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 they are incorporated into the DRG, they new
technologies 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 was implemented
initially through
an Interim Final Rule (IFR) with Request for Comment, published
in the
Federal Register on September 3, 2020,
then
finalized through Final Rule, amending the TRICARE regulation
by adding
32 CFR 199.14(a)(1)(iv)(A)(1)(iii)(E)(5) through (a)(1)(iv)(A)(11) 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
will be 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, Defense Health Agency 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 Home Page found on the CMS website. The reimbursement amounts
in the current FY IPPS Final rule represent the maximum add on payment that
will be 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 Final Rule and as documented in 42 CFR 412.88. 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 Final Rule, or
• The maximum NTAP payment amount
for the specific technology, as determined by CMS.
The resulting NTAP amount shall is then be 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.,
in the case that 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 exceeds the MS-DRG payment,
and maximum payment amounts or both within 10 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. This paragraph specifies reimbursement for pediatric NTAPs.
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-designated 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-designated 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. Details 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. Details for
reporting are identified in DD Form 1423, CDRL, located in Section
J of the applicable contract.
4.6.2 Government Responsibilities4.6.2.1 The Government 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 The Government 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 The Government will
determine if the technology treats a severe, disabling, or fatal
condition.
4.6.2.4 The Government 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 The Government will
publish the list of TRICARE-designated NTAPs and any corrections
or updates, on at least an annual basis, by September 15 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
ExampleThe
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 EXPIRATION5.1 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.