OBJECTIVES: The United States Renal Data System reported that of $2.78 billion spent on injectable drugs for patients with end-stage renal disease (ESRD) during 2009, $1.89 bil­lion was for erythropoiesis-stimulating agents (ESAs), such as epoetin alfa. These costs were reimbursed to dialysis providers under the Medicare Prospective Payment System, where dialysis payment is bundled with injectable drugs payment. Oral ferric citrate (FC) is a phosphate binder in clinical development for hyperphosphatemia treatment in ESRD patients. Clinical trials demonstrated that FC lowers patients’ serum phosphorus levels with the added benefit of increasing patients’ serum ferritin and saturated transferrin (TSAT) levels. In an observational study analyzing data of a large dialysis provider, similar increases in ferritin and TSAT in patients with stable hemoglobin were associated with reduced doses of intravenous (IV) iron and ESAs. METHODS: We created a facility-level Medicare cost-offset model that considered annual costs of ESRD treatment for patients prescribed FC versus other phosphate binder medications (PBs). The model assumed equal price and efficacy between FC and competitor PBs. Model inputs included the Medicare average sales price of iron and ESAs, proportion of ESRD patients on PBs, facility-level cost, and Medicare reimbursement rates with case-mix adjusters. Margin was calculated as the difference between reimbursement and cost. We assessed the effects of FC use to dialysis providers by comparing margin for patients on FC versus those taking other PBs. RESULTS: With FC use versus other PBs, annual facility-level reductions in ESA and IV iron administration were 9.60% and 11.9%, respectively. These decreases translated to an annual cost savings of approximately 2.56% of the facility’s total annual bundled Medicare reimbursement. CONCLUSIONS: A 2% potential cost savings with FC use in patients taking PBs would be an important opportunity for dialysis providers to reduce patients’ treatment costs under Medicare’s Prospective Payment System.