Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals (IPPS) and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year (FY) 2026 Rates; Changes to the FY 2025 IPPS Rates Due to Court Decision; Requirements for Quality Programs; and Other Policy Changes; Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization ion of condition codes, cases below the $373,000 threshold may be identified as clinical trials when the provider incurs the cost of the drug. The commenter stated that as a result, these cases would be included in ratesetting for MS–DRG 018 and these cases could be underpaid, particularly as more hospitals administer cell and gene therapies. The commenter requested that CMS publish information on future cases that are below the $373,000 threshold given the likely impact on the payment rate for MS–DRG 018. Response: As we stated in the FY 2024 (88 FR 58791) and FY 2025 IPPS/ LTCH PPS (89 FR 69112) final rules, while there continues to be a small percentage of claims that report standardized drug charges of less than $373,000 and do not report ICD–10–CM code Z00.6, we do not believe it is necessary to continue the use of the proxy until the number of cases reaches zero. In addition, our proposal to exclude claims with standardized drug charges below the median standardized drug charge of claims identified as clinical trials in MS–DRG 018 (that is, claims that (a) contain ICD–10–CM diagnosis code Z00.6 and do not include payer-only code ‘‘ZC’’ or (b) contain condition code ‘‘90’’) is f claims identified as clinical trials in MS–DRG 018 (that is, claims that (a) contain ICD–10–CM diagnosis code Z00.6 and do not include payer-only code ‘‘ZC’’ or (b) contain condition code ‘‘90’’) is expected to reduce the number of cases with low standardized drug charges that group to MS–DRG 018. We note that information on obtaining the MedPAR Limited Data Set is available on the CMS website, at https://www.cms.gov/Research- Statistics-Data-and-Systems/Files-for- Order/LimitedDataSets/ MEDPARLDSHospitalNational. Comment: A few commenters expressed confusion about CMS’ differentiation between clinical trial and expanded access use cases. A commenter stated that it does not believe this differentiation is CMS’ intent because expanded access use of CAR T-cell or other therapies that are grouped to MS–DRG 018 must occur as part of an Investigational New Device (IND) study, which would have a National Clinical Trial number and would meet criteria for routine costs of the clinical trial NCD 310.1. This commenter cited the FDA website 13 in support of these statements. Another commenter requested that CMS clarify that expanded access cases are a type of clinical trial. A commenter req NCD 310.1. This commenter cited the FDA website 13 in support of these statements. Another commenter requested that CMS clarify that expanded access cases are a type of clinical trial. A commenter requested that CMS clarify that expanded access use would also be excluded from ratesetting because facilities do not incur the cost of these products. A few commenters requested that CMS clarify that the agency would expect to see clinical trial billing indicators on expanded access claims (that is, diagnosis code Z00.6, condition code 30, value code D4, and the NCT number), in addition to condition code 90, which would help identify which clinical trial claims are expanded access claims. Response. The FDA states, at the link provided by the commenter, ‘‘Expanded access, sometimes called ‘‘compassionate use,’’ is the use of investigational new drug products outside of clinical trials to treat patients with serious or immediately life- threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options’’. While we utilize separate condition codes to identify clinical trial claims and expanded access use cases, we note that they are treated the sam arable or satisfactory alternative treatment options’’. While we utilize separate condition codes to identify clinical trial claims and expanded access use cases, we note that they are treated the same for payment purposes and in the calculation of the relative weights for MS–DRG 018. Comment: A commenter stated that the MS–DRG payment for CAR T-cell therapy services has never been sufficient and provided various reasons for this, including problems with hospital chargemasters, CCRs, and charge compression. Commenters provided various suggestions to mitigate these concerns and increase the payment rate for MS–DRG 018. Commenters stated that the percentage of cases in MS–DRG 018 that are eligible for outlier payments has increased since FY 2021, which, the commenter stated, if left unaddressed, places a constraint on the outlier pool, which negatively impacts all hospitals. A commenter stated that hospitals should not be targeted for having high outlier payments given that it is the ‘‘new norm’’ for cell and gene therapies, and that hospitals should not be questioned if they set their charges consistent with their CCRs. This commenter stated that CMS needs to provide more clarity so ew norm’’ for cell and gene therapies, and that hospitals should not be questioned if they set their charges consistent with their CCRs. This commenter stated that CMS needs to provide more clarity so that stakeholders understand that hospitals have no choice but to mark up product charges, and that patients do not bear the cost of those charges. This 13 https://www.fda.gov/drugs/investigational-new- drug-ind-application/ind-applications-clinical- treatment-expanded-access-overview. commenter also requested that CMS consider other methodologies to pay for immunotherapies and expand CMMI’s cell and gene therapy model. Commenters requested that CMS explore the integration of Medicare Advantage claims into the ratesetting process for MS–DRG 018 to improve the sample size available for low volume products, which could improve the robustness and reliability of cost estimates. A commenter noted that as the percentage of enrollees in Medicare fee-for-service decreases, the number of claims used in the ratesetting process will decrease and become less representative for predicting resource utilization. Response: Regarding the comments that the MS–DRG relative weight for MS–DRG 018 is inade ed in the ratesetting process will decrease and become less representative for predicting resource utilization. Response: Regarding the comments that the MS–DRG relative weight for MS–DRG 018 is inadequate and does not result in payment that fully covers the hospital resource costs, as well as comments regarding hospital charging practices, we refer readers to the FY 2022 IPPS/LTCH final rule (86 FR 44965) where we responded to similar comments. With respect to the commenter’s statement about hospitals being ‘‘targeted’’ for having high outlier payments, we are unaware of the issue the commenter is raising. We note our proposal, as discussed in the CY 2026 OPPS proposed rule (90 FR 33476), to collect payer-specific negotiated charge data from MA organizations by MS– DRG for use in the MS–DRG relative weight setting, would, if finalized, obviate many of the concerns that commenters raised, including challenges with hospital charging practices and the potential role of MA claims in the ratesetting process. Comment: Commenters requested that CMS revise its cost reporting instructions for cell and gene therapy products (revenue codes 0891 and 0892) to instruct providers to use cost cen atesetting process. Comment: Commenters requested that CMS revise its cost reporting instructions for cell and gene therapy products (revenue codes 0891 and 0892) to instruct providers to use cost center 78. A commenter requested that CMS also instruct providers to leave the services associated with these therapies in their original cost centers. This commenter stated that there is a precedent for CMS to define a cost center based on a revenue code, like it did for the implantable devices cost center. The commenter also requested that CMS clarify whether hospitals are allowed to use product charges and expenses as valid statistics to allocate administrative and general expenses to cost report line 78. Response: We do not believe changes to billing guidance are needed at this time but will take these comments into consideration when developing policies and program requirements for future years for CAR T-cell therapy policy. We further note that under the proposal in VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00121 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36656 Federal Register / Vol. 90, No. 14 36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00121 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36656 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations the CY 2026 OPPS proposed rule to collect payer-specific negotiated charge data from MA organizations by MS– DRG for use in the MS–DRG relative weight setting, an additional cost center would not impact the relative weight for MS–DRG 018. After consideration of the public comments we received, we are finalizing our proposals without modifications regarding the calculation of the relative weight for MS–DRG 018. We note that for this final rule, based on the March 2025 update of the FY 2024 MedPAR file, we estimated that the median standardized drug charge of claims identified as clinical trials in MS–DRG 018 (that is, claims that (a) contain ICD–10–CM diagnosis code Z00.6 and do not include payer-only code ‘‘ZC’’ or (b) contain condition code ‘‘90’’) is $27,466. Applying this finalized methodology, based on the March 2025 update of the FY 2024 MedPAR file used for this final rule, we estimated that the average costs of cases assigned to de ‘‘90’’) is $27,466. Applying this finalized methodology, based on the March 2025 update of the FY 2024 MedPAR file used for this final rule, we estimated that the average costs of cases assigned to MS–DRG 018 that are identified as clinical trial cases ($61,643.46) were 16 percent of the average costs of the cases assigned to MS–DRG 018 that are identified as nonclinical trial cases ($384,471.59). Accordingly, as we did for FY 2025, we are finalizing our proposal to adjust the transfer-adjusted case count for MS– DRG 018 by applying the adjustor of 0.16 to the applicable clinical trial and expanded access use immunotherapy cases, and other cases where the immunotherapy product is not purchased in the usual manner, such as obtained at no cost, and to use this adjusted case count for MS–DRG 018 in calculating the national average cost per case, which is used in the calculation of the relative weights. Therefore, in calculating the national average cost per case for purposes of this final rule, each case identified as an applicable clinical trial or expanded access use immunotherapy case, and other cases where immunotherapy product is not purchased in the usual manner, such as obta nal rule, each case identified as an applicable clinical trial or expanded access use immunotherapy case, and other cases where immunotherapy product is not purchased in the usual manner, such as obtained at no cost, was adjusted by 0.16. As we did for FY 2025, we are applying this same adjustor for the applicable cases that group to MS–DRG 018 for purposes of budget neutrality and outlier simulations. d. Cap for Relative Weight Reductions In the FY 2023 IPPS/LTCH PPS final rule, we finalized a permanent 10- percent cap on the reduction in an MS– DRG’s relative weight in a given fiscal year, beginning in FY 2023. We also finalized a budget neutrality adjustment to the standardized amount for all hospitals to ensure that application of the permanent 10-percent cap does not result in an increase or decrease of estimated aggregate payments. We refer the reader to the FY 2023 IPPS/LTCH PPS final rule for further discussion of this policy. In the Addendum to this IPPS/LTCH PPS final rule, we present the budget neutrality adjustment for reclassification and recalibration of the FY 2026 MS–DRG relative weights with application of this cap. We are also making available on the CMS website a e present the budget neutrality adjustment for reclassification and recalibration of the FY 2026 MS–DRG relative weights with application of this cap. We are also making available on the CMS website a supplemental file demonstrating the application of the permanent 10 percent cap for FY 2026. For a further discussion of the final budget neutrality adjustment for FY 2026, we refer readers to the Addendum of this final rule. 3. Development of National Average Cost-to-Charge Ratios (CCRs) We developed the national average CCRs as follows: Using the FY 2023 cost report data, we removed CAHs, REHs, Indian Health Service hospitals, all-inclusive rate hospitals, and cost reports that represented time periods of less than 1 year (365 days). We included hospitals located in Maryland because we include their charges in our claims database. Then we created CCRs for each provider for each cost center (see the supplemental data file for line items used in the calculations) and removed any CCRs that were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the purpose of trimming the data. Then we too were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the purpose of trimming the data. Then we took the logs of the normalized cost center CCRs and removed any cost center CCRs where the log of the cost center CCR was greater or less than the mean log plus/ minus 3 times the standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific CCR. The Medicare-specific CCR was determined by taking the Medicare charges for each line item from Worksheet D–3 and deriving the Medicare-specific costs by applying the hospital-specific departmental CCRs to the Medicare- specific charges for each line item from Worksheet D–3. Once each hospital’s Medicare-specific costs were established, we summed the total Medicare-specific costs and divided by the sum of the total Medicare-specific charges to produce national average, charge-weighted CCRs. After we multiplied the total charges for each MS–DRG in each of the 19 cost centers by the corresponding national average CCR, we summed the 19 ‘‘costs’’ across each MS–DRG to produce a tota ed CCRs. After we multiplied the total charges for each MS–DRG in each of the 19 cost centers by the corresponding national average CCR, we summed the 19 ‘‘costs’’ across each MS–DRG to produce a total standardized cost for the MS–DRG. The average standardized cost for each MS– DRG was then computed as the total standardized cost for the MS–DRG divided by the transfer-adjusted case count for the MS–DRG. The average cost for each MS–DRG was then divided by the national average standardized cost per case to determine the relative weight. The final FY 2026 cost-based relative weights were then normalized by an adjustment factor of 1.922881 so that the average case weight after recalibration was equal to the average case weight before recalibration. The normalization adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act. We then applied the permanent 10-percent cap on the reduction in a MS–DRG’s relative weight in a given fiscal year; specifically for those MS–DRGs for which the relative weight otherwise would have declined by more than 10 percent from the FY 2025 the reduction in a MS–DRG’s relative weight in a given fiscal year; specifically for those MS–DRGs for which the relative weight otherwise would have declined by more than 10 percent from the FY 2025 relative weight, we set the FY 2026 relative weight equal to 90 percent of the FY 2025 relative weight. The final relative weights for FY 2026 as set forth in Table 5 associated with this final rule and available on the CMS website at https:// www.cms.gov/Medicare/Medicare-Fee- for-Service-Payment/AcuteInpatientPPS reflect the application of this cap. The 19 national average CCRs for FY 2026 are as follows: 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00122 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36657 Since FY 2009, the relative weights have been based on 100 percent cost weights based on our MS–DRG grouping system. When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We proposed to use that same case thresh When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We proposed to use that same case threshold in recalibrating the proposed MS–DRG relative weights for FY 2026. In this final rule, using data from the FY 2024 MedPAR file, there are 9 MS–DRGs that contain fewer than 10 cases. For FY 2026, because we do not have sufficient MedPAR data to set accurate and stable cost relative weights for these low-volume MS–DRGs, we proposed to compute relative weights for the low-volume MS–DRGs by adjusting their final FY 2025 relative weights by the percentage change in the average weight of the cases in other MS– DRGs from FY 2025 to FY 2026. The crosswalk table is as follows. We did not receive any public comments on this proposal and therefore are finalizing it for FY 2026 without modification. E. Add-On Payments for New Services and Technologies for FY 2026 1. Background Effective for discharges beginning on or after October 1, 2001, section 1886(d)(5)(K)(i) of the Act requires the Secretary to establish a mechanism to recognize the costs of new medical services and technologies (sometim rges beginning on or after October 1, 2001, section 1886(d)(5)(K)(i) of the Act requires the Secretary to establish a mechanism to recognize the costs of new medical services and technologies (sometimes collectively referred to in this section as ‘‘new technologies’’) under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00123 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00124 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36659 for new medical service or technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for further information on this issue. (3) Substantial Clinical Improvement Cr new medical service or technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for further information on this issue. (3) Substantial Clinical Improvement Criterion Under the third criterion at § 412.87(b)(1), a medical service or technology must represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. In the FY 2020 IPPS/ LTCH PPS final rule (84 FR 42288 through 42292), we prospectively codified in our regulations at § 412.87(b) the following aspects of how we evaluate substantial clinical improvement for purposes of new technology add-on payments under the IPPS: • The totality of the circumstances is considered when making a determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries. • A determination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare b mination that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries means— ++ The new medical service or technology offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments; ++ The new medical service or technology offers the ability to diagnose a medical condition in a patient population where that medical condition is currently undetectable, or offers the ability to diagnose a medical condition earlier in a patient population than allowed by currently available methods, and there must also be evidence that use of the new medical service or technology to make a diagnosis affects the management of the patient; ++ The use of the new medical service or technology significantly improves clinical outcomes relative to services or technologies previously available as demonstrated by one or more of the following: a reduction in at least one clinically significant adverse event, including a reduction in mortality or a clinically significant complication; a decreased rate of at least one more of the following: a reduction in at least one clinically significant adverse event, including a reduction in mortality or a clinically significant complication; a decreased rate of at least one subsequent diagnostic or therapeutic intervention; a decreased number of future hospitalizations or physician visits; a more rapid beneficial resolution of the disease process treatment including, but not limited to, a reduced length of stay or recovery time; an improvement in one or more activities of daily living; an improved quality of life; or, a demonstrated greater medication adherence or compliance; or ++ The totality of the circumstances otherwise demonstrates that the new medical service or technology substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. • Evidence from the following published or unpublished information sources from within the United States or elsewhere may be sufficient to establish that a new medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries: clini medical service or technology represents an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of Medicare beneficiaries: clinical trials, peer reviewed journal articles; study results; meta-analyses; consensus statements; white papers; patient surveys; case studies; reports; systematic literature reviews; letters from major healthcare associations; editorials and letters to the editor; and public comments. Other appropriate information sources may be considered. • The medical condition diagnosed or treated by the new medical service or technology may have a low prevalence among Medicare beneficiaries. • The new medical service or technology may represent an advance that substantially improves, relative to services or technologies previously available, the diagnosis or treatment of a subpopulation of patients with the medical condition diagnosed or treated by the new medical service or technology. We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42288 through 42292) for additional discussion of the evaluation of substantial clinical improvement for purposes of new technology add-on payments u der to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42288 through 42292) for