Navigating the 2025 ESRD PPS Final Rule: Key Updates for Billing Departments

The Centers for Medicare and Medicaid Services (CMS) has released the final rule for the end-stage renal disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2025. These updates contain several significant changes that billing departments of dialysis programs need to understand to ensure seamless compliance and optimal reimbursement. We will highlight the most critical updates in the 2025 ESRD PPS final rule and their potential impact on billing operations.  

Updated Base Rate and Revised Wage Index Calculations 

The ESRD PPS base rate for CY 2025 has been set at $273.82, reflecting an increase of $2.80 from the CY 2024 rate. The ESRD PPS wage index will be derived from Bureau of Labor Statistics data and ESRD facility cost reports. To determine the effect these changes will have on your dialysis program’s bottom line, you can check your program’s CMS certification number in the CMS facility level impact files. Visit www.cms.gov and search for “CMS-1805-F” and you will find the files in the downloads section.  

Expanded List of Outlier Services 

CMS has expanded the list of outlier services to include additional medications that were part of the composite rate before the ESRD PPS. This change had a significant effect on the amounts used to calculate outlier eligibility for pediatric claims. Below are the updated fixed dollar loss (FDL) and Medicare allowable payment (MAP) amounts.  

• Pediatric FDL: Increased significantly to $234.26 (up from $11.32 in CY 2024), driven primarily by the inclusion of alteplase 

• Pediatric MAP: Increased to $59.60 (up from $23.36 in CY 2024) 

• Adult FDL: Decreased to $45.41 (from $71.76) 

• Adult MAP: Decreased to $31.02 (from $36.28) 

These adjustments highlight the importance of understanding the criteria for outlier payments. Billing teams should verify that medications and services qualifying as outliers are properly documented and billed to capture outlier adjustment amounts where applicable.  

Low-Volume Payment Adjustment  

The low-volume payment adjustment has transitioned to a two-tiered model: programs performing fewer than 3,000 treatments annually will receive a 28.9% adjustment to the base rate, and facilities with 3,000 to 3,999 treatments annually will receive an 18.3% adjustment. CMS will determine which tier a program is eligible for based on the median treatment count over the past three cost reporting periods. Billing departments should review historical data to verify their facility’s tier and ensure proper reimbursement is received.  

Inclusion of Oral-Only Drugs in the ESRD PPS  

Effective January 1, 2025, oral-only drugs are included in the ESRD PPS. CMS will use the traditional drug add-on payment adjustment (TDAPA) to reimburse phosphate binders based on 100% of the average sales price, wholesale acquisition cost, or invoice cost depending on availability of pricing information. In addition, facilities will receive a fixed, per claim reimbursement of $36.41 for the costs associated with dispensing and storing these drugs.  

Clinical and billing teams will need to collaborate when outlining processes around identifying the patients who need to continue to get their phosphate binders from a retail pharmacy and those who should receive their phosphate binders from the dialysis program. Thorough documentation around the patient’s insurance plan, prescribed dose, and the quantities of phosphate binders distributed is critical to ensuring accurate billing and reimbursement. Billing departments must update their systems to incorporate oral-only drugs into claims and familiarize themselves with TDAPA processes to ensure full reimbursement.  

Reimbursement for Home Dialysis and Training for AKI Beneficiaries 

CMS will now allow reimbursement for home dialysis and home dialysis training for acute kidney injury (AKI) beneficiaries. Billing teams should confirm that training sessions and related services are documented and coded accurately and educate staff about the additional reimbursement opportunities for home dialysis services for patients with AKI.  

Reporting ‘Time on Machine’ 

Starting January 1, 2025, facilities must report the “time on machine” on each claim using value code D6. Billing departments should ensure electronic health records (EHRs) are configured to capture and transmit these data for inclusion on claims per CMS specifications.  

Preparing for Implementation 

With the CY 2025 ESRD PPS updates introducing several significant changes to requirements and reimbursement, dialysis programs must proactively educate their teams on changes that relate to their daily tasks and responsibilities. Confirming that billing software and EHR systems are updated to reflect new reporting requirements is a crucial step in preparedness. To achieve maximum reimbursement, all teams must work together to ensure clinical documentation supports billing data.  

The opinions expressed in this column are the contributor’s own and do not represent those of Nephrology Times.