Knowledge Base Article

“The primary objective of the IPPS and the LTCH PPS is to create incentives for hospitals to operate efficiently and minimize unnecessary costs, while at the same time ensuring that payments are sufficient to adequately compensate hospitals for their legitimate costs in delivering necessary care to Medicare beneficiaries.”

• Source: Appendix A: Economic Analysis of FY 2024 IPPS Final Rule

There are eighteen days until the October 1^st start to the 2024 CMS Fiscal Year. As you continue to prepare, this article focuses on New Technologies Add-On Payments (NTAPs). Section E. Add-On Payments for New Services and Technologies for FY 2024 begins on page 58,793 of the FY 2024 IPPS Final Rule.

New Technologies Eligible for Add-On Payment (NTAPs) Background

Section 1886(d)(5)(K)(i) of the Act requires the Secretary to establish a mechanism to recognize the costs of new medical services and technologies under the payment system under the subsection which establishes the system for paying for the operating costs of inpatient hospital services.

The system of payment for capital costs is established in section 1886(g) of the Act. For this reason, capital costs are not included in the add-on payments for a new medical service or technology.  

NTAPs are not budget neutral and the “newness” for payment is limited to the 2-to-3-year period after the date a technology becomes available.

In response to the COVID-19 public health emergency (PHE) and as new therapies received approval to treat COVID-19, CMS established the New COVID-19 Treatments Add-on Payment (NCTAP). With the PHE ending in May of this year, the add-on payments for NCTAPs will end September 30, 2023.

There are three pathways for a new service or technology to be approved for the add-on payment (Traditional pathway, Certain Antimicrobial Products Alternative Pathway, and Certain Transformative New Devices Alternative Pathway).

For the alternative pathways, a technology is not required to have a specified FDA designation at the time the application for NTAP is made. Instead, “CMS reviews the application based on the information provided by the applicant only under the alternative pathway specified by the applicant at the time of new technology add-on payment application submission. However, to receive approval for the new technology add-on payment under that alternative pathway, the technology must have the applicable FDA designation and meet all other requirements in the regulations in § 412.87(c) and (d), as applicable.”

Coding NTAPs

Section X New Technology was added to ICD-10-PCS effective October 1, 2015. CMS has indicated (https://www.cms.gov/Medicare/Coding/ICD10/Downloads/2016-Section-X-New-Technology-.pdf) that “Section X was created in response to public comments received regarding New Technology proposals presented at ICD-10 Coordination and Maintenance Committee Meetings, and general issues facing classification of new technology procedures.”  To receive payment for an eligible NTAP, the applicable section X New Technology ICD-10-PCS code must be on the claim submitted for adjudication.

NTAPs by the Numbers

Before looking ahead to FY 2024, I wanted to see what new technologies have been coded in FY 2023 claims with dates of service from October 1, 2022 through March 31, 2023. The following claims volume was provided by our sister company RealTime Medicare Data (RTMD), represents claims volume for the entire nation, and is specific to the Medicare Fee-for-Service population.   

FY 2023

25: The number of technologies eligible for add-on payment.

94,210: The number of claims with dates of service from October 1, 2022 through March 2023 that included an ICD-10-PCS code eligible for add-on payment.

7,551: The number of claims with an ICD-10-PCS new technology code when the technologies eligible for the COVID-19 Treatments Add-On Payment (NCTAP) (convalescent plasma, Olumiant, and Veklury® (remdesivir)) were excluded from the claims volume. 

FY 2024

33: The number of technologies eligible for add-on payment.

58,524.5: The number of Medicare beneficiaries that CMS expects will receive one of the new technologies. Note, the .5 is not an error. CMS’ estimated cases for the NTAP Livtencity™ is 129.5 cases.

$495,497,861.97: CMS’ estimated Medicare spending on NTAPs in FY 2024.

Moving Forward

Identifying and coding new technologies is an opportunity not to be missed for those hospitals providing these services. That said, some questions come to mind for you to think about:

• Is your hospital providing any of these services or technologies?
• Who needs to be aware of what the new technologies are? (i.e., Physicians, Pharmacy, Coding Professionals, Clinical Documentation Integrity Specialists, Case Managers)
• What process do you have in place to alert your Coding Staff of the need to code the new technology ICD-10-PCS codes?

Resource

FY 2024 IPPS CMS webpage: https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2024-ipps-final-rule-home-page