A new national kidney care plan was a major effort in the Trump-1 administration (2019 here). One of the leaders, Abe Sutton, now heads CMMI.
In October 2026, HHS announces an updated Kidney Plan. Worth tracking. It gives important sightlines into how this CMS views healthcare innovation.
- A Google-AI summary is here.
- The new Kidney Care National Plan, KCNP, home page is here.
- See the 17-page white paper here.
- See the press release here.
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AI CORNER
See the six page white paper PDF here.
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HHS’s Kidney Care Plan: A Window into How CMS Thinks About Innovation
DaVita’s response exposes a central policy debate: how should government reward innovation while ensuring that established providers face meaningful competition?
HHS’s Kidney Care National Plan offers a revealing look at how federal officials think innovation happens and why it sometimes stalls. For readers following CMS policy, the significance extends beyond dialysis. The plan connects prevention, payment incentives, competition, and regulatory reform. DaVita’s response exposes the central tension: government sees entrenched structures that may impede progress, while a major provider argues that its scale helps deliver it. The next challenge is turning those positions into policy.
A Kidney Strategy with Broader Policy Implications
On October 20, 2026, HHS released its Kidney Care National Plan, outlining an agenda for earlier intervention, better dialysis options, and expanded transplantation. For readers following CMS innovation policy, the document deserves attention well beyond kidney care. It offers an unusually explicit argument about how government payment, regulation, and market concentration can shape—or suppress—innovation.
The HHS announcement describes a department-wide effort spanning payment policy, research, product regulation, and oversight. Its ambitions are broad: prevent kidney failure, expand patient choice, and improve transplantation. The accompanying plan goes considerably further in diagnosing why progress has been inadequate.
Its central contention is that disappointing outcomes reflect the incentives and institutions government helped create. Medicare is consequently both the payer confronting the consequences and a policymaker with considerable responsibility for changing them. The full argument appears in the supplied plan, especially its discussion of competition and prevention on printed pages 4–12.
DaVita’s response supports many of the goals while challenging that diagnosis. The exchange is a useful case study in what “innovation” means to an agency, a payer, and a major provider.
Looking at the Market Government Helped Build
The plan argues that dialysis facility requirements can impose substantial upfront costs on new entrants, including providers pursuing home-based approaches for which conventional facility infrastructure may be less necessary. It also questions whether established payment arrangements offer a durable business case for adopting better technologies.
This is a broader policy inquiry than deciding whether to increase a reimbursement rate. HHS is asking whether the conditions for receiving payment favor particular organizations, facilities, and delivery methods.
For an innovation company, those conditions can matter as much as the quality of its product. A technology may work clinically yet struggle commercially if providers cannot finance its adoption or prospective customers have little incentive to change.
The plan is also unusually confrontational about incumbent behavior. It discusses physician financial relationships, contracting restrictions, bargaining power with insurers, and third-party premium assistance. These are HHS’s concerns and policy arguments; the document should not be read as an adjudication that any particular company has violated the law. Nevertheless, their prominence signals that HHS sees competition policy as part of health innovation policy.
Prevention’s Problem: Who Pays, and Who Benefits?
The most interesting payment problem concerns who benefits from prevention. An insurer or employer may pay today for earlier detection and treatment, while Medicare receives much of the eventual financial benefit if kidney failure is delayed or avoided. Patients can change coverage before those benefits emerge. Providers likewise may have no practical way to capture the value of preventing an expensive event years later.
The plan therefore identifies a mismatch between the party making the investment and the party receiving the return.
That is a consequential diagnosis for CMS. Encouraging prevention through education alone does not solve it. Nor does an additional payment for a screening encounter necessarily create sustained incentives for treatment and follow-up.
The document proposes exploring accountability across the course of disease, earlier intervention, sustainable financing for new technologies, and coordination among payers. Its recommendation to consider a multi-payer summit acknowledges that Medicare cannot fully solve a problem created by patients moving among coverage arrangements simply by changing one Medicare payment.
The difficult implementation questions remain: Who pays upfront? Who receives credit for avoided kidney failure? How long must a model run? How should it distinguish a treatment effect from differences in the patients who enroll?
The plan identifies the economic problem more clearly than it specifies the contractual solution.
CMS Experiments: Better Outcomes Can Still Cost More
DaVita invokes the Kidney Care Choices model as evidence that value-based kidney care can meaningfully improve patients’ lives. CMS’s evaluation supports important parts of that argument—but adds a financial complication.