additional discussion of the evaluation of substantial clinical improvement for purposes of new technology add-on payments under the IPPS. We note, consistent with the discussion in the FY 2003 IPPS final rule (67 FR 50015), that while FDA has regulatory responsibility for decisions related to marketing authorization (for example, approval, clearance, etc.), we do not rely upon FDA criteria in our evaluation of substantial clinical improvement for purposes of determining what services and technologies qualify for new technology add-on payments under Medicare. This criterion does not depend on the standard of safety and effectiveness on which FDA relies but on a demonstration of substantial clinical improvement in the Medicare population. b. Alternative Inpatient New Technology Add-On Payment Pathway Beginning with applications for FY 2021 new technology add-on payments, under the regulations at § 412.87(c), a medical device that is part of FDA’s Breakthrough Devices Program may qualify for the new technology add-on payment under an alternative pathway. Additionally, under the regulations at § 412.87(d) for edical device that is part of FDA’s Breakthrough Devices Program may qualify for the new technology add-on payment under an alternative pathway. Additionally, under the regulations at § 412.87(d) for certain antimicrobial products, beginning with FY 2021, a drug that is designated by FDA as a Qualified Infectious Disease Product (QIDP), and, beginning with FY 2022, a drug that is approved by FDA under the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD), may also qualify for the new technology add-on payment under an alternative pathway. We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and the FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739) for further discussion on this policy. We note that CMS reviews the application based on the information provided by the applicant only under the alternative pathway specified by the applicant at the time of application submission. To receive approval for the new technology add-on payment under that alternative pathway, the technology must have the applicable FDA designation and meet all other requirements in the regulations in § 412.87(c) and (d), as applicable. (1) Alt add-on payment under that alternative pathway, the technology must have the applicable FDA designation and meet all other requirements in the regulations in § 412.87(c) and (d), as applicable. (1) Alternative Pathway for Certain Transformative New Devices For applications received for new technology add-on payments for FY 2021 and subsequent fiscal years, a medical device designated under FDA’s Breakthrough Devices Program14 that has received FDA marketing authorization will be considered not substantially similar to an existing technology for purposes of the new technology add-on payment under the IPPS, and will not need to meet the requirement under § 412.87(b)(1) that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. Under this alternative pathway, a medical device that has received a Breakthrough Device designation, and then received FDA marketing authorization (that is, has been 14 Breakthrough Devices Program https:// www.fda.gov/medical-devices/how-study-and- market-your-device/breakthrough-devices-program. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00125 14 Breakthrough Devices Program https:// www.fda.gov/medical-devices/how-study-and- market-your-device/breakthrough-devices-program. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00125 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36660 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations approved or cleared by, or had a De Novo classification request granted by, FDA) for the indication covered by the Breakthrough Device designation, will need to meet the requirements of § 412.87(c). We note that in the FY 2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736), we clarified our policy that a new medical device under this alternative pathway must receive marketing authorization for the indication covered by the Breakthrough Devices Program designation. We refer the reader to the FY 2021 IPPS/LTCH PPS final rule (85 FR 58734 through 58736) for further discussion regarding this clarification. (2) Alternative Pathway for Certain Antimicrobial Products For applications received for new technology add-on payments for certain antimicrobial products, beginning with FY 2021, this clarification. (2) Alternative Pathway for Certain Antimicrobial Products For applications received for new technology add-on payments for certain antimicrobial products, beginning with FY 2021, if a technology is designated by FDA as a QIDP and received FDA marketing authorization, and, beginning with FY 2022, if a drug is approved under FDA’s LPAD pathway and used for the indication approved under the LPAD pathway, it will be considered not substantially similar to an existing technology for purposes of new technology add-on payments and will not need to meet the requirement that it represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. Under this alternative pathway for QIDPs and LPADs, a medical product that has received FDA marketing authorization and is designated by FDA as a QIDP or approved under the LPAD pathway will need to meet the requirements of § 412.87(d). We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739) for further discussion on this policy. We note that, in the F eader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42292 through 42297) and FY 2021 IPPS/LTCH PPS final rule (85 FR 58737 through 58739) for further discussion on this policy. We note that, in the FY 2021 IPPS/ LTCH PPS final rule (85 FR 58737 through 58739), we clarified that a new medical product seeking approval for the new technology add-on payment under the alternative pathway for QIDPs must receive FDA marketing authorization for the indication covered by the QIDP designation. We also finalized our policy to expand our alternative new technology add-on payment pathway for certain antimicrobial products to include products approved under the LPAD pathway and used for the indication approved under the LPAD pathway. c. Additional Payment for New Medical Service or Technology The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies, while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. As noted pre rving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. As noted previously, we do not include capital costs in the add-on payments for a new medical service or technology or make new technology add-on payments under the IPPS for capital-related costs (72 FR 47307 through 47308). For discharges occurring before October 1, 2019, under § 412.88, if the costs of the discharge (determined by applying operating cost-to-charge ratios (CCRs) as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), CMS made an add-on payment equal to the lesser of: (1) 50 percent of the costs of the new medical service or technology; or (2) 50 percent of the amount by which the costs of the case exceed the standard DRG payment. Beginning with discharges on or after October 1, 2019, for the reasons discussed in the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300), we finalized an increase in the new technology add-on payment percentage, as reflected at § 412.88(a)(2)(ii). Specifically, for a new t he FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300), we finalized an increase in the new technology add-on payment percentage, as reflected at § 412.88(a)(2)(ii). Specifically, for a new technology other than a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (determined by applying CCRs as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add- on payment equal to the lesser of: (1) 65 percent of the costs of the new medical service or technology; or (2) 65 percent of the amount by which the costs of the case exceed the standard DRG payment. For a new technology that is a medical product designated by FDA as a QIDP, beginning with discharges on or after October 1, 2019, if the costs of a discharge involving a new technology (determined by applying CCRs as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add- on payment equal to the lesser of: (1) 75 percent of the costs of the 4(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add- on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment. For a new technology that is a medical product approved under FDA’s LPAD pathway, beginning with discharges on or after October 1, 2020, if the costs of a discharge involving a new technology (determined by applying CCRs as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add- on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment. As set forth in § 412.88(b)(2), unless the discharge qualifies for an outlier payment, the additional Medicare payment will be limited to the full MS– DRG payment plus 65 percent (or 75 percent for certain antimicrobial products (QIDPs and LPADs)) of the estimated costs of the new technology dditional Medicare payment will be limited to the full MS– DRG payment plus 65 percent (or 75 percent for certain antimicrobial products (QIDPs and LPADs)) of the estimated costs of the new technology or medical service. We refer the reader to the FY 2020 IPPS/LTCH PPS final rule (84 FR 42297 through 42300) for further discussion on the increase in the new technology add-on payment beginning with discharges on or after October 1, 2019. As discussed in the FY 2025 IPPS/ LTCH PPS final rule (89 FR 69245 through 69252), we finalized an increase in the new technology add-on payment percentage, reflected at § 412.88(a)(2)(ii)(C) and (b)(2)(iv), that for certain gene therapies approved for new technology add-on payments in the FY 2025 IPPS/LTCH PPS final rule that are indicated and used specifically for the treatment of sickle cell disease (SCD), effective with discharges on or after October 1, 2024 and concluding at the end of the 2- to 3-year newness period for such therapy, if the costs of a discharge (determined by applying CCRs as described in § 412.84(h)) involving the use of such therapy for the treatment of SCD exceed the full DRG payment (including payments for IME and DSH, but f a discharge (determined by applying CCRs as described in § 412.84(h)) involving the use of such therapy for the treatment of SCD exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add- on payment equal to the lesser of: (1) 75 percent of the costs of the new medical service or technology; or (2) 75 percent of the amount by which the costs of the case exceed the standard DRG payment. We noted that these payment amounts would only apply to CasgevyTM (exagamglogene autotemcel) and LyfgeniaTM (lovotibeglogene autotemcel), when indicated and used specifically for the treatment of SCD, which were approved for new VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00126 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36661 technology add-on payments in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69128 through 69135, and 89 FR 69188 through 69196). We note that, consistent with the prospective nature of the IPPS, we finalize the new technology add on payment amou PPS/LTCH PPS final rule (89 FR 69128 through 69135, and 89 FR 69188 through 69196). We note that, consistent with the prospective nature of the IPPS, we finalize the new technology add on payment amount for technologies approved or conditionally approved for new technology add-on payments in the final rule for each fiscal year and do not make mid-year changes to new technology add-on payment amounts. Updated cost information may be submitted and included in rulemaking to be considered for the following fiscal year. Section 503(d)(2) of the MMA (Pub. L. 108–173) provides that there shall be no reduction or adjustment in aggregate payments under the IPPS due to add-on payments for new medical services and technologies. Therefore, in accordance with section 503(d)(2) of the MMA, add- on payments for new medical services or technologies for FY 2005 and subsequent years have not been subjected to budget neutrality. d. Evaluation of Eligibility Criteria for New Medical Service or Technology Applications In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our regulation at § 412.87 to codify our longstanding practice of how CMS evaluates the eligibility criteria for ne Applications In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our regulation at § 412.87 to codify our longstanding practice of how CMS evaluates the eligibility criteria for new medical service or technology add-on payment applications. That is, we first determine whether a medical service or technology meets the newness criterion, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. We specified that all applicants for new technology add-on payments must have FDA approval or clearance by July 1 of the year prior to the beginning of the fiscal year for which the application is being considered. In the FY 2021 IPPS/LTCH PPS final rule, to more precisely describe the various types of FDA approvals, clearances and classifications that we consider under our new technology add-on payment policy, we finalized a technical clarification to the regulation to indicate that new technologies must receive FDA marketing authorization 15 16 (such as 15 How to Study and Market Your Device https:// www.fda.gov/medical-devices/devi arification to the regulation to indicate that new technologies must receive FDA marketing authorization 15 16 (such as 15 How to Study and Market Your Device https:// www.fda.gov/medical-devices/device-advice- comprehensive-regulatory-assistance/how-study- and-market-your-device. 16 Types of Applications https://www.fda.gov/ drugs/how-drugs-are-developed-and-approved/ types-applications. pre-market approval (PMA); 510(k) clearance; the granting of a De Novo classification request; or approval of a New Drug Application (NDA) or Biologics License Application (BLA)) by July 1 of the year prior to the beginning of the fiscal year for which the application is being considered (85 FR 58742). Consistent with our longstanding policy, we consider FDA marketing authorization as representing that a product has received FDA approval or clearance, or has been granted a De Novo classification request when considering eligibility for the new technology add-on payment. Additionally, in the FY 2021 IPPS/ LTCH PPS final rule (85 FR 58739 through 58742), we finalized our proposal to provide conditional approval for new technology add-on payment for a technology for which an application is submitted PS/ LTCH PPS final rule (85 FR 58739 through 58742), we finalized our proposal to provide conditional approval for new technology add-on payment for a technology for which an application is submitted under the alternative pathway for certain antimicrobial products at § 412.87(d) that does not receive FDA marketing authorization by July 1 prior to the particular fiscal year for which the applicant applied for new technology add-on payments, provided that the technology otherwise meets the applicable add-on payment criteria. Under this policy, cases involving eligible antimicrobial products would begin receiving the new technology add- on payment sooner, effective for discharges the quarter after the date of FDA marketing authorization, provided that the technology receives FDA marketing authorization before July 1 of the fiscal year for which the applicant applied for new technology add-on payments. As discussed in the FY 2024 IPPS/ LTCH PPS final rule (88 FR 58948 through 58958) and the FY 2025 IPPS/ LTCH PPS final rule (89 FR 69242 through 69245), beginning with the new technology add-on payment applications for FY 2025, for technologies that are not already FDA market authorized e FY 2025 IPPS/ LTCH PPS final rule (89 FR 69242 through 69245), beginning with the new technology add-on payment applications for FY 2025, for technologies that are not already FDA market authorized for the indication that is the subject of the new technology add-on payment application, applicants must have a complete and active FDA market authorization request at the time of new technology add-on payment application submission and must provide documentation of FDA acceptance (for a 510k application or De Novo Classification request) or filing (for a PMA, NDA, or BLA) to CMS at the time of application submission, consistent with the type of FDA marketing authorization application the applicant has submitted to FDA. See § 412.87(e) and further discussion in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958) and the FY 2025 IPPS/LTCH PPS final rule (89 FR 69242 through 69245). As we have discussed in prior rulemaking, we consider the application to be complete when the full application has been submitted to FDA and FDA has provided documentation to the applicant indicating that FDA has determined that the application is sufficiently complete to allow for substantive re l application has been submitted to FDA and FDA has provided documentation to the applicant indicating that FDA has determined that the application is sufficiently complete to allow for substantive review by FDA. We recognize that FDA processes and documentation may change over time, and the acceptance or filing documentation may vary depending on the type of FDA marketing authorization application the applicant has submitted to FDA. For example, we understand that FDA considers submission of a 510(k) or De Novo Classification request to be accepted for substantive review after the completion of either a refuse to accept (RTA) review or a technical screening process. 17 18 Submissions of 510(k) and De Novo Classification requests undergo a technical screening process when they are submitted to FDA using the electronic Submission Template And Resource (eSTAR) process; 510(k) and De Novo Classification requests that are not submitted via eSTAR undergo an RTA review. Accordingly, FDA provides applicants using eSTAR with a review assignment notification to indicate that FDA has completed its technical screening process and has determined that the application is sufficiently complete to ides applicants using eSTAR with a review assignment notification to indicate that FDA has completed its technical screening process and has determined that the application is sufficiently complete to allow for substantive review. Therefore, new technology add- on payment applicants that have submitted a 510(k) application or De Novo Classification request to FDA through eSTAR must submit a copy of the review assignment notification to CMS (at the time of new technology add-on payment application) to establish the application is sufficiently complete to allow for substantive review by FDA. We note that PMAs submitted using eSTAR that complete technical screening will still undergo a subsequent filing review by FDA, after which an application is determined to be sufficiently complete to allow for substantive review; therefore, we 17 FDA and Industry Actions on Premarket Notification (510(k)) Submissions: Effect on FDA Review Clock and Goals Guidance for Industry and Food and Drug Administration Staff Document issued on October 3, 2022. https://www.fda.gov/ media/73507/download. 18 FDA and Industry Actions on De Novo Classification Requests: Effect on FDA Review Clock and Goals Guida stration Staff Document issued on October 3, 2022. https://www.fda.gov/ media/73507/download. 18 FDA and Industry Actions on De Novo Classification Requests: Effect on FDA Review Clock and Goals Guidance for Industry and Food and Drug Administration Staff Document issued on October 3, 2022. https://www.fda.gov/media/ 107652/download. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00127 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36662 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations continue to require documentation of FDA filing for these applications. In addition, we recognize that FDA does not conduct a new filing review for NDA or BLA applications that were the subject of a Complete Response Letter (CRL) and were subsequently resubmitted to FDA, even though resubmissions are considered a new review cycle.19 20 Therefore, beginning with the new technology add-on applications submitted for FY 2027, these new technology add-on payment applicants must provide to CMS a copy of the resubmission acknowledgement letter from FDA that provides the new goal date for FDA r lications submitted for FY 2027, these new technology add-on payment applicants must provide to CMS a copy of the resubmission acknowledgement letter from FDA that provides the new goal date for FDA review of the application. We further note that if there are other processes not described here, or if there are further changes to FDA’s review processes, consistent with our policy, applicants must provide to CMS the most up-to-date documentation that indicates FDA has determined that the application is sufficiently complete to allow for substantive review by FDA. Comment: A commenter expressed support for this clarification and, as FDA’s review processes evolve or other challenges arise, encouraged CMS to be flexible and to consider additional opportunities to clarify documentation requirements to ensure technologies remain eligible for new technology add- on payment and reach patients who need them, without creating further delays in the availability of new technology add-on payment. Response: We appreciate the commenter’s support and note that an applicant may submit to us specific questions regarding their new technology add-on payment application using the resources described on sponse: We appreciate the commenter’s support and note that an applicant may submit to us specific questions regarding their new technology add-on payment application using the resources described on the CMS website for the electronic application intake system: https:// www.cms.gov/medicare/payment/ prospective-payment-systems/acute- inpatient-pps/new-medical-services- and-new-technologies. In the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958), we also finalized that, beginning with FY 2025 applications, in order to be eligible for consideration for the new technology add-on payment for the upcoming fiscal year, an applicant for new technology add-on payments must have received FDA marketing authorization by May 1 (rather than July 1) of the year prior to the beginning of the fiscal year for 19 SOPP 8405.1: Procedures for Resubmissions to an Application or Supplement. Version: 8 Effective Date: November 13, 2022. https://www.fda.gov/ media/84417/download. 