CMS New Technology Add-On Payment FY 2021 Proposed Rule

The Centers for Medicare and Medicaid Services’ (CMS) New Technology Add-On Payment (NTAP) program is a system enacted by Congress and implemented in 2001 which designed to enable the adoption of new and clinically beneficial medical technologies used during inpatient hospital stays regularly paid under Medicare’s inpatient prospective payment system (IPPS). Technologies eligible to receive NTAP must meet specific criteria based on: newness, meeting a standardized cost threshold, and demonstrating substantial clinical improvement.

This year’s IPPS proposed rule, released in April, discusses proposed changes to the NTAP system in response to growing antimicrobial resistance increasing as a public health concern. Last year CMS enacted an alternative new technology add-on payment pathway for products designated by FDA as Qualified Infectious Disease Products (QIDPs) to be considered “new and not substantially similar to” an existing technology for purposes of the new technology add-on payment under the IPPS.  CMS proposes to extend this alternative pathway to automatically recognize alternative QIDPs as “New” that will include technologies approved through FDA’s Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD pathway). These must be approved by July 1st to be considered in the year’s final rule. CMS\ also proposes beginning FY2021 and for subsequent fiscal years, if a medical device is part of the FDA’s Breakthrough Devices Program and is granted FDA marketing authorization, “it will be considered new”.

We continue to monitor the rulings on individual technologies, and trends we’ve observed over the past few years appear to be continuing this year, such as an increase in the sheer number of applications and (likely) approvals and favorability of NTAP approvals towards drugs over devices. High-volume clinical areas we’ve observed over the past few years include oncology and infectious disease and we see that continuing through this cycle of NTAP applications as well.  As this is only the proposed rule, comments from the public will be accepted until July 10th, no later than 5:00 pm EDT, and we will have more specific trends and analyses specific to this year once the final rule is released in early August.