CMS Updates New Technology Add-On Payments for Select Cell and Gene Therapies

On August 1, 2024, the U.S. Centers for Medicare and Medicaid Services (CMS) issued the Fiscal Year 2025 Hospital Inpatient Prospective Payment Systems final rule (Final Rule), which updates Medicare fee-for-service payment rates and policies for in-patient hospitals and long-term-care hospitals.

Notably, the Final Rule includes key updates to new technology add-on payments (NTAPs) for approved cell and gene therapies (CGT) indicated for the treatment of sickle cell disease, both of which were approved in late 2023. Specifically, despite historic reluctance to increase NTAP payments, following receipt of public feedback regarding the adequacy of NTAP payments for CGT to treat sickle cell disease, CMS announced an increase to the NTAP percentage from 65% to 75% for approved sickle cell disease CGT during their newness periods, effective October 1, 2024. The agency’s decision comes amidst the continued roll-out of the CMS Innovation Center’s CGT Access Model, with CMS announcing on August 15, 2024 (a few weeks later than its original June/July target date) that state Medicaid Programs may begin to apply for cooperative funding to support their participation in the Model. Manufacturers of CGT, and other innovative therapies, should take note of these developments and evaluate potential applicability to, and implications for, other therapeutic areas as CMS continues to unfold the CGT Access Model and related policies.

In a further update applicable to all NTAP applicants, the Final Rule changes the cutoff date for determining whether a technology is within its two- to three-year newness period from April 1 to October 1, improving flexibility for NTAP applications. This change is effective starting in FY 2026 for new applicants, and when extending NTAP for an additional year for those technologies initially approved for NTAP payment in FY 2025. CMS also finalized its proposal to no longer consider a hold with the Food and Drug Administration to be an inactive status for the purposes of determining eligibility for NTAP, beginning with applications for FY 2026.

CMS intends for these NTAP updates to increase patient access and reduce financial barriers to CGT technologies.