3.0 NTAP
Overview
3.1 NTAPs are special payments
that are offered because new medical services and new technologies
are not yet included in the calculation of standardized DRG rates.
By law and regulation, Medicare has established a reimbursement
methodology to more appropriately pay for the costs of new medical
services and technologies under the hospital Inpatient Prospective
Payment System (IPPS). As a part of this methodology, Centers for
Medicare and Medicaid Services (CMS) clinical experts evaluate applications
for new technologies that may raise the cost of care to the extent
that it merits additional payment beyond the base DRG payment.
3.2 CMS uses
criteria set forth in regulation regarding the newness, clinical
benefit, and cost of a new technology to determine which treatments
will receive an NTAP. That is, CMS determines the newness based
upon the delay in projected market entry; clinical benefits considerations
require that the technology substantially improve the diagnosis
or treatment of patients; and cost considerations require the applicant
to provide data showing that the technology is expensive relative
to the cost of the entire case based upon set statistical cost deviations.
3.3 To qualify
for the NTAPs, a specific technology will be “new” according to
CMS regulations, specifically §412.87(b)(2). The statutory provision
allows for special payment treatment for new technologies until
they are incorporated into the DRG, which takes between two and
three years. Once new technologies are
incorporated into the DRG, they are no longer considered NTAPs.
4.0 POLICY
In accordance with Title 10,
United States Code (USC), Section 1079(i)(2), the amount to be paid
to hospitals, Skilled Nursing Facilities (SNFs), and other institutional
providers under the TRICARE
Program,
“shall be determined to the extent practicable in accordance with
the same reimbursement rules as apply to payments to providers of
services of the same type under Medicare.” This statutory authority
has been implemented through an Interim Final Rule (IFR) with Request
for Comment, published in the Federal Register on September 3, 2020,
amending the TRICARE regulation by adding 32 Code of Federal Regulations
(CFR)
32 CFR 199.14(a)(1)(iv)(A) to
allow adoption of Medicare NTAP payment adjustments to TRICARE DRG
reimbursements. Under the amended TRICARE regulation, any Medicare
approved NTAP reimbursement of hospitals subject to the Medicare
program as required under 42 CFR 412.88
is adopted
or adopted as modified
, for
the TRICARE
Program unless
the Assistant Secretary of Defense for Health Affairs (ASD(HA))
determines that it is not practicable for
the TRICARE
Program to
adopt the Medicare NTAP. The Director, DHA will issue necessary
guidance regarding any Medicare NTAP not adopted by the ASD(HA)
or any modification of a Medicare NTAP deemed necessary for adoption
by
the TRICARE
Program.
4.1 Payment Method
4.1.1 NTAP payment
adjustments apply for discharges on or after January 1, 2020.
4.1.2 The contractor
shall reimburse hospitals subject to NTAPs using the list of NTAPs
and reimbursement rules in the current Fiscal Year (FY) IPPS Final
Rule (FR) Home Page found on the CMS website. The reimbursement
amounts in the current FY IPPS FR represent the maximum add on payment
provided for each NTAP.
4.1.3 The contractor shall determine
each procedure code eligible for an NTAP payment according to 42
CFR 412.87, which provides the reference to the most recent
Federal
Register with a list of approved NTAPs and the procedure
codes used to identify use of the technology. Each year in the IPPS
Final Rule, the list of NTAPs is updated by CMS.
4.1.3.1 The contractor shall maintain
a list of procedure codes eligible for NTAP payments.
4.1.3.2 The contractor shall update
the list of procedure codes eligible for NTAPs within ten business
days of publication by CMS.
4.1.4 The contractor
shall also determine the maximum NTAP payment amount for each technology
according to 42 CFR 412.87, which provides the reference to the
most recent
Federal Register with the maximum payment
for each approved NTAP. Each year the maximum NTAP payment amounts
are updated by CMS.
4.1.4.1 The contractor shall maintain
a list of the maximum NTAP payment amounts for each technology.
4.1.4.2 The contractor shall update
the list of the maximum NTAP payment amounts for each technology
within ten business days of publication by CMS.
4.1.5 The contractor
shall apply the separate NTAP payment using the appropriate formula
from the IPPS FR and as documented in 42 CFR 412.88.
