Sponsors (3)
The bill increases access to and provider incentives for innovative dialysis therapies by extending TDAPA and creating a permanent add‑on, but does so at the cost of higher Medicare/taxpayer spending and risks to payment alignment and program sustainability.
Medicare beneficiaries receiving dialysis will have better and more sustained access to new renal drugs because TDAPA is extended and a permanent post‑TDAPA add‑on is created, making coverage of novel therapies more predictable.
Hospitals, dialysis providers, and healthcare workers will face fewer financial disincentives to furnish innovative dialysis therapies because providers receive higher reimbursements and payment updates are adjusted to correct past forecasting errors and better reflect actual dialysis costs.
Patients and payers may see more price stability for innovative renal therapies because the permanent add‑on is calculated from historic expenditures and updated annually for inflation, reducing abrupt payment swings after the TDAPA period ends.
Taxpayers and the Medicare program face higher spending and longer‑term sustainability pressure because the permanent post‑TDAPA add‑on is explicitly non‑budget‑neutral and could accumulate across multiple products, raising ESRD program costs and potentially premiums.
Drug manufacturers may set higher launch prices knowing a permanent add‑on will apply, which could increase overall drug spending and downstream costs for insurers, providers, and taxpayers.
Removing patient‑level case‑mix adjustments risks misaligning payments with patient complexity, potentially overpaying for less complex patients, under‑funding care for more complex patients, and weakening incentives for cost control or appropriate resource allocation.
Based on analysis of 3 sections of legislative text.
Extends TDAPA to at least three years for qualifying new renal dialysis drugs/biologics and creates a permanent post‑TDAPA add‑on (65% of per‑use spending) with annual updates and a forecast error correction beginning in 2026.
Introduced September 8, 2025 by Marsha Blackburn · Last progress September 8, 2025
Requires HHS/CMS to extend the Medicare Transitional Drug Add‑On Payment Adjustment (TDAPA) to at least three years for qualifying new renal dialysis drugs or biologicals approved since Jan 1, 2020 and furnished on or after Jan 1, 2026, and creates a permanent post‑TDAPA add‑on payment to the ESRD (renal dialysis) base rate for drugs that previously received TDAPA. The permanent add‑on is calculated from actual drug spending per dialysis service (multiplied by 65%), updated annually for inflation, applied once TDAPA expires, and explicitly treated as non‑budget‑neutral and not subject to patient case‑mix adjustments. Also requires CMS to implement a “forecast error adjustment” beginning in 2026 that modifies the annual update factor for ESRD payment rates when the difference between forecasted and actual price changes for dialysis goods/services exceeds 0.5 percentage points; the initial adjustment must account for cumulative forecast error for 2021–2022.