August 9, 2019 Read Advisory Board's take: Why we don't expect a spike in CAR T treatment providers

CMS on Wednesday announced that Medicare will cover FDA-approved CAR T-cell therapies nationwide at health care facilities that meet certain requirements, Modern Healthcare reports.

Background on CAR T-cell therapies, payments

CAR T-cell immunotherapies are a precision cancer treatment that entails extracting immune system T-cells from a patient's blood. The T-cells then are frozen and shipped to the drugmakers' facility, where they are genetically modified to attack the patient's cancerous cells. Physicians then infuse the T-cells back into the patient, at which point the cells begin fighting the cancer.

To date, FDA has approved two CAR T-cell therapies, Kymriah and Yescarta, to treat certain relapsed or refractory leukemias and lymphomas. A full course of treatments—not including hospital stay costs—can cost about $373,000 per procedure. About 70 to 80 cancer centers in the United States currently are authorized to administer CAR T-cell immunotherapies, but most of the centers are not actively providing the treatments. There are a number of barriers to more facilities offering the treatments, including the therapies' costs and the expertise required to administer them.

CMS in 2018 set Medicare Part B reimbursements for CAR T-cell therapies at $400,000 for Yescarta and $500,000 for Kymriah in the outpatient setting. However, most CAR T-cell therapies are administered in the inpatient setting. CMS' current reimbursement policy sets a maximum inpatient payment of $186,500 per case. For FY 2020, as part of the Inpatient Prodesptive Payment (IPPS) final rule, CMS will implement policies that increase that amount to $242,450, which industry analysts note is still well below the cost of treatment. According to the Journal, hospitals could request additional reimbursements if they incur extra costs.

But until now, CMS did not have a national policy for covering the treatments. As such, coverage decisions were made by individual regional Medicare contractors. CMS in February proposed a national policy under which Medicare would have covered Kymriah and Yescarta if beneficiaries receiving the treatments agreed to participate in a CMS-approved registry or clinical trial for at least two years to assess the treatments' long-term effects

CMS finalizes national coverage policy for CAR T-cell therapies

CMS on Wednesday finalized its national coverage determination for CAR T-cell therapies with some updates from the initial proposal.

Experts had raised concerns that CMS' proposal would have further inhibited Medicare beneficiaries' access to CAR T-cell therapies by placing new administrative burdens on facilities that administer the therapies.

As such, CMS did not finalize its proposed requirement that coverage for CAR T-cell therapies be tied to whether the treatments are being offered under a CMS-approved registry or clinical study. Instead, the agency said it would "leverage information obtained from … FDA's required post-approval safety studies for CAR T-cell therapies to the fullest extent possible."

CMS also walked back a proposal to limit Medicare CAR T-cell therapy coverage to hospitals, STAT News reports. Instead, Medicare will cover FDA-approved CAR T-cell therapies nationwide at both inpatient and outpatient facilities that are enrolled in FDA's risk evaluation and mitigation strategies (REMS) program for the therapies. CMS said it also will pay for certain off-label uses of the therapies as recommended by a CMS-approved compendia.

According to STAT News, while the national coverage determination ensures Medicare will pay for CAR T-cell therapies administered at qualifying health care facilities, the policy does not change Medicare's payment rates for the treatments, meaning providers still could receive payments that are lower than the actual cost of providing the treatments. CMS Administrator Seema Verma earlier this week told STAT News that the agency has been "struggling" to set new payment rates for the therapies, and that it could take years for CMS to do so.

According to the Journal, Verma said, "There will be more to come from [CMS] on CAR T." (Livingston, Modern Healthcare, 8/7; CMS release, 8/7; Florko, STAT News, 8/7; Owens, "Vitals," Axios, 8/8; Rockoff, Wall Street Journal, 8/7; McGinley, Washington Post, 8/7; Wilkerson, Inside Health Policy, 8/7 [subscription required]).

Advisory Board's take

Why we don't expect a spike in CAR T treatment providers

Deirdre Saulet, Practice Manager, Oncology Roundtable

Last week's Inpatient Prospective Payment System (IPPS) rule and Wednesday's National Coverage Determination (NCD) for CAR T therapy were just the latest in a series of controversial decisions about how to reimburse the therapy. Most notably, in the IPPS ruling, CMS decided not to create a new MS-DRG for CAR T. Instead, they finalized their decision to increase the new technology add-on payment from 50% to 65%. While this at least gets reimbursement a little higher, it still isn't close to covering the list price of the drug itself—not to mention the costs of hospitalization, supportive medications, labor, and other costs. While many organizations hoped CMS would provide a dedicated DRG or otherwise ensure greater reimbursement for the therapy, CMS held fast in its stance that they do not have enough clinical or cost data yet. 

Soon after the IPPS, CMS also released a National Coverage Determination for CAR T. What this decision does try to do is make reimbursement more predictable and ensure that all CMS contractors are covering it. However, from what the manufacturers have been saying, we don't think that this has been as much of a problem in recent months. Still, CMS did throw providers two bones with this decision. First, many members were concerned about the requirements introduced in the NCD proposal that all CAR T providers would have to participate in a registry tracking patients for at least two years to be eligible to provide the treatment. CMS likely rolled back this provision in response to provider pushback about the resources that would be required.

Second, providers were concerned that CMS' language and regulations would have allowed for CAR T to only be delivered in hospitals. In response, CMS explicitly announced that their reimbursement would not be limited to just hospitals, but any facility that adheres to FDA's REMS rules. However, this doesn't necessarily mean that all facilities will be eager to offer these treatments. First off, nearly all providers are aware that reimbursement is still fairly challenging and unpredictable right now. Second, many smaller practices will be hesitant to take on the financial risk and overhead costs for these remarkably expensive therapies. In fact, some of our academic medical center members say their community oncologists send them all of their patients on checkpoint inhibitors because they don't want the risk of those costs—and those costs over the course of a year are only around a third of the cost of CAR T therapy alone. Third, the drug manufacturers themselves have restrictions on who is certified to provide their therapies. Lastly, while more CAR T treatments will likely move to the outpatient setting over time, the vast majority still are performed inpatient where patient reactions can be closely monitored and responded to quickly. So while it's a good thing to expand who can provide the therapy, I don't think this is going to immediately cause a spike in the number of providers offering CAR T.

To learn more about the implications of these updates, and other regulatory changes in the OPPS proposed rule and IPPS final rule, be sure to subscribe to our Oncology Rounds blog.

Then, to learn more CAR T-cell therapy, other clinical innovations in oncology, and how to balance economic realities with the need for innovation, be sure to download out research report on Clinical Innovations in Oncology.

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