Medicare officials on Tuesday proposed increasing reimbursements for a groundbreaking but costly cancer therapy used for patients whose blood cancers don’t respond to other treatments.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, said the proposed changes are necessary because “Medicare’s antiquated payment systems” have not kept up with the development of “transformative technologies.” She said she is concerned inadequate payments might be prompting hospitals to limit Medicare patients’ access to needed therapies.

In particular, she said the agency was considering boosting reimbursements for a customized approach called CAR T-cell therapy, which has revolutionized the treatment of hard-to-treat pediatric leukemia and adult lymphoma. Hospitals have complained vociferously that they lose tens of thousands of dollars — and in some cases, hundreds of thousands — on each Medicare patient they treat.

The list prices for the drugs are $373,000 or $475,000, depending on the illness for which they are used. Accompanying hospital care can double or triple the expense, especially for a patient with severe side effects who ends up in the intensive care unit, health providers say. Yet Medicare reimburses only a portion of that overall cost.

In a press call with reporters, Verma said the agency is considering increasing a special payment to hospitals for expensive new technologies from the current maximum of 50 percent to 65 percent of the product’s cost. That would boost payments for CAR T-cell therapy from $186,500 to $242,450. The agency also is considering changes to the formula used to calculate payments to hospitals for the treatment.

The ideas are part of the agency’s proposed rule for reimbursement rates for fiscal year 2020 for hospital inpatient services and long-term care hospitals. The agency also is proposing to increase the wage index of low wage index hospitals to try to bring stability to rural hospitals, Verma said. If the changes are adopted, they would go into effect Oct. 1.

The Food and Drug Administration has approved two versions of CAR T-cell therapy — Kymriah, made by Novartis, for childhood leukemia and lymphoma, and Yescarta, manufactured by Gilead Sciences, for lymphoma. The treatments are approved for patients who have not responded to other therapies and have no other options.

The benefits of the treatment, when it works, can last for months, years or even a lifetime, experts say. Still, a substantial proportion of patients who are treated and initially go into remission do relapse.

The complicated treatment uses the patient’s own immune system to fight cancer. Their T cells, which are immune cells, are extracted, sent to a special lab and genetically modified to attack a protein on the surface of the cancer cells. After being multiplied in number, the T cells are infused back into the patient, where they expand further in number, creating an army of anti-cancer agents.

“There’s little question that when done effectively in the right circumstances for the right patients, it can be a lifesaving treatment,” said J. Leonard Lichtenfeld, interim chief medical officer for the American Cancer Society.

Roy Silverstein, president of the American Society of Hematology, said on Tuesday he was pleased CMS responded to the group’s concerns about inadequate inpatient reimbursement for CAR T-cell therapy. Increasing the payment for medical technologies to 65 percent of the cost would be “a significant improvement,” he added.

This month, the hematology group and others had called on CMS to increase payment rates.

“We are concerned that Medicare beneficiaries will continue to face barriers accessing CAR T-cell therapy unless providers are reimbursed equitably for the treatment,” said the letter, whose signers included the American Society for Clinical Oncology and the Cancer Support Community, a patient-support group.

Earlier this year, CMS separately proposed a national policy to cover the therapy for Medicare patients, but with certain restrictions. A final decision on that proposal is not expected until May. Currently, coverage decisions for CAR T-cell therapy are left up to local Medicare administrators.

Read more: