The Service Line

Medicare just proposed banning the outsourced staffing model that many chronic kidney disease monitoring programs run on, a rule change nephrology groups and their value based partners need to plan around before comments close September 14. On July 16, 2026, the Centers for Medicare and Medicaid Services (CMS) published its Calendar Year (CY) 2027 Medicare Physician Fee Schedule (MPFS) proposed rule (CMS-1848-P) in the Federal Register, containing what several health law firms are calling the most significant overhaul of remote patient monitoring (RPM) and remote therapeutic monitoring (RTM) payment policy since Medicare began covering RPM in 2019. The rule proposes to end Medicare payment for RPM and RTM services performed by outsourced third party vendors, requiring instead that monitoring staff be direct employees of the billing practice, adds a new requirement that both services be initiated during a separately billable face to face visit with an established patient, reduces reimbursement for several codes, and asks for comment on consolidating the existing code set into four new G-codes. CMS cites Office of Inspector General (OIG) findings that contracted monitoring staff frequently had little to no established relationship with the beneficiary or care team as the rationale. Chronic kidney disease is one of the conditions RPM programs target most, since stage 3 to 5 patients typically need daily blood pressure and weight tracking for concurrent hypertension or diabetes; a direct employment mandate would force nephrology practices and the value based kidney care companies that manage CKD populations to choose between building monitoring staff in house or losing that revenue. Confidence: High on the rule’s provisions, Medium on how many kidney focused RPM programs currently lean on outsourced vendors and would need to restructure. Sources: Calendar Year (CY) 2027 Medicare Physician Fee Schedule Proposed Rule, CMS, Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule, Federal Register.

Reimbursement

The public comment window on Medicare’s proposed 2027 dialysis payment rate closes today, and a detail in the rule shows nearly $16 of the proposed increase is just the cost of moving phosphate binders into the payment bundle. We first covered CMS’s Calendar Year (CY) 2027 End Stage Renal Disease (ESRD) Prospective Payment System (PPS) proposed rule when it published June 26, 2026: a base rate rising to $299.55 per treatment, an approximately 1.1 percent aggregate payment increase for freestanding and hospital based dialysis facilities. CMS’s fact sheet for the rule specifies that $15.96 of that per treatment increase reflects incorporating oral phosphate binders into the ESRD bundled payment for the first time, part of a broader rebasing of the ESRD Bundled market basket that shifts a drug cost facilities previously billed separately into the per treatment rate facilities are paid regardless of what they spend. The public comment period on the rule closes today, August 24, 2026; CMS has historically issued ESRD PPS final rules in late October or November for a January 1 effective date. Confidence: High on the published figures, Medium on whether the $15.96 phosphate binder add on survives unchanged to the final rule. Sources: Calendar Year (CY) 2027 End-Stage Renal Disease (ESRD) Prospective Payment System Proposed Rule, CMS, Medicare Program; CY 2027 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System, Federal Register.

Enforcement

No new dialysis or nephrology enforcement action broke publicly in this scan window. The vascular access overutilization theory behind the $6.73 million Serrano Kidney and Vascular Access Center settlement we covered July 27 remains the dominant live pattern industry wide, with no new settlements, indictments, or OIG actions announced against dialysis or nephrology entities since.

Who’s Buying

DaVita’s in house value based kidney care arm posted its first meaningfully profitable quarter, a signal the dialysis duopoly itself, not just the outside enablers nephrology groups partner with, now wants a bigger cut of the risk based kidney care dollar. DaVita reported August 4, 2026 that its Integrated Kidney Care (IKC) division generated $40 million in adjusted operating income in the second quarter of 2026, a swing from a $19 million loss in the first quarter, which the company attributed primarily to a net increase in shared savings recognized earlier than expected. As of June 30, 2026, DaVita had approximately 64,900 patients in risk based, value based kidney care arrangements representing about $5.8 billion in annualized medical spend under management, and the company said it expects IKC to keep contributing roughly $20 million to full year adjusted operating income growth. That puts the country’s largest dialysis chain in more direct competition with the value based kidney care enablers, Strive Health, Monogram Health, InterWell Health, and Evergreen Nephrology among them, that court the same nephrology practices for alignment deals; a practice negotiating with an outside enabler this year is increasingly also weighing whether its own dialysis provider is becoming the more attractive value based partner. Confidence: High on the reported financial figures, Medium on how much of IKC’s swing to profitability reflects one time revenue timing versus a durable trend. Sources: DaVita Inc. Second Quarter 2026 Results, DaVita.

Clinical Policy

DaVita says fewer of its dialysis patients are dying, and it is crediting the same phosphate binder shift CMS just proposed folding into next year’s payment bundle. On its August 4, 2026 second quarter earnings call, DaVita executives told investors that full year 2026 treatment volume growth is tracking toward the high end of the company’s 25 to 50 basis point guidance range, driven mainly by sustained improvements in patient mortality rather than market share gains. Management specifically credited transitioning phosphate binders into the Medicare dialysis payment bundle with cutting the share of patients relying on what executives called less effective over the counter options by more than half, a clinical shift that predates but now lines up with CMS’s proposal to formally build phosphate binder costs into the CY2027 ESRD PPS base rate. Revenue per treatment fell roughly $2 sequentially in the quarter, which DaVita tied in part to that same phosphate binder transition, even as the mortality benefit supported higher overall treatment volume. For an industry watching whether GLP-1 drugs will eventually shrink the dialysis population, a question we covered July 27, DaVita’s numbers this quarter point to a nearer term volume driver: fewer dialysis patients dying from poorly controlled phosphate levels, sustaining facility census independent of the GLP-1 debate. Confidence: Medium, based on management commentary on the earnings call rather than published clinical trial data. Sources: DaVita Inc. Second Quarter 2026 Results, DaVita, DaVita (DVA) Q2 2026 earnings call transcript, Investing.com.

The Operator Metric

333. That is how many candidates matched into a nephrology fellowship for the training year that started July 2026, down 8 percent from the year before, and it is the clearest signal yet of how tight the talent pipeline is getting for every practice, MSO, and value based kidney care enabler competing for nephrologists. The American Society of Nephrology’s first look at the Appointment Year (AY) 2026 fellowship Match found that only 89 of 186 nephrology training tracks filled completely, just 48 percent, and that 66 percent of the 501 fellowship positions offered nationally were claimed on Match Day, even though the number of positions offered rose 1 percent year over year. International medical graduates made up 40 percent of the 333 matched fellows. For an operator layer built on courting a fixed and shrinking supply of practicing nephrologists, whether for medical directorships, MSO alignment, or value based care partnerships, a fellowship class that keeps failing to fill available slots means the competition for existing nephrologists, not new graduates, will keep intensifying over the next several years. Confidence: High on the match figures as reported. Sources: First Look: AY 2026 Match, American Society of Nephrology.