CMS final rule seeks to unleash medical innovation

The Centers for Medicare and Medicaid Services has finalized a rule to promote quicker access to new medical technology through changes in payment policies.

“President Trump is strengthening Medicare by clearing the way for Medicare beneficiaries to access the same transformative technologies and treatment options emerging in the private market,” said CMS Administrator Seema Verma in a written statement.


“Through our efforts to improve transparency and reduce regulatory burden, we are hearing more than ever from innovators who want to work with us so that Medicare beneficiaries have access to the latest advances in healthcare,” Verma added.

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The Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System for Fiscal Year 2020 increases Medicare add-on payments—called new technology add-on payments (NTAP)—for cases with high costs involving eligible new technologies, with payment increasing from 50 percent to 65 percent.

“Under the current new technology add-on payment calculation, Medicare pays a marginal cost factor of 50 percent of the estimated costs of the case in excess of the full (Diagnosis-Related Group) payment, up to a maximum of 50 percent of the costs of the technology,” according to the agency. “CMS believes that setting the maximum add-on payment percentage at 50 percent may not result in an appropriate add-on payment. To address this issue, CMS is finalizing an increase to the add-on payment, beginning in FY 2020, from 50 percent to 65 percent, and additionally is increasing the add-on payment to 75 percent for certain antimicrobials.”

In addition, CMS is revising payment policies for medical devices that meet the Food and Drug Administration’s Breakthrough Devices designation for expedited FDA approval or clearance.

The FDA’s Breakthrough Devices Program—first authorized in late 2016—is intended to offer new ways to treat or diagnose a disease or condition, have significant advantages over existing treatment or diagnostic alternatives or provide another public health benefit.

“CMS finalized an alternative NTAP pathway in which breakthrough devices would no longer be required to demonstrate evidence of ‘substantial clinical improvement’ to qualify for new technology add-on payments,” states the agency’s announcement. “This will provide additional Medicare payment for these technologies while real-world evidence is emerging, giving Medicare beneficiaries timely access to the latest innovations in treatment.”