Reimbursement
New Technology Add-On Payment(NTAP)
In one line
Supplemental Medicare payment for inpatient use of qualifying new technologies.
Definition
NTAP provides up to 65% additional payment (75% for some categories) above the MS-DRG rate to hospitals using qualifying new technologies. Eligibility requires FDA marketing authorization, newness (typically <3 years), substantial clinical improvement, and inadequate MS-DRG payment.
NTAP applications are due in the fall for the next fiscal year and are reviewed in the IPPS proposed and final rules. Breakthrough Devices and certain antimicrobial products follow an alternative pathway that does not require proving substantial clinical improvement. NTAP status generally lasts two to three years, after which the cost should be reflected in DRG data.
Why it matters
NTAP bridges the gap while CMS gathers utilization data to update DRG weights. Time-limited (2–3 years). Critical for high-cost devices used inpatient.
Common pitfalls
- •A common pitfall is failing to secure timely FDA marketing authorization, which is a prerequisite for NTAP consideration.
- •Misinterpreting the "newness" criterion can lead to missed application windows, as technologies typically qualify for a limited period, often three years.
- •Overlooking the requirement for "substantial clinical improvement" can result in rejection, as mere incremental advancements may not be sufficient.
- •Failing to demonstrate that the existing Medicare Severity-Diagnosis Related Group (MS-DRG) payment is inadequate to cover the technology's costs is a frequent pitfall.
- •Companies sometimes assume NTAP is a permanent solution rather than a transitional payment mechanism while CMS updates DRG weights.
Sources