For
non-pediatric beneficiaries, the contractor shall calculate
for each eligible NTAP case on a claim, the appropriate NTAP payment,
where the payment rate is equal to the lesser of:
• The designated percentage of
the amount by which the total covered costs of the case exceed the Medicare
Severity (MS)-DRG payment, as determined by CMS, as published in
the current FY IPPS FR, or
• The maximum NTAP payment amount
for the specific technology, as determined by CMS.
The resulting NTAP amount is then reimbursed
in addition to the MS-TRICARE DRG payment amount.
4.2 The contractor
shall monitor the CMS FY IPPS website and adopt other updates (e.g.,
Medicare issues a correction or mid-year update) to the list of
NTAPs, the designated percentage of the amount by which the total
covered costs of the case exceed the MS-DRG payment, and maximum
payment amounts within ten business days of publication by CMS.
4.3 Pediatric NTAPs4.3.1 Pediatric, as
used in this paragraph, is defined as pertaining to patients under
the age of 18, on date of admission, or any individual who is treated
in a children’s hospital or in a pediatric ward paid under the DRG
reimbursement system.
4.3.2 Medicare Approved
NTAPs Applied to Claims for Pediatric BeneficiariesThe contractor
shall calculate, for each eligible NTAP on the claim, the appropriate
NTAP payment, where the payment rate is equal to the lesser of 100%
of the average cost of the technology or 100% of the total covered
costs in excess of the MS-DRG payment.
4.4 Pediatric NTAP
ExampleThe
cost for the NTAP technology (according to CMS) is $500,000.
The case qualifies
for a pediatric NTAP adjustment since the patient is under the age
of 18.
The TRICARE percentage
for pediatric NTAPs is equal to 100%.
($500,000 x 100%).
The maximum TRICARE
pediatric NTAP add-on payment for the technology is $500,000:
The MS-DRG payment
for the case is $100,000.
The cost for
the case is equal to $700,000.
($700,000 (cost
of case) - $100,000 (DRG payment)) x (100%)
The TRICARE designated
percentage of the amount the costs exceeding the standard DRG payment
is $600,000.
The pediatric
NTAP add-on payment in this case is the lesser of the maximum TRICARE
pediatric NTAP add-on payment for the technology ($500,000), or
the TRICARE designated percentage of the amount the costs exceeding
the standard DRG payment ($600,000). In this case, the add-on payment
would be equal to $500,000.
4.5 TRICARE-Designated
NTAPs4.5.1 For categories
of TRICARE covered services and supplies for which Medicare has
not established an NTAP adjustment for DRGs, the Director, DHA may
designate a TRICARE NTAP adjustment through the process established
in this paragraph.
4.5.2 Requirements.
All criteria in this paragraph must be met for a new technology
to be considered for a TRICARE NTAP. The technology must:4.5.2.1 Be eligible for
coverage under current TRICARE policy;
4.5.2.2 Represent an
advance that substantially improves, relative to technologies previously available,
the diagnosis or treatment of a particular condition, or be the
only available, covered treatment for a particular condition. In
determining if this requirement is met, the totality of the circumstances
will be considered. This requirement may be defined as one or more
of the following:4.5.2.2.1 The technology
offers a treatment option for a patient population unresponsive
to, or ineligible for, currently available treatments.
4.5.2.2.2 The technology
offers the ability to diagnose a medical condition in a patient population
where that medical condition is currently undetectable or offers
the ability to diagnose a medical condition earlier in a patient
population than allowed by currently available methods, and there
must also be evidence that use of the new medical service or technology
to make a diagnosis affects the management of the patient.
4.5.2.2.3 The use of the
technology significantly improves clinical outcomes relative to
services or technologies previously available as demonstrated by
one or more of the following outcomes:
• A reduction in
at least one clinically significant adverse event, including a reduction
in mortality or a clinically significant complication;
• A decreased rate
of at least one subsequent diagnostic or therapeutic intervention;
• A decreased number
of future hospitalizations or physician visits;
• A more rapid
beneficial resolution of the disease process treatment including,
but not limited to, a reduced length of stay or recovery time;
• An improvement
in one or more activities of daily living;
• An improved quality
of life; or
• A demonstrated
greater medication adherence or compliance.
