Medicare’s ‘new technology’ payment plan doesn’t go far enough

It’s a story that’s sadly too familiar to clinicians like me: A middle-aged patient at the prime of life is diagnosed with blood cancer. Despite years of treatment with chemotherapy, stem cell transplants, and a range of medications, the cancer remains and the patient prepares to say his or her goodbyes.

But over the past several years, after decades of challenging scientific work, there is new hope for such patients and their doctors due to a new type of treatment called CAR-T. It turns a patient’s immune cells into a personalized, living drug that recognizes and attacks tumor cells, keeping cancer at bay for months or years. For some, it may even be a cure.

Today, two CAR-T therapies have been approved to treat some of the most common types of blood cancers, non-Hodgkin lymphoma and acute lymphoblastic leukemia. If the science continues to progress, the benefits of CAR-T therapies could go beyond the 80,000 Americans estimated to be newly diagnosed with these cancers each year to the nearly 1.8 million diagnosed with any form of cancer. They could also move from therapies of last resort to the first option.

One substantial hurdle to the wider use of CAR-T therapies is cost. At nearly $500,000, CAR-T therapies are some of the most expensive treatments ever approved. That’s compounded by the additional costs of care — which can come close to $1 million — for the lengthy hospitalizations that many patients need to care for treatment-related side effects.

The result of decades of work across government agencies, academia, and industry, these are truly custom therapies, tailored to individual patients through a complex manufacturing process. These complexities mean that only a handful of academic medical centers, often in large metropolitan areas, are equipped to give CAR-T to patients.

With support from the government, U.S. scientists have done the difficult scientific work to bring these therapies to patients. But the U.S. health care system isn’t equipped to pay for expensive therapies like CAR-T or cell and gene therapies.

Medicare, arguably the most important and influential payer in the country, provides a case study, explained in a recent STAT interview with Centers for Medicare and Medicaid Services Administrator Seema Verma, on these complexities. It illustrates that improvements are urgently needed if we truly want patients to receive these potentially curative therapies.

Within the past week, CMS announced it will institute a broad coverage policy for Medicare beneficiaries who have indications for CAR-T and will increase the rate it pays hospitals administering CAR-T and other new therapies from 50% to 65% of the cost of the product as part of what are called new technology add-on payments (NTAPs). While this is a step in the right direction, it represents a piecemeal approach to a systemic problem and one that leaves hospitals with unsustainable expenses.

While patients see CAR-T therapies as lifelines, hospital administrators look at them and see substantial financial risk. That view often delays or stops institutions from becoming certified to provide CAR-T therapies.

I am currently the president of the American Society of Hematology, the largest organization for medical professionals treating blood diseases. We recently called on CMS to set the reimbursement rate at 80% for these new technologies — and ideally cover them in full. In addition, medical researchers need funding to develop improved CAR-T therapies with broader effectiveness and fewer side effects, both of which will lower the costs associated with these therapies.

The decision to increase Medicare payments for new technology from 50% to just 65% will have ripple effects across medicine. It affects potential cures for cancer, like CAR-T, as well as a growing pipeline of cell and gene therapies that represent potential cures for devastating inherited diseases such as sickle cell disease and spinal muscular atrophy.

In exam rooms all over the country, there are patients who have tried everything and are running out of options. Their doctors want to give them good news. To make that happen, we need to establish a system that reimburses hospitals and clinicians for the treatments they provide that is as innovative as the medicines themselves.

Roy Silverstein, M.D., is professor and chair of medicine at the Medical College of Wisconsin in Milwaukee and president of the American Society of Hematology.