NPC Comments on the Medicare Program's Hospital Inpatient Prospective Payment Systems

June 17, 2022

The Honorable Chiquita Brooks-LaSure
Administrator, Centers for Medicare & Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244

Submitted electronically via https://regulations.gov

RE: Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2023 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Costs Incurred for Qualified and Non-qualified Deferred Compensation Plans; and Changes to Hospital and Critical Access Hospital Conditions of Participation [CMS–1771–P]

Dear Administrator Brooks-LaSure:

The National Pharmaceutical Council (NPC) appreciates the opportunity to submit comments regarding the Centers for Medicare & Medicaid Services (CMS) notice of proposed rulemaking, Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2023 Rates; Quality Programs and Medicare Promoting Interoperability Program Requirements for Eligible Hospitals and Critical Access Hospitals; Costs Incurred for Qualified and Non-qualified Deferred Compensation Plans; and Changes to Hospital and Critical Access Hospital Conditions of Participation. 

NPC is a health policy research organization dedicated to the advancement of good evidence and science and to fostering an environment in the United States that supports medical innovation. NPC is supported by the major U.S. research-based biopharmaceutical companies. We focus on research development, information dissemination, education, and communication of the critical issues of evidence, innovation, and the value of medicines for patients. Our research helps inform important health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible. 

NPC supports the Agency’s continued efforts to ensure that Medicare beneficiaries have access to new, innovative technologies, including those addressing rare diseases through payment policies such as the New Technology Add-on Payments. To that end, our comments focus on recent proposals related to New Technology Add-on Payments (NTAPs) and recommendations regarding payment mechanisms to improve access to treatments for rare diseases and conditions. 

Proposed Transition to National Drug Codes for New Therapeutic Agents Approved for New Technology Add-on Payments
NPC appreciates CMS’s efforts to support innovation and reduce the administrative burden for New Technology Add-on Payments (NTAPs). NPC shares CMS’s goal for reducing administrative burden, however, we do have concerns about the transition to using National Drug Codes (NDCs) instead of the ICD-10 Procedure Coding System (ICD-10-PCS) codes to identify cases involving NTAP-eligible therapies. NPC is concerned that the transition to using NDCs may pose significant operational challenges while creating potential difficulties for performing quality research.  We urge CMS to use caution in evaluating whether to move forward with this proposal.  

The transition to NDCs may create complexity in tracking patient cases, which may make it difficult to perform further valuable research. High-quality data that provides sufficient clinical detail and specificity is vital for efficiently tracking health care trends, quality of care issues, and evaluating health outcomes. We encourage CMS to consider how to balance reducing the coding administrative burden while maintaining the data quality that supports the valuable research on quality and health outcomes. 

Additionally, NPC is concerned with potential operational challenges that may arise if shifting from ICD-10-PCS codes to NDCs. Hospitals are not currently required to bill NDCs on Medicare inpatient claims, and the proposed transition could entail providers billing differently depending on when a given therapeutic agent was approved for NTAP. There likely will be additional challenges for providers in ensuring that their hospital pharmacy clinical and billing systems are capable of operationalizing the transition to NDCs given that NDCs are not currently used for Medicare billing on hospital claims. We ask that the Agency further study the feasibility of this proposal before finalizing and implementing it. Should CMS proceed, it must work closely with hospitals to ensure that there is adequate guidance and support in transitioning to NDCs to protect against the transition creating additional administrative burdens and patient access issues for NTAP-approved therapies. 

Improving NTAP Reimbursement for Novel Antimicrobials
Given the growing public health threat of antimicrobial resistance, NPC appreciates CMS’s previous efforts to improve patient access to innovative antimicrobials via its additional NTAP pathways. However, the current NTAP policy for these products does not go far enough in addressing the significant reimbursement and patient access challenges faced by these therapies. Because use of such products is intended to be limited to protect against antimicrobial resistance, the current NTAP period of 2-3 years may not yield sufficient volume for CMS to adequately recalibrate MS-DRGs post-NTAP. In addition, many hospitals require additional infrastructure for coding and billing NTAP and lack knowledge of whether and how much NTAP claims are reimbursed which further creates challenges for these providers in using these therapies. Also, the current NTAP for antimicrobials is capped at the lesser of 75% of the costs that exceed the applicable MS-DRG payment or 75% of the costs of the drug. This reimbursement does not fully account for costs of the therapy and is of marginal benefit given the added administrative burden and costs associated with billing the NTAP. Thus, these issues further impact utilization and hinder patient access.

