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 NTAPs
4.3.1 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 Beneficiaries
The 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 Example
The 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
NTAPs
4.5.1 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-Specificdesignated 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
Process
4.6.1 Contractor Responsibilities
4.6.1.1 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-Specificdesignated 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
Responsibilities
4.6.2.1 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 Methodology
The 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) Authorization
The 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.