Since the introduction of the present End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) in 2011, Medicare has utilized a bundled payment mechanism to reimburse facilities for dialysis services and for most dialysis drugs, laboratory tests, and other related items and services that were previously billed separately. The Centers for Medicare & Medicaid Services (CMS) subsequently introduced the Transitional Drug Add-on Payment Adjustment (TDAPA) payment designation to provide increased reimbursement for certain qualifying new drugs and biological products in this bundled payment system. CMS has refined the payment parameters and eligibility criteria for this payment designation several times since it was first introduced in 2016 rulemaking.

TDAPA was first implemented in 2018 for the calcimimetic therapies; these therapies have since completed their TDAPA period and been incorporated into the ESRD PPS bundle. Presently one therapy (an anti-pruritis agent) is eligible for this payment designation through March 2024, and several agents with expected indications to treat patients on dialysis are currently in development. As such, CMS is considering further potential opportunities to refine this payment designation to support patient access to TDAPA-eligible treatments following the conclusion of this payment designation period.

In the recently released CY 2023 ESRD PPS proposed rule, CMS included a request for information on new product bundle incorporation following the end of the product’s TDAPA period. CMS acknowledged stakeholder concerns about the current payment policies and access to new products at the end of the TDAPA period. CMS opted to include potential methodological changes that would adjust the bundled reimbursement rate following the TDAPA period for products that fall into existing functional categories. However, if CMS were to move forward with any changes to policy surrounding bundle incorporation of new products, the earliest these changes could take effect would likely be January 1, 2024.

The potential changes to the TDAPA payment designation and broader Medicare bundle is one of many changes introducing new questions for stakeholders in the dialysis space. For example, the Medicare Advantage market is seeing an increased enrollment by patients with ESRD, new payment models are introducing financial risks and incentives for dialysis providers, and new efforts are underway to address disparities in access and outcomes in kidney care.

To learn more about the evolving kidney care market and how Avalere can help your business drive access and continuity of care in this dynamic time, connect with us.