20 21 CFR 314.110, Complete response letter to the applicant https://www.ecfr.gov/current/title-21/ chapter-I/subchapter-D/part-314/subpart-D/section- 314.110. which the application is being considered (except for an 0, Complete response letter to the applicant https://www.ecfr.gov/current/title-21/ chapter-I/subchapter-D/part-314/subpart-D/section- 314.110. which the application is being considered (except for an application that is submitted under the alternative pathway for certain antimicrobial products), as reflected at § 412.87(f)(2) and (3), as amended and redesignated in the FY 2024 IPPS/LTCH PPS final rule (88 FR 58948 through 58958, 88 FR 59331). e. Pharmaceutical & Technology Ombudsman (PTO) Many interested parties (including device/biologic/drug developers or manufacturers, industry consultants, others) engage with CMS for coverage, coding, and payment questions or concerns. In order to streamline engagement by centralizing the different innovation pathways within CMS including new technology add-on payments, CMS utilizes the Pharmaceutical & Technology Ombudsman as an initial resource for interested parties. This Ombudsman is available to assist with all of the following: • Help to point interested parties to or provide information and resources where possible regarding process, requirements, and timelines. • As necessary, coordinate and facilitate opportunities for interested part nt interested parties to or provide information and resources where possible regarding process, requirements, and timelines. • As necessary, coordinate and facilitate opportunities for interested parties to engage with various CMS components. • Serve as a primary point of contact for interested parties and provide updates on developments where possible or appropriate. We receive many questions from parties interested in pursuing new technology add-on payments who may not be entirely familiar with working with CMS. While we encourage interested parties to first review our resources available at https:// www.cms.gov/Medicare/Medicare-Fee- for-Service-Payment/ AcuteInpatientPPS/newtech, we know that there may be additional questions about the application process. Interested parties with further questions regarding Medicare’s coverage, coding, and payment processes, and how they can navigate these processes, whether for new technology add-on payments or otherwise, should review the updated resource guide available at: https:// www.cms.gov/medicare/coding-billing/ guide-medical-technology-companies- other-interested-parties. Parties that would like to further discuss questions or concer resource guide available at: https:// www.cms.gov/medicare/coding-billing/ guide-medical-technology-companies- other-interested-parties. Parties that would like to further discuss questions or concerns with CMS should contact the Pharmaceutical & Technology Ombudsman at PharmTechOmbud@ cms.hhs.gov. f. Application Information for New Medical Services or Technologies Applicants for add-on payments for new medical services or technologies for FY 2027 must submit a formal request, including a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement (unless the application is under one of the alternative pathways as previously described), along with a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. CMS will review the application based on the information provided by the applicant under the pathway specified by the applicant at the time of application submission. Complete application information, along with final deadlines for submitting a full applicati ovided by the applicant under the pathway specified by the applicant at the time of application submission. Complete application information, along with final deadlines for submitting a full application, will be posted as it becomes available on the CMS website at: https://www.cms.gov/ Medicare/Medicare-Fee-for-Service- Payment/AcuteInpatientPPS/ newtech.html. To allow interested parties to identify the new medical services or technologies under review before the publication of the proposed rule for FY 2027, once the application deadline has closed, CMS will post on its website a list of the applications submitted, along with a brief description of each technology as provided by the applicant. As discussed in the FY 2023 IPPS/ LTCH PPS final rule (87 FR 48986 through 48990), we finalized our proposal to publicly post online new technology add-on payment applications, including the completed application forms, certain related materials, and any additional updated application information submitted subsequent to the initial application submission (except certain volume, cost and other information identified by the applicant as confidential), beginning with the application cycle for FY submitted subsequent to the initial application submission (except certain volume, cost and other information identified by the applicant as confidential), beginning with the application cycle for FY 2024, at the time the proposed rule is published. We also finalized that with the exception of information included in a confidential information section of the application, cost and volume information, and materials identified by the applicant as copyrighted or not otherwise releasable to the public, the contents of the application and related materials may be posted publicly, and that we will not post applications that are withdrawn prior to publication of the proposed rule. We refer the reader to the FY 2023 IPPS/LTCH PPS final VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00128 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36663 rule (87 FR 48986 through 48990) for further information regarding this policy. In the proposed rule, we stated that beginning with the new technology add-on applications submitted for FY 202 ns 36663 rule (87 FR 48986 through 48990) for further information regarding this policy. In the proposed rule, we stated that beginning with the new technology add-on applications submitted for FY 2027, we intend to include certain cost criterion information in this public posting; however, consistent with our current policy, cost and volume information will not be publicly posted. Consistent with current practice, certain cost and volume information may still be summarized and discussed in the proposed rule, but we intend to provide more succinct information as part of the summaries in the proposed and final rules regarding the applicant’s assertions as to how the medical service or technology meets the cost criterion. Specifically, beginning with the FY 2027 applications, the public posting will include the applicant’s explanation of the cost analysis methodology, including the step-by-step explanation of the columns used in the cost analysis spreadsheet attachment, any optional comments provided by the applicant, and information about the case weighted threshold and final inflated case weighted standardized charge per case, as is currently subject to discussion in the cost crite ents provided by the applicant, and information about the case weighted threshold and final inflated case weighted standardized charge per case, as is currently subject to discussion in the cost criterion analysis for each eligible application in the proposed rule. The cost analysis spreadsheet attachment and other charge values provided in the applicant’s responses would not be included in the public posting. We stated that we believe that including the described cost criterion information in the public posting will further improve and streamline our evaluation process, while also further supporting transparency and engagement with interested parties. Comment: Multiple commenters asked CMS to reconsider finalizing or request additional input from interested parties through rulemaking before finalizing the inclusion of certain cost criterion information in the public posting beginning with FY 2027. Commenters stated that because CMS already summarizes the relevant cost analyses in the proposed rules to allow interested parties to comment on the analyses, there is no extra benefit to additional disclosures. Some commenters stated that disclosing applicants’ cost analyses raises conf proposed rules to allow interested parties to comment on the analyses, there is no extra benefit to additional disclosures. Some commenters stated that disclosing applicants’ cost analyses raises confidentiality concerns because information about expected inpatient volume and other data incorporated within cost analyses are based on confidential commercial and financial information, including proprietary market analyses. A commenter further explained that for therapies that target small patient populations, even high- level methodological detail may be commercially sensitive or permit back- calculation of pricing strategy. Commenters explained that such information should be kept confidential, consistent with long-standing statutes recognizing the need to protect confidential commercial and financial information against public disclosure. Multiple commenters also noted that because of the single annual application period, applicants generally submit their applications before their products are approved by FDA, creating special sensitivities in disclosing pricing information. Commenters stated that public release of this information could create disincentives for small or emerging c ucts are approved by FDA, creating special sensitivities in disclosing pricing information. Commenters stated that public release of this information could create disincentives for small or emerging companies that may be more risk-averse with respect to transparency of confidential methods. Multiple commenters requested that CMS provide additional details on the guardrails and specific steps the Agency would employ to ensure proprietary and market sensitive cost and pricing data provided by new technology add-on payment applicants are not inadvertently publicized, either directly or indirectly, through this proposal. For example, a commenter noted that the application asks the applicant to provide the charges related to the new technology, as well as the cost-to-charge ratio used to convert the product’s cost to charges, and if CMS were to publish these two data points, the public would be able to calculate the cost of the product. Another commenter further asked CMS to articulate the policy gaps this proposal would address and what stakeholder needs it would serve. A commenter recommended that CMS modify the proposal to allow applicants to redact, generalize, or submit alternate p policy gaps this proposal would address and what stakeholder needs it would serve. A commenter recommended that CMS modify the proposal to allow applicants to redact, generalize, or submit alternate public summaries of methodology where disclosure could reasonably reveal proprietary strategy. It also asked that CMS provide clear written guidance on what components of the cost methodology are considered ‘‘public’’ versus protected from disclosure. Another commenter also stated its appreciation and support for CMS’s commitment to only publishing an explanation of the applicant’s cost analysis methodology without including cost or pricing data, and CMS’s effort to bring additional information about new technology add-on payment applications to the public. The commenter further asked that CMS create a sub-section text box dedicated to capturing proprietary information in the cost analysis methodology section that would not be included in any publication. Finally, the commenter asked that CMS avoid use of artificial intelligence in drafting summaries of applications for public display, including in the proposed rule, or ensure human review of the summary before publication. Response: We MS avoid use of artificial intelligence in drafting summaries of applications for public display, including in the proposed rule, or ensure human review of the summary before publication. Response: We thank the commenters for their feedback and appreciate the commenters’ raising their concerns regarding balancing the need to maintain the confidentiality of commercial and financial information with our intent to further improve and streamline our evaluation process and support transparency and engagement with interested parties. As discussed in the FY 2023 IPPS/ LTCH PPS final rule (87 FR 48986 through 48990), we finalized to publicly post online new technology add-on payment applications, including the completed application forms, certain related materials (for example, attachments, uploaded supportive materials), and any additional updated application information submitted subsequent to the initial application submission (except certain volume, cost and other information identified by the applicant as confidential). We also provided a mechanism for applicants to submit confidential information that would not be posted online, such as in a separate section of the application, or by the applicant as confidential). We also provided a mechanism for applicants to submit confidential information that would not be posted online, such as in a separate section of the application, or by identifying particular questions for which the information submitted would not be publicly posted. We also stated we would not publicly post cost and volume information; however, consistent with our current practice, we would continue to summarize and discuss certain cost and volume information for the proposed rule and will indicate as such in the application. With the exception of information included in a confidential information section of the application, cost and volume information, and materials identified by the applicant as copyrighted and/or not otherwise releasable to the public, the contents of the application and related materials may be posted publicly. While we did not initially include the cost criterion analysis and related materials in the public posting as we gained experience with the public posting process, as noted by the commenters, in the meantime, we have continued to summarize the information under the cost criterion, including the applicant’s assertions and erience with the public posting process, as noted by the commenters, in the meantime, we have continued to summarize the information under the cost criterion, including the applicant’s assertions and supporting data on how the technology meets the criteria under § 412.87, in the annual rules. This includes information such as: the inclusion/exclusion criteria used for the cost analysis, including the data source and list of ICD–10–CM/PCS codes and MS–DRGs used by the applicant, the number of claims and VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00129 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36664 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations MS–DRGs identified by the applicant for the cost analysis, the indirect and direct charges removed for prior technology (including the methodology used to estimate these charges), how the applicant standardized charges, the inflation factor applied to the standardized charges, the indirect and direct charges added for the new technology (including the methodology used to convert the cost of the new technology to charg he inflation factor applied to the standardized charges, the indirect and direct charges added for the new technology (including the methodology used to convert the cost of the new technology to charges), the average case- weighted threshold amount, and the final inflated average case-weighted standardized charge per case. Under this current proposal, the processes described in the FY 2023 IPPS/LTCH PPS final rule (87 FR 48986 through 48990) remain unchanged. The information described by commenters, including high-level methodological detail or information about data incorporated within cost analyses, is already included or subject to inclusion in the proposed and final rulemaking. Under our existing practice, we generally do not consider information that is marked as confidential, proprietary, or trade secret when determining whether a technology meets the criteria for new technology add-on payments. We would continue to indicate in the application where certain information will not be posted publicly (for example, contact information, cost and volume), otherwise, applicants should expect that everything else may be posted publicly. We would continue to provide a mechanism for app e posted publicly (for example, contact information, cost and volume), otherwise, applicants should expect that everything else may be posted publicly. We would continue to provide a mechanism for applicants to submit confidential information that would not be posted online in a separate section of the application. Certain cost and volume information would continue to be included in the proposed or final rulemaking. For example, for an alternative pathway application, we continue to include, as applicable, the maximum add-on payment amount, where cost information is available. In the final rule, we would continue to provide, for approved technologies, the final add-on payment amounts and volume estimates. When reviewing the public postings prior to publication, we would continue to use human review rather than review by artificial intelligence. Under this proposal, the case weighted threshold and final inflated case weighted standardized charge per case would be included in the public posting because they are currently subject to discussion in the cost criterion analysis for each eligible application in the proposed rule. The cost criterion analysis spreadsheet attachment would con posting because they are currently subject to discussion in the cost criterion analysis for each eligible application in the proposed rule. The cost criterion analysis spreadsheet attachment would continue to be excluded from the public posting. Other cost or charge values, such as for charges related to the new technology, provided in the applicant’s responses would not be included in the public posting. Human review would be used to identify and manually redact cost or charge values that may have been provided in the applicant’s responses in the cost criterion section. We continue to believe that providing additional information to the public by publicly posting the applications and certain related materials online helps further public engagement and fosters greater public input on the various new medical services and technologies presented annually for consideration for new technology add-on payments. We also continue to believe that posting the applications online reduces the risk that we may inadvertently omit or misrepresent relevant information submitted by applicants, or are perceived as misrepresenting such information, in our summaries in the rules. We do not believe that that we may inadvertently omit or misrepresent relevant information submitted by applicants, or are perceived as misrepresenting such information, in our summaries in the rules. We do not believe that it would be appropriate for applicants to further redact, generalize, or provide alternate public summaries that would differ from the information provided in their new technology add-on payment applications for public review. As noted, we will continue to provide a mechanism for applicants to submit confidential information that would not be posted online in a separate section of the application. Therefore, we are finalizing that, beginning with the new technology add- on payment applications submitted for FY 2027, the public posting will include the applicant’s explanation of the cost analysis methodology, including the step-by-step explanation of the columns used in the cost analysis spreadsheet attachment, any optional comments provided by the applicant, and information about the case weighted threshold and final inflated case weighted standardized charge per case, as is currently subject to discussion in the cost criterion analysis for each eligible application in the proposed ru weighted threshold and final inflated case weighted standardized charge per case, as is currently subject to discussion in the cost criterion analysis for each eligible application in the proposed rule. The cost analysis spreadsheet attachment and other cost or charge values that may have been provided in the applicant’s responses in the cost criterion section would not be included in the public posting. Consistent with current practice, certain cost and volume information may still be summarized and discussed in the proposed rule, but we intend to provide more succinct information as part of the summaries in the proposed and final rules regarding the applicant’s assertions as to how the medical service or technology meets the cost criterion. We note that the burden associated with this information collection requirement is the time and effort required to collect and submit the data in the formal request for add-on payments for new medical services and technologies to CMS. The aforementioned burden is subject to the PRA and approved under OMB control number 0938–1347 and has an expiration date of December 31, 2026. 