4.5.2.2.4 The totality
of the information otherwise demonstrates that the technology substantially
improves, relative to technologies previously available, the diagnosis
or treatment of TRICARE beneficiaries.
4.5.2.2.5 The technology
may represent an advance that substantially improves the diagnosis
or treatment of a subpopulation of patients (e.g., pediatrics) with
the medical condition that is diagnosed or treated by the new technology
(i.e., any of the above definitions may apply to a sub-population
of patients with the condition that the technology treats).
4.5.2.3 Treat a severe,
disabling, or fatal condition.
4.5.2.4 Be sufficiently
new, which is defined as, upon submission to the TRICARE Program,
the technology must be within three years after the point at which
data begin to become available reflecting the inpatient hospital
code assigned to the new service or technology (depending on when
a new code is assigned and data on the new service or technology
becomes available for DRG recalibration). After TRICARE re-calibrates
the DRGs, based on available data, to reflect the costs of an otherwise
new medical service or technology, the medical service or technology
will no longer be considered a TRICARE-Specific NTAP because they
will no longer meet the criteria of being “new”.
4.5.2.5 Have a DRG prospective
payment rate otherwise applicable to discharges involving the technology
that is inadequate, based on application of a threshold amount to
estimated charges incurred with respect to such discharges.
4.5.2.6 Be typically
provided to patients aged 64 and younger, or for the treatment of
a condition that primarily affects patients aged 64 and younger.
4.5.2.7 Not been previously
reviewed by CMS for an NTAP, nor been rejected solely on the basis
of the technology not being used to treat the Medicare beneficiary
population.
4.6 TRICARE-Designated
NTAPs Approval Process4.6.1 Contractor Responsibilities4.6.1.1 The contractor
shall receive and process TRICARE NTAP applications submitted by
the technology manufacturer within 21 calendar days of receipt.
While the contractor must create their own application, a sample
NTAP application can be found at https://www.health.mil/ntap which contains
all necessary elements required for NTAP applications and should
be used as a guide.
4.6.1.2 The contractor
shall ensure through review that the TRICARE NTAP application is completed
accurately, and the following requirements are met:4.6.1.2.1 The contractor
receives the application no later than July 8 of the preceding fiscal
year for which the TRICARE-Specific NTAP is to be considered. In
other words, to be considered for FY 2024, the application must
be received by the contractor by July 8, 2023.
4.6.1.2.2 The technology
is eligible for coverage under current TRICARE Program policy;
4.6.1.2.3 The technology
has not either been previously reviewed by CMS for an NTAP, or been rejected
solely on the basis of the technology not being used to treat the
Medicare beneficiary population;
4.6.1.2.4 The technology
is sufficiently new;
4.6.1.2.5 The DRG payment
rate is inadequate.4.6.1.2.5.1 In order to determine
reimbursement adequacy or inadequacy, the contractor shall; determine
whether the charges of the cases involving the technology exceed
a threshold amount that is the lesser of:
• Seventy-five
percent (75%) of the standardized amount (increased to reflect the
difference between cost and charges) or
• Seventy-five
percent (75%) of one standard deviation beyond the geometric mean
standardized charge for all cases in the DRG to which the new medical
service or technology is assigned (or the case-weighted average
of all relevant DRGs if the new medical service or technology occurs
in many different DRGs).
4.6.1.2.5.2 Standardized
charges reflect the actual charges of a case adjusted by the prospective payment
system payment factors applicable to an individual hospital, such
as the wage index, the indirect medical education adjustment factor,
and the disproportionate share adjustment factor.
4.6.1.3 The contractor
shall forward the NTAP application to DHA through their contracting
officer no later than August 1 of every year to be considered for
TRICARE NTAP status for the next fiscal year, if the conditions
stated in paragraph 4.5 are satisfied. Detail for reporting
are identified in DD Form 1423, Contract Data Requirements List
(CDRL), located in Section J of the applicable contract.
4.6.1.4 The contractor
shall notify the manufacturer and DHA of the reason(s) for rejection
if the conditions in paragraph 4.5 are not satisfied. A decision
to designate a TRICARE category of services/supplies for an NTAP
adjustment to DRGs and the amount of such an adjustment are not
subject to the appeal and hearing procedures. Detail for reporting
are identified in DD Form 1423, CDRL, located in Section J of the
applicable contract.
