/2026/06/26/2026-12925
- Coordinate with ASN or RPA on comment letters if LVPA or outlier changes affect your revenue
- Flag the phosphate binder bundling impact if $15.96 does not cover your actual drug costs
Oct 2026
- Pull CY 2026 treatment volume per facility — determine LVPA tier eligibility under the new 6-tier structure
- Estimate net phosphate binder bundling impact: compare current TDAPA claim revenue vs. proposed $15.96/treatment
- Review high-cost patients against new outlier thresholds (FDL: $14.80 → $114.98 for adults)
- Model home dialysis training revenue uplift: $95.60 → $138.22, plus new onset period eligibility
- Review QIP TPS under proposed Kt/V 4-measure split — identify modality-level gaps
2026
- Update chargemaster with new $299.55 base rate as soon as final rule is confirmed
- Remove TDAPA claim lines for phosphate binders from your billing system — critical compliance action
- Update LVPA tier configuration in your billing software if your facility qualifies under the new threshold
- Add onset period (first 120 days) home dialysis training add-on to your billing workflow
2026
- Brief billing team on phosphate binder TDAPA removal — no TDAPA claims after Dec 31, 2026
- Reinforce MCP visit count verification process — monthly pre-bill audit for all dialysis patients
- Retrain on Modifier 25 use for unrelated condition visits alongside MCP billing
- Update QIP quality reporting workflows to reflect measure removals effective PY 2027
- Implement N18.6 + Z99.2 pairing audit in your coding review checklist
2027
- New base rate of $299.55 per treatment effective for all dialysis services
- Phosphate binder TDAPA add-on no longer valid — embedded in base rate
- LVPA new tier structure in effect for qualifying facilities
Key Dates and Action Plan
August 24, 2026 — Comment deadline
This is the most urgent near-term date. If any of the CY 2027 proposals would negatively affect your practice — particularly the LVPA threshold change, the phosphate binder bundling, or the outlier policy updates — the public comment period is your opportunity to put that on the record. CMS does read and respond to specialty society and individual provider comments in the final rule. Coordinate with the American Society of Nephrology (ASN) or Renal Physicians Association (RPA) on coordinated comment submissions.
Submit comments at: federalregister.gov/documents/2026/06/26/2026-12925
Now through October 2026 — Model your revenue impact
Pull your CY 2026 treatment volume by facility. Identify where you fall in the proposed LVPA tiers. Estimate the phosphate binder bundling impact by reviewing your current TDAPA billing. Model the outlier payment threshold changes against your high-cost patient population. This analysis will tell you whether the net CY 2027 impact is positive, negative, or neutral for your specific practice — and give you the data to submit meaningful comments.
October–November 2026 — Prepare for the final rule
CMS typically publishes the ESRD PPS final rule in early November, effective January 1. You will have approximately 45 days to implement changes. Update your chargemaster, billing system, and fee schedules as soon as the final rate is confirmed. If you have home dialysis training programs, update your billing workflows to capture the expanded onset period add-on payment from day one.
November–December 2026 — Systems and training
Brief your billing team on all changes, with particular attention to the phosphate binder TDAPA removal. Any claim for phosphate binder TDAPA with a date of service on or after January 1, 2027 will create a compliance risk. Train before the cutover, not after.
January 1, 2027 — New rates and policies effective
Key Takeaways
The CY 2027 ESRD PPS proposed rule introduces the most significant package of ESRD payment changes in recent memory. The proposed base rate of $299.55 represents a meaningful increase — but it comes with changes to bundle composition, quality scoring, and outlier policy that require careful analysis before the net revenue impact can be determined for any individual practice or facility.
The August 24 comment deadline is the immediate priority. After that, the work shifts to revenue impact modeling, system preparation, and staff training — all before the January 1, 2027 effective date.
Nephrology billing is too complex and too volume-dependent to absorb these changes passively. The practices that engage with the proposed rule now will enter 2027 with their billing systems updated, their teams trained, and their revenue optimized. Those that wait for the final rule to land in November will spend the holiday season scrambling.
Resources
- CMS CY 2027 ESRD PPS Proposed Rule Fact Sheet
- Federal Register: Full Proposed Rule CMS-1846-P
- CMS ESRD PPS Landing Page
- Comment submission deadline: August 24, 2026
Need help assessing how the CY 2027 ESRD proposed rule affects your nephrology practice’s revenue cycle? At RCM Masters, our team specializes in nephrology billing with deep expertise in MCP coding, ESRD PPS compliance, and QIP reporting. Contact us at rcmmasters.com to schedule a review.
Tags: Nephrology billing, ESRD 2027, CMS proposed rule, ESRD PPS, dialysis billing, MCP codes, phosphate binders, ESRD QIP, CY 2027, medical billing nephrology, home dialysis billing, low-volume payment adjustment
