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New Medical Services and New Technologies

Application Information for FY 2020

  • The deadline to submit (and for CMS to receive) an application for FY 2020 new technology add-on payments is Friday October 12, 2018.

Information for New Technology Town Hall Meeting for Applicants for FY 2020 New Technology Add-On Payments

Section 1886(d)(5)(K)(viii) of the Act provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement or advancement. In order to provide an opportunity for public input regarding add-on payments for new medical services and technologies, CMS holds an annual public town hall meeting at CMS Headquarters. Typically, applicants present at the meeting (to the public and to the clinical staff of CMS) regarding whether their technology represents a substantial clinical improvement. 

The annual town hall meeting has historically been help in February of each year. For FY 2020 applications, the annual meeting will be held Tuesday December 4, 2018. 

  • Complete details on the Town Hall meeting can be found in the Federal Register notice published on October 4, 2018. To view the notice, click the link below "FY 2020 New Technology Town Hall Federal Register Notice." 
  • To register to attend the New Technology Town Hall meeting in person, click the link in the Related Links section below titled “Register to Attend the New Technology Town Hall Meeting”. 
  • For participants who cannot attend the Town Hall Meeting in person, an open toll free phone line will be made available. Also, there will be an option to view and participate in the Town Hall Meeting via live streaming technology or webinar. NO PRIOR REGISTRATION IS NECESSARY TO PARTICIPATE VIA CONFERENCE CALL, STREAMING TECHNOLOGY OR WEBINAR. Information on the option to participate via conference call or live streaming technology or webinar will be posted on this web site at a later date.
  • An agenda for the meeting will be posted the week of the meeting.
  • Disclaimer: We cannot guarantee reliability for live streaming technology and/or a webinar. 

Background

Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies under the IPPS. Section 1886(d)(5)(K)(ii)(I) of the Act specifies that the process must apply to a new medical service or technology if, "based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate." Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered "new" if it meets criteria established by the Secretary after notice and opportunity for public comment.

Section 412.87(b)(3) provides that, to receive special payment treatment, new technologies meeting this clinical definition must be demonstrated to be inadequately paid otherwise under the DRG system. For applicants for new technology add-on payments for FY 2005 and forward, we established the criteria that will be applied to assess whether technologies would be inadequately paid under the DRGs the lesser of 75 percent of the standardized amount increased to reflect the difference between costs and charges (based on the national case weighted cost-to-charge ratio) or 75 percent of 1 standard deviation (based on the logarithmic values of the charges and transformed back to charges) beyond the geometric mean standardized charge for all cases in the DRGs to which the new technology is assigned (or the case weighted average of all relevant DRGs, if the new technology occurs in many different DRGs).

In order to qualify for the new technology add-on payments, a specific technology must be "new" under the requirements of §412.87(b)(2) of our regulations. The statutory provision contemplated the special payment treatment for new technologies until such time as data are available to reflect the cost of the technology in the DRG weights through recalibration (no less than 2 years and no more than 3 years).

Section 412.87(b)(1) of our existing regulations provides that a new technology will be an appropriate candidate for an additional payment when it represents an advance in medical technology that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries (see the September 7, 200l final rule (66 FR 46902)). Applicants for FY 2010 must submit a formal request, including a full description of the clinical applications of the technology and the results of any clinical evaluations demonstrating that the new technology represents a substantial clinical improvement, along with data to demonstrate the technology meets the high cost threshold.

The new technology add-on payment policy provides additional payments for cases with high costs involving eligible new technologies while preserving some of the incentives under the average-based payment system. The payment mechanism is based on the cost to hospitals for the new technology. Under §412.88, Medicare pays a marginal cost factor of 50 percent for the costs of the new technology in excess of the full DRG payment. If the actual costs of a new technology case exceed the DRG payment by more than the estimated costs of the new technology, Medicare payment is limited to the DRG payment plus 50 percent of the estimated costs of the new technology.

For a more complete reading on Add-On Payments for New Services and Technologies, please view the Inpatient Prospective Payment System (IPPS) final rule published on August 18, 2008. The final rule and all other regulations and notices are located in the left navigational area of this page.

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