According to CMS, the model’s second performance year produced improvements in home dialysis, optimal starts to dialysis, and preemptive and living-donor transplantation. Yet it also produced an estimated $304 million net loss to Medicare in performance year 2023. CMS has continued the model through 2027 while changing its financial methodology and participation options.
Those findings deserve to be presented together. Better care is valuable. Better care does not automatically establish that a particular payment model saves money.
The HHS plan also acknowledges the termination of the separate ESRD Treatment Choices model after it failed to achieve its intended results or anticipated savings. The policy lesson is that a plausible incentive mechanism remains an experiment. Participation, enthusiasm, and improved intermediate measures are insufficient substitutes for evaluating the full result.
The proposed direction is to move intervention earlier. The plan points to CMS’s ACCESS model, which tests recurring payments for technology-supported chronic care, with full payment tied to measurable outcomes. Its covered conditions include stage 3a and 3b chronic kidney disease.
The plan indicates that HHS wants CMS to make preserving health a more dependable business proposition. That requires defining an outcome worth purchasing, establishing credible measures, and offering a payment structure under which organizations can deliver it.
DaVita’s Rebuttal: Scale Can Support Innovation
DaVita’s statement contains a particularly direct sentence:
“Where we differ is the suggestion that kidney care has lacked innovation or that scale stands in its way.”
The company describes investments in coordinated care, transplant navigation, proprietary technology, and a clinical innovation being deployed across its centers. It argues that organizational scale supplies the expertise and capital needed to develop improvements and spread them widely.
That is a substantive response. HHS emphasizes the possibility that concentration protects established practices and discourages entry. DaVita emphasizes the possibility that size enables investment and rapid adoption.
Both mechanisms can operate in the same market. A large provider can introduce a meaningful improvement while also benefiting from conditions that make competing delivery models difficult to establish. Evidence of innovation by an incumbent does not, by itself, settle whether the market produces enough innovation or gives patients sufficient choice.
Conversely, identifying concentration does not establish that smaller organizations would necessarily deliver better care. HHS will need evidence that particular changes in entry requirements, contracting, or payment actually improve access, quality, and costs.
DaVita also makes a clinically important distinction: preventing future kidney failure and treating people who already have it are simultaneous obligations. A prevention strategy must preserve effective care for patients whose need for dialysis cannot be eliminated by earlier intervention today.
Transplantation: Innovation Includes Institutional Reform
DaVita emphasizes the shortage of viable organs. HHS also examines the institutions governing organ procurement, allocation, and transplantation: regional monopolies, payment incentives, contractor arrangements, transparency, and accountability.
The difference in emphasis matters. An organ shortage can coexist with avoidable failures to identify donors, support living donation, recover organs, or complete transplantation. The plan treats those organizational processes as legitimate targets for innovation.
The press release connects this agenda to living-donor assistance, transplant system oversight, and a proposed national expansion strategy.
This also reveals a tension within the administration’s approach. The plan favors reducing barriers and limiting unnecessary regulation, while calling for stronger accountability and enforcement in selected areas. In practice, its proposed federal role is highly active: redesign payment, reconsider entry requirements, scrutinize market behavior, modernize procurement, and enforce performance expectations.
What Happens Next Matters More Than the Announcement
Many recommendations say HHS “should consider” an action or “could” explore a model. The plan itself does not establish a new nationwide prevention benefit, finalize a payment methodology, or complete the proposed regulatory reforms.
For CMS observers, the useful next questions are concrete:
Does a new model reach patients early enough to change disease progression?
Can new providers participate without reproducing the infrastructure of incumbent organizations?
Are outcomes measured over a credible period?
Do payments reward improvements that would otherwise not occur?
Are patients already dependent on dialysis protected as incentives change?
The document’s larger significance is its willingness to examine the relationship between public policy and private business models. HHS is arguing that innovation depends on what the healthcare system makes financially possible, attractive, and scalable. DaVita is arguing that established organizations already possess important capabilities for delivering that progress.
Effective policy will require CMS to preserve those capabilities while making room for approaches that the existing system has little reason to adopt.
Key Takeaways and Surprises
HHS is questioning the market structure its own rules helped create. Facility requirements and payment arrangements are being examined as possible barriers to innovation and entry.
