Dialysis Facility

Key facts

Federal standards

ESRD Conditions for Coverage, 42 CFR Part 494

Medicare payment

ESRD Prospective Payment System, a bundled per-treatment rate since 2011

Quality program

ESRD Quality Incentive Program (QIP), reductions of up to 2 percent

Medicare eligibility

ESRD qualifies people for Medicare at any age, under 1972 amendments

Patient data system

ESRD Quality Reporting System (EQRS)

What is a dialysis facility?

Dialysis replaces the waste and fluid removal work of failed kidneys. Most U.S. dialysis patients receive in-center hemodialysis, typically three sessions a week of several hours each. Others use home hemodialysis or peritoneal dialysis, with the facility providing training, supplies and regular oversight.

Facilities can be independent or hospital-based. Ownership is highly concentrated, with a small number of national chains operating most U.S. outpatient dialysis clinics.

Each facility must meet federal Conditions for Coverage on water quality, infection control, patient assessment and staffing. State survey agencies inspect facilities, and regional ESRD Networks under contract with CMS monitor quality.

How Medicare pays for dialysis

Medicare is the dominant payer for dialysis, and its bundle shapes facility economics:

• The ESRD Prospective Payment System pays a single bundled rate per treatment covering dialysis and most related drugs and laboratory tests, adjusted for patient and facility factors.
• Drugs once billed separately, such as erythropoiesis-stimulating agents, are inside the bundle. Certain new renal drugs receive a temporary add-on payment before being folded in.
• The ESRD Quality Incentive Program reduces payment by up to 2 percent for facilities that fall short on quality measures.
• For people with employer group health coverage, that plan pays first during a 30-month coordination period before Medicare becomes primary.

Why dialysis facility data matters

Dialysis is a concentrated, heavily measured market:

• Renal drug makers and suppliers of dialyzers and anemia treatments sell into a small set of chains, so mapping facilities to owners defines the account list.
• Dialysis Facility Care Compare publishes star ratings and quality measures by facility, keyed to the CMS Certification Number.
• Commercial insurers typically pay dialysis providers substantially more than Medicare during the coordination period, which makes payer mix a key diligence metric.
• Facility locations relative to patient populations inform access analysis for kidney care models and nephrology practice planning.