2. Public Input Before Publication of a Notice of Rulemaking on Ad ntioned burden is subject to the PRA and approved under OMB control number 0938–1347 and has an expiration date of December 31, 2026. 2. Public Input Before Publication of a Notice of Rulemaking on Add-On Payments Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of the MMA, provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement. The process for evaluating new medical service and technology applications requires the Secretary to do all of the following: • Provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of Medicare beneficiaries. • Make public and periodically update a list of the services and technologies for which applications for add-on payments are pending. • Accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement. • Provide, before publication of a proposed rule, for a meet omments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement. • Provide, before publication of a proposed rule, for a meeting at which organizations representing hospitals, physicians, manufacturers, and any other interested party may present comments, recommendations, and data regarding whether a new medical service or technology represents a substantial clinical improvement to the clinical staff of CMS. In order to provide an opportunity for public input regarding add-on payments for new medical services and technologies for FY 2026 prior to publication of the FY 2026 IPPS/LTCH PPS proposed rule, we published a notice in the September 13, 2024, Federal Register (89 FR 74962) and held a virtual town hall meeting on December 11, 2024. In the announcement notice for the meeting, we stated that the opinions and presentations provided during the meeting would assist us in our evaluations of applications by allowing public discussion of the substantial clinical improvement criterion for the FY 2026 new medical service and technology add-on payment VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00 ing public discussion of the substantial clinical improvement criterion for the FY 2026 new medical service and technology add-on payment VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00130 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36665 applications before the publication of the FY 2026 IPPS/LTCH PPS proposed rule. Approximately 200 individuals attended the virtual town hall meeting. We posted the recordings of the virtual town hall on the CMS web page at: https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ AcuteInpatientPPS/newtech. We considered each applicant’s presentation made at the town hall meeting, as well as written comments received by the December 16, 2024, deadline, in our evaluation of the new technology add-on payment applications for FY 2026 in the development of the FY 2026 IPPS/LTCH PPS proposed rule. In response to the published notice and the December 11, 2024, New Technology Town Hall meeting, we received written comments regarding the applications for FY 2026 new technology add o proposed rule. In response to the published notice and the December 11, 2024, New Technology Town Hall meeting, we received written comments regarding the applications for FY 2026 new technology add on payments. As explained earlier and in the Federal Register notice announcing the New Technology Town Hall meeting (89 FR 74962 through 74964), the purpose of the meeting was specifically to discuss the substantial clinical improvement criterion with regard to pending new technology add-on payment applications for FY 2026. Therefore, we did not summarize any written comments in the proposed rule that were unrelated to the substantial clinical improvement criterion. In section II.E.5. of the preamble of the proposed rule, we summarized comments regarding individual applications, or, if applicable, indicated that there were no comments received in response to the New Technology Town Hall meeting notice or New Technology Town Hall meeting, at the end of each discussion of the individual applications. 3. ICD–10–PCS Section ‘‘X’’ Codes for Certain New Medical Services and Technologies As discussed in the FY 2016 IPPS/ LTCH PPS final rule (80 FR 49434), the ICD–10–PCS includes a new section ications. 3. ICD–10–PCS Section ‘‘X’’ Codes for Certain New Medical Services and Technologies As discussed in the FY 2016 IPPS/ LTCH PPS final rule (80 FR 49434), the ICD–10–PCS includes a new section containing the new Section ‘‘X’’ codes, which began being used with discharges occurring on or after October 1, 2015. Decisions regarding changes to ICD–10– PCS Section ‘‘X’’ codes will be handled in the same manner as the decisions for all of the other ICD–10–PCS code changes. That is, proposals to create, delete, or revise Section ‘‘X’’ codes under the ICD–10–PCS structure will be referred to the ICD–10 Coordination and Maintenance CommitteIn addition, several of the new medical services and technologies that have been, or may be, approved for new technology add-on payments may now, and in the future, be assigned a Section ‘‘X’’ code within the structure of the ICD–10–PCS. We posted ICD–10–PCS Guidelines on the CMS website at: https://www.cms.gov/ medicare/coding-billing/icd-10-codes, including guidelines for ICD–10–PCS Section ‘‘X’’ codes. We encourage providers to view the material provided on ICD–10–PCS Section ‘‘X’’ codes. 4. FY 2026 Status of Technologies Receiving New Technolo ncluding guidelines for ICD–10–PCS Section ‘‘X’’ codes. We encourage providers to view the material provided on ICD–10–PCS Section ‘‘X’’ codes. 4. FY 2026 Status of Technologies Receiving New Technology Add-On Payments for FY 2025 In this section of the final rule, we discuss the FY 2026 status of 42 technologies approved for 39 new technology add-on payments for FY 2025, as set forth in the tables that follow. In the proposed rule, we presented our proposals to continue the new technology add-on payments for FY 2026 for those technologies that were approved for the new technology add-on payment for FY 2025, and which would still be considered ‘‘new’’ for purposes of new technology add-on payments for FY 2026. We also presented our proposals to discontinue new technology add-on payments for FY 2026 for those technologies that were approved for the new technology add-on payment for FY 2025, and which would no longer be considered ‘‘new’’ for purposes of new technology add-on payments for FY 2026. Our policy is that a medical service or technology may continue to be considered ‘‘new’’ for purposes of new technology add-on payments within 2 or 3 years after the point at which data beg r FY 2026. Our policy is that a medical service or technology may continue to be considered ‘‘new’’ for purposes of new technology add-on payments within 2 or 3 years after the point at which data begin to become available reflecting the inpatient hospital code assigned to the new service or technology. Our practice has been to begin and end new technology add-on payments on the basis of a fiscal year, and we have generally followed a guideline that uses a 6-month window before and after the start of the fiscal year to determine whether to extend the new technology add-on payment for an additional fiscal year, and, in general, we have extended new technology add-on payments for an additional year only if the 3-year anniversary date of the product’s entry onto the U.S. market occurs in the latter half of the fiscal year (70 FR 47362). As discussed in the FY 2025 IPPS/ LTCH PPS final rule (89 FR 69238 through 69242), we finalized that, beginning with new technology add-on payments for FY 2026, in assessing whether to continue the new technology add-on payments for those technologies that are first approved for new technology add-on payments in FY 2025 or a subsequent year, we will ex 2026, in assessing whether to continue the new technology add-on payments for those technologies that are first approved for new technology add-on payments in FY 2025 or a subsequent year, we will extend new technology add-on payments for an additional fiscal year when the 3-year anniversary date of the product’s entry onto the U.S. market occurs on or after October 1 of that fiscal year. This change is effective beginning with those technologies that are initially approved for new technology add-on payments in FY 2025 or a subsequent year. For technologies that were first approved for new technology add-on payments prior to FY 2025, including for technologies we determine to be substantially similar to those technologies, we continue to use the midpoint of the upcoming fiscal year (April 1) when determining whether a technology would still be considered ‘‘new’’ for purposes of new technology add-on payments. In the proposed rule, we provided Table II.E–01.A listing the technologies that were first approved for new technology add-on payments prior to FY 2025, for which we proposed to continue making new technology add- on payments for FY 2026 because they were still considered ‘‘n hat were first approved for new technology add-on payments prior to FY 2025, for which we proposed to continue making new technology add- on payments for FY 2026 because they were still considered ‘‘new’’ for purposes of new technology add-on payments because the 3-year anniversary date of the product’s entry onto the U.S. market occurs on or after April 1, 2026. This table also presented the newness start date, new technology add-on payment start date, 3-year anniversary date of the product’s entry onto the U.S. market, relevant final rule citations from prior fiscal years, proposed maximum add-on payment amount, and coding assignments for each technology. We referred readers to the cited final rules in the table for a complete discussion of the new technology add-on payment application, coding, and payment amount for these technologies, including the applicable indications and discussion of the newness start date. In the proposed rule, we also provided Table II.E–01.B listing the technologies that were first approved for new technology add-on payments in FY 2025, for which we proposed to continue making new technology add- on payments for FY 2026 because they were still considere hnologies that were first approved for new technology add-on payments in FY 2025, for which we proposed to continue making new technology add- on payments for FY 2026 because they were still considered ‘‘new’’ for purposes of new technology add-on payments because the 3-year anniversary date of the product’s entry onto the U.S. market occurs on or after October 1, 2025. This table also presented the newness start date, new technology add-on payment start date, 3-year anniversary date of the product’s entry onto the U.S. market, relevant final rule citations from prior fiscal years, proposed maximum add-on payment amount, and coding assignments for each technology. We referred readers to the cited final rules in the table for a complete discussion of VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00131 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36666 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations the new technology add-on payment application, coding, and payment amount for these technologies, including the applicable indications and discussion of the newness star , 2025 / Rules and Regulations the new technology add-on payment application, coding, and payment amount for these technologies, including the applicable indications and discussion of the newness start date. We invited public comments on our proposals to continue new technology add-on payments for FY 2026 for the technologies listed in Tables II.E.–01.A and II.E.–01.B of the proposed rule. Comment: Multiple commenters supported CMS’s proposed continuation of new technology add-on payments for FY 2026 for those technologies that were approved for the new technology add-on payment for FY 2025, and which would still be considered ‘‘new’’ for purposes of new technology add-on payments for FY 2026. Response: We appreciate the commenters’ support. Comment: Commenters, including the for use in lung applicant for CYTALUX® cancer, stated that they found that providers often do not bill for the full cost of the single-use vials when only a portion of the vial is administered during the surgical procedure. Commenters noted that this appears to be due confusion about whether Medicare Part B’s discarded drug billing rules apply to inpatient billing under Medicare Part A, or uncertainty about wh procedure. Commenters noted that this appears to be due confusion about whether Medicare Part B’s discarded drug billing rules apply to inpatient billing under Medicare Part A, or uncertainty about whether the full vial cost should be reported in cases where only partial use occurs due to patient-specific dosing considerations. The applicant noted that although the , this non-reporting of the full vial cost does not affect the triggering of the new technology add-on payment because payment is driven by the unique ICD– 10–PCS code for CYTALUX® practice can decrease the likelihood that a hospital’s reported cost for a case will exceed the payment threshold. Furthermore, commenters noted that underreporting of the full cost of CYTALUX® can distort the hospital’s cost report data, which CMS relies upon for rate-setting purposes and for future MS–DRG assignments. Commenters requested that CMS clarify that because hospitals are not required to report drug wastage, they should bill for the full package size used in administration, and that hospitals should report the full acquisition cost of inpatient-administered drugs in their cost reports, regardless of the quantity administered. A com ll package size used in administration, and that hospitals should report the full acquisition cost of inpatient-administered drugs in their cost reports, regardless of the quantity administered. A commenter further suggested that CMS could instead support the reporting of waste for products within the billing process for Medicare Part A inpatient billing, similar to what is required on Medicare Part B. Response: We thank the applicant and other commenters for their comment. We note that they are correct that the drug wastage policy applies to Medicare Part B. We encourage commenters to consult the CMS Medicare discarded drug policy website at https:// www.cms.gov/medicare/payment/part- b-drugs/discarded-drugs for further information. Comment: The applicant for received (ceftobiprole medocaril ZEVTERA® sodium for injection) submitted a comment providing updated information on its commercial availability and to update its Wholesale Acquisition Cost (WAC). The applicant noted that ZEVTERA® marketing approval from FDA on April 3, 2024, for the treatment of adult patients with Staphylococcus aureus bloodstream infections (bacteremia) (SAB), including those with right-sided infective end ® marketing approval from FDA on April 3, 2024, for the treatment of adult patients with Staphylococcus aureus bloodstream infections (bacteremia) (SAB), including those with right-sided infective endocarditis, and adult patients with acute bacterial skin and skin structure infections (ABSSSI) and for adult and pediatric patients (3 months to less than 18 years old) with community-acquired bacterial pneumonia (CABP). The applicant also noted that ZEVTERA® technology add-on payment approval for FY 2025, with its newness period beginning on April 3, 2024. received new Per the applicant, on December 14, 2024, it entered into a license and distribution agreement with Innoviva Specialty Therapeutics, LLC (ISTx) for the commercialization of ZEVTERA® in the United States. The applicant stated that transfer of ownership for the ceftobiprole Investigational New Drug (IND) Application (064407) and the ZEVTERA (ceftobiprole medocaril sodium for injection) NDA (218275) from Basilea to ISTx, LLC was submitted to FDA and was effective on March 18, 2025. ISTx, LLC announced on May 20th the commercial availability of ZEVTERA® applicant asserted that prior to this date, ZEVTERA® was not available t s submitted to FDA and was effective on March 18, 2025. ISTx, LLC announced on May 20th the commercial availability of ZEVTERA® applicant asserted that prior to this date, ZEVTERA® was not available to Medicare beneficiaries in the United States, and requested that CMS assign a newness date of May 20, 2025. The applicant asserted that CMS had delayed the newness dates for other products when market availability was significantly later than the FDA approval date, and provided examples from FY 2025: HEPZATOTM KIT, Annalise Enterprise CTB Triage—OH, and the LimFlowTM System. for the US market. The The applicant also stated that ISTx, LLC made ZEVTERA® available for use on May 20, 2025, with a WAC of $235.00 per vial. The applicant explained that, with this updated pricing information, the average inpatient cost per case is $21,620 for the indication of SAB and $7,050 for the is a indication of ABSSSI and CABP. Therefore, because ZEVTERA® Qualified Infectious Disease Product (QIDP), the applicant requested that the maximum new technology add-on payment for a case involving the use of ZEVTERA® be updated to $16,215 for the indication of SAB and $5,288 for the indications of ABSSSI and C plicant requested that the maximum new technology add-on payment for a case involving the use of ZEVTERA® be updated to $16,215 for the indication of SAB and $5,288 for the indications of ABSSSI and CABP for FY 2026 (that is, 75 percent of the average cost of the technology). Response: We thank the applicant for its comment and the updated cost information. We have updated the new technology add-on payment amount for ZEVTERA® accordingly. ZEVTERA® ’s current new technology add-on payment amount is $8,625.00 for the indication of SAB and $2,812.50 for the indications of ABSSSI and CABP, based on a WAC of $125 per vial. As we noted in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69237), for ABSSSI and CABP, the suggested daily dose is 3 vials per day for a duration of 5–14 days, resulting in an estimated average cost of $3,750 for a 10-day therapy. For SAB, the recommended dose is every 6 hours for the first 8 days, followed by every 8 hours for up to 42 days, and the applicant had made the assumption that patients would be inpatient for 28 days and then continue the therapy as an outpatient for up to 42 days. For FY 2026, the maximum new technology add-on payment amount is $16,215.00 he assumption that patients would be inpatient for 28 days and then continue the therapy as an outpatient for up to 42 days. For FY 2026, the maximum new technology add-on payment amount is $16,215.00 for the indication of SAB and $5,287.50 for the indications of ABSSSI and CABP, as reflected in Table II.E.–01.B in this final rule. With respect to the applicant’s request that CMS should consider the beginning of the newness period to commence on May 20, 2025, which it states is the date on which ZEVTERA® became commercially available on the U.S. market, we note that that date occurred after new technology add-on payments for ZEVTERA® began, as it was approved for new technology add-on payment for FY 2025 (starting October 1, 2024). While we agree that per our policy, we may consider a documented delay in a technology’s market availability in our determination of newness, we note that the new technology add-on payment for claims reporting ICD–10–PCS procedure codes for ZEVTERA® (XW0335A (Introduction of ceftobiprole medocaril anti-infective into peripheral vein, percutaneous approach) and XW0435A (Introduction of ceftobiprole medocaril anti-infective into central vein, percutaneous (Introduction of ceftobiprole medocaril anti-infective into peripheral vein, percutaneous approach) and XW0435A (Introduction of ceftobiprole medocaril anti-infective into central vein, percutaneous approach)) was available beginning October 1, 2024. Furthermore, as discussed in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69238 through 69242), we finalized that, VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00132 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36667 beginning with new technology add-on payments for FY 2026, in assessing whether to continue the new technology add-on payments for those technologies that are first approved for new technology add-on payments in FY 2025 or a subsequent year, we would extend new technology add-on payments for an additional fiscal year when the 3-year anniversary date of the product’s entry onto the U.S. market occurs on or after October 1 of that fiscal year. If we were to consider the beginning of the newness period to commence on May 20, 2025, the date on which the applica uct’s entry onto the U.S. market occurs on or after October 1 of that fiscal year. If we were to consider the beginning of the newness period to commence on May 20, 2025, the date on which the applicant states ZEVTERA® became commercially available on the U.S. market, under our policy, the technology would potentially be eligible for new technology add-on payment for up to four years. Although the applicant stated that CMS had delayed the newness start dates for other technologies when market availability was significantly later than the FDA approval date, and that like these other products, ZEVTERA® ’s newness period should commence on the date on which the technology became commercially available, we note that, unlike these other technologies, the applicant for ZEVTERA® commercial availability that occurred after its new technology add-on payment began. is asserting a date of We also note that applicants may assert a delay in commercial availability due to business decisions made by the applicant. We are concerned that a delay in commercial availability extending beyond the implementation date for the new technology add-on payment would potentially allow applicants to postpone co the applicant. We are concerned that a delay in commercial availability extending beyond the implementation date for the new technology add-on payment would potentially allow applicants to postpone commercial availability for an indefinite period of time while the technology (and other technologies reported using the same codes) remain eligible for new technology add-on payment. Therefore, we question whether, where the applicant asserts a date of commercial availability that occurred after the new technology add-on payment for the technology began, it would be appropriate to instead consider the beginning of the newness period to commence with the start of the technology’s new technology add-on payment. We note that regardless of whether we consider the beginning of the newness period to commence for ZEVTERA® on May 20, 2025, April 3, 2024, or a date in between, the three- year anniversary date would occur after April 1, 2026, and, therefore, the technology would be considered new for FY 2026. After consideration of the public comments we received, we are finalizing our proposals to continue new technology add-on payments for FY 2026 for the technologies that were approved for new FY 2026. After consideration of the public comments we received, we are finalizing our proposals to continue new technology add-on payments for FY 2026 for the technologies that were approved for new technology add-on payment for FY 2025 and would still be considered ‘‘new’’ for purposes of new technology add-on payments for FY 2026, as listed in the proposed rule and in the following Tables II.E.