Appropriate Reimbursement Key to Making CAR T-Cell Therapy Accessible for Medicare Beneficiaries

July 13, 2020

The Association for Clinical Oncology (ASCO) recently submitted comments to the Centers for Medicare & Medicaid Services (CMS) in response to the FY 2021 Hospital Inpatient Prospective Payment System proposed rule. The proposal would establish a new Medicare Severity Diagnosis Related Group (MS-DRG) for procedures involving chimeric antigen receptor T-cell immunotherapies (CAR-T). 

ASCO thanks CMS for establishing the new payment group for CAR-T, MS-DRG 018, which had been requested by multiple stakeholders, including ASCO. The new payment group aims to predictably compensate hospitals for the cost of delivering necessary CAR-T therapy to Medicare beneficiaries, while providing payment flexibility as new CAR-T therapies become available.

However, ASCO has serious concerns that the reimbursement rate for MS-DRG 018 does not sufficiently cover the cost of CAR-T and related services, especially given CMS’ proposal to discontinue the new technology add-on payment (NTAP) established for CAR-T in 2020, which set the national reimbursement rate for the therapy at $285,594. Under the 2021 proposal, in which a new MS-DRG for CAR-T is established but the NTAP is discontinued, the base reimbursement amount for CAR-T would be $46,104 less than the 2020 reimbursement rate and $133,510 less than the cost of the therapies themselves, which could significantly threaten access for Medicare beneficiaries.

In order to adequately reimburse providers for CAR-T therapies, ASCO recommends that CMS consider two alternative rate setting methodologies:

  • Calculate the relative weight for MS-DRG 018 by ensuring that each claim has a standardized charge for the drug cost center that is greater than or equal to $1,963,158, which is the standardized charge equivalent to the average sales price for CAR-T therapies; or
  • Establish separate payment for CAR-T drugs based on the average sales price, like the separate payment that is made for clotting factors.

In ASCO’s view, providers should not have to bear the financial burden when payors do not reimburse for the full cost of a therapy, especially since manufacturers set list prices for drugs or treatments. All patients should be supported by the right therapy at the right time, which can only happen if providers are reimbursed appropriately. 

Read the full comment letter.

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