Red Tape Stifling Innovation in Kidney Care

Fifty years ago, the government created the Medicare End-Stage Renal Disease system to ensure that all patients with end-stage renal disease (ERSD), or kidney failure, could access dialysis treatment. The 1972 legislation was, in part, intended to prevent policies that were effectively rationing life-saving care at the time.   

While this policy may have been born from a desire to ensure expanded access, today’s Medicare payment system is a far cry from its original vision. In an era of accelerating innovations in medicine and health technology, the sad truth is that current payment policy ultimately leaves behind those living with kidney disease.   

The problem stems from a newer portion of the ESRD Medicare payment system, the Transitional Drug Add-on Payment Adjustment (TDAPA). The theory is that a qualified innovative product will be covered for two years and following this period, the Centers for Medicare & Medicaid Services (CMS) can adjust the base payment rate to accommodate its uptake for three years. After that period, the bundle reverts back to the basic rate that was originally designed to incorporate products and services available in the mid-2000s – nearly 25 years ago.  However, while TDAPA intends to expand and ensure access to new drugs and biological products, in practice this isn’t what’s happening.  

As an example, in August of 2021, the FDA approved a drug that effectively treats pruritus, or severe itching associated with hemodialysis treatment. The itching is so intense that many patients give themselves open wounds that leave them vulnerable to infection, hospitalization, and a substantially reduced quality of life.   

In the latest ESRD payment rule, CMS failed to acknowledge the bundle does not include funding for this breakthrough product that addressed a long-standing gap in treatment. Instead, the agency indicated that patients would be just fine if they continued to receive generic antihistamine – a status quo treatment – that has been proven ineffective and does nothing more than put patients to sleep. Moreover, the post-TDAPA policy provides very little funding for three years to dialysis facilities regardless of whether or not they provide the product, which costs facilities more than the pennies being added to the base rate.    

For many facilities, especially in rural and medically underserved areas, providing this medication is not an option. Providing an innovative treatment at an economic loss means cutting back on staffing, treatment shifts, or other overhead needed to keep their doors open. It’s no surprise then that so few patients are getting this product.   

This one-size-fits-all approach is not only harmful to patients who will continue to suffer despite the existence of an FDA-approved effective treatment but also threatens future innovations in kidney care therapeutics. As the overwhelmingly dominant payer for individuals with kidney failure, Medicare has a unique responsibility to these patients to provide an appropriate reimbursement amount for truly innovative treatment options.  

These investment disincentives, coupled with a flawed payment policy that fails to adapt to innovations, are keeping the standard of kidney care stuck in the late 1980s and early 1990s, rather than meeting the potential of today’s era of medical innovation.   

In short, the Medicare program is failing patients living with kidney disease. Reforming the Medicare ESRD PPS is a critical step to ensuring that kidney care patients have access to innovation. Given that kidney disease disproportionately impacts Black and Hispanic Americans, such reform would also help Medicare achieve its stated goal of advancing health equity while improving outcomes for all.   

To reform this outdated and broken payment system and mitigate the impact of the recently proposed ESRD PPS rule for next year, Congress must pass the Chronic Kidney Disease Improvement in Research and Treatment Act (HR 5027). If passed, this legislation would implement long-term, sustainable payment pathways for new drugs, biologics, and devices—lowering costs and improving care for our nation’s kidney community.   

Passing this much-needed, bipartisan legislation can jump-start a broader update to help ESRD patients more easily and affordably access innovative drugs, devices, and therapies, all while addressing serious gaps in treatment options to improve their overall health and well-being. Congress should act quickly to help improve vital access to care for ESRD patients nationwide.   

John Butler is President and CEO of Akebia Therapeutics and former Chair of Kidney Care Partners