New Technology Add-on Payments (NTAP)

09/21/20 • 6 min

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!

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.
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.
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.
Since some drugs will have their NTAP designation expire on October 1, it would be good to have the P&T Committee review p...

Shoutouts!

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.
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.
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.
Since some drugs will have their NTAP designation expire on October 1, it would be good to have the P&T Committee review p...

Previous Episode

Influenza Vaccines

Healthcare organizations are being asked to manage ventilators, drug shortages, establish telehealth services, manage a budget, and downsize staff among other tasks amid the pandemic. You may leave the day feeling as if you were Thor conquering the Nine Realms. The Pharmacy Revenue Cycle Newsletter aims to put the Mjölnir (hammer of Thor) into your hands and provide you with helpful tips, resources, and emerging updates that can improve your pharmacy revenue. “Pharmacy Revenue Cycle” (www.pharmacyrevenuecycle.com) is brought to you by Agatha Nolen, Ph.D., CRCR, FASHP and Maxie Friemel, PharmD, MS, BCPS, CRCR. Together we bring over 25 years of experience working with CFO’s, pharmacy directors, billing & charge master teams, informatics, and alike. Recognizing organizations' gaps in understanding the pharmacy revenue cycle and the increasing impact pharmaceuticals have on our budget, our goal is simple. We take complex and ever changing rules and regulations, bring you awareness and practical tools that can help you understand and enhance your pharmacy revenue cycle. Each year the influenza season brings about its own challenges from distribution to billing. In the midst of a pandemic, influenza billing may seem trivial which is more the reason a simplified tool could boost your accuracy. For our debut of the Pharmacy Revenue Cycle Newsletter and website, we bring you an Influenza Billing Tool. The influenza tool extracts the influenza products and packages from the CDC. This information is then mapped to available CMS Flu Shot Coding which contains the HCPCS/CPT and descriptions for each vaccine. When mapping NDC to CPT codes, caution is taken to ensure accuracy based upon dosage, valency, formulation (e.g. MDV, SDV) among other attributes of each individual product. Lastly, we have included the CMS payment allowance which is calculated at 95% of AWP. This is the estimated reimbursement for Medicare Part B beneficiaries with the exception of Hospital Outpatient Departments which are paid at reasonable cost. Shoutouts! 1. Sanofi Pastuer has developed a high dose formulation that is dosed at 0.7 mL versus the traditional 0.5 mL. CPT code 90662 will be used to code this product, but is the same code as previous years 0.5 mL dosage. Ensure the CDM or billing crosswalks reflect the updated 0.7 mL per billed units or is based on a per dose and only 1 billed unit is calculated per dose. 2. CPT 90686 and 90685 differ only by the dosage administered but often represent the same NDC. Validate that your system produces the correct CPT based on the dose administered.

Next Episode

TRICARE NTAP and Investigational Drugs related to COVID-19

The Department of Defense published an Interim Final Rule in the Federal Register on September 3, 2020 with two provisions which directly impact payment for drugs on TRICARE inpatient and outpatient claims.

The first provision is that TRICARE will adopt the payment criteria and formulas for new technology add-on payments (NTAP) as outlined in CMS Inpatient Prospective Payment System (IPPS) Final Rule. This is a new payment provision and will be made retroactive to January 1, 2020. In the future, TRICARE will adopt CMS’s effective date of October 1 of each year. This is listed as a permanent change. For a tool listing the FY2020 and FY2021 drugs eligible for CMS NTAP payments (and now applying to TRICARE), see: NTAP Tool.

The second provision is a temporary provision where TRICARE, for the first time, will cover not just the care associated with administration of an investigational drug, but the investigational drug itself, when the investigational drug is for the treatment of COVID–19 or its associated sequelae. This use may be authorized in any setting for which the FDA allows treatment use of an investigational drug under expanded access to proceed.

The change under this provision is temporary for the duration of the President’s national emergency for the COVID–19 outbreak, but the drug may continue to be covered beyond the national emergency if the course of treatment was started prior to the end of the national emergency.

TRICARE indicated that it intends to use this national emergency period to re-evaluate their current exclusion on coverage of treatment INDs and may revise the regulation to cover investigational drugs for treatment use under expanded access for all indications if appropriate after they evaluate the costs, benefits, risks, and other considerations. Coverage for investigational drugs may impact both inpatient and outpatient TRICARE claims as the charges may contribute to outlier payments and there may be additional separate reimbursement on outpatient claims depending upon the cost incurred by the facility.

TRICARE has 9.4 million beneficiaries who receive healthcare in a network of civilian providers and military hospitals and clinics. TRICARE beneficiaries are the men and women of the Armed Forces and their families including active duty and retirees, as well as National Guard and Reserve members

SHOUTOUTS!

1. The Finance Team will want to review all FY2020 CMS NTAP-eligible drugs to determine if any were used on TRICARE inpatients with claim dates on or after January 1, 2020. The appropriate ICD-10-PCS codes should be added if not already on the claim and rebilled to TRICARE.

2. The Finance Team will want to include TRICARE accounts in any edits or monitoring for FY2021 NTAP drugs (similar to their current process for Medicare), to ensure that appropriate ICD-10-PCS codes are added to the claim.

3. The Pharmacy and P&T Committee should include Medicare and TRICARE data when evaluating NTAP-designated drugs for formulary status.