CMS to cover FDA-approved chimeric antigen receptor T-cell (CAR T-cell) therapy.

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Aug. 9, 2019


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Hospitals May Feel More Confident Putting Therapy in the CAR-T


On Wednesday, the Centers for Medicare & Medicaid Services (CMS) announced it would cover autologous CAR T-cell therapy (chimeric antigen receptor T-cell therapy) for the treatment of Food and Drug Administration (FDA)-approved indications as well as FDA-approved therapies for off-label uses recommended by CMS-approved compendia.

CAR T-cell therapy is a biologic approach to cancer treatment currently available for the treatment of childhood leukemia and specific lymphomas, with treatments for other cancers in development. The treatment involves extracting a patient’s T-cells in order to alter the genetic material to target specific cancer proteins. Costs for the existing therapies range from $375,000 to $475,000, and estimates for total care, including hospital-related costs, can exceed $1.5 million.

Before this announcement, Medicare coverage of CAR T-cell therapy was uncertain, as the decision of whether to cover was left to the 12 regional Medicare contractors. This created uncertainty for hospitals as to whether they would be reimbursed for treatment. In addition to stating with certainty that treatment would be covered by Medicare, the policy laid to rest concerns that: 1) treatment in oncology offices would not be covered; and 2) hospitals would be required to provide burdensome clinical evidence to receive reimbursement (ie, coverage with evidence development [CED]).

Long-term outcomes of the therapy are unknown, and CMS will rely on patient data collected by the FDA through the Risk Evaluation and Mitigation Strategies (REMS) program already established for current CAR-T and the National Cancer Institute for future policy development. The American Society of Hematology praised the overall decision, particularly the elimination of CED.

The decision memo represents a large shift in policy from the patient-selection perspective contained in the proposed decision memo published in February, in which CMS outlined both proper patient selection and reporting requirements; both now lie within the FDA’s jurisdiction. With the issue of proper patient selection falling squarely on FDA-approved indications and CMS-approved compendia recommendations, focus may shift to interpreting clinically appropriate patients as well as the compendia’s role in off-label review of CAR-T products.

Of continued concern is whether CMS coverage will be sufficient for hospitals and other healthcare centers to break even financially on the treatment. The 65% reimbursement (see the related IPPS final rule article below) for the therapy itself is generally considered by hospitals to be inadequate to cover costs, and CMS has adopted a wait-and-see approach (with no deadline) to determining reimbursement of related costs.


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Legislative Bytes


Note: Congress is on recess and will reconvene after Labor Day (unless Senate or House leadership calls back their chambers).

  • Rep. Chellie Pingree (D-ME) introduced HR 4158 that would prohibit price gouging in the sale of drugs.
  • Rep. Denver Riggleman (R-VA) introduced HR 4159 that would amend the Health Insurance Portability and Accountability Act to ensure coverage for individuals with pre-existing conditions.

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Rollin’, Rollin’ Rollin’, Keep That Value Moving: Value Round-Up


On Wednesday, the Institute for Clinical and Economic Review (ICER) released a draft set of proposed adaptations to its Value Assessment Framework (VAF) as part of its Valuing A Cure project. These adaptations will be applied to ICER’s assessment of potential curative therapies, as well as other treatments that qualify as “single or short-term transformative therapies.” The draft set of proposed adaptations will be open for public comment until September 6. The proposed changes will complement and build upon ICER’s ongoing update to its 2020 VAF, scheduled to be released next Friday, August 16.

Last week, the American Journal of Managed Care published an interview with Dr. Jeroen Jansen, Lead Scientist Advisor at the Innovation and Value Initiative (IVI), which discussed challenges with current approaches to value assessment in the US. Among other topics, Dr. Jansen highlighted the need to “get a better understanding of what is relevant for patients and acknowledge that patients are diverse” in order to incorporate the patient perspective into value assessments. He also noted the importance of finding methods to quantify patient preferences in the value assessment process.

Additionally, last week, the National Pharmaceutical Council published an interview with Tonya Winders, Chief Executive Officer and President of the Allergy and Asthma Network, regarding her involvement in ICER’s assessment of peanut allergy products. Ms. Winders raised several concerns regarding ICER’s incorporation of the patient perspective, specifically noting limitations with ICER’s use of the quality-adjusted life-year (QALY) and lack of real-world evidence in its evaluations. Despite these challenges, she encouraged patient groups to “engage early and often” with ICER to ensure every opportunity is used to “bring the patient voice forward in the [ICER evaluation] process.”

As always, if you need assistance with all things ICER or value-related, please contact

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NTAP, Not a Barre Move: IPPS Final Rule Released


Late last Friday, CMS issued a final rule to update fiscal year (FY) 2020 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). In an accompanying press release and fact sheet, CMS emphasized how the final rule improves payments to rural hospitals and will reward medical innovation. Here is our initial take on the main IPPS provisions.

