CMS Releases Final New Technology Add-on Payment Decisions

On August 2, 2021, CMS placed on display at the Federal Register the final fiscal year 2022 Inpatient Prospective Payment System Final rule. Amongst the over 2,000 pages are CMS's final decisions on New Technology Add-on Payments (NTAP) for FY 2022.

The NTAP program was designed to identify new technologies and to ensure that payment under the IPPS would be adequate so that early adopters of new technologies would not be financially disadvantaged. Under the traditional NTAP pathway, a technology must be considered "new", the charges of cases involving the technology must be more than 75 percent of the unadjusted rate for the MS-DRG to which the technology is assigned, and the technology must represent a substantial clinical improvement over existing technologies.

Beginning in 2021, CMS implemented an alternative NTAP pathway for technologies granted "break-through" approval by the FDA and for certain antimicrobial products. For this alternative pathway, technologies are assumed to meet both the "newness" criteria and the "substantial clinical improvement" criteria by the nature of their "break-through" approval status. These technologies must still meet the "cost" criteria.

CMS reviewed 26 NTAP applications under the traditional pathway. Nine were withdrawn by the applicant and one was not reviewed because the technology was not FDA approved by the deadline. CMS approved seven applications. Under the alternative pathway, CMS received 17 applications, reviewed 12, ultimately approving nine. These charts show the breakdown of the applications that CMS reviewed and of CMS's final payment determinations.

For more information about this rule, and about the NTAP process, contact me at john@policypros.net. The final FY 2022 rule is available for download here and will be published in the Federal Register on August 13, 2021.

John Warren is the owner and principal consultant at Gettysburg Healthcare Consulting. Located in Hanover, Pennsylvania. He focuses on issues affecting the Medicare program -- including coverage, coding, and reimbursement of diagnostic tests, prescription drugs and other Medicare covered services.

Comments

Selecting Therapeutic Alternatives: A Critical Perspective for Drug Manufacturers

The Inflation Reduction Act (IRA) of 2022 instructed the Centers for Medicare and Medicaid Services (CMS) to initiate drug price negotiations with manufacturers for the first time. A key component of these negotiations involves considering factors like the drug's benefits and costs to establish a "lowest maximum fair price." (MFP) For drug manufacturers, CMS’s process for making comparisons of therapeutic alternative(s) to determine the MFP raises a number of crucial questions. The IRA's guidance suggests that CMS will initially compare drugs within the same class as the negotiated drug to determine a starting point for pricing. For drug manufacturers, this approach raises concerns regarding price competition within drug classes. As new drugs are often priced in line with preexisting brand-name drugs in the same class, the negotiation process may result in downward pressure on prices for all drugs in the class. This could significantly affect the revenue and profitabi...

TCET Pathway Could Accelerate Access to Innovating Technologies

The Centers for Medicare & Medicaid Services (CMS) proposed the Transitional Coverage for Emerging Technologies (TCET) pathway to enable quicker coverage decisions for breakthrough devices needing accelerated regulatory review. As described in JAMA Health Forum, TCET allows tailored oversight based on an innovation’s specific benefits and risks. TCET focuses on FDA Breakthrough-designated devices for serious conditions supported by limited clinical data for market authorization. By facilitating transitional coverage, TCET aims to help make cutting-edge technologies accessible to patients while additional real-world evidence is gathered to meet CMS’ “reasonable and necessary” standard. For developers to optimize TCET’s streamlined approach they should be sure to: - Pursue FDA Breakthrough designation when criteria are met. This opens the TCET pathway. - Engage CMS early on study designs and evidence needs. Incorporate draft guidance on endpoints and real-world data....

Bridging the Gap: The Long Road from FDA Approval to Medicare Coverage

A new study published in JAMA Health Forum reveals that the road to Medicare coverage for novel medical technologies is a long and winding one. Researchers found that only 44% of innovative devices and diagnostics approved by the FDA from 2016-2019 had even “nominal” Medicare coverage by 2022. This data highlights major hurdles in the system that delay patient access to beneficial emerging technologies. About the Research The study examined 281 novel products cleared through the FDA from 2016-2019 via the high-risk premarket approval, de novo, and breakthrough 510(k) pathways. These included things like groundbreaking diagnostic tests, implantable devices, and other innovative treatment technologies. The goal was to measure how long it took to establish national or regional Medicare coverage policies for these newly approved products. This is important because Medicare coverage is required before hospitals, physicians and patients can reliably access new technologies. Key Findings The ...

The Health Policy War Room

Search This Blog