HemOnc Today's PharmAnalysis

HemOnc Today's PharmAnalysis

April 30, 2019
4 min read

Medicare’s proposed CAR T reimbursement increase ‘woefully inadequate’

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Frederick L. Locke, MD
Frederick L. Locke

CMS has announced a proposed 15% increase in the amount it would reimburse hospitals for inpatient CAR T-cell therapy for Medicare patients.

The proposal would increase CMS’ new technology add-on payment (NTAP) from $186,500 to $242,450 starting in fiscal year 2020. The current NTAP covers 50% of the estimated cost for CAR T-cell treatments.

The proposed increase, although welcomed by many in the health care community, is seen as insufficient by some because it only accounts for a percentage of the manufactured product and does not factor in the overall cost of care, which in the majority of cases includes inpatient care for treatment toxicity.

“While that is unusual and perhaps unprecedented that CMS [is] increasing [its] reimbursement rate, it remains woefully inadequate to cover the cost of the therapy,” Frederick L. Locke, MD, director of the immune cell therapy program at Moffitt Cancer Center in Tampa, told HemOnc Today. “They are saying they are going to pay more, but the amount they’re going to pay is not enough to cover the cost of the product, let alone the total hospitalization care costs.”

Locke said he understands the government’s strategy to put pressure on the manufacturers to reduce prices, but the proposed rule to increase NTAPs for CAR T-cell therapy fails to address the overall cost of care.

“We are not even in the same ballpark here because the cost of providing the care is not even covered by this proposed rule. It’s really just passing the cost onto the hospitals, and they will eat the costs for providing this therapy to Medicare patients,” he said.

Cancer centers that deliver CAR T-cell treatments to Medicare recipients may stop providing the therapy because it’s a financial liability, Locke said. “This may, in effect, render the therapy — at least within the hospital — inaccessible to Medicare patients,” he added.

The FDA has approved two CAR T-cell therapies: axicabtagene ciloleucel (Yescarta; Kite/Gilead) for adults with relapsed or refractory large B-cell lymphoma and tisagenlecleucel (Kymriah; Novartis) for adults with relapsed or refractory large B-cell lymphoma and pediatric patients with relapsed or refractory acute lymphoblastic leukemia.

“Novartis is pleased to work with stakeholders across the health care spectrum to ensure eligible patients have access to innovative therapies like Kymriah,” Julie Masow, executive director and global head of oncology external communications at Novartis, told HemOnc Today. “Novartis is reviewing the CMS proposed rule and may provide a response during the 60-day open comment period.”


Nathan Kaiser, senior VP of public affairs at Gilead, told HemOnc Today that his company was still reviewing the proposed rule, but that Gilead was “encouraged by the CMS comments regarding payment for CAR T cell therapies.”


An Unsustainable Landscape

Samuel M. Silver, MD, PhD
Samuel M. Silver

The proposed increase in the NTAP is a positive step, according to Samuel M. Silver, MD, PhD, assistant dean for research and professor of internal medicine/hematology-oncology at the University of Michigan’s Rogel Cancer Center and a member of HemOnc Today’s editorial advisory board.

"The bottom line is that the devil’s in the details. This is better than nothing at all, but it still may not be enough for Medicare beneficiaries,” he told HemOnc Today.

He echoed a common refrain about Medicare’s reimbursement for CAR T-cell therapy: the cost includes not only the product, but also patient care when they experience common effects of treatment toxicity, which can often outpace the cost of the manufacturer’s product. The NTAP, Silver explained, helps defray the cost of the CAR T-cells themselves and does not account for the total cost of care.

The overall price of CAR T-cell therapy continues to be a major issue, especially in older patients with lymphoma who have Medicare as their primary insurance. The topic was raised by the American Society of Hematology in a November 2018 letter to CMS.

“ASH is pleased that the agency is currently examining its existing payment policies to identify ways to more realistically account for the costs of administering this life-saving therapy,” the group said in press release on the proposed NTAP increase.

“While ASH had originally suggested a higher payment, any increase is an improvement,” the group added.

ASH said it was concerned that patients are being denied access to the treatment, despite the availability of two CAR T-cell products and more in development.

“Some centers are unable to offer CAR-T to Medicare beneficiaries because the overall cost is unsustainable,” per the press release, highlighting that CMS reimburses CAR T-cell treatment providers at the same level provided to stem cell transplant, which does not account for the cost of care associated with treating adverse events that typically accompany CAR T-cell therapy.

“While the proposal from CMS is promising, it is not a one-stop solution for making CAR-T more accessible to patients,” ASH said. “Just as these therapies are innovative, it is going to take some innovation on the part of CMS to develop a plan that equitably compensates providers and institutions so that offering the therapy is sustainable.”


Silver agreed that although the proposed NTAP increase to 65% will help some Medicare beneficiaries gain access to treatment, it will still be a money-losing endeavor for the cancer centers that provide the treatment.

"We will still have problems in terms of providing this treatment to Medicare patients,” he said.

“There certainly should not be any fanfare about this proposed rule,” Locke added. “If anything, it’s an extreme disappointment.”

He said the proposed NTAP increase does little to affect the CAR T-cell payment landscape, which he believes is currently unsustainable.

“It’s not a disingenuous effort by CMS, but it’s clearly not enough,” Locke said. “We will have people die of lymphoma because they are Medicare recipients and you find there will be centers that will not administer this therapy because of the cost.” – by Drew Amorosi



American Society of Hematology. ASBMT and ASH submit letter on CMS Medicare inpatient final rule. Available at: http://www.hematology.org/Advocacy/ASH-Testimony/2018/9101.aspx.


Centers for Medicare & Medicaid Services. Fiscal year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Acute Care Hospital (LTCH) prospective payment system proposed rule and request for information. Available at: https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2020-medicare-hospital-inpatient-prospective-payment-system-ipps-and-long-term-acute.



Disclosure: Silver reports no relevant financial disclosures. Locke reports being a scientific advisor to Kite/Gilead and Novartis, receiving research funding (to Moffit Cancer Center) from Kite/Gilead and Novartis and consulting for Cellular Biomedicine Group.