The Centers for Medicare & Medicaid Services (CMS) is developing what it calls the first Medicare fee-for-service pay-for-performance program, under which end-stage renal disease (ESRD) providers face the prospect of reduced payments for failure to meet quality benchmarks. Under the Medicare Improvements for Patients and Providers Act of 2008, CMS is required to develop a quality incentive payment program for ESRD services. A final rule issued in late July establishes three quality measures that facilities will have to report; one measure of hemodialysis adequacy and two measures of anemia management. Facilities that are unable to reach benchmarks for these three quality measures risk reductions in Medicare reimbursements of up to two percent. The program is set to begin January 1, 2012, using a performance period of calendar year 2010. There are currently 600 hospital-based and 4,300 independent ESRD facilities in the U.S. Simultaneously, CMS has announced that effective next January 1st, Medicare will reimburse facilities using single bundled payments rather than the composite rate payment methodology now in use. IPRO is the End-Stage Renal Disease Network contractor for New York, with oversight responsibility for all facilities in the state that are approved by Medicare to provide chronic dialysis treatments and/or kidney transplants. For more information, visit www.esrd.ipro.org.