New Technology Add-on Payments (NTAP)

Question: “Don’t all inpatient claims receive the same fixed payment based upon the diagnosis? Why should I itemize charges on an inpatient?”

Answer: “YES; you should itemize because you may receive extra reimbursement in addition to the MS-DRG payment.”

One scenario that generates extra payment is when services, (including drugs) are used on inpatients that are designated for New Technology Add-on Payments (NTAP).

Next question: “What do I need to do to receive the extra payment?”

• The medical record must contain a valid order for the drug,
• The medical record must contain documentation of the administration of at least one dose, and,
• The appropriate ICD-10-PCS code for the administration of the drug must be added to the claim.

For FY2021, effective October 1, 2020, nineteen drugs are eligible for maximum NTAP payments ranging from $1014.79 to $125,448.05 per case.

Eligible drug products for FY2021 are summarized in the attached tool with the maximum reimbursement per case and the related ICD-10-PCS codes listed.

• 9 products were continued from last year (Zemdri, AndexXa, Azedra, Cablivi, Elzonris, Balversa, Spravato, Xospata and Jakafi)
• 3 are newly approved with the normal pathway (Imfinzi, Tecentriq, and Soliris)
• 5 newly approved Qualified Infectious Disease Products (QIDP) (Fetroja, Nuzyra, Recarbio, Xenleta, Zerbaxa)
• 1 QIDP that has not yet been approved by the FDA but received conditional NTAP approval: Contepo.

◦Contepo will be eligible for NTAP payment effective for discharges the quarter after the date of FDA marketing authorization provided that the technology receives FDA marketing authorization before July 1, 2021.

Six drugs that were previously eligible for NTAP payments will no longer be eligible as of October 1, 2020: Kymriah/Yescarta, Vyxeos, Vabomere, Giapreza, Erleada).

NTAP payments are approved annually by CMS. On a per claim basis, Medicare makes an add-on payment equal to the lesser of: 

1. 65 percent of the costs of the new medical technology (as established in the IPPS Final Rule), or
2. 65 percent of the amount by which the costs of the case exceed the standard DRG payment (with costs being calculated based upon the hospital’s cost-to-charge ratio).

Note: Drugs approved under the QIDP pathway use 75 percent rather than 65 percent in the calculations.

Since the total charges on the claim are used for the calculation, it is important that all eligible services, including all drugs, be separately reported so that they are counted in the total charges. This includes anesthesia agents, contrast agents, IV fluids and other drugs which may be overlooked. 

The application process starts with the manufacturer applying to CMS for the designation which may result in 2-3 years of additional payment. For FY2022, the application deadline is October 16, 2020. In order to be eligible for NTAP, the technology must meet three criteria. It must be: 

1. new
2. costly, such that the DRG rate otherwise is determined to be inadequate; and
3. a substantial clinical improvement over existing services or technologies.

Note: Drugs approved under the QIDP pathway are deemed to meet the “newness” and “substantial clinical improvement criteria” and therefore only need to meet the cost criteria for NTAP eligibility.

Shoutouts!

1. The Pharmacy Director should have a general understanding of which drugs are awarded NTAP status each year so that it can be used in formulary decision-making. The NTAP process was implemented to encourage medical innovation, so that new technology would have a 2-3 year period when physicians could use the drugs with additional reimbursement to see if they had advantages over older therapies.
2. The Finance Team should work to ensure that when these drugs are administered to inpatients, the claims are identified and held to ensure that the coders can review them and get the appropriate ICD-10-PCS codes on the claim before they are final billed. Either a HCPCS code or NDC number would be a good way to identify usage in the system and stop the claim for coding prior to the final bill being released.
3. The Finance Team will want make sure that each time an NTAP drug is administered to an inpatient, the ICD-10-PCS code is verified on the claim. With the claim payment, the payer is required to add value code 77 to the remittance advice which indicates the additional payment for NTAP. Each drug administration should be tracked all the way through to the payer and back to the payment received to ensure that if eligible, NTAP money is received as expected.
4. Since some drugs will have their NTAP designation expire on October 1, it would be good to have the P&T Committee review previous usage and outcomes and determine if the drug’s formulary status should remain the same or be revised.