HHS CMS Releases Proposed Rule for Inpatient Prospective Payment System (IPPS) for 2020/2021

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On May 11, the Trump Administration proposed changes for acute care and long-term care hospitals that build on the progress made over the past 3 years and further the agency’s priority to transform the health care delivery system through competition and innovation while providing patients with better value and results. The proposed rule would update Medicare payment policies for hospitals paid under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) for FY 2021.

CMS is proposing a separate new hospital payment category for Chimeric Antigen Receptor (CAR) T-cell therapy. CAR-T is the first-ever gene therapy, and it uses a patient’s own genetically modified immune cells to treat people with certain types of cancer, instead of additional chemotherapy or other types of treatment paid for under the IPPS. Currently, CAR-T hospital cases are paid at the same rate as bone marrow transplants and qualify for additional payments through the temporary new technology add-on payment for high cost cases, but that rule is set to expire this year. The new inpatient hospital payment category, or the Medicare Severity Diagnostic Related Group (DRG), for CAR-T will provide a predictable payment rate for hospitals administering the therapy.

This rule includes proposals to remove barriers to new antimicrobials, which are antibiotics to treat drug-resistant infections. Medicare beneficiaries account for the majority of new diagnoses and resulting deaths due to drug-resistant infections, which also remain a public health concern. To support access to these critical antibiotics for Medicare beneficiaries, CMS is proposing changes for the New Technology Add-on Payment (NTAP), which is an additional payment to hospitals for cases using eligible high-cost technologies. CMS is proposing that drugs that are approved by the Food and Drug Administration (FDA) under the Limited Population Pathway for Antibacterial and Antifungal Drugs pathway can seek an NTAP through an alternative NTAP pathway for certain antimicrobial products, which is the same streamlined pathway made available last year for drugs designated by the FDA as Qualified Infectious Disease Products. This provides more predictability for these products with respect to new technology add-on payments.

CMS is proposing to collect a summary of certain data already required to be disclosed by CMS’ 2019 price transparency rule; specifically, hospitals’ median payer-specific negotiated inpatient services charges for Medicare Advantage organizations and third party payers. In addition, the agency is requesting information regarding the potential use of these data to set relative Medicare payment rates for hospital procedures. These provisions advance the mandates in the President’s Executive Orders on Promoting Healthcare Choice and Competition Across the United States, Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First, and Protecting and Improving Medicare for Our Nation’s Seniors.

For more information on the proposed rule, see the fact sheet here: [Fact Sheet]

For the full proposed rule, see here: [Proposed Rule]