On August 1, the Centers for Medicare & Medicaid Services (CMS) released the Fiscal Year (FY) 2024 Inpatient Prospective Payment System (IPPS) proposed rule. In this rule, CMS finalized updates to payments, quality metric thresholds, and broader payment policies for inpatient hospital care for fee-for-service Medicare beneficiaries.

In each IPPS rulemaking cycle, CMS assesses technologies that have been submitted for potential New Technology Add-on Payment (NTAP) status and reconsiders the eligibility for technologies already so designated. NTAPs are additional Medicare payment to hospitals that cover excess costs associated with a specific stay involving an NTAP-designated therapy (i.e., costs that exceed the bundled payment amount for the case). Over the past decade, an increasing number of manufacturers have sought NTAP status for their technologies, and CMS has created new pathways for technologies to qualify for this designation.

FY 2024 NTAP Applicants

In the most recent NTAP application cycle, CMS received 27 NTAP applications for FY 2024 under the traditional NTAP pathway, although eight were withdrawn before the release of the proposed rule and an additional six were either withdrawn before the release of the final rule or did not receive Food and Drug Administration (FDA) approval by the deadline. To qualify for NTAP designation for FY 2024 (which starts October 1, 2023), these new technologies must meet the three eligibility criteria: newness, cost, and substantial clinical improvement. Further, these technologies were required to receive FDA approval or clearance by July 1, 2023. In the final rule, 10 applications were approved for NTAP in FY 2024.

CMS also received 27 NTAP applications for FY 2024 through alternative application pathways. However, 14 applicants withdrew their applications before the proposed or final rule and one additional applicant did not meet the July 1 deadline for FDA approval. These pathways streamline the NTAP application process for devices with FDA breakthrough designation, drugs designated as qualified infectious disease products, and technologies approved through the FDA’s Limited Population Pathway for Antibacterial and Antifungal Drugs. Technologies applying through an alternative pathway must only meet CMS’s cost criterion. In the final rule, 11 applications were awarded NTAP designation, and one technology was conditionally approved for NTAP in FY 2024.

Finalized Revisions to NTAP Eligibility Criteria

CMS finalized two revisions related to the NTAP eligibility criteria for products that have not yet received FDA marketing authorization by submission of the NTAP application. For such technologies, applicants must have:

1. A “complete and active FDA marketing authorization request” at the time of submission
2. FDA marketing authorization by May 1 (moved up from July 1)

These eligibility criteria are effective for the FY 2025 NTAP application cycle (i.e., those applications to be submitted in October 2023) and will require manufacturers to assess the feasibility for meeting these new requirements at time of submission by October 17, 2023.

Avalere Market-Leading Expertise

Avalere has supported more than 20 NTAP applications over the past decade and can provide market-leading expertise on the inpatient setting and the NTAP designation. To learn more about how Avalere can support you in understanding the opportunities and processes associated with NTAP, connect with us.