Adjusting Add-On Payments for New Technology
CMS finalized its proposal to increase the new technology add-on payment (NTAP) beginning in FY 2020 from 50% to 65% and is also increasing the add-on payment to 75% for certain antimicrobials. Under the current NTAP calculation, Medicare pays a marginal cost factor of 50% of the estimated costs of the case in excess of the full Medicare Severity Diagnosis-Related Group (MS-DRG) payment, up to a maximum of 50% of the technology cost. CMS had indicated that setting the maximum add-on payment percentage at 50% may not result in an adequate add-on payment.

CMS also revised and clarified the policies for the “substantial clinical improvement” criterion used to evaluate applications for the NTAP.

FY 2020 Status of Technologies Approved for FY 2019 Add-On Payments
CMS approved 13 technologies for add-on payments in FY 2019. Below is their add-on payment status for FY 2020.

FY 2020 Add-On Payments for New Services and Technologies
CMS received 18 applications for new technology add-on payments for FY 2020. CMS did not consider 5 applications for a number of reasons. Below is the FY 2020 add-on payment status for the remaining 13 technologies.

New NTAP Pathway for Devices
CMS finalized its proposal for an alternative NTAP pathway for a medical device that receives FDA marketing authorization and is part of an FDA expedited program for medical devices, which is currently the Breakthrough Devices Program.

If a medical device subject to one of the FDA’s expedited programs has received marketing authorization from the FDA, CMS would consider that product “new” and “not substantially similar” to an existing technology for purposes of the NTAP. Under this proposal, the medical device would only need to meet the cost criterion to receive the add-on payment. This change would begin with applications received for new technology add on payments for FY 2021.

Leveling the Playing Field for Rural Health
CMS finalized its proposal to increase rural hospitals’ wage indexes by half the difference between the otherwise applicable wage-index value for that hospital and the 25th percentile wage-index value across all hospitals, beginning in FY 2020 and effective for at least 4 years.

CMS also finalized its proposal to change the wage index “rural floor” calculation. As of FY 2020, CMS will remove urban-to-rural hospital reclassifications from the calculation of the rural floor wage index value. Additionally, CMS will place a 5% cap on any decrease in a hospital’s wage index from the final wage index for FY 2019, so a hospital’s final wage index for FY 2020 will not be less than 95% of its final wage index for FY 2019.

Addressing Antimicrobial Resistance (AMR)
CMS finalized an alternative NTAP pathway for antimicrobial products designated by the FDA as Qualified Infectious Disease Products (QIDPs). See the related article below for a full description of this pathway and CMS’ plans to help combat AMR.

Changes to Payment Rates Under IPPS
The increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is approximately 3.1%.

Individual hospitals may be subject to other payment adjustments under the IPPS, including:

  • Penalties for excess readmissions, which reflect an adjustment to a hospital’s performance relative to other hospitals with a similar proportion of patients who are dually eligible for Medicare and full-benefit Medicaid
  • Penalty (1%) for worst-performing quartile under the Hospital Acquired Condition Reduction Program
  • Upward and downward adjustments under the Hospital Value-Based Purchasing Program

The final rule will be published in the August 16 issue of the Federal Register. The changes will affect discharges occurring on or after October 1, 2019.


CMS Turns up the Heat on Antibacterial Resistance


On Tuesday, CMS Administrator Seema Verma released a blog post describing reforms to ensure Medicare beneficiaries’ access to antimicrobials. The realigned financial incentives and modernized payments were part of the FY 2020 IPPS. See the related story discussing the IPPS final rule.

The reforms are in response to rising AMR in the US. Each year, more than 2 million Americans suffer from antibiotic-resistant bacterial infections. A majority of these cases are seen in Medicare beneficiaries, due to the increased opportunity for infection in seniors caused by factors such as age-related immunosuppression, catheterization, and chronic disease. However, new drug development required to treat these increasingly complicated infections has been historically suppressed by governmental regulations.

Reimbursement decisions for antibiotics are a double-edged sword in that payments for new drug development must capture the public health value of these treatments while also discouraging the inappropriate antibiotic usage that fosters AMR. A finalized NTAP pathway for QIDP attempts to manage this balancing act by increasing the pathway payment to 75%, up from 50%. This top band of NTAP is limited to QIDP and does not require demonstration of the substantial clinical improvement criterion.

Further, CMS upgraded the severity level designation of 18 ICD-10 codes to “CC” (complications and comorbidities), reflective of the increased intricacy and cost of treating AMR patients. This coding change is intended to incentivize physicians to use the appropriate, albeit more expensive, therapy demanded in drug-resistant, inpatient cases.

