Refining the end-stage renal disease payment system to improve access to innovative treatment options

(a) Extension of Transitional Drug Add-On Payment Adjustment (TDAPA) period The Secretary of Health and Human Services (in this section referred to as the Secretary) shall pay the transitional drug add-on payment adjustment under section 413.234(c) of title 42, Code of Federal Regulations (or a successor regulation), for not less than 3 years for any new renal dialysis drug or biological product— (1) approved by the Food and Drug Administration on or after January 1, 2020, under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or section 351 of the Public Health Service Act (42 U.S.C. 262); (2) that qualifies for such adjustment under such section; and (3) that is furnished on or after January 1, 2026. (b) Permanent post-TDAPA adjustment Section 1881(b)(14) of the Social Security Act (42 U.S.C. 1395rr(b)(14)) is amended by adding at the end the following new subparagraph: (J) Payment for new and innovative drugs, biologicals, and devices that are renal dialysis services (i) In general For any new renal dialysis drug or biological product that is used to treat or manage a condition as defined in section 413.234(a) of title 42, Code of Federal Regulations that received a transitional drug add-on payment adjustment (referred to in this subparagraph as TDAPA) under section 413.234(c) of such title, and was furnished on or after January 1, 2024, the Secretary shall establish a permanent add-on adjustment to the base rate for claims submitted on or after January 1, 2026, that includes the administration of such drugs or biologicals. (ii) Calculation of the post-TDAPA add-on adjustment In calculating the add-on adjustment described in clause (i), the Secretary shall— (I) base the calculation on— (aa) except as provided in items (bb) and (cc), the most recent 12-month period of utilization for the new renal dialysis drug or biological product and the most recent available full calendar quarter of average sales price data for such drug or product; (bb) if the most recent available full calendar quarter of average sales price data reflects 0 or negative sales, 100 percent of the wholesale acquisition cost (as defined in section 1847A(c)(6)) of such drug or product; or (cc) if the wholesale acquisition cost is not available, the drug manufacturer’s invoice; (II) calculate the post-TDAPA add-on payment adjustment as the expenditures for the new renal dialysis drug or biological product divided by the total number of renal dialysis services during which such drug or biological was administered during the same period; (III) set the amount of the add-on adjustment as an amount equal to 65 percent of the amount calculated under subclause (II); (IV) update the add-on adjustment annually to account for inflationary changes; and (V) apply the add-on adjustment amount immediately upon the expiration of the TDAPA period and availability of the post-TDAPA add-on adjustment. (iii) Implementation This subparagraph shall not be implemented in a budget neutral manner and shall not be adjusted by any applicable patient-level case-mix adjustments described in section 413.235 of title 42, Code of Federal Regulations (or any successor regulation).. (c) Clarification to definition of renal dialysis services Section 1881(b)(14)(B) of the Social Security Act (42 U.S.C. 1395rr(b)(14)(B)) is amended— (1) by redesignating clauses (i) through (iv) as subclauses (I) through (IV), respectively; (2) by inserting (i) after (B); (3) in clause (i)(IV), as added by paragraph (2), by striking clause (i) and inserting subclause (I); (4) in the flush text at the end, by striking Such term does not and inserting the following: (ii) Such term— (I) does not; (5) in clause (ii), as added by paragraph (2)— (A) in subclause (I), by striking the period at the end and inserting; and; and (B) by adding at the end the following: (II) does not include drugs or biological products used to treat a comorbid disease or condition (including cardiovascular disease, an inflammatory condition, cancer, diabetes, and obesity) that may occur in an individual who has been determined to have end-stage renal diseases and is receiving dialysis and— (aa) that have been approved by the Food and Drug Administration after December 31, 2025; and (bb) do not substitute for a drug or biological included in the ESRD prospective payment system base rate.; and (6) by adding at the end the following new clause: (iii) Implementation Beginning on the date of enactment of this clause, for purposes of implementing clause (ii)(II), the Secretary shall require that a claim for a drug or biological product described in such clause, that is payable under this part and is furnished by a provider of services or renal dialysis facility, contain the AY modifier (or a successor modifier).. (d) Revisions to Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) (1) Extension of period The Secretary shall pay the transitional add-on payment adjustment for new and innovative equipment and supplies under section 413.236 of title 42, Code of Federal Regulations (or a successor regulation), for not less than 3 years for any new renal dialysis device that— (A) qualifies for such adjustment; and (B) is furnished on or after January 1, 2026. (2) Eligibility of breakthrough devices Beginning January 1, 2026, a device designated for expedited development and priority review under section 515B of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360e–3) shall be eligible for a transitional add-on payment adjustment for new and innovative equipment and supplies under section 413.236 of title 42, Code of Federal Regulations (or a successor regulation). (3) Inclusion of capital-related assets in the transitional add-on payment adjustment for new and innovative equipment and supplies and post-Transitional Add-On Payment Adjustment for New and Innovative Equipment and Supplies Beginning January 1, 2026, the Secretary shall not apply the criterion described in section 413.236(b)(6) of title 42, Code of Federal Regulations (or a successor regulation), that excludes capital-related assets from the transitional add-on payment adjustment for new and innovative equipment and supplies and shall calculate such adjustment for capital-related assets that are devices that otherwise meet the requirements for the transitional add-on payment adjustment for new and innovative equipment. (e) Effective date The amendments made by this section shall take effect on January 1, 2026, and apply to items and services furnished on or after such date.