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Medicare secondary payer claims are included in the tabulation of non-ESRD USPCCs and AGAs. Projections for Part B physician-administered drugs are in aggregate and reflect the projected impact of changes in the demographic profile of the FFS population. We believe that the information in the CY 2026 Advance Notice and now this CY 2026 Rate Announcement provides the necessary support for understanding USPCC levels and trends. ESRD Dialysis-Only USPCC and Growth Rate Comment: A few commenters expressed concern regarding volatility in ESRD growth rates, including restatements of prior year estimates. One of these commenters requested greater transparency regarding the methodology and assumptions used to develop the ESRD USPCCs. Another commenter requested that cost and trend data, including utilization, be published for the ESRD beneficiary population, given the increase in ESRD enrollment in MA. Response: As discussed in past Rate Announcements4, we believe it is important to update the FFS per capita cost estimates using the most current FFS data available at the time those values are announced and apply repricing adjustments to reflect changes in FFS payment rules. Similar to prior Rate Announcements, the method for calculating the county-level non-ESRD rates and the state-level ESRD rates includes AGAs based on a five-year rolling average of historical claims experience, which provides some measure of stability in the rates. The published 2024-2026 “Medicare Unit Cost Increases” by service category (available at https://www.cms.gov/files/document/ffs-trends-2024-2026.pdf) apply to provider payments for both ESRD and non-ESRD beneficiaries. Starting with the CY 2024 Rate Announcement posting, we have added trends for the ESRD Prospective Payment System (ESRD PPS) base rate. The ESRD dialysis USPCCs are derived from the total ESRD USPCC baseline but are adjusted for recent trend differences between the total ESRD and dialysis ESRD populations. Thus, the ESRD dialysis USPCCs are projected using a base year USPCC trended to 2026 using total ESRD growth with an “adjustment factor for dialysis only.” The utilization and intensity assumptions supporting the ESRD trends are based on multiple years of historical experience. The applicable trends are found in the table in Attachment II, “Basis for ESRD Dialysis-only FFS USPCC Trend.”

4 Prior Rate Announcements are available at: https://www.cms.gov/medicare/payment/medicare-advantage-rates- statistics/announcements-and-documents