Diabetic nephropathy is a serious complication of type 1 diabetes and type 2 diabetes. It’s also called diabetic kidney disease. Diabetic nephropathy affects the kidneys’ ability to do their usual work of removing waste products and extra fluid from your bodyDiabetic nephropathy is a serious complication of type 1 diabetes and type 2 diabetes. It’s also called diabetic kidney disease. Diabetic nephropathy affects the kidneys’ ability to do their usual work of removing waste products and extra fluid from your body.