NPC Comments on CMS Proposed Rule for Hospital Inpatient Prospective Payment Systems

July 10, 2020

The Honorable Seema Verma
Administrator, Centers for Medicare and Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244

Submitted electronically via

RE: 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 2021 Rates; Quality Reporting and Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals

Dear Administrator Verma:

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 2021 Rates; Quality Reporting and Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals.

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

We appreciate the Administration’s emphasis on speeding Medicare beneficiary access to new and innovative treatments.[1] With rapid innovation, life sciences companies have been able to improve patient outcomes and quality of life for patients with conditions and diseases once considered untreatable or unmanageable. As we move forward with new treatments such as cell and gene therapies and other complex drugs, it is critical that our health insurance program for America’s seniors and disabled adults has the flexibility to innovate as well as to ensure access.

Biopharmaceuticals Are a Key Factor in Improvements in Patient Outcomes
Pharmaceutical products have been an important tool in achieving positive health outcomes for patients of a variety of ages and with a variety of conditions for decades. For example, investments made 20 years ago in fighting the worst diseases of the day have paid off. Six of the top seven causes of death and disability in 1995 have seen significant improvement in patient outcomes. Findings from a physician survey indicated that pharmaceutical and biopharmaceutical products were viewed as accounting for the greatest impact on mortality and morbidity across these top conditions since 1990.[2] Pharmaceuticals in that period and beyond represent significant advances in treatment for diseases and conditions such as cerebrovascular diseases, HIV, hepatitis C, and others.

In light of this, it is critical to design reimbursement policies that encourage the utilization of pharmaceutical products that represent improvements in treatment and standard of care for patients facing debilitating and sometimes deadly medical conditions. Additional spending to treat the most critical causes of death and disability over the past 20 years is cost-effective and a source of value creation.[3] Using high-value pharmaceuticals may allow for better and more efficient care in less-costly settings or lower-cost treatments. Policies that recognize the benefits of new innovative technologies can encourage future investment in these innovations. We encourage CMS to adopt policies that will promote innovation and ensure that Medicare patients have access to necessary treatments. 

Bridging the Payment Gap for Innovative Technologies by Creating a More Permanent and Stable Payment Rate Is a Good First Step
NPC appreciates the creation of a new MS-DRG for procedures involving CAR T-cell therapies. Without a reimbursement system that adequately reflects the cost of life-saving therapies, use of new technologies is disincentivized. Under the current system, even with the additional reimbursement through the new technology add-on payment for CAR-T therapies, hospitals are required to weigh financial losses when considering new innovative treatments. Further, despite the frequent need for monitoring and more extensive care post-administration of CAR-T therapies, providers and patients need to weigh incentives to receive treatment in outpatient settings rather than inpatient where additional monitoring is feasible.

NPC also appreciates the agency’s recognition that usual procedures would not ensure sufficient reimbursement. Limited reimbursement for non-clinical trials use and vastly different costs based upon the use highlights the limitations of using clinical trial data. Further, we appreciate the modifications to address statistical outliers. Statistical outliers are typically removed if concerns exist due to measurement or data entry errors or differentiate target populations — neither applicable to the CAR-T cell therapy experience. As new and additional innovations and cell and gene therapies become available, further consideration of the existing reimbursement systems will be needed.

Product Uptake Occurs Over Time and Steady-State Utilization to Inform Payment Amounts May Require Additional Time
We also suggest that manufacturers who collect real-world evidence following FDA approval be given credit for that investment through the extension of NTAP eligibility beyond the initial two to three years. Only one-quarter of all products reach a saturation point within the first five years of the product’s launch.[4] Because uptake in the first year after a product launch is typically lower than in subsequent years, it might take Medicare payment amounts longer to account for the cost of new technologies than the initial two to three years that a product is on the market. This is especially true for new treatments used in limited patient populations too large to qualify under the existing outlier payment program, but not large enough to have a meaningful impact on the overall MS-DRG payment. We urge CMS to consider a voluntary demonstration program where a manufacturer could earn time credits to delay the application of NTAP after launch by performing post-marketing studies to gather RWE.

New innovative curative therapies and other single administration products present challenges for payors due to their unique set-up that may not neatly fit into the payment structures and incentives built into insurance benefits designs. We appreciate CMS’ acknowledgment of the unique innovation prevented by these therapies, gene and cell therapies, and encourage the agency to continue supporting further innovation across the health care landscape.


Jennifer S. Graff, PharmD
Vice President, Comparative Effectiveness Research
National Pharmaceutical Council

[1] Executive Office of the President. Executive Order on Protecting and Improving Medicare for our Nation’s Seniors (October 3, 2019).

[2] Wamble D, Ciarametaro M, and Dubois R. The Effect of Medical Technology Innovations on Patient Outcomes, 1990-2015: Results of a Physician Survey. Journal of Managed Care & Specialty Pharmacy. 2019; 25(1): 66-71.

[3] Wamble D, Ciarametaro M, Houghton K, Ajmera M, and Dubois R. What’s Been the Bang for the Buck? Cost-Effectiveness of Health Care Spending Across Selected Conditions in the US. Health Affairs. 2019; 38(1): 68-75. 

[4] Lifetime Trends in Biopharmaceutical Innovation: Recent Evidence and Implications. January 10, 2017. Available at Accessed June 12, 2019.