Understanding New Technology Add-On Payment (NTAP)
Understanding New Technology Add-On Payment (NTAP)
NTAP is a mechanism introduced by the Centers for Medicare and Medicaid Services (CMS) to support the adoption of innovative medical technologies. It is significant for manufacturers because it provides additional financial incentives for hospitals to use new technologies, addressing the constraints of Medicare Severity Diagnosis Related Groups (MS-DRG) bundled payment which often fails to cover the high costs of cutting-edge treatments. NTAP helps overcome these limitations by offering supplemental payments, ensuring that new technologies are more feasibly integrated into inpatient care.
What Is NTAP?
NTAP is a payment adjustment under the Medicare Inpatient Prospective Payment System (IPPS) that provides extra reimbursement to hospitals for using specific new technologies. Hospitals can receive this additional payment for qualifying products for a period of 2-3 years after they enter the market, which helps offset their higher costs. The NTAP amount is calculated as the lesser of 65% of the cost of the new technology or 65% of the amount by which the costs of the case exceed the standard MS-DRG payment amount. This financial support encourages the adoption of innovative medical solutions by reducing the financial burden on hospitals.
Eligibility Criteria for NTAP
To be eligible for NTAP, a technology must meet 3 key criteria:
- Be new and not previously available in the market
- Result in significantly higher costs for the hospital compared with existing alternatives
- Provide substantial clinical improvement over current treatments
Additionally, there are specialized pathways for breakthrough devices and antimicrobial products that streamline the NTAP application process for these categories, recognizing their critical impact on patient care.
NTAP Application Process and Timeline
The NTAP application process involves several steps, starting with the submission of a comprehensive application that includes clinical data, cost information, and evidence of substantial improvement. NTAP applications are due annually, aligned with CMS’s IPPS rulemaking schedule. Key NTAP deadlines and detailed documentation requirements are outlined in the Federal Register and NTAP CMS guidelines. Early preparation is crucial, and engaging with experts in the field can significantly enhance the chances of a successful NTAP application by ensuring that all criteria are thoroughly addressed.
Recent Changes to the NTAP Program
The FY 2024 and FY 2025 IPPS final rules introduced and finalized significant changes to the NTAP program, including revised Food and Drug Administration (FDA) marketing authorization requirements. Additionally, the FY 2025 IPPS final rule increases the NTAP amount to 75% for new cell and gene therapies that specifically treat sickle cell disease. These updates impact how technologies are evaluated for NTAP eligibility and may affect the documentation needed for applications. Manufacturers must stay informed about these changes and adapt their strategies accordingly to navigate the revised requirements and maintain their competitive edge.
Why NTAP Is Critical for Market Access
NTAP is a crucial factor in market access because it directly influences a hospital’s decision to adopt new technologies. By providing additional financial support, NTAP helps make innovative technologies more economically viable for hospitals, thereby facilitating their integration into clinical practice. For manufacturers, leveraging NTAP can be a strategic component in their market access strategy, improving the likelihood of widespread adoption and ultimately enhancing patient access, care, and outcomes through the availability of advanced treatments.
Interested in learning more? Contact us to discuss strengthening your NTAP application strategy.