CMS Proposes Higher Reimbursement Rate for CAR T-Cell Therapies

The Centers for Medicare and Medicaid Services (CMS) has proposed a new system for calculating reimbursement rates for hospitals administering chimeric antigen receptor (CAR) T-cell therapies. The system was released as part of the proposed 2021 Inpatient Prospective Payment System (IPPS), which determines Medicare payment policies.

Under the new approach, CMS would compensate health-care systems that administer CAR T-cell treatments based on the average price of the two therapies currently on the market:
Gilead’s axicabtagene ciloleucel and Novartis’ tisagenlecleucel.

Currently, Medicare reimbursement rates for CAR T-cell therapies are based on the average cost of administering a bone marrow transplant, which a 2017 study found has a median cost between $150,000 and $300,000, depending on the patients’ diagnosis. CAR T-cell treatments, however, have list prices more than $450,000 per patient. The previous reimbursement system may have forced hospitals to choose between taking a financial loss or declining to offer the treatment.

The new rules would affect only patients who receive coverage through Medicare, but private insurance providers may use federal guidelines as a model for setting their own payment rates.

CMS is expected to confirm the IPPS rulings in the fall after accepting comments from the public and industry and patient groups.

Sources: STAT, May 12, 2020; American Health & Drug Benefits, October 2017.