CMS released the FY 2021 Inpatient Prospective Payment System Proposed Rules
CMS released the FY 2021 Inpatient Prospective Payment System Proposed Rules on Monday, May 11, 2020 – a long delay from the normal mid-April release. This time of year is exciting for us at Qualia Bio. While the 1602-page Proposed Rules have lots to talk about, we’ve highlighted key impacts to chimeric antigen receptor T-cell therapies below. These updates (or lack of changes) impact the economics of these important novel oncology therapies.
After years of pressure for a dedicated MS-DRG, CAR T-cell therapies are proposed to be moved from MS-DRG 016 (which was previously dedicated to autologous stem cell transplantation) to MS-DRG 018 (now called Chimeric Antigen Receptor (CAR) T-cell Immunotherapy). The proposed weight for the DRG is 37.1412 (vs 6.7241 for MS-DRG 016). The proposed weight is proposed to not include clinical trial cases; however, the calculations do include clinical trial cases that have been adjusted to the average cost of non-clinical trial cases. The estimated national weighted mean (weighted by bills submitted to Medicare) FY 2021 base payment (prior to NTAP and outlier) for MS-DRG 018 is estimated to be $256,333 vs $47,068 for MS-DRG 016.
Based on the December 2019 update of the FY 2019 MedPAR file, CMS estimated that the average costs of CAR T-cell therapy cases identified as clinical trial cases ($42,164) are 15 percent of the average costs of CAR T-cell therapy cases identified as non-clinical trial cases ($277,592).
Hospitals report on the Medicare cost report: (1) the median payer-specific negotiated charge that the hospital has negotiated with all of its Medicare Advantage (MA) payers, by MS-DRG; and (2) the median payer-specific negotiated charge the hospital has negotiated with all of its third-party payers, which would include MA organizations, by MS-DRG. This potential MS-DRG relative weight methodology would utilize the proposed median payer specific negotiated charge information, collected on the cost report, for calculating the MS-DRG relative weights.
CMS is proposing to discontinue NTAPs for YESCARTA and KYMRIAH for FY 2021 because the 3-year anniversary date of the entry of the technology onto the U.S. market (November 22, 2020) will occur in the first half of FY 2021. For new NTAP applicants, the average case-weighted new technology threshold amount based on the proposed new MS-DRG 018 is $1,237,393. Starting FY 2022, for applications for NTAPs and previously approved technologies that may continue to receive NTAPs, the proposed threshold for a proposed new MS-DRG for the upcoming fiscal year would be used to evaluate the cost criterion for technologies that would be assigned to a proposed new MS-DRG. Liso-cel was not recommended for approval of NTAP, based on concerns with regards to newness, cost, and substantial clinical improvement criteria.
The NTAP still pays 65 percent of the costs of the new technology (or 75 percent of the costs for technologies designated as QIDPs or approved under the LPAD pathway); or (2) 65 percent of the amount by which the costs of the case exceed the standard MS–DRG payment for the case (or 75 percent of the amount for technologies designated as QIDPs or approved under the LPAD pathway).