–01.A and II–E.–01.B in this section of this final rule. , as We note that the following Tables II.E.–01.A and II.E.–01.B are the same as Tables II.E.–01.A and II.E.–01.B that were presented in the proposed rule, but Table II.E.–01.A in this final rule includes the SAINT Neuromodulation System, as discussed later in this section, and Table II.E.–01.B in this final rule includes the updated cost information for ZEVTERA® discussed previously. Tables II.E.–01.A and II.E.–01.B in this final rule also present the newness start date, new technology add-on payment start date, 3-year anniversary date of the product’s entry onto the U.S. market, relevant final rule citations from prior fiscal years, maximum add-on payment amount, and coding assignments for each technology. We refer readers to the of the product’s entry onto the U.S. market, relevant final rule citations from prior fiscal years, maximum add-on payment amount, and coding assignments for each technology. We refer readers to the final rules cited in the following tables for a complete discussion of the new technology add-on payment application, coding, and payment amount for these technologies, including the applicable indications and discussion of the newness start date. BILLING CODE 4120–01–P 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00133 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 36668 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00134 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00135 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00136 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00136 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36671 included in the evaluation of continued eligibility. The applicant asked that CMS establish the newness start date for the SAINT Neuromodulation System to be April 5, 2024, and noted that this would allow for the new technology add-on payment to continue in FY 2026. The applicant further asserted that this accurate newness date and continued new technology add-on payment would no longer result in premature termination of payment. The applicant stated that to fulfill the requirement for an adequate period of data collection of no less than 2 and no more than 3 years, terminating the new technology add-on payment at the end of FY 2025 would fall short of two years of active new technology add-on payment. Response: We thank the applicant and the commenters for their comments and further details regarding the claims reporting the ICD–10–PCS code X0Z0X18 (Computer-assisted transcranial magne -on payment. Response: We thank the applicant and the commenters for their comments and further details regarding the claims reporting the ICD–10–PCS code X0Z0X18 (Computer-assisted transcranial magnetic stimulation of prefrontal cortex, new technology group 8). As discussed in greater detail previously in this section, we question whether, where the applicant asserts a date of commercial availability that occurred after the new technology add- on payment for the technology began, it would be appropriate to instead consider the beginning of the newness period to commence with the start of the technology’s new technology add-on payment. We note that regardless of whether we consider the beginning of the newness period to commence for SAINT Neuromodulation System on April 5, 2024; a date that reflects the start of the technology’s new technology add-on payment in FY 2024; or a date in between, the three-year anniversary date would occur after April 1, 2026, and, therefore, the technology would be considered new for FY 2026. Comment: Multiple commenters, including the applicant for EchoGo® Heart Failure 1.0 (referred to as EchoGo® Heart Failure), requested that CMS extend new technolo would be considered new for FY 2026. Comment: Multiple commenters, including the applicant for EchoGo® Heart Failure 1.0 (referred to as EchoGo® Heart Failure), requested that CMS extend new technology add-on payment for EchoGo® Heart Failure for a third year. The commenters noted that EchoGo® Heart Failure, developed by Ultromics, is an FDA-cleared, AI- powered decision support platform designed to assist clinicians in detecting heart failure with preserved ejection fraction (HFpEF) using a single, routine echocardiogram view, and described the clinical need and clinical value of the device in identifying HFpEF from a standard echocardiogram. The applicant stated that the request to extend new technology add-on payment is consistent with CMS’s longstanding policy that the newness period begins with availability of the product on the market, which is when data become available. The applicant explained that the device was not available on the market until November 2023, when it entered its first contract with a customer and invoiced a customer for the service. As such, the applicant asserted that the three-year anniversary of entry into the U.S. market would be in November of 2026. its first contract with a customer and invoiced a customer for the service. As such, the applicant asserted that the three-year anniversary of entry into the U.S. market would be in November of 2026. The applicant noted that CMS has recognized a later date where an applicant could prove a delay in actual availability of a product after FDA approval or clearance. Therefore, the applicant stated that consistent with this policy, CMS should not use the identified date of November 23, 2022 (date of FDA marketing authorization) as the newness start date for EchoGo® Heart Failure because that does not reflect when the product was first available. The applicant explained that the reason for the gap in time from FDA clearance to sales of EchoGo® Heart Failure was that upon FDA clearance, it had to perform considerable architectural and workflow changes to integrate the software into the product platform. Additionally, the applicant stated that it took considerable time to implement its product platform into a hospital’s Picture Archiving and Communication System (PACS) and electronic health record (EHR) systems, all of which delayed it being able to have a viable and available product for t platform into a hospital’s Picture Archiving and Communication System (PACS) and electronic health record (EHR) systems, all of which delayed it being able to have a viable and available product for which it could sign a commercial contract until 12 months after clearance. The applicant explained that it was not until late in 2023 that it could pursue contracts with customers, the first of which was signed in November of 2023, leading to a first invoice dated November 30, 2023. The applicant further stated that in light of this information, supplemented by its understanding that there are no claims for the ICD–10–PCS procedure code tied to the technology (XXE2X19) in the MedPAR database of FY 2023 claims, it asked CMS to apply its current policy and consider the starting point for the newness period for EchoGo® Heart Failure to begin in November of 2023, not November of 2022, such that EchoGo® Heart Failure would continue to receive new technology add-on payment for FY 2026. Commenters stated that that while EchoGo® Heart Failure had been available with new technology add-on payment since October 2023, the technology is still in the early stages of adoption across U.S. hospitals. rs stated that that while EchoGo® Heart Failure had been available with new technology add-on payment since October 2023, the technology is still in the early stages of adoption across U.S. hospitals. Commenters explained that new technology add-on payment has been instrumental in facilitating access to the device by offsetting the additional costs associated with its use. However, commenters asserted that broader clinical integration and real-world evidence generation of novel technologies require more than two years, particularly in the context of hospital operational cycles, education, and ongoing validation in diverse patient populations. Commenters explained that extending new technology add-on payment for a third year would: ensure continued access to EchoGo® Heart Failure for Medicare beneficiaries, particularly as hospitals complete the necessary training and workflow adjustments; support ongoing data collection and outcomes research, further establishing the clinical and economic value of the technology; and encourage adoption in a wider range of hospital settings, including those serving high-risk and underserved populations disproportionately affected by HFpEF. The appli mic value of the technology; and encourage adoption in a wider range of hospital settings, including those serving high-risk and underserved populations disproportionately affected by HFpEF. The applicant stated that if CMS did not believe this extension is warranted under current policy, it should make changes to the new technology add-on payment policy to provide new technology add-on payment for three years for all technologies, similar to what was done under the hospital outpatient prospective payment system pass-through policy. The applicant explained that it can take a considerable period of time for a new technology to enter into the market, and that having a later year’s data should provide more fulsome data set for rate setting. The applicant stated that CMS should not settle for data that would not be insufficient, but instead should strive to use as fulsome a data set as possible when making the important determination as to how to work a new technology into the MS–DRGs. Response: We thank the applicant and commenters for their comments. We note that while CMS may consider a documented delay in the technology’s market availability in our determination of newness, our pol ponse: We thank the applicant and commenters for their comments. We note that while CMS may consider a documented delay in the technology’s market availability in our determination of newness, our policy for determining whether to extend new technology add- on payments for an additional year generally applies regardless of the volume of claims for the technology after the beginning of the newness period (83 FR 41280). We do not consider the date of first sale of a product, or first shipment of a product, as an indicator of the entry of a product onto the U.S. market; neither of these dates indicate when a technology in fact became available for sale. Similarly, our policy for determining whether to extend new technology add-on payments for a third year generally VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00137 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36672 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations applies regardless of the claims volume for the technology after the start of the newness period (88 FR 58801 through 58802). The applicant stated the devic day, August 4, 2025 / Rules and Regulations applies regardless of the claims volume for the technology after the start of the newness period (88 FR 58801 through 58802). The applicant stated the device was not available on the market until November 2023, which is when the applicant was able to enter its first contract with a customer and invoice a customer for the service; however, it is not clear to us when the technology first became available for sale. The applicant noted that it was not until late in 2023 that it had taken such steps that it could pursue contracts with customers, the first of which was signed in November of 2023, leading to a first invoice dated November 30, 2023. However, it seems that a viable product would have needed to be available for sale before the applicant would be able to pursue and enter its first contract. Furthermore, we note that according to the applicant’s website, the device was available in the United States as of the press release on July 5, 2023,21 if not earlier. This further conflicts with the applicant’s assertion that the device was not available for sale until November 2023. Therefore, we cannot determine a newness date based on a docu 3,21 if not earlier. This further conflicts with the applicant’s assertion that the device was not available for sale until November 2023. Therefore, we cannot determine a newness date based on a documented delay in the technology’s availability on the U.S. market. Accordingly, we are 21 CMS Establishes HCPCS code for Ultromics EchoGo® Heart Failure, Accelerating Access to Precision HFpEF Detection: https:// www.ultromics.com/press-releases/cms-establishes- hcpcs-code-for-echogo-heart-failure-accelerating- access-to-precision-hfpef-detection. finalizing that we consider November 23, 2022, the date on which the technology received FDA 510(k) clearance for the indication covered by its Breakthrough Device designation, to be the date the technology became available on the market and the beginning of its newness period. We also disagree with the applicant’s request that if CMS does not believe this extension is warranted under current policy, we should make changes to the new technology add-on payment policy to provide new technology add-on payment for three years for all technologies, similar to the hospital outpatient prospective payment system pass-through policy, to allow for as fu d-on payment policy to provide new technology add-on payment for three years for all technologies, similar to the hospital outpatient prospective payment system pass-through policy, to allow for as fulsome a data set as possible. When we had stated in the FY 2025 IPPS/LTCH PPS final rule (89 FR 69241) that we did not believe that 2 years’ worth of data would be insufficient to inform rate- setting for the inpatient setting, we also noted that, as described in the FY 2005 IPPS final rule (69 FR 49003), even if a technology does not receive new technology add-on payments, CMS continues to pay for new technologies through the regular payment mechanism established by the DRG payment methodology. In addition, the costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any eligible outlier payment is added to the DRG-adjusted base payment rate (88 FR 58648). We further noted that whether a technology receives new technology add-on payments or not does not affect coverage of the outlier payment is added to the DRG-adjusted base payment rate (88 FR 58648). We further noted that whether a technology receives new technology add-on payments or not does not affect coverage of the technology or the ability for hospitals to provide a technology to patients where appropriate. After consideration of the public comments we received, we are finalizing our proposal to discontinue new technology add-on payments for the technologies as listed in the proposed rule and in the following Table II.E.-02 of this final rule for FY 2025 because they are no longer ‘‘new’’ for purposes of new technology add-on payments. We note that Table II.E.-02 is the same as Table II.E.-02 that was presented in the proposed rule, but Table II.E.-02 in this final rule no longer lists the SAINT Neuromodulation System, as discussed previously. This Table II.E.-02 also presents the newness start date, new technology add-on payment start date, the 3-year anniversary date of the product’s entry onto the U.S. market, and relevant final rule citations from prior fiscal years. We refer readers to the final rules cited in the following table for a complete discussion of each new technology add- on pay he U.S. market, and relevant final rule citations from prior fiscal years. We refer readers to the final rules cited in the following table for a complete discussion of each new technology add- on payment application and the coding and payment amount for these technologies, including the applicable indications and discussion of the newness start date. BILLING CODE 4120–01–P 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00138 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36673 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00139 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00140 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36675 be used to currently identify the R/R B– ALL indication for AUCATZYL® under the ICD–10–CM coding system a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36675 be used to currently identify the R/R B– ALL indication for AUCATZYL® under the ICD–10–CM coding system. As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered ‘‘new’’ for the purpose of new technology add-on payments. With respect to the substantial similarity criteria, the applicant asserted is not substantially that AUCATZYL® similar to other currently available technologies because it has a distinct immune-modulating mechanism of action and first-in-class tumor burden- guided dosing indicated for the treatment of adults with R/R B–ALL, and that therefore, the technology meets the newness criterion. More specifically, the applicant asserted that AUCATZYL® is the only CAR T-cell therapy constructed using the differentiated 4– 1BB co-stimulatory domain with a novel, proprietary low affinity, fast off- rate CAT19 binding domain, and tumor burden-guided dosing. The following table summarizes the applicant’s assertions reg 4– 1BB co-stimulatory domain with a novel, proprietary low affinity, fast off- rate CAT19 binding domain, and tumor burden-guided dosing. The following table summarizes the applicant’s assertions regarding the substantial similarity criteria. Please see the online application posting for AUCATZYL® for the applicant’s complete statements in support of its assertion that AUCATZYL® similar to other currently available technologies. BILLING CODE 4120–01–P is not substantially 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00141 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 36676 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k BILLING CODE 4120–01–C As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18092), we had the following concerns with regard to the newness criterion. We noted that the applicant asserted that AUCATZYL® does not use the same or VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00142 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 20 plicant asserted that AUCATZYL® does not use the same or VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00142 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00143 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36678 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations action. These components included the CAT19 fast off-rate binder, the CD8- derived hinge region/transmembrane domain, the 4–1BB co-stimulatory domain, shown to enhance CAR T-cell expansion and reduce exhaustion compared with CD28 CARs in preclinical studies, and the CD3-zeta activation domain. The applicant reiterated that shorter cell-cell contact resulting from the greater than 40-fold lower affinity of CAT19 (off-rate of 3.7 minutes) compared with the FMC63 antigen-binding domain used in other currently available CAR T-cell therapy, including TECARTUS® cytokine release and toxicity and CAR T-cell exhaustion, and enhances CAR T- cell persistence. The applicant also reiterated that the 4–1BB co-stimulatory domain is also highly differentiated from the cytokine release and toxicity and CAR T-cell exhaustion, and enhances CAR T- cell persistence. The applicant also reiterated that the 4–1BB co-stimulatory domain is also highly differentiated from the CD28 co-stimulatory domain used in TECARTUS® distinct signaling pathway results in lower T-Cell activation, increased mitochrondrial biogenesis, greater oxidative metabolism, and sustained CAR T-Cell persistence. ; the 4–1BB , reduces The applicant stated although it agreed that both AUCATZYL® and TECARTUS® target and kill CD19- expressing cancer cells, AUCATZYL® has a differentiated mechanism of action in how it binds CD19, with the key difference residing in the components of the respective CAR constructs. The applicant described differences in the CAR single chain variable fragments (scFv) for each technology and how they were derived, as well as the differing co- stimulatory domains, reiterating that the resulting shorter target interaction with targeT-Cells for AUCATZYL® due to its lower affinity for CD19 mimics physiologic