CMS is soliciting feedback on the FY 2020 IPPS rule for additional reforms down the road and to balance hospital resources used in implementing these new payment adjustments.


Summer’s Almost Over, but Warren’s Plan Aims to Keep Rural Healthcare Afloat


On Wednesday, Democratic nominee hopeful Elizabeth Warren (D-MA) provided some details on what she would do to help improve access to healthcare—with a focus on rural communities. The addition to her Medicare-for-All plan aims to remove barriers to coverage of quality healthcare, increase the number of available health professionals, and reduce the closure of hospitals in rural areas. Specifically, Warren’s plan would:

  • Increase funding for community health centers by 15% per year over the next 5 years plus an extra $25 billion capital fund for states to use on anything from establishing telemedicine programs to expanding existing clinics
  • Expand the healthcare workforce in rural communities by scaling up apprenticeship programs, lifting the cap on residency placements by 15,000, and significantly expanding current loan repayment programs for health professionals in rural and Native American communities
  • Direct the Federal Trade Commission to block all future mergers between hospitals unless they show the merger would result in the same or improved access to care

Another part of her plan to help access to rural healthcare would be a proposal to establish a “public option for broadband” that would treat the internet like any other public utility. While some in the media are calling Warren’s plan “Bernie 2.0,” the proposed changes to help rural healthcare are based on the ability to pass new statutes that create new funding.

Warren’s focus on the rural community is important, as that sector has had challenges for decades that are being exacerbated as healthcare evolves. Rural areas are disproportionately serviced by lower-paying Medicare and Medicaid, making it difficult to retain primary care and specialist providers. The physicians who do treat the rural community, therefore, tend to be overworked, so burnout is common. The greater distance to hospitals can be deadly for acute injuries and episodes and also makes follow-up care more difficult.


Information Buffet (AKA, Other Stuff That Caught Our Attention)


We kept running into stories we wanted to bring to your attention, so here’s a quick hit list of other news we thought you should know:

  • Who is excited? Version 8.0 of the USP Model Guidelines process for Part D is underway. The Candidate Drug File has been released, which includes drugs USP will be considering. If you need help navigating this process, let us know.
  • According to a Vizient Drug Price Forecast, health systems can expect a nearly 5% increase in the cost of their pharmaceutical purchases in 2020.


“[W]e stress that if policymakers are dissatisfied with the degree of competition among biologic drugs today, the set of credible policy options to consider is not limited only to price controls, nor would such federal rate setting be a costless endeavor for society writ large. A wide set of options also exists to further promote competition by reducing entry costs of biosimilars, adjusting incentives embedded in payment policies, improving information about new biosimilars to providers, revisiting allowable contracting strategies of biologics, and much more.”

– Alex Brill and Benedic Ippolito, “The Economics of Biologic Drugs: A Further Response to Bach et al,Health Affairs, August 8



85% vs 44%


Adoption of telehealth solutions or services has surged in the inpatient setting from roughly 54% in 2014 to 85% in 2019, while adoption of telehealth solutions/services by outpatient physician practices remained relatively flat from 2018 to 2019, lingering at about 44%.

Sources: “Definitive Healthcare Survey: Inpatient Telehealth Adoption on the Rise” and “Definitive Healthcare Survey: 2019 Outpatient Telehealth Adoption Remains Flat,” Definitive Healthcare, August 6



Copay Accumulators: Are Your Patients Really at Risk?


As patients face a growing share of healthcare costs in the United States, pharmaceutical manufacturers have sought to ease the burden and break down medication access and adherence barriers by offering copay assistance and other support programs.

But payers have recently started to limit the financial support allowed by such programs by adopting copay accumulators, which prevent manufacturer coupons and copay assistance from counting toward patients’ deductibles and other out-of-pocket costs.

How to assess your readiness and prepare for the impact of copay accumulators >


Count on Health Policy Weekly for an at-a-glance view of legislative and regulatory developments and news that impacts the healthcare industry.


Jennifer Snow
Vice President,
Reimbursement and
Policy Insights,

Scott Shields
Associate Director,
Health Policy



Doug Cook
President | Commercialization Services & Animal Health

Kristine Flemister, PharmD
President | Xcenda

Tommy Bramley, PhD, RPh
President | Lash Group

Stacie Heller
Vice President | Government Policy | AmerisourceBergen Corporation

Rita Norton
Senior Vice President | Government and Public Policy | AmerisourceBergen Corporation

Ana Stojanovska
Vice President | Commercial Consulting | Xcenda


Jenna Kappel | Stew Kaufman | Scott Shields | Diane Smith | Linnea Tennant | Kyler Tormey


Laurie Kozbelt | Ellen Olson | Tia O’Brien


Aug. 9, 2019


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