Dive Brief:

• Medical device manufacturers bringing new and innovative renal dialysis equipment and supplies to market may soon be able to take advantage of a transitional add-on payment for the products included in CMS' 2020 final rule for end-stage renal disease and durable medical equipment finalized late Thursday.  
• The rule also formalizes how CMS will calculate fee schedule payment amounts for durable medical equipment, prosthetics, orthotics and supplies items and services as well as changes to agency policies around the products' competitive bidding program. Notably, the agency did not finalize a plan to use technology assessments to help establish fee schedule amounts for DME items to deem comparableness to older existing items.
• The base Medicare rate for dialysis companies will increase under the final rule to $239.33, a 1.7% hike from the current rate of $235.27. CMS' proposed rule in July had previously set a 1.5% increase for 2020.

Dive Insight:

The transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES) will only apply to products granted marketing authorization by FDA starting Jan. 1, 2020, and that are commercially available by Jan. 1 of the calendar year the payment adjustment would take effect.

In comments on the proposed rule, AdvaMed urged CMS to extend the eligibility for the add-on payment to devices that received marketing clearance as early as Jan. 1, 2018 to help products struggling with market adoption. It appears CMS did not adopt the trade group's request in the final rule.

"While we appreciate that manufacturers of renal dialysis equipment and supplies that were granted FDA marketing authorization in prior years would want these products to be eligible for the TPNIES, our goal is not to provide a payment adjustment for all the products that have received FDA marketing authorization or for products that have had limited market uptake, but rather to establish an add-on payment adjustment for certain new and innovative products in order to support uptake by ESRD facilities of new and innovative renal dialysis equipment and supplies," CMS said in its final rule.

Instead, CMS will only consider TPNIES applications submitted by Feb. 1 before the next calendar year, and FDA marketing authorization must be received by Sept. 1. The add-on payment will be based on 65% of the price established by Medicare Administrative Contractors, and will be paid for two calendar years, according to the final rule.

"For example, under our proposal, in order to receive the TPNIES under the ESRD PPS effective January 1, 2022,  we would require that a complete application meeting our requirements be received by CMS no later than February 1, 2021," the final rule states.

For DMEPOS items, CMS decided to not finalize its proposal to use technology assessments to establish fee schedule amounts after reviewing comments it received. The proposed idea had come under fire from the homecare industry, which argued the proposal simply was aimed at minimizing reimbursement at the cost of beneficiary access to services and DME.

"We are highly skeptical that any third party outside of a particular device's manufacturer could truly understand how a particular device would compare to seemingly similar technology, in terms of its production and related costs," the American Association for Homecare said in its comment.

But the agency said it will continue to review the idea and potentially include technology assessments in future rulemaking in its final rule.