Policy Perspectives: FY 2021 IPPS Final Rule

On September 2, 2020 the Centers for Medicare and Medicaid Services (CMS) released the FY2021 Inpatient Prospective Payment System (IPPS) final rule. The rule updates and makes changes to the payment system for the fiscal year 2021 that impacts the work of ASTCT membership. In the agency’s proposed rule they put forth a proposal to create a new Medicare Severity-Diagnosis Related Group (MS-DRG) for CAR-T therapies. This proposal was finalized in the released rule and creates a new payment group to reimburse institutions for the delivery of care for these therapies. This is a large win for the cellular therapy community.

In the creation of a new MS-DRG 018, ASTCT was concerned with how the agency would use CAR-T cases to create the correct relative weight. CMS adopted ASTCT’s recommendation to create a relative weight for MS-DRG 018 by including all of the CAR-T charges reported in revenue code 0891. Additionally, we requested that CMS not use cases with clinical trial Z00.6 diagnosis code or cases with standardized drug charges of less than $373,000. CMS adopted this two-step process in the creation of the new DRG. The final rule notes that CMS will pay 100% of MS-DRG 018 for CAR-T cases where the provider incurs a product charge for the FDA-approved product. CMS will pay a reduced amount for cases where the provider does not incur a cost for the FDA-approved product which will be 17% of the full rate. While CMS had proposed a reduced payment for clinical trial and expanded access cases, it had not contemplated certain situations where under-and-over payments could occur. CMS took ASTCT’s recommendations that it must use a more refined methodology than what was proposed to correctly identify cases for the reduced payment. CMS is working on this now and will release guidance soon. According to the final rule CMS noted: According to the final rule CMS noted:

…we do agree with commenters that given that the product cost is an extremely large portion of the total costs of CAR T-cell therapy cases that do not involve a clinical trial of the CAR T-cell therapy product, and that the relative weight for new MS-DRG 018 assumes that the provider has incurred the costs of the CAR T-cell therapy product, the same adjustment should be applied to payment for cases involving expanded access use of immunotherapy where the hospital does not incur the cost of the CAR T-cell therapy product. For this same reason, as well as mitigating potential disincentives related to clinical trial participation, we also agree with commenters that when the CAR T-cell therapy product is purchased in the usual manner, but the case involves a clinical trial of a different product, the payment adjustment should not be applied in calculating the payment for the case. We believe the application of this policy to the scenarios identified by the commenters, while occurring with less frequently, is consistent with our proposal to apply a differential payment for cases where the CAR T-cell therapy product is provided without cost to ensure that the payment amount appropriately reflects the relative resources required for such cases.”

CMS is changing its methodology which may lower the financial burden on some institutions and allow for increased patient access to care by allowing physicians and institutions to treat patients according to what is clinically in the patient’s best interest rather than making financial decisions on a patient’s case. ASTCT has repeatedly advocated for these changes.

A number of other proposals that were also finalized include:

  • CMS agreed with our finding that it had left out some CAR-T product charges that should otherwise be included and changed its methodology in the final rule resulting in an increase in the relative weight
  • Future releases of the MedPAR data dictionary will address how CAR-T charges in revenue code 0891 will be handled
  • Cytokine release syndrome (CRS) codes grades 3, 4, and 5 to count as a CC instead of what had been proposed which was non-CC
  • CMS also agreed to change its MS-DRG grouping logic so that CRS cases coded with an appropriate complication T-code and one of the new CRS codes, can group into MS-DRGs 814-816
  • CMS corrected the error on the NTAP threshold for new products

CMS also addressed changes in payment for stem cell transplantation which benefits ASTCT membership. First, CMS agreed that it will not force hospitals to create and report a single standard average. This means that transplant centers do not have to change how they bill for allogeneic donor search and cell acquisition. ASTCT advocated for this at the congressional and administrative levels and appreciates CMS’ recognition of the potential problem in requiring reporting of a single standard average charge. Also, CMS agreed to make the interim cost pass-through payment using a biweekly payment model where it will compute the payment amount using data from the PS&R report and divide by 26 to come up with each center’s payments. This was one of the scenarios we suggested to CMS and they adopted this methodology.

For further information on the final rule and its implementation, please register here for the ASTCT webinar on September 17th, 2020.

For CMS’ press release on the rule click here.

For any questions or comments please reach out to info@astct.org.