4.6.2 DHA Responsibilities4.6.2.1 DHA will examine
the manufacturer-submitted NTAP applications processed by the contractor
and, if necessary, correct discrepancies in the contractor’s reviews.
4.6.2.2 DHA will determine
if the technology represents a substantial clinical improvement, relative
to technologies previously available, the diagnosis or treatment
of a particular condition, or be the only available, covered treatment
for a particular condition, using the criteria specified in paragraph 4.5.
In determining if this requirement is met, DHA may cite published
or unpublished evidence using information from, but not limited
to, the following:
• Clinical trials;
• Peer-reviewed
journal articles;
• Study results;
• Meta-analyses;
• Consensus statements;
• White papers;
• Patient surveys;
• Case studies;
• Reports;
• Systematic literature
reviews;
• Letters from
major healthcare associations;
• Editorials;
• Public comments.
4.6.2.3 DHA will determine
if the technology treats a severe, disabling, or fatal condition.
4.6.2.4 DHA will determine
if the technology is typically provided to patients age 64 and younger, or
if the technology is used for the treatment of a condition that
primarily affects patients age 64 and younger.
4.6.2.5 By September
15, DHA will publish the list of TRICARE-designated NTAPs and any corrections
or updates, on at least an annual basis online at https://www.health.mil/ntap.
4.6.3 Reimbursement
MethodologyThe contractor
shall, for TRICARE-designated NTAPs, calculate for each eligible
NTAP case on a claim the appropriate NTAP payment, where the payment
rate is equal to the lesser of:
• The CMS designated
NTAP percentage of the estimated costs of the technology or service;
or
• The
CMS designated NTAP percentage of the amount by which the costs
of the case exceed the standard DRG payment.
4.7 TRICARE-Designated
NTAP Application United States Food And Drug Administration (FDA)
AuthorizationThe contractor
shall only consider applications, for each fiscal year, for which
the new medical device or product has received:
• FDA marketing
authorization on or before July 1 of the preceding fiscal year;
or
• An
alternative pathway for FDA marketing authorization is granted before
July 1 of the preceding fiscal year.
4.8 TRICARE-Designated
NTAP Example
The CMS designated
percentage for this example is 65%.
The cost for
the technology is $500,000.
($500,000 x 65%).
The maximum TRICARE
payment for the Technology is $325,000.
The standard
DRG payment in this case is $45,000.
($500,000 - $45,000)
x (65%).
The provider
should be reimbursed the lesser of the two which is $295,750.
The CMS designated
percentage of the amount the costs exceed the standard DRG payment
is $295,750.
The TRICARE-designated
NTAP add-on payment in this case is the lesser of the CMS designated
NTAP percentage of the amount by which the costs of the case exceed
the standard DRG payment ($325,000), or the CMS designated NTAP
percentage of the amount by which the costs of the case exceed the
standard DRG payment ($295,750). In this case, the add-on payment
would be equal to $295,750.
Note: The CMS designated
percentage is currently 65% of the estimated cost of the technology
or 75% for certain drugs designated by the FDA as a Qualified Infectious
Disease Product (QIDP). When CMS updates the percentage, TRICARE
will use the updated CMS percentage.
5.0 NTAP Expiration
5.1 The contractor
shall provide a three month grace period (October 1 - December 31st)
until the effective date of the new TRICARE MS-DRG (January 1st)
and continue to pay the additional add-on amount during the grace
period for the expired NTAP, if CMS creates a new MS-DRG effective
for the following year. In other words, any NTAP that CMS expires
at the end of the fiscal year, which has a DRG created for that
NTAP, shall not expire until the TRICARE DRG update.
5.2 The contractor
shall discontinue additional NTAP payments, effective January 1,
for that expired treatment, regardless of what MS-DRG is provided
on the claim.
5.3 The contractor shall apply
paragraph 5.0 only
if a new MS-DRG is created for a specific high-cost NTAP treatment.
In the case there is not a new MS-DRG established by CMS, the TRICARE
NTAP add-on payment will expire on the original date of expiration
(September 30). In other words, if a new MS-DRG is not established
for an NTAP, there will be no grace period for the NTAP.