CMS Finalizes 2026 ESRD Payment Rule With 2.2% Rate Increase
Key Summary
- Payment update: CMS will raise the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) base rate to $281.71 in calendar year (CY) 2026, a 2.2% increase in total payments to ESRD facilities.
- Geographic adjustment: New nonlabor payment increases of up to 25% will apply to facilities in Alaska, Hawaii, and US Pacific Territories.
- Quality program revisions: CMS will remove 3 health equity reporting measures and shorten the ICH CAHPS survey to 39 questions.
Washington, DC, November 20, 2025 — The Centers for Medicare & Medicaid Services (CMS) has issued the final rule for the Calendar Year (CY) 2026 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) (CMS-1830-F). The update affects payment rates and quality reporting requirements for dialysis facilities nationwide, including both freestanding and hospital-based centers. The rule also ends the ESRD Treatment Choices Model as of December 31, 2025.
Main News
Under the final rule, Medicare will pay an estimated $6 billion to approximately 7600 ESRD facilities for renal dialysis services in CY 2026. The ESRD PPS base rate will increase from $273.82 to $281.71, reflecting a 2.1% market basket update, a wage index adjustment factor of 1.00905, and a budget neutrality adjustment of 0.99860.
The rule establishes a new noncontiguous area payment adjustment (NAPA) to account for higher non-labor costs in remote areas. ESRD facilities in Alaska and the US Pacific Territories will receive the maximum 25% increase to the nonlabor portion of the base rate, while Hawaii facilities will receive a 21% increase.
CMS will also update the wage index using the latest data from the Bureau of Labor Statistics Occupational Employment & Wage Statistics (OEWS) program. The 5% cap on wage-index decreases and the 0.6000 wage-index floor will remain in effect.
The Outlier Policy is being revised with decreases in fixed dollar loss and Medicare allowable payment thresholds for both adult and pediatric beneficiaries. Additionally, CMS is aligning the Acute Kidney Injury (AKI) dialysis payment rate with the new ESRD PPS base rate at $281.71.
Industry Implications
The 2026 ESRD PPS final rule reflects CMS’s continued commitment to balancing payment adequacy, cost efficiency, and quality improvement in dialysis care. The 2.2% increase provides modest financial relief amid inflationary pressures and operational challenges for dialysis providers.
By eliminating 3 health equity-related reporting measures and streamlining the ICH CAHPS patient survey, CMS aims to reduce administrative burden while maintaining accountability through the ESRD Quality Incentive Program (QIP). The early termination of the ESRD Treatment Choices Model follows evaluations indicating limited success in achieving home dialysis and transplant goals, signaling a strategic realignment of CMS’s innovation initiatives.
These updates could help facilities focus more on patient outcomes, data interoperability, and resource optimization—especially in geographically isolated regions now receiving higher reimbursement support.
Conclusion
The CY 2026 ESRD PPS final rule delivers a 2.2% overall payment increase and key operational changes to support sustainability and equity in kidney care. Implementation begins January 1, 2026, as CMS continues to refine payment models and quality measures for the nation’s dialysis providers.
Reference
Calendar Year (CY) 2026 End-Stage Renal Disease (ESRD) Prospective Payment System Final Rule. CMS.gov. Published November 20, 2025. Accessed November 21, 2025. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-end-stage-renal-disease-esrd-prospective-payment-system-final-rule