In light of these concerns, we ask that CMS make changes to its existing NTAP policies to improve reimbursement and patient access. CMS should provide for antimicrobial Qualified Infectious Disease Products (QIDPs) and Limited Population for Antibacterial and Antifungal Drugs (LPAD) NTAP reimbursement at 100% of the cost of the product which would provide hospitals with a clear, adequate, and consistent level of reimbursement for these therapies and allow for appropriate use. NPC also asks that CMS consider extending NTAP status for these antimicrobial products to loss of exclusivity due to the limited utilization of these products and allow for NTAP QIDP and LPAD reimbursement regardless of NTAP eligibility having expired given the importance of supporting appropriate patient access to these therapies. To address hospital uptake of NTAP, CMS should engage with hospitals to ensure they have adequate information regarding NTAP reimbursement including education on submitting NTAP claims and transparency into submitted NTAP claim approvals, denials, and reimbursement. Increased outreach and visibility into NTAP would provide hospitals with more certainty regarding reimbursement and would support NTAP uptake. Lastly, to ensure the appropriate use of antimicrobials, we recommend that CMS require hospitals to implement antimicrobial stewardship programs as part of eligibility for receiving this NTAP.

Proposal to Publicly Post NTAP Applications
CMS is proposing to publicly post NTAP applications, except for certain cost and volume information, and also proposes to eliminate the ability of manufacturers to designate information on the application as confidential. While we appreciate CMS’s interest in increasing transparency, it also is important that confidential information in NTAP applications continues to be protected. Therefore, we urge CMS to continue to permit manufacturers to identify information in NTAP applications that is confidential, such as proprietary or trade secret information, and that CMS not release such information. This is an important safeguard so that manufacturers can provide information to support the NTAP application, particularly in the case of products for which FDA approval is pending and publications of data are pending. In addition, we agree that CMS should not publicly release cost and volume information that is submitted as part of the NTAP application and ask CMS to confirm that manufacturers can still designate such information as confidential.   

Ensuring Access to Valuable, Innovative Rare Disease Treatments
NPC appreciates CMS’s recognition of the current barriers for Medicare beneficiaries in accessing transformative therapies for rare diseases and conditions. As noted by stakeholders[1], one of the hurdles to patient access is hospital formulary coverage of rare disease treatments and the lack of access to these formularies. Hospitals often utilize formularies as a cost-management strategy that incentivizes the use of on-formulary drugs over off-formulary drugs which may not include treatments for rare diseases. We encourage CMS to promote greater transparency of hospital formularies to shed light on potential patient access issues for rare diseases. 

In addition, NPC supports CMS’s efforts to address stakeholders’ concerns regarding inadequate Medicare reimbursement for certain treatments for rare diseases.[2]  The current MS-DRG system is a system of averages that pays hospitals most consistently and accurately the higher the volume of cases and the less technological change for treatments within a given DRG. As such, we agree with CMS that the current system does not adequately address innovative treatments for rare diseases and conditions with low patient volumes. To that end, NPC encourages CMS’s interest in moving to a more systematic approach for addressing payment for these treatments and recommends the Agency leverage recent lessons from Chimeric Antigen Receptor (CAR) T-Cell and antimicrobial resistance (AMR) therapies when exploring potential solutions for hospital reimbursement. New payment policies for addressing rare disease treatments will help to ensure timely patient access and predictable provider reimbursement for these transformative new therapies.

Conclusion
We appreciate CMS’s efforts to support innovation through proposed changes to the current NTAP policies and new mechanisms to facilitate access to treatment for rare diseases. Regarding the Agency’s proposed NTAP transition to NDCs, if CMS were to move forward with the transition, we encourage CMS to provide for data continuity to enable essential quality of care and health outcomes research. In any such change, CMS should also work to ensure providers have adequate guidance and support in transitioning to NDCs to minimize provider administrative burdens and patient access issues. We also ask that CMS continue to safeguard confidential information in NTAP applications such as proprietary or trade secret information noted by manufacturers alongside cost and volume information. Given existing reimbursement and patient access issues, CMS should also look to improve the existing NTAP policies for antimicrobials given the unique market dynamics and importance of these therapies to public health. To improve patient access to innovative rare disease treatments, NPC recommends CMS encourage greater transparency for hospital formularies and work to identify systematic solutions to hospital reimbursement for rare disease treatments. 

Thank you for the opportunity to provide comments. We look forward to continuing this conversation and would be happy to meet to expand upon our comments and share our research. 

Sincerely,

John M. O’Brien, PharmD, MPH
President and Chief Executive Officer

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[1] CMS. Hospital Inpatient Prospective Payment System for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2023 Rates (CMS-1771-P). May 10, 2022. Available at: https://www.govinfo.gov/content/pkg/FR-2022-05-10/pdf/2022-08268.pdf

[2] Ibid.