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Medicare boosts payment for breakthrough cancer therapy

But the change doesn’t go as far as many health providers had hoped.

Emily Whitehead, the first child to receive a pioneering cancer treatment called CAR T-cell therapy, enjoys ice cream with her father, Tom. Now 14, Emily has been in remission for seven years. (SEAN SIMMERS/For The Washington Post)

Medicare officials on Friday said the program would increase reimbursements to hospitals for expensive new medical technologies, including a high-priced therapy used as a last-resort treatment for patients with blood cancers.

The Centers for Medicare and Medicaid Services issued a final rule raising payments for new technologies from 50 percent to 65 percent of estimated costs. CMS Administrator Seema Verma said the step would promote access to potentially lifesaving treatments and reduce uncertainty about payments for a cancer immunotherapy known as CAR T-cell therapy, among other new therapies.

But the increase only partly eases the squeeze on hospitals offering CAR T-cell therapy, health providers said. The change means hospitals will be reimbursed about $240,000 for the cancer treatment for Medicare lymphoma patients, up from $186,500. The hospitals pay a list price of $373,000 for the treatment, and related costs can drive their expenses much higher.

Jayson Slotnik, a partner at Health Policy Strategies, a consulting firm, said hospitals and manufacturers will be disappointed by the CMS decision. Some provider groups and manufacturers said the agency should raise the payment to 80 to 100 percent of costs.

“Under this plan, I have concern that access to CAR T won’t be universal,” he said, adding that only some hospitals will be able to afford to offer it.

Currently, hospitals say they lose tens of thousands to hundreds of thousands of dollars on each Medicare patient who gets CAR T.

Joseph Alvarnas, an oncologist at the City of Hope Comprehensive Cancer Center, was muted in his response. “For now, this should probably be viewed as a step forward, but an incremental (rather than decisive) one,” he said. He noted that technology payments last for three years, so it is not clear what happens when the one for CAR T expires in 2021.

But the Leukemia & Lymphoma Society said it was “very pleased” by the CMS decision. The American Hospital Association said the change will provide “some much-needed short-relief” but further long-term solutions are needed.

The CMS decision came after months of criticism from hospital officials about what they said were inadequate reimbursements. Some oncologists have warned that the low payments have resulted in smaller-than-expected numbers of patients receiving the treatment.

The CMS announcement was part of the agency’s final rule for payment rates for hospital inpatient services and long-term care hospitals for fiscal year 2020, which begins Oct. 1.

The Food and Drug Administration has approved two versions of CAR T-cell therapy, which stands for chimeric antigen receptor T-cell. Kymriah is made by Novartis for certain types of lymphoma and childhood leukemia, and Yescarta is manufactured by Gilead Sciences for lymphoma.

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 eventually relapse.

The complicated treatment uses the patient’s own immune system to fight cancer. Their T cells, which are part of the immune system, 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, creating an army of anti-cancer agents.

Separately, CMS is weighing whether to issue a national policy that will cover CAR T-cell therapy for Medicare patients everywhere in the United States. Currently, Medicare’s local administrators decide whether Medicare patients will be covered, which can lead to regional differences in coverage and patient access.

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