Prevention faces a financial coordination problem. The organization paying for early intervention may never receive the savings. The proposed multi-payer discussion acknowledges that changing Medicare alone may be insufficient.
A model can improve care while increasing Medicare spending. Kidney Care Choices illustrates why clinical gains and financial performance must be evaluated separately.
DaVita and HHS disagree about the role of scale. HHS emphasizes protection from competition; DaVita emphasizes investment capacity and the ability to spread improvements. Both claims require evidence.
“Less regulation” comes with an active federal agenda. The plan combines easier market entry with stronger oversight, scrutiny of business practices, and accountability for transplant organizations.
Innovation includes changing institutions. Procurement arrangements, donor support, referral processes, and payment incentives can influence outcomes alongside new drugs and devices.
The plan’s diagnosis is more definite than its implementation. Its criticism of existing structures is forceful, but many remedies remain proposals to consider. The decisive developments will be specific model designs, payment terms, and regulatory actions
Yes—DaVita is explicitly putting its disagreement on the record. But it has chosen a fairly careful form of disagreement: support the administration’s goals, challenge its characterization of the industry, and offer continued cooperation. Whether responding within roughly four hours was smart depends partly on what HHS said publicly beyond the written plan; the exact interval hasn’t been verified here.
Your concern is reasonable. The sentence “Where we differ…” is conspicuous. It ensures that the response cannot be mistaken for an uncomplicated endorsement.
There are several reasons that might nevertheless be a calculated choice:
- The criticism threatens DaVita’s legitimacy, not just a payment rate. HHS is suggesting that established market structures impede progress. Silence could allow the narrative to harden that large dialysis companies are obstacles to better care.
- The audience includes investors, employees, physicians, and patients. A plausible purpose of the rapid response is to reassure those groups that the company has an answer and intends to defend its role.
- DaVita needs to remain a potential implementation partner. Its emphasis on existing capabilities makes the argument that HHS can achieve some of its goals by working with the company.
The statement is diplomatically constructed. It begins with shared urgency, credits the plan with reflecting DaVita’s priorities, identifies a narrow disagreement, and closes with cooperation. It avoids naming or criticizing individual officials. That is controlled pushback, rather than a declaration of war.
But there is a strategic weakness: DaVita partly answers a broader structural criticism with examples of its own innovation. HHS could readily respond: “We did not say you have never introduced anything useful. We said the market could deliver more innovation with stronger competition.” Similarly, saying that scale finances innovation does not resolve whether particular contracting arrangements inhibit competitors.
The paragraph insisting that prevention must not be conflated with lifesaving dialysis is also pointed. It could be read as a necessary defense of current patients—or as suggesting that HHS does not understand an elementary clinical distinction. That is where the tone risks becoming irritating to officials.
On balance, a public response was defensible; the speed and explicit disagreement were optional. A softer formulation could have preserved the substance: “Achieving these goals will require both new entrants and the investment and clinical capabilities of established providers.”
The more revealing question is whether DaVita privately briefed HHS before issuing the statement. Advance notice could make this routine stakeholder positioning. A surprise rebuttal, hours after a flagship announcement, carries more relationship risk. The public statement alone does not tell us which occurred.
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One more time...why Da Vita says "something" today instead of "nothing" ???
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Silence was a perfectly reasonable option. The earlier answer overstated the risk that silence would be interpreted as agreement.
The argument against silence is that HHS had publicly challenged the industry’s structure and incentives. DaVita might want investors, employees, and physician partners to hear promptly that it disputes the implication that its size obstructs innovation. That is a reason to respond—but it does not require an immediate public rebuttal.
Silence would have offered several advantages:
- Let HHS have its announcement without creating a second story about industry disagreement.
- Allow private conversations to clarify which criticisms might become actual policy.
- Preserve the opportunity to respond later with evidence and specific proposals.
- Avoid defending the existing system before knowing precisely what changes HHS intends.
A company does not concede a policy argument by declining to contest it on announcement day. It could also issue a short statement welcoming prevention and patient choice, leaving its objections for private meetings or subsequent comments.
The strongest reason for an immediate rebuttal would be a concrete need to reassure stakeholders—for example, substantial investor concern or damaging public allegations. We have not established that such a need required this particular response.
So your instinct is sound: given a potentially sensitive agency and an exploratory plan, public restraint combined with vigorous private engagement could have been the smarter opening. DaVita’s statement was measured, but measured disagreement can still be unnecessary disagreement at that moment.
