CMS finalizes CAR T-cell therapy inpatient payments


Medical associations are expressing disappointment at the new payment scheme put forward by the Centers for Medicare & Medicaid Services for inpatient administration of two chimeric antigen receptor (CAR) T-cell therapies, calling the reimbursement insufficient for use of the expensive medications.

Tisagenlecleucel (Kymriah) has a list price of $475,000. Courtesy Novartis

Under its Aug. 17 final rule, CMS will now categorize CAR T-cell therapies under the umbrella of the renamed Medicare Severity–Diagnosis Related Groups (MS-DRG) 016 – Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy – and assign ICD-10-PCS procedure codes XW033C3 and XW043C3 to the use of axicabtagene ciloleucel (Yescarta) and tisagenlecleucel (Kymriah) in the inpatient setting for fiscal year 2019, which begins in October 2018.

CMS also approved a temporary New Technology Add-On Payment (NTAP) for use of the therapies with a maximum threshold of $186,500, according to the rule.

According to the American Society of Hematology (ASH), this payment structure is an improvement, but it hardly covers the cost of the products, nor does it account for full hospitalization costs. ASH noted that the revised MS-DRG 016 has a base payment rate of $36,000 and that the maximum NTAP payment ($186,500) is only about half of the cost for a CAR T-cell product.

“ASH is concerned that this final policy may impede access to care to this cutting-edge therapy because hospitals and academic medical centers that provide this personalized treatment will simply not be able to withstand the negative financial impact,” the society said in a statement. “While this final policy represents an improvement over current CAR T therapy reimbursement rates, ASH believes patient access to care will be jeopardized as providers and hospitals will not be able to afford to deliver the therapy at this reimbursement rate, particularly as other CAR T products receive FDA [Food and Drug Administration] approval.”

ASH and the American Society for Blood and Marrow Transplantation (ASBMT) had strongly urged CMS to develop a site-neutral, equitable payment structure that would have allowed providers to recover more product acquisition costs from CAR T-cell therapies. In its final rule, CMS stated that it was too early to develop a novel payment structure for CAR T-cell treatments and that more research is needed before such changes are made. The agency noted that in May CMS opened a national coverage determination analysis on CAR T-cell therapy for Medicare patients with advanced cancer, which is expected to be completed by May 2019.

“[CMS] is soliciting public comment … on key design considerations for developing a potential model that would test private market strategies and introduce competition to improve quality of care for beneficiaries,” the agency said in the rule. “Given the relative newness of CAR T-cell therapy, the potential model, and our request for feedback on this model approach, we believe it would be premature to adopt changes to our existing payment mechanisms.”

The payment outline by CMS is essentially the bare minimum it could have extended to CAR T-cell therapies for 2019, said Stephanie Farnia, director of health policy and strategic relations for the ASBMT.

“[ASBMT] and a number of stakeholders have been very clear in our comment letters that that would not be enough and the reasons why,” Ms. Farnia said in an interview. “It’s not going to be sufficient to cover the cost of care or the product.”

The rule also fails to address the cancer centers that are exempt from the DRG payment system, Ms. Farnia said. Eleven centers are excluded from the payment system because of past legislation that excludes exclusive cancer hospitals that do not provide noncancer services. The exempt cancer centers cannot receive additional money for new or expensive drugs and therefore will not gain any financial relief from the CAR T-cell therapy payment changes in the CMS final rule.

ASH officials plan to follow up with congressional leaders to identify ways to improve future CAR T-cell therapy payments, including a potential legislative solution. An ASH spokesperson declined to elaborate on its ideal legislative remedy.

Hospital administrators and physicians will need to have difficult conversations in the upcoming year about whether treating patients with CAR T-cell therapies is worth the cost deficits, Ms. Farnia said.

“Everyone was really counting on it being a different reimbursement scenario for the upcoming fiscal year, and it is, but again, it’s that bare minimum difference,” Ms. Farnia said. “I think a number of programs are going to be taking a look at their financial experience thus far and comparing that to the reimbursement and deciding on if they [should] continue to offer it and how to do that.”

In April 2018, CMS announced payment rates for outpatient administration of the two drugs, settling on $395,380 for axicabtagene ciloleucel and $500,839 for tisagenlecleucel. The two medications have list prices of $373,000 and $475,000, respectively.

However, physicians have raised concerns that even if the drugs are first administered in the outpatient setting, inpatient care is likely to occur with CAR T-cell therapies because some patients will need to be admitted in order to be monitored for serious side effects. In such cases, all payments will become part of the inpatient stay under CMS’s 3-day payment window rule.

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