T-cell activation, and the 4– 1BB co-stimulatory domain is generally associated with longer persistence. The applicant stated that the use of these different ower affinity for CD19 mimics physiologic T-cell activation, and the 4– 1BB co-stimulatory domain is generally associated with longer persistence. The applicant stated that the use of these different features in AUCATZYL® to a unique mechanism of action characterized by differentiated binding kinetics, engraftment, persistence and immune-elicited responses. Regarding differentiated binding kinetics, the applicant stated that the CD19 (CAT) CAR binds CD19 with an above 40-fold lower affinity, resulting in faster disengagement, and >40 shorter half-life compared to the CD19 (FMC63) CAR used in currently marketed CAR–Ts, including TECARTUS® (CAT 3.73 min vs FMC63 2.8 hours). Per the applicant, both antibodies bind to an overlapping epitope of CD19 consisting of residues within loops 1 and 2 of the CD19 ectodomain and provided a chart that shows the results of the Ghorashian (2019) study. The applicant stated that, leads in particular, in in vitro studies, AUCATZYL® showed a higher equilibrium dissociation constant with CAT scFv (14 nM) as a result of a much faster off-rate (CAT: 3.1 × 10¥3 s¥1 vs FMC63: 6.8 × 10¥5 s¥1), whereas the on-rate was equivalent compared to FMC63 scFv (CAT: 2 rium dissociation constant with CAT scFv (14 nM) as a result of a much faster off-rate (CAT: 3.1 × 10¥3 s¥1 vs FMC63: 6.8 × 10¥5 s¥1), whereas the on-rate was equivalent compared to FMC63 scFv (CAT: 2.2 × 105 M¥1s¥1 vs FMC63: 2.1 × 105 M¥1s¥1). According to the applicant, the fast off-rate and subsequent shorter cell-cell contact is advantageous by reducing cytokine release and thereby reducing toxicity, as well as reducing T-cell exhaustion, which enhances CAR T-cell persistence. The applicant stated that these features are designed to address major limitations of CAR T-cell therapy in B– ALL, namely, toxicity and lack of durable responses. Regarding engraftment and , differenT-Cell persistence, the applicant stated that owing to the differentiated binding kinetics of AUCATZYL® kinetics at initial expansion and persistence compared to TECARTUS® are observed. According to the applicant, the pharmacokinetics for each patient in the Infused Set of Cohort IIA (N=94) of the FELIX study were assessed between Day 1 and Day 28, and AUCATZYL® demonstrated a rapid and high level of expansion of the cells following infusion. The overall geometric mean of Cmax was 114,982 copies/mg/deoxyribon e assessed between Day 1 and Day 28, and AUCATZYL® demonstrated a rapid and high level of expansion of the cells following infusion. The overall geometric mean of Cmax was 114,982 copies/mg/deoxyribonucleic acid (DNA) (range 129–600,000 copies/mg DNA) with a median time to maximum (or peak) concentration (Tmax) of 14 days (range 2–55 days) and a geometric mean AUC0–28d of 1,138,188 copies/mg DNA (range 179,000–7,230,000 copies/mg DNA * day). The applicant stated that expansion, measured by droplet digital PCR (ddPCR), was high regardless of whether patients achieved complete remission/complete remission with incomplete count recovery (CR/CRi) or not. Per the applicant, no biologically significant differences were seen in the geometric mean or median, interquartile range of Cmax. Per the applicant, in CR/ CRi patients, approximately 68.4 percent (54.6 percent–78.7 percent 95 percent confidence interval [CI]) demonstrated persistence at 6 months with a maximum duration of 21 months. The applicant added that 75 percent (27/36) of the patients who had ongoing remission as of the data cut-off date had ongoing CAR T persistence at the last laboratory assessment as of the data cut- off da applicant added that 75 percent (27/36) of the patients who had ongoing remission as of the data cut-off date had ongoing CAR T persistence at the last laboratory assessment as of the data cut- off date. According to the applicant, in comparison to other FMC63-based CARs approved for ALL, such as TECARTUS® 38.35 cells/uL (range: 1.31–1533.4) and median AUC0–28 was 424.03 cells/uL × , the median Cmax was day (range: 14.12–19390.42) in responding patients treated with TECARTUS® (ZUMA–3 trial) compared to 0.49 cells/uL (range 0.0–183.50) and 4.12 cells/uL × day (range 0.0–642.25) for Cmax and AUC0–28d respectively for non-responders. The applicant added that no CAR persistence was seen for TECARTUS® beyond 3 months by flow cytometry and 6 months by ddPCR. in the ZUMA–3 trial Per the applicant, not only was CAR– T expansion generally lower for TECARTUS® than that seen for AUCATZYL® , an even lower expansion was observed in patients who did not respond compared to patients who responded, and CAR–T expansion of AUCATZYL® demonstrated a less than 3-fold increase in patients in CR/CRi vs patients not in CR/CRi. According to the applicant, this is strikingly different from TECARTUS® where ∼ d CAR–T expansion of AUCATZYL® demonstrated a less than 3-fold increase in patients in CR/CRi vs patients not in CR/CRi. According to the applicant, this is strikingly different from TECARTUS® where ∼80-fold increase in CAR–T expansion is seen in CR/CRi vs patients not in CR/CRi and where there is minimal CAR–T expansion in patients not in CR/CRi (0.49 cell/uL). The applicant referred to the chart that shows the comparative results of the Ghorashian (2019) study. The applicant further stated that the . Per the applicant, at an immune-elicited responses for AUCATZYL® are not similar to TECARTUS® early stage of AUCATZYL® development, it was hypothesized that the scFv of obe-cel’s CAT CAR with a greatly reduced affinity for CD19 would improve the post-infusion immune- mediated cytokine release kinetics and toxicity profile common to currently marketed CAR Ts using the FMC63 CAR construct. The applicant stated that the novel 2-step fractionated tumor burden- guided dosing regimen further enhances the ability to reduce immunotoxicity, which has been linked to both disease burden and expansion of CAR T-cells. The applicant stated that supportive data from a number of different CD19 CAR T nhances the ability to reduce immunotoxicity, which has been linked to both disease burden and expansion of CAR T-cells. The applicant stated that supportive data from a number of different CD19 CAR T-cell trials in acute lymphoblastic leukemia indicated that higher disease burden is predictive of more severe CRS. The applicant further stated this led some groups to mitigate this toxicity by either administering a lower dose of CAR T-cells to patients with higher disease burden or splitting the total dose. Furthermore, the applicant stated that tumor burden-guided dosing provides an opportunity to tailor AUCATZYL® doses based on the patient-specific tumor burden, which may reduce the extent and rate of expansion, and thereby affect the severity of CRS. The applicant stated that spacing between the dose fractions takes into consideration the duration of IL–15 surge following lymphodepletion VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00144 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36679 . The applicant stated inf UR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36679 . The applicant stated infusion. The applicant (LD), which is important for CAR T-cell expansion and function as well as timing of early signals of subsequent severe toxicity. The applicant also stated that tumor burden-guided dose is also unlikely to increase the risk of immune-mediated reactions to the murine sequence present in the CD19 antigen-binding domain of AUCATZYL® thaT-Cellular immune response at the time of the second dose, on Day 10, will be significantly reduced by the LD chemotherapy administered before AUCATZYL® added that the humoral immune response, which takes approximately 14 days to be generated, will be impaired by the B cell aplasia and subsequent hypogammaglobulinaemia induced by the CD19 CAR T-cells administered on Day 1. The applicant also stated that a range of serum biomarkers were evaluated in the FELIX study, and per the applicant, in accordance with AUCATZYL® ’s distinct immune- modulating mechanism of action, the profiles observed for induced inflammatory soluble serum biomarkers ated in the FELIX study, and per the applicant, in accordance with AUCATZYL® ’s distinct immune- modulating mechanism of action, the profiles observed for induced inflammatory soluble serum biomarkers were overall consistently and considerably lower than those reported for TECARTUS® in the ZUMA–3 trial. The applicant illustrated this finding with a table that compares selected peak inflammatory soluble serum biomarkers between the FELIX and ZUMA–3 trials. (2.4 percent vs treatment was reduced Per the applicant, the efficacy of CAR–T-cell therapy with impressive response rates in hematologic malignancies must be weighed with immune-mediated toxicities, notably CRS, a toxicity requiring urgent diagnostic and therapeutic interventions, and targeted modulation of key cytokine pathways represents the mainstay of CRS management. The applicant stated that the expected risk of developing CRS grade 3 after AUCATZYL® relative to TECARTUS® 25 percent). Per the applicant, the observed magnitude of difference in grade 3 CRS substantiates the distinct functional and biological properties of AUCATZYL® acknowledged the limitations of unadjusted comparisons between single- arm trials and conducted difference in grade 3 CRS substantiates the distinct functional and biological properties of AUCATZYL® acknowledged the limitations of unadjusted comparisons between single- arm trials and conducted a prospectively designed matching- adjusted indirect comparison (MAIC) of AUCATZYL® and TECARTUS® which, per the applicant, demonstrated that patients treated with TECARTUS® are significantly more likely to experience a grade 3 CRS event or immune-mediated neurotoxicity relative to patients treated with AUCATZYL® . . The applicant The applicant concluded that AUCATZYL® ’s immune-modulating mechanism of action is not the same or substantially similar to TECARTUS® because the novel CD19 (CAT) CAR in AUCATZYL® exhibits distinct functional and biological characteristics, notably lower affinity binding kinetics, prolonged persistence, and a differentiated immune-modulating mechanism of action that leads to a marked decrease in the release of inflammatory cytokines and a decrease in the incidence of grade 3 CRS and immune-mediated neurotoxicity. According to the applicant and is not is non-similar in its mechanism of several commenters, KYMRIAH® a relevant comparator for treatment of the Med e of grade 3 CRS and immune-mediated neurotoxicity. According to the applicant and is not is non-similar in its mechanism of several commenters, KYMRIAH® a relevant comparator for treatment of the Medicare population, as it is only approved for treatment of patients aged 25 or younger with R/R B–ALL. The applicant stated that in the pivotal AUCATZYL® Phase 2 Cohort IIA FELIX study population (n=94, infused), the median age was 50 years (range 20–81), with 88.3 percent over the age of 25. The applicant, as well as several commenters, also stated that while KYMRIAH® also uses the 4–1BB co- stimulatory domain, its scFv is FMC63- derived and therefore differences in binding kinetics described previously for TECARTUS® apply to KYMRIAH® as well. The applicant stated that therefore, AUCATZYL® to KYMRIAH® action and its intended population. In addition, the applicant stated that AUCATZYL® has a fundamentally different mechanism of action as a CAR T-cell therapy compared to immunotherapy, BLINCYTO® and BESPONSA® BLINCYTO® engager molecule derived from two distinct monoclonal antibodies that bind CD19 and CD3, while BESPONSA® is an antibody-drug conjugate (ADC) composed of a CD22-directed mo YTO® and BESPONSA® BLINCYTO® engager molecule derived from two distinct monoclonal antibodies that bind CD19 and CD3, while BESPONSA® is an antibody-drug conjugate (ADC) composed of a CD22-directed monoclonal IgG4 antibody linked to a cytotoxic agent. The applicant also explained that while immunotherapy is recommended as first-line treatment and considered superior to standard chemotherapy, CAR T-cell therapy is recommended following immunotherapy. The applicant stated that therefore, the focus of the substantial similarity test for AUCATZYL® should be TECARTUS® . The applicant stated that is a bispecific T-cell . is Response: We appreciate the additional information from the applicant and commenters with respect to whether AUCATZYL® substantially similar to existing technologies. We agree that AUCATZYL® has a different mechanism of action as a CD19-directed CAR T-cell therapy compared to BLINCYTO® and BESPONSA® , which are bispecific T- cell engager molecule and antibody- is , it therefore treats a drug conjugates. We also agree with the applicant that because KYMRIAH® only approved for treatment of patients aged 25 or younger, representing a very small fraction of adults compare refore treats a drug conjugates. We also agree with the applicant that because KYMRIAH® only approved for treatment of patients aged 25 or younger, representing a very small fraction of adults compared to AUCATZYL® different population and is not substantially similar. However, we disagree with the applicant and commenters that AUCATZYL® has a unique mechanism of action because we do not believe there is a clear differentiation between the mechanism of action of AUCATZYL® and that of TECARTUS® . While the applicant highlights differences such as the binding domain, costimulatory/ activation domains, binding kinetics, and dosing regimen, we do not believe these meaningfully differentiate the mechanism of action of AUCATZYL® from other CD19-directed CAR T-cell therapies, which are all genetically modified autologous T-cell immunotherapies that bind to CD–19 expressing cancer cells. We refer the reader to the FY 2019 and FY 2022 IPPS/LTCH PPS final rules (83 FR 41287 through 41291, and 86 FR 44999 through 45000) for further discussion of this issue, where we determined that the mechanisms of action for CAR T-cell therapies were not new based on similar factors. While the applicant sta FR 44999 through 45000) for further discussion of this issue, where we determined that the mechanisms of action for CAR T-cell therapies were not new based on similar factors. While the applicant stated that AUCATZYL® uses a fast-on-fast-off mechanism, we disagree that a shorter length of binding time for AUCATZYL® represents a different mechanism of action than the other CAR T-cell therapies. We also disagree that any association between AUCATZYL® ’s binding and the rates of CRS and ICANS would represent the technology’s mechanism of action, nor would CAR T- cell persistence and how it affects durability of response, as any differences between AUCATZYL® and existing technologies in observed outcomes would relate to an assessment of substantial clinical improvement rather than the newness criterion. Therefore, after consideration of the ’s newness, we believe comments we received on AUCATZYL® that AUCATZYL® and TECARTUS® use the same mechanism of action to achieve a therapeutic outcome: the binding to CD19 by a CAR construct, which results in T-cell activation and killing of malignant cells in the treatment of B–ALL, and are assigned to the same MS–DRG. We also agree with the appl e: the binding to CD19 by a CAR construct, which results in T-cell activation and killing of malignant cells in the treatment of B–ALL, and are assigned to the same MS–DRG. We also agree with the applicant that AUCATZYL® treats the same or similar patient population and disease as TECARTUS® , which is used in treatment for adult patients with R/R B–ALL. Because AUCATZYL® meets all three of the substantial similarity criteria, we VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00145 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36680 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations . . In accordance is substantially ’s entry onto the market believe AUCATZYL® similar to TECARTUS® with our policy, because these technologies are substantially similar to each other, we use the earliest market availability date as the beginning of the newness period for AUCATZYL® Therefore, we consider the newness period for AUCATZYL® to begin on October 1, 2021, the date TECARTUS® became commercially available. Since the 3-year anniversary date of TECARTUS® occurred prior to FY 2026, AUCAT consider the newness period for AUCATZYL® to begin on October 1, 2021, the date TECARTUS® became commercially available. Since the 3-year anniversary date of TECARTUS® occurred prior to FY 2026, AUCATZYL® does not meet the newness criterion and is not eligible for new technology add-on payments for FY 2026. We note that we received public comments with regard to the cost and substantial clinical improvement criteria for this technology, but because we have determined that the technology does not meet the newness criterion and therefore is not eligible for approval for new technology add-on payments for FY 2026, we are not summarizing comments received or making a determination on those criteria in this final rule. b. AURLUMYNTM (iloprost injection) SERB Pharmaceuticals submitted an application for new technology add-on payments for AURLUMYNTM for FY 2026. According to the applicant, AURLUMYNTM is an intravenous form of iloprost associated with immediate generalized vasodilation, immunomodulation, and anti- inflammation indicated for the treatment of severe frostbite in adults to reduce the risk of digit amputations. Please refer to the online application posting for AURLUMYNTM, ava modulation, and anti- inflammation indicated for the treatment of severe frostbite in adults to reduce the risk of digit amputations. Please refer to the online application posting for AURLUMYNTM, available at https://mearis.cms.gov/public/ publications/ntap/NTP241007QK29V, for additional detail describing the technology and the disease treated by the technology. With respect to the newness criterion, according to the applicant, FDA granted NDA approval for AURLUMYNTM on February 13, 2024, for the treatment of severe frostbite in adults to reduce the risk of digit amputations. Per the applicant, the commercial launch of AURLUMYNTM was delayed until the NDA sponsor could secure a capable commercial partner. Per the applicant, it acquired AURLUMYNTM globally on October 18, 2024, and prepared for launch aligned with the beginning of the winter season. The applicant stated that the technology became available for sale on November 12, 2024. In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18096), we stated we were interested in additional information regarding the cause of any delay in the technology’s commercial availability, including additional details about the preparation for laun 18096), we stated we were interested in additional information regarding the cause of any delay in the technology’s commercial availability, including additional details about the preparation for launch that aligned with the beginning of the winter season. According to the applicant, AURLUMYNTM is administered as a continuous intravenous (IV) infusion over 6 hours per day, increased in increments up to a maximum dose of 2 ng/kg/minute, for up to a maximum of 8 consecutive days. The applicant expected that AURLUMYNTM will be dosed in the inpatient setting for 8 consecutive days using a total of eight single-use vials (one per day). The applicant submitted a request for unique ICD–10–PCS procedure codes for AURLUMYNTM beginning in FY 2026 and was granted approval for the following procedure codes effective October 1, 2025: XW033QB (Introduction of iloprost into peripheral vein, percutaneous approach, new technology group 11) and XW043QB (Introduction of iloprost into central vein, percutaneous approach, new technology group 11). The applicant provided a list of diagnosis codes that may be used to currently identify the indication for AURLUMYNTM under the ICD–10–CM coding system. Plea aneous approach, new technology group 11). The applicant provided a list of diagnosis codes that may be used to currently identify the indication for AURLUMYNTM under the ICD–10–CM coding system. Please refer to the online application posting for the complete list of ICD–10–CM codes provided by the applicant. As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered ‘‘new’’ for the purpose of new technology add-on payments. With respect to the substantial similarity criteria, the applicant asserted that AURLUMYNTM is not substantially similar to other currently available technologies because it is the first-ever FDA-approved treatment for frostbite of any grade and is specifically indicated for the treatment of severe frostbite in adults to reduce the risk of finger or toe amputation, and therefore, the technology meets the newness criterion. The following table summarizes the applicant’s assertions regarding the substantial similarity criteria. Please see the online application posting for AURLUMYNTM for the applicant e newness criterion. The following table summarizes the applicant’s assertions regarding the substantial similarity criteria. Please see the online application posting for AURLUMYNTM for the applicant’s complete statements in support of its assertion that AURLUMYNTM is not substantially similar to other currently available technologies. BILLING CODE 4120–01–P 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00146 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36681 BILLING CODE 4120–01–C In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18097), we noted that the applicant asserted that AURLUMYNTM is not assigned to the same MS–DRG as existing technologies. However, as the applicant also stated that AURLUMYNTM will map to MS– DRGs based