CAR T-cell Therapy: An Update on Coverage and Reimbursement

ASH continues to advocate for adequate coverage and reimbursement for chimeric antigen receptor T-cell (CAR-T) therapy. ASH members are at the forefront of this therapy, conducting research and providing this potentially curative treatment to patients with certain types of lymphoma and leukemia. The Society’s priority is to protect access to care for patients eligible to receive this therapy. Unfortunately, ASH continues to hear from members regarding the significant negative financial impact on institutions of providing CAR-T therapy to Medicare beneficiaries due to inadequate reimbursement. The Society has heard anecdotally that institutions have been reluctant to make the investments necessary to run a CAR-T program because of this.

In early August, the Centers for Medicare and Medicaid Services (CMS) finalized policies impacting both reimbursement of and coverage for CAR-T therapy. The final Inpatient Prospective Payment System (IPPS) rule, published on August 2, did increase the payment received under the new technology add-on payment (NTAP) from 50 percent of the cost of the new technology to 65 percent, but did nothing further to address the inadequate reimbursement for this therapy. On the other hand, the final Decision Memo for CAR T-cell Therapy for Cancers, issued August 7, outlines a broad coverage policy for Medicare beneficiaries eligible to receive CAR-T therapy. Unfortunately, a broad coverage policy paired with poor reimbursement leaves institutions in the difficult position of being required to cover this therapy while continuing to receive inadequate payment to cover the costs associated with it.

For more on the IPPS final rule and the final decision memo, continue reading below.

Reimbursement

In June, ASH submitted extensive comments on the Inpatient Prospective Payment System (IPPS) proposed rule, outlining recommendations on how the Centers for Medicare and Medicaid Services (CMS) could improve reimbursement for chimeric antigen receptor T-cell (CAR-T) therapy. Although CMS had included a number of proposals in the IPPS rule specific to the reimbursement of CAR-T, the agency opted to take little action in the final rule, issued August 2.

CMS did increase the payment received under the new technology add-on payment (NTAP) from 50 percent of the cost of the new technology to 65 percent. This change will impact all NTAPs, including CAR-T. While this is an improvement, it still leaves institutions to cover the remaining 35 percent of the product cost. Institutions will now be reimbursed $242,450 for the CAR-T product, which has a total cost of $373,000. ASH had requested that CMS increase this amount to 80 percent. Additionally, the NTAP for CAR-T will expire at the end of 2020.

CMS also decided not to modify the MS-DRG assignment for cases reporting CAR-T therapies for FY 2020 and these cases will continue to be reported to MS-DRG 016, “Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.” ASH supports this decision and agrees with the agency that there is not yet comprehensive clinical and cost data that is needed to create a CAR-T specific MS-DRG.

CMS, however, did not accept any of the requested changes to the current payment mechanisms for FY 2020 for CAR-T, including ASH’s request for a cost-to-charge ratio of 1.0 to calculate both the NTAP and the outlier, only to be applied to the two currently approved CAR-T products. CMS cited the relative newness of CAR T-cell therapy, and the agency’s continued consideration of approaches and authorities to encourage value-based care and lower drug prices. CMS believes it would be premature to adopt structural changes to existing payment mechanisms, either under the IPPS or for IPPS-excluded cancer hospitals, specifically for CAR T-cell therapy. While ASH supports a long-term sustainable solution, the Society is disappointed that CMS did little to help institutions providing this therapy in the short-term.

Coverage

On August 7, CMS released the final Decision Memo for CAR T-cell Therapy for Cancers. The memo, originally expected in late May, differs significantly from what was initially proposed in February. CMS removed the coverage with evidence development requirement, which the Society strongly opposed because it would have provided a legal means by which institutions could opt out of providing CAR-T therapy to Medicare beneficiaries, but to continue providing it to patients with commercial insurance. Additionally, CMS will provide coverage for CAR-T products for either a U.S. Food and Drug Administration (FDA)-approved indication (according to the label) or for off-label uses of FDA-approved products supported in one or more CMS-approved compendia. ASH advocated for coverage to be expanded to include FDA-approved indications rather than only for relapsed or refractory cancer as CMS originally proposed. Current clinical trials are underway to employ CAR-T earlier in the disease process. While ASH is pleased with the final coverage policy, the Society remains concerned about the poor reimbursement for this potentially life-saving therapy.