CMS Finalizes One-year Extension of New Technology Add-on Payments  

Various approvals, exceptions, and new PCS codes that may potentially lead to additional payments.

The Centers for Medicare & Medicaid Services (CMS) desires to use the best data available when rate setting for the upcoming fiscal year. Because COVID-19 unsettled the playing field within the healthcare arena, CMS made the decision to use data from 2019 instead of 2020 due to the COVID-19 public health emergency (PHE). CMS is finalizing a one-year extension of New Technology Add-on Payments (NTAP) for 13 technologies for which the new technology add-on payment would otherwise be discontinued beginning FY 2022.

New covid treatment add on payment (NCTAP) is eligible for discharges during the PHE. In addition, CMS predicts inpatient covid cases will continue to be treated beyond the expiration of the Public Health Emergency.  To mitigate potential financial pitfalls for hospitals treating covid patients, CMS is extending the NCTAP for eligible COVID-19 products through the end of the fiscal year in which the PHE ends. CMS is inserting measures for NCTAP that are discontinued but may still be eligible for NTAP. The goal is to prevent double dipping. Hospitals, however, will be eligible to receive both NCTAP and the traditional new technology add-on payment for qualifying patient stays, through the end of the fiscal year in which the PHE ends.  The new technology add-on payment will reduce the amount of the NCTAP. For example: Fiscal year ends Sept. 30, 2022, but if the PHE is declared over by Dec. 25, 2022, (a Christmas miracle), the payment would remain in effect until the new fiscal year begins on Oct. 1, 2023.

The NCTAP is the lesser of the following:

• 65 percent of the operating outlier threshold for the claim
• 65 percent of the cost of a COVID-19 stay beyond the operating Medicare payment, including the 20 percent add-on payment under section 3710 of the Coronavirus Aid, Relief, and Economic Security Act

Several new technology substances, services and devices were on schedule to be phased out this year, but a one-year extension was granted. Some can be an add-on status for two to three years before being discontinued. Some from 2020 are in their last year for 2022.

Hospitals are encouraged to report the PCS code for the various type(s) of covid treatments.  Many hospitals have implemented measures to ensure NCTAP are not omitted during billing via checks and balances.  For instance, the finance department can run report of accounts with NCTAP charges without a PCS code.  These accounts are then sent to Health Information Management account review and remediation if necessary. This is not an uncommon practice and is often used for NTAP relating to new technology or drugs unrelated to covid. 

It is not unusual for the cost of treating a covid patient to exceed the assigned MSDRG payment.  Consequently, it is imperative to implement measures which ensure treatments are accurately captured.  Equally important is the need to capture NTAP.

There are 42 technologies eligible to receive add-on payments for FY 2022. CMS estimates $1.5 billion in Medicare spending for FY 2022 – a 77 percent increase over fiscal year 2021.

Programming Note: Listen to Susan Gatehouse report this story live today during Talk Ten Tuesdays at 10 Eastern.