CMS Proposes Several Changes To Reimbursement For Transformative Medical Technologies

Key Points

In recent proposed rulemaking, the Centers for Medicare and Medicaid Services (CMS) make several significant recommendations that incentivize innovation and break down patient barriers to accessing cutting-edge medical technology. CMS proposes a more expansive approach to how the agency assesses "substantial clinical improvement" for purposes of determining whether a new medical technology merits a new technology add-on payment (NTAP) under the Medicare Inpatient Prospective Payment System. CMS also proposes to develop an alternative pathway to receive an NTAP payment for medical technologies that are part of the Food and Drug Administration (FDA) Breakthrough Device Program. Finally, CMS proposes to increase the NTAP payment calculation methodology to further incentivize innovation. On April 23, 2019, CMS issued its FY 2020 hospital inpatient prospective payment system (IPPS) proposed rule (IPPS Proposed Rule).1 The IPPS Proposed Rule addresses many critical Medicare coding, coverage and reimbursement issues, including new medical technology that offers improved solutions for patients but that might add to the cost of a medical procedure or treatment. Under the IPPS Proposed Rule, CMS suggests several changes to how the agency grants new technology add-on payments under IPPS and similar transitional pass-through payments under the outpatient equivalent, the Outpatient Prospective Payment System (OPPS).

First, CMS proposes to recalibrate how it analyzes and appraises "substantial clinical improvement" for determining which medical technology merits IPPS add-on payments and OPPS transitional pass-through payments. Second, CMS proposes to eliminate the substantial clinical improvement criteria for medical technology participating in the FDA Breakthrough Device Program. Third, CMS seeks comments on a proposal to increase the value of the IPPS new technology add-on payment. CMS' proposed revisions would likely result in increased payment for new and transformative medical technology and would also provide a mechanism for swift uptake in these settings. These policies reflect a shift in the agency's approach, signaling support for more and better patient access. CMS is moving in the same direction as the FDA and consistent with Congressional intent in establishing the Breakthrough Pathway in the 21st Century Cures Act, as further outlined below.

Appropriate Substantial Clinical Improvement Criteria

CMS examines several factors when determining whether new medical technology should receive an NTAP under the IPPS or a transitional pass-through payment under the OPPS. Among these factors are the technology's novelty, the technology's cost and whether the technology represents a...

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