COVID-19 interim final rule focus: Increased Medicare payment for qualifying COVID-19 treatment

• CMS’s latest COVID-19 interim final rule increases payments for qualifying COVID-19 treatments provided to Medicare during inpatient stays.
• The rule also includes provisions that include providing states the flexibility to maintain enrollment during the PHE and extending by an additional six months the Comprehensive Care for Joint Replacement (CJR) program’s model year five.
• The rule also ensures that once a COVID-19 vaccine was widely available that Americans would be able to access the vaccine without out-of-pocket costs regardless of their source of health insurance coverage or if they have coverage at all.

On Oct. 28, CMS released another COVID-19 interim final rule. The rule was mainly focused on ensuring that once a COVID-19 vaccine was widely available Americans would be able to access  the vaccine without out-of-pocket costs regardless of their source of health insurance coverage. The rule also includes provisions that:

• Provide states with the flexibility to maintain enrollment during the PHE.
• Establish enhanced payments Medicare hospital payments for new COVID-19 treatments.
• Further support price transparency for COVID-19 tests.
• Extends by an additional six months the Comprehensive Care for Joint Replacement (CJR) program’s model year five.

Specific to enhanced Medicare payments to hospitals for new COVID-19 treatments provided as part of an inpatient admission, the provisions in the IFC are intended to overcome any potential financial incentives that would limit access to these therapies.

For qualifying new products provided during the PHE for an inpatient COVID-19 stay, the enhanced payment will be equal to the lesser of:

 1. 65% of the operating outlier threshold for the claim

 2. 65% of the cost of the COVID-19 stay beyond the operating Medicare payment (including the 20% add-on payment for COVID-19 discharges).

For outpatient services, CMS has excluded FDA-authorized or approved drugs and biologicals to treat/prevent COVID-19 from being packaged into the Comprehensive Ambulatory Payment Classifications when the treatment is billed on the same claim. Qualifying drugs or biologicals will be separately payable.

Takeaway

HFMA appreciates CMS’s recognition of the significant cost associated with new COVID-19 therapies provided to Medicare beneficiaries who are hospitalized. However, the NCTAP payment methodology will not cover the cost of qualifying new COVID-19 treatments provided to Medicare beneficiaries. And in all likelihood, hospitals will lose money on these cases, increasing the stress on hospitals at a time when they are under considerable financial pressure due to their efforts to protect their communities from the coronavirus. Therefore, CMS should modify the NCTAP payment. The payment should be a cost based “pass-through” tied to the qualifying treatment’s ICD-10 code. The covered charges for the ICD-10 code should be multiplied by the hospital’s operating cost-to-charge ratio.

HFMA’s executive summary is currently available. A detailed summary will be available shortly here.