on diagnosis/procedure codes, we stated our belief that the use of AURLUMYNTM will not change the MS–DRG assignment and will, therefore, map to the same MS–DRGs as other treatments for severe frostbite. In addition, while the applicant asserted that AURLUMYNTM does not treat the same or sim ge the MS–DRG assignment and will, therefore, map to the same MS–DRGs as other treatments for severe frostbite. In addition, while the applicant asserted that AURLUMYNTM does not treat the same or similar type of disease and the same or similar patient population as existing treatments because it is the first-ever FDA-approved treatment for frostbite, we noted that there are other severe frostbite treatments that are commonly used including rapid rewarming, fasciotomy, thrombolysis, and sympathectomy. We invited public comments on whether AURLUMYNTM is substantially similar to existing technologies and whether AURLUMYNTM meets the newness criterion. Comment: A few commenters, including the applicant, stated that AURLUMYNTM meets the newness criterion because it is the only FDA- approved treatment for severe frostbite and the only available intravenous formulation of iloprost, which enhances blood flow and accelerates the healing VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00147 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00148 Fmt 4701 Sfmt rm 00147 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00148 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36683 Because the final inflated average case-weighted standardized charge per case exceeded the average case- weighted threshold amount in both scenarios, the applicant asserted that AURLUMYNTM meets the cost criterion. We invited public comments on whether AURLUMYNTM meets the cost criterion. Comment: Multiple commenters, inclusive of the applicant, stated that AURLUMYNTM meets the cost criterion. A few commenters also asserted that the current DRG payments for an inpatient hospitalization for severe frostbite are inadequate to account for the total cost of care and suggested that, without approval of new technology add-on payments, hospitals may not be able to use AURLUMYNTM for the treatment of frostbite in Medicare patients. Response: We thank the applicant and other commenters for their comments. Based on the information submitted by the applicant as part of its F YNTM for the treatment of frostbite in Medicare patients. Response: We thank the applicant and other commenters for their comments. Based on the information submitted by the applicant as part of its FY 2026 new technology add-on payment application, as previously summarized, the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount under both scenarios. Therefore, we agree that AURLUMYNTM meets the cost criterion. With regard to the substantial clinical improvement criterion, the applicant asserted that AURLUMYNTM represents a substantial clinical improvement over existing technologies because AURLUMYNTM substantially lowers the risk of digit amputation in severe frostbite cases. Additionally, the applicant claimed that, by reducing the risk of finger and toe amputations in adults with severe frostbite, AURLUMYNTM mitigates debilitating, lifelong health-related, functional, and work-related impacts associated with digit amputation. The applicant provided four documents, including two studies and clinical practice guidelines to support these claims, as well as two background articles about a classification system for fr putation. The applicant provided four documents, including two studies and clinical practice guidelines to support these claims, as well as two background articles about a classification system for frostbite severity and the prevention and clinical treatment of frostbite.25 The following table summarizes the applicant’s assertions regarding the substantial clinical improvement criterion. Please see the online posting for AURLUMYNTM for the applicant’s complete statements regarding the substantial clinical improvement criterion and the supporting evidence provided. 25 Background articles are not included in the following table but can be accessed via the online posting for the technology. 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00149 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00150 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00151 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00151 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36686 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations important treatment option for patients with severe frostbite who are contraindicated for the off-label use of tPA. In addition, a few commenters, including the applicant, asserted that AURLUMYNTM is an important component of a multimodal treatment regimen that includes pharmacologic and non-pharmacologic treatment for frostbite, such as rewarming, pain management, systemic hydration, and pharmacologic treatment. These commenters further stated that although non-pharmacologic post-thaw medical therapy, such as hydrotherapy, hyperbaric oxygen therapy (HBOT), sympathectomy, and fasciotomy, should be considered in a multimodal frostbite treatment regimen, these therapies do not replace AURLUMYNTM and instead are complementary. To demonstrate this, the applicant stated that they attached or enclosed two examples of clinical practice protocols for frostbite, which vary do not replace AURLUMYNTM and instead are complementary. To demonstrate this, the applicant stated that they attached or enclosed two examples of clinical practice protocols for frostbite, which vary from institution to institution, but we note that there were no enclosures/attachments of that nature. In response to CMS’s concern as to whether the Cauchy et al. (2011) and Crooks et al. (2022) studies were sufficiently comparable and demonstrated clinically significant outcomes, the applicant reiterated the results from these two studies. The applicant also stated that Cauchy et al. (2011) reported results from the largest and only randomized, controlled, open- label study of severe frostbite treatment, which included 46 patients with grade 3 or grade 4 frostbite and 1 patient with grade 2 frostbite who were treated with buflomedil, AURLUMYNTM, or recombinant tPA plus AURLUMYNTM. The applicant also stated that the results from this study played a role in the WMS Guidelines recommending AURLUMYNTM. With regard to rapid rewarming, a commenter stated that a substantial proportion of the patients in Crooks et al. (2022) presented after the frostbitten tissue was already thawed and did AURLUMYNTM. With regard to rapid rewarming, a commenter stated that a substantial proportion of the patients in Crooks et al. (2022) presented after the frostbitten tissue was already thawed and did not undergo rapid rewarming, which may have contributed to less favorable outcomes compared to the patients in Cauchy et al. (2011) who all underwent rapid rewarming. The commenter also stated that sympathectomy has not been shown to improve outcomes in frostbite and can be performed regardless of treatment with thrombolytics or AURLUMYNTM, and fasciotomy is rarely necessary to treat frostbite but should be performed regardless of other treatments when required. In addition, the applicant cited a retrospective chart review of 22 patients and a multicenter prospective single- arm study of 28 patients. The applicant stated that the retrospective chart review of 22 patients in Whitehorse, Yukon Territory, Canada, who presented to the hospital with grade 2, 3, or 4 frostbite, found that patients treated with AURLUMYNTM, or AURLUMYNTM in addition to alteplase and heparin in the case of grade 4 frostbite, exhibited lower than expected amputation rates. Specifically, the applicant stated that ts treated with AURLUMYNTM, or AURLUMYNTM in addition to alteplase and heparin in the case of grade 4 frostbite, exhibited lower than expected amputation rates. Specifically, the applicant stated that no digits with grade 2 or 3 frostbite were amputated in patients treated with AURLUMYNTM, and 50 percent of the digits with grade 4 frostbite treated with AURLUMYNTM, alteplase, and heparin, required amputation. The applicant stated that overall, 29 of 142 (20.4 percent) digits were amputated, and the majority of digits amputated (N = 19) were from 1 patient who, according to direct correspondence with the author, was a very extreme case with frostbite extending beyond the carpal/tarsal region of the patient’s limbs.28 The applicant referenced expected rates of amputation of 1 percent for grade 2 digits, 31 to 67 percent for the grade 3 digits, and 98 to 100 percent for grade 4 digits, based on the Cauchy 2001 study.29 The applicant also stated that a multicenter prospective single-arm study of 28 patients with grade 3 or 4 frostbite conducted in Switzerland and France compared early HBOT and AURLUMYNTM to treatment with AURLUMYNTM alone. The applicant stated that after 1 year of foll udy of 28 patients with grade 3 or 4 frostbite conducted in Switzerland and France compared early HBOT and AURLUMYNTM to treatment with AURLUMYNTM alone. The applicant stated that after 1 year of follow-up, 92 percent of injured digits/limbs treated with AURLUMYNTM did not require amputation, (85 percent in the AURLUMYNTM only control group and 98 percent in the AURLUMYNTM + HBOT group).30 The applicant stated that this study’s interpretability is limited, as the study does not report the amputation outcome rate in comparable patients who did not receive AURLUMYNTM. In response to CMS’s concerns related to the Crooks et al. (2022) study’s potentially inaccurate severity grading and the adequacy of the comparator in the absence of tPA in the control group, a commenter stated that the study authors listed both factors as limitations and that some or all of the 41 patients 28 Poole A, et al. Management of severe frostbite with iloprost, alteplase and heparin. A Yu-kon case series. CMAJ open 9 (2021), E585–E591. 29 Cauchy E, et al. Retrospective study of 70 cases of severe frostbite lesions. A proposed new classification scheme. Wilderness & Environmental Medicine 2001;12, 248–255. 30 en 9 (2021), E585–E591. 29 Cauchy E, et al. Retrospective study of 70 cases of severe frostbite lesions. A proposed new classification scheme. Wilderness & Environmental Medicine 2001;12, 248–255. 30 Magnan MA, et al. Hyperbaric oxygen therapy with iloprost improves digit salvage in severe frostbite compared to iloprost alone. Medicina (Kaunas, Lathuania) 57 (2021). that presented within 24 hours had other contraindications to the use of tPA, including only grade 2 frostbite. The commenter further stated that Crooks et al. (2022) did not report which patients in the standard care group presented within 24 hours with grade 2 frostbite and noted that clinicians can sometimes have difficulty distinguishing between grade 2 and grade 3 frostbite initially, leading most clinicians to err on the side of caution and classifying the frostbite as grade 3. In response to CMS’s concern that the applicant did not present evidence that directly compared AURLUMYNTM with other therapies that are also strongly recommended by the WMS, the applicant stated that it is unaware of any published literature examining frostbite injury cases following treatment with AURLUMYNTM that are described specificall strongly recommended by the WMS, the applicant stated that it is unaware of any published literature examining frostbite injury cases following treatment with AURLUMYNTM that are described specifically referencing results of other adjunctive post-thaw treatment options described in the WMS Guidelines (hydrotherapy, sympathectomy, and fasciotomy). The applicant reiterated that iloprost is a part of the multimodal treatment protocol hospitals follow and does not replace any of these non-pharmacologic treatment approaches; nor are these options employed at the exclusion of iloprost. In response to CMS’s concern about the Cauchy et al. (2011) and Crooks et al. (2022) studies’ generalizability to the Medicare population, the applicant stated that, in its analysis of 2023 MedPAR data, Medicare paid 62 patient claims for severe frostbite, the majority of which (about 63 percent) were for Medicare beneficiaries under 65 years of age. The applicant stated that these findings mirror the age demographics in the cited AURLUMYNTM studies. The applicant also stated that evidence- based guidance for the prevention and treatment of frostbite does not vary by age groups nor by geographic region, wh graphics in the cited AURLUMYNTM studies. The applicant also stated that evidence- based guidance for the prevention and treatment of frostbite does not vary by age groups nor by geographic region, which according to the applicant, aligns with the Cauchy et al. (2011) and Crooks et al. (2022) studies’ results which demonstrate that regardless of age or geographic region, patients treated with AURLUMYNTM showed substantial clinical improvement. Another commenter stated that whether studies were conducted outside the U.S. is irrelevant as there is no evidence to suggest that the physiology of frostbite varies by location. The commenter also stated that it is prudent to treat older patients and patients with comorbidities using AURLUMYNTM when there are no contraindications because there is no evidence to suggest the effects of frostbite vary with age or that the response to treatment with VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00152 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36687 AURLUMYNTM differs between ol .SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36687 AURLUMYNTM differs between older and younger patients but frostbite outcomes are likely to be worse in older patients or patients with comorbidities, such as diabetes. The commenter further stated that the proposed rule incorrectly reports the age range in the Crooks et al. (2022) study to be between 29 to 54 years and that these were instead interquartile ranges (90 FR 18099). The applicant summarized adverse events reported in Cauchy et al. (2011) and Crooks et al. (2022), as well as a multicenter retrospective cohort study and the AURLUMYNTM prescribing information. The applicant also referenced the NDA sponsors clinical trial program for patients with systemic sclerosis who received either placebo or AURLUMYNTM to support the clinical safety of AURLUMYNTM in patients with severe frostbite. The applicant stated this clinical trial reported no deaths, study drug-related serious adverse events, or adverse events of special interest leading to study drug discontinuation, and all adverse events related to the study s clinical trial reported no deaths, study drug-related serious adverse events, or adverse events of special interest leading to study drug discontinuation, and all adverse events related to the study drug were expected and consistent with the established safety profile of AURLUMYNTM. Response: We thank the applicant and other commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received, we agree with the applicant and other commenters that AURLUMYNTM represents a substantial clinical improvement over existing technologies for the treatment of severe frostbite in adults because it reduces the risk of digit amputation compared to the standard of care, especially for patients who are contraindicated for tPA or are beyond the 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00153 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36688 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18100), we invited public comments on the use of these ICD–10–CM diagnosis codes to id l. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations In the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18100), we invited public comments on the use of these ICD–10–CM diagnosis codes to identify the indication of R/R SLL or CLL for purposes of the new technology add-on payment, if approved. Comment: We received comments expressing general support of the use of the listed ICD–10–CM codes for which CMS specifically sought input. A few commenters, including the applicant, agreed that these ICD–10–CM codes properly identify the R/R SLL/CLL indication for BREYANZI® commenters also suggested that CMS consider four additional diagnosis codes that also identify the indication of R/R SLL/CLL, including C91.Z0 (Other lymphoid leukemia not having achieved remission), C91.Z2 (Other lymphoid leukemia, in relapse), C91.90 (Lymphoid leukemia, unspecified not having achieved remission), and C91.92 . One of the (Lymphoid leukemia, unspecified, in relapse). Response: We thank the applicant and commenters for their input. We note that the four additional ICD–10–CM codes describing ‘‘other lymphoid leukemia’’ and ‘‘lymphoid leukemia, unspecified’’ are not specific to SLL or CLL. Therefore, nd commenters for their input. We note that the four additional ICD–10–CM codes describing ‘‘other lymphoid leukemia’’ and ‘‘lymphoid leukemia, unspecified’’ are not specific to SLL or CLL. Therefore, we do not believe those diagnosis codes are appropriate to identify the indication of R/R SLL/CLL. We agree with the applicant that the codes listed by the applicant accurately identify the indication for BREYANZI® . As previously discussed, if a technology meets all three of the substantial similarity criteria under the newness criterion, it would be considered substantially similar to an existing technology and would not be considered ‘‘new’’ for the purpose of new technology add-on payments. With respect to the substantial similarity criteria, the applicant asserted is not substantially that BREYANZI® similar to other currently available technologies because BREYANZI® does not use the same or similar mechanism of action as other therapies approved for the treatment of R/R CLL/SLL, is not assigned to the same MS–DRG as other therapies currently approved for the treatment of R/R CLL/SLL, and does not involve treatment of the same or similar type of disease and patient population as o ot assigned to the same MS–DRG as other therapies currently approved for the treatment of R/R CLL/SLL, and does not involve treatment of the same or similar type of disease and patient population as other CAR T-cell therapies, and that therefore, the technology meets the newness criterion. The following table summarizes the applicant’s assertions regarding the substantial similarity criteria. Please see the online application posting for BREYANZI® for the applicant’s complete statements in support of its assertion that BREYANZI® is not substantially similar to other currently available technologies. BILLING CODE 4120–01–P 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00154 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00155 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00156 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00157 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 00 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00157 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00158 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36693 , are not preferred 31.4 and 31.7 months of follow up respectively. The applicant further stated that PI3Kis, such as Copiktra® and Zydelig® treatment options for double class exposed patients due to their benefit- risk profile. The applicant noted that 31 percent of Copiktra® -treated patients and 48 percent of Zydelig® -treated patients experienced fatal/serious infections, while 18 percent and 20 percent of patients experienced fatal/ serious diarrhea or colitis respectively. The applicant added that 15 percent of Copiktra® -treated patients demonstrated treatment-related mortality, and accordingly, an FDA expert panel voted on April 21, 2022 t hea or colitis respectively. The applicant added that 15 percent of Copiktra® -treated patients demonstrated treatment-related mortality, and accordingly, an FDA expert panel voted on April 21, 2022 to recommend that future FDA approvals of PI3Kis be supported by randomized data, rather than single-arm data only, and further discontinuing the use of almost all PI3Kis in hematologic treatment. Another commenter stated that CMS’s inquiry into whether there is a particular subpopulation that is unresponsive to or ineligible for alternatives to BREYANZI® did not recognize that a new treatment line in a chronic cancer can offer an incremental, additive survival benefit. In response to CMS’s concern about the lack of historical controls in the single-arm TRANSCEND CLL 004 trial to compare the effects of BREYANZI® on clinical outcomes, the applicant stated that it conducted an external control arm analysis to compare BREYANZI® to the standard of care treatments for double case exposed patients with R/R CLL/SLL using patients from the TRANSCEND CLL 004 monotherapy cohort matched to real- world patients from U.S. oncology practice and cancer centers. Per the applicant, to ensure fair and ro s with R/R CLL/SLL using patients from the TRANSCEND CLL 004 monotherapy cohort matched to real- world patients from U.S. oncology practice and cancer centers. Per the applicant, to ensure fair and robust comparisons, it employed an advanced causal inference methodology, Inverse Probability of Treatment Weighting combined with regression modeling, to adjust for the differences in patient and disease characteristics between the clinical trial and the real-world cohorts. The applicant stated that this analysis demonstrated that BREYANZI® significantly improved response, including higher CR rates ([95% CI] of 17.9% [9–34] for BREYANZI® vs 2.2% [1–5]) for standard of care treatments, P 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00159 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36694 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations . The applicant 004 study, which was the cohort of patients who experienced disease progression while on BTKi and failed to respond to Venclexta® asserted that BREYANZI® uniquely demonstrates efficacy in an especially high-risk, refractory, and disea patients who experienced disease progression while on BTKi and failed to respond to Venclexta® asserted that BREYANZI® uniquely demonstrates efficacy in an especially high-risk, refractory, and disease- aggressive population, which was not represented in the Jaypirca® study. The applicant further stated that it is inappropriate to compare the outcomes of BREYANZI® ’s primary efficacy analysis set to those of the Jaypirca® study, who showed a median PFS of 16.8 months, because the patient population of the Jaypirca® study was previously treated with a BTKi and Venclexta® but not required to exhibit refractoriness to these treatments. The applicant further commented that the Jaypirca® study showed that the median PFS of double class exposed patients treated with Jaypirca® decreased to 15.9 months at a median follow-up of 27.5 months. The applicant contrasted these results to those of the TRANSCEND trial, in which 80 percent of the treated patients were double class exposed, and the median PFS for these patients remained at 18 months and among the patients who responded to BREYANZI® the median PFS was 26.2 months at a median follow-up of 31.7 months. The applicant further stated that an PFS for these patients remained at 18 months and among the patients who responded to BREYANZI® the median PFS was 26.2 months at a median follow-up of 31.7 months. The applicant further stated that BREYANZI® disease remission, which is manifested as health-related quality of life improvements in the R/R CLL/SLL population. Per the applicant, in the TRANSCEND–CLL–004 trial, clinically meaningful improvements were achieved in the key domains of global health status/quality of life, physical function, role functioning, symptom burdens, and fatigue after BREYANZI® infusion, and exceeded the pre-defined minimum important difference thresholds. The applicant also stated that BREYANZI® ’s one-time infusion eliminates the compliance and adherence challenges commonly associated with existing continuous treatment technologies. results in treatment-free , Another commenter stated that part of the clinical improvement BREYANZI® offers by virtue of being the only approved CAR T-cell therapy indicated for R/R CLL/SLL is the additional survival benefit from a new line of treatment for patients with few available options. The commenter further stated that BREYANZI® and its incremental benefit a cated for R/R CLL/SLL is the additional survival benefit from a new line of treatment for patients with few available options. The commenter further stated that BREYANZI® and its incremental benefit are best viewed as additions to that accrued by both prior and subsequent treatments, unlike second generation covalent BTKis, which are unlikely to be effective after progression on another treatment in its class. The commenter also stated that, during CMS’s Medicare Drug Price Negotiation Program Town Hall for Initial Price Applicability Year 2027, CLL researchers and clinician experts emphasized that the treatment goal for CLL is to prolong survival without compromising quality of life. The commenter further stated that patients may remain in a ‘‘wait and see’’ period after diagnosis and may delay second and subsequent lines of treatment to delay or avoid progression through available treatments, and therefore, the ‘‘time to next treatment’’ endpoint is highly relevant to CLL. The commenter stated that median time to next therapy following treatment with BREYANZI® was considerably longer than that observed in a real-world study of patients with CLL/SLL after prior treatment with a BT ter stated that median time to next therapy following treatment with BREYANZI® was considerably longer than that observed in a real-world study of patients with CLL/SLL after prior treatment with a BTKi and B-cell lymphoma 2 inhibitors (6.6 months, [95 percent CI, 3.6–10.1] 41). The commenter stated that this improvement in time to next therapy is an important clinical improvement for patients with R/R CLL/ SLL from both a patient and clinician perspective. In addition, the commenter stated that, according to clinicians and researchers, patients prefer treatment regimens of fixed duration and those that offer remission with shorter times on treatment. The commenter therefore stated it believes the option of receiving a course of therapy through a single infusion is an important benefit of BREYANZI® commenter stated that patients treated with BREYANZI® or Jaypirca® are not choosing between the median PFS of . In addition, the for the FDA-labeled each therapy, but instead the decision is one of sequencing, and the incremental benefit in terms of PFS and/or overall survival is additive and significant. Moreover, the commenter argued that use of BREYANZI® indications would require hosp one of sequencing, and the incremental benefit in terms of PFS and/or overall survival is additive and significant. Moreover, the commenter argued that use of BREYANZI® indications would require hospitals to incur costs that, without new technology add-on payments, would have to be fully absorbed by the treating hospital. The commenter asserted that the mechanism of new technology add- on payments was created to eliminate the limitations on access to new therapies due to lack of reimbursement in the inpatient setting. Response: We thank the applicant and other commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received, we agree with the applicant and other commenters that BREYANZI® represents a substantial clinical improvement over existing technologies because BREYANZI® treatment that significantly improves CR with lower risk of adverse events in R/ R CLL/SLL patients who have received prior BTKi and BCL2i therapy. is a one-time After consideration of the public comments we received and the information included in the applicant’s new technology add-on payment application, we have determined that BREYANZI® m apy. is a one-time After consideration of the public comments we received and the information included in the applicant’s new technology add-on payment application, we have determined that BREYANZI® meets the criteria for approval for new technology add-on payment. Therefore, we are approving new technology add-on payments for this technology for FY 2026. Cases involving the use of BREYANZI® that are eligible for new technology add-on payments will be identified by ICD–10– PCS codes: XW033N7 (Transfusion of lisocabtagene maraleucel immunotherapy into peripheral vein, percutaneous approach, new technology group 7) or XW043N7 (Transfusion of lisocabtagene maraleucel immunotherapy into central vein, percutaneous approach, new technology group 7) in combination with one of the following ICD–10–CM codes: 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 41 Siddiqi et al. (2023), op. cit. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00160 Fmt 4701 Sfmt 4725 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00161 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00162 :\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00161 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00162 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00163 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00164 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36699 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k BILLING CODE 4120–01–C We also received a public comment in response to the New Technology Town Hall meeting notice published in the Federal Register regarding the substantial clinical improvement criterion for COBENFYTM, which we summarized in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18107). After review of the information provided by the applicant and the VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00165 Fmt 470 ed in the FY 2026 IPPS/LTCH PPS proposed rule (90 FR 18107). After review of the information provided by the applicant and the VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00165 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00166 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36701 Another commenter stated that CMS should ensure coverage of new therapies, such as COBENFYTM, to allow clinicians the ability to choose medications based on their expertise and patient needs, while also allowing patients to benefit from the full range of schizophrenia treatment options and to determine which therapy is an appropriate, advantageous option for them. Response: We thank the commenters for their input and have taken it into consideration in determining whether COBENFYTM meets the substantial clinical improvement criterion as discussed later in this section. We note that whether a technology receives new technology add-on payments or not does not affect coverage of the tec the substantial clinical improvement criterion as discussed later in this section. We note that whether a technology receives new technology add-on payments or not does not affect coverage of the technology or the ability for hospitals to provide a technology to patients where appropriate. Comment: The applicant for COBENFYTM submitted a public comment regarding the substantial clinical improvement criterion and provided responses to CMS’s concerns from the proposed rule. The applicant asserted that COBENFYTM satisfies the substantial clinical improvement criterion by introducing the first novel pharmacological approach to schizophrenia treatment in decades. The applicant reiterated that COBENFYTM fundamentally differs from all existing antipsychotics as a first-in-class muscarinic agonist that selectively targets M1 and M4 receptors without blocking dopamine receptors. The applicant also stated that COBENFYTM has the potential to break the cycle of treatment resistance progression through its innovative mechanism and that the placebo-controlled trials submitted as part of its application were scientifically appropriate for evaluating this groundbreaking medication. The applicant rough its innovative mechanism and that the placebo-controlled trials submitted as part of its application were scientifically appropriate for evaluating this groundbreaking medication. The applicant also noted COBENFYTM’s differentiated safety profile relative to existing antipsychotics across both 5- week and 52-week trials, as well as comprehensive long-term data that confirms sustained efficacy. In response to CMS’s concern that the applicant did not identify a patient population for which COBENFYTM could be used that is unresponsive to other available treatments, the applicant stated that by leveraging its novel mechanism of action, COBENFYTM offers a promising alternative that addresses multiple unmet needs in patients with schizophrenia by providing an effective and safe treatment option, particularly because all other approved antipsychotics work through varying degrees of dopamine receptor modulation. In response to CMS’s concern that the clinical trials excluded patients with a history of treatment resistance to schizophrenia medications, and questioned how the trials demonstrate that COBENFYTM treats patients unresponsive to other therapies, the applicant clarified that a history of treatment resistance to schizophrenia medications, and questioned how the trials demonstrate that COBENFYTM treats patients unresponsive to other therapies, the applicant clarified that FDA recognizes treatment-resistant schizophrenia as a distinct indication from the general treatment of schizophrenia, as evidenced by FDA granting a separate indication to clozapine for treatment- resistant patients. The applicant also stated that treatment-resistant schizophrenia is estimated to affect only about 30 percent of individuals with the disease, meaning that roughly 70 percent of patients do not meet the criteria for treatment resistance and typically respond to standard therapies. The applicant asserted that while the COBENFYTM clinical trials focused on the primary indication of schizophrenia, the trials’ exclusion of patients with documented treatment resistance does not preclude potential benefits across a broad segment of the schizophrenia population, namely the 70 percent of patients who do not meet the criteria for treatment resistance. The applicant further stated that because COBENFYTM does not rely on dopamine receptor antagonism, this therapy creates the potenti t of patients who do not meet the criteria for treatment resistance. The applicant further stated that because COBENFYTM does not rely on dopamine receptor antagonism, this therapy creates the potential for broader benefit. The applicant stated that medical literature suggests that the occurrence of treatment resistance in schizophrenia may develop through successive treatment failures, a cycle perpetuated by the limited mechanistic diversity of available therapies, such that patients experiencing insufficient response or intolerable side effects with one antipsychotic often encounter similar challenges when switching to another. The applicant explained that COBENFYTM presents an opportunity to interrupt patients’ progression toward treatment resistance by offering a genuinely different pharmacological option. The applicant also stated that, although COBENFYTM does not carry a specific FDA-approved indication for treatment-resistant schizophrenia, it provides clinicians with an entirely different neurobiological approach that has the potential to benefit patients across the disease spectrum, including but not limited to, those who have experienced inadequate response or intolerable y different neurobiological approach that has the potential to benefit patients across the disease spectrum, including but not limited to, those who have experienced inadequate response or intolerable side effects with traditional antipsychotics that modulate dopamine receptors. The applicant also stated that the side effects associated with conventional antipsychotics frequently lead to antipsychotic discontinuation and stem directly from dopamine receptor blockade and other associated receptor interactions, contributing to the cycle of treatment failures. The applicant asserted that COBENFYTM’s fundamentally different mechanism of action significantly reduces the risk of these dopamine-related side effects, such as weight gain, diabetes, TD, extrapyramidal symptoms, sedation, and cognitive dulling, and may only result in manageable and transient effects, such as nausea and dyspepsia. The applicant also stated that there is a significant economic burden associated with managing antipsychotic-induced side effects due to the chronic nature of schizophrenia treatment and the potential need for long-term management of side effects, which can result in costs greater than $10,000 to $15 ychotic-induced side effects due to the chronic nature of schizophrenia treatment and the potential need for long-term management of side effects, which can result in costs greater than $10,000 to $15,000 per patient annually. The applicant stated that COBENFYTM may reduce the need for such costly interventions, providing not only a clinically significant alternative but also a financially prudent option for healthcare systems and patients. The applicant asserted that this further highlights how COBENFYTM addresses the real unmet needs faced by patients with schizophrenia and underscores its importance in breaking the cycle of treatment failures that contribute to treatment resistance development. In response to CMS’s request for additional information comparing COBENFYTM’s clinical outcomes to other FDA-approved therapies, the applicant stated that it made the scientifically sound and regulatory- compliant methodological decision to conduct placebo-controlled trials. The applicant explained that it believes placebo-controlled trials represent the most rigorous and appropriate methodology for establishing the safety, tolerability, and efficacy profile of COBENFYTM. The applicant st lained that it believes placebo-controlled trials represent the most rigorous and appropriate methodology for establishing the safety, tolerability, and efficacy profile of COBENFYTM. The applicant stated that placebo-controlled clinical trials are sufficient as well as the standard approach for obtaining initial FDA approval. The applicant further explained that placebo-controlled trials are particularly appropriate for psychiatric medications because FDA specifically prefers them to evaluate efficacy and safety due to the unique challenges inherent in psychiatric research and considers them essential to establish that a drug has an effect beyond nonspecific trial effects, such as expectation, rater bias, and regression to the mean—all of which are prominent in psychiatric trials. The applicant reiterated the findings from the three 5- week trials (EMERGENT–1, EMERGENT–2, and EMERGENT–3) and VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00167 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36702 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 2 52-week trials (EMERG 04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36702 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 2 52-week trials (EMERGENT–4 and EMERGENT–5) submitted in its new technology add-on payment application. Additionally, the applicant noted that despite being placebo-controlled, these trials demonstrate the comparative advantages of COBENFYTM with respect to its safety profile across both the 5- week trials and 52-week trials, indicating the sustained tolerability advantage of COBENFYTM. In response to CMS’s concern whether COBENFYTM improves tolerability and side-effects relative to previously available therapies, the applicant stated that COBENFYTM’s unique mechanism of action suggests potential benefits over both typical and atypical antipsychotics, although the Cornett et al. (2017) review it submitted only focused on typical antipsychotics. The applicant explained that, unlike any existing antipsychotics, COBENFYTM does not target dopamine receptors, which is the fundamental mechanism implicated in TD development. The applicant, therefore, asserted that this represents a categorical distinction rather t OBENFYTM does not target dopamine receptors, which is the fundamental mechanism implicated in TD development. The applicant, therefore, asserted that this represents a categorical distinction rather than a marginal improvement, suggesting that COBENFYTM results in potential TD risk reduction compared to all current antipsychotics, both typical and atypical. In response to CMS’s concern that the clinical trials submitted in its application may be too brief in duration to observe some side effects, such as TD, the applicant summarized the safety data from the EMERGENT clinical trials. Specifically, the applicant stated there were no cases of TD reported in the three 5-week clinical trials, with the primary adverse effects being mild gastrointestinal symptoms. The applicant highlighted that the two 52- week EMERGENT trials did not show any new safety concerns compared with the 5-week trials. The applicant also stated that COBENFYTM demonstrated sustained symptom improvement through 52 weeks of treatment, and the trials only observed two cases of TD, which the primary investigator adjudicated as unrelated to treatment with COBENFYTM, as the patients had pre-existing TD histories. The a ks of treatment, and the trials only observed two cases of TD, which the primary investigator adjudicated as unrelated to treatment with COBENFYTM, as the patients had pre-existing TD histories. The applicant asserted that the EMERGENT–4 and EMERGENT–5 52-week clinical trials directly address the potential emergence of delayed adverse effects and provide compelling evidence of COBENFYTM’s long-term tolerability compared to the characteristic adverse effects associated with both typical and atypical antipsychotics that the applicant notes are commonly understood to be a result of prolonged dopamine receptor blockage, which COBENFYTM avoids. The applicant provided the side effect data from COBENFYTM’s package insert: nausea (19 percent), dyspepsia (18 percent), vomiting (15 percent), hypertension (11 percent), abdominal pain (8 percent), diarrhea (6 percent), dizziness (5 percent), and tachycardia (5 percent). The applicant also indicated that motor disturbances, sedation, vision impairments, seizures, weight gain, hyperlipidemia, insulin resistance/ diabetes, QTc prolongation, extrapyramidal symptoms, tardive dyskinesia, and sexual dysfunction are common antipsychotic side effects. ents, seizures, weight gain, hyperlipidemia, insulin resistance/ diabetes, QTc prolongation, extrapyramidal symptoms, tardive dyskinesia, and sexual dysfunction are common antipsychotic side effects. In response to CMS’s concern whether the EMERGENT–1 and EMERGENT–3 clinical trials demonstrate COBENFYTM’s long-term efficacy in reducing illness severity, the applicant provided additional evidence from the 52-week EMERGENT–4 trial, which showed COBENFYTM improves disease severity, as measured by the CGI–S scale, throughout a full 52-week trial period. The applicant explained that 47.4 percent of participants who remained on COBENFYTM by week 52 achieved CGI–S scores 3, compared to the mean baseline scores of 4, which reflected clinically meaningful improvement to mild disease severity or better. The applicant also stated that the EMERGENT–4 study demonstrates COBENFYTM’s sustained efficacy across core schizophrenia symptoms as measured by the PANSS total score. Specifically, the applicant stated that nearly 70 percent of participants in the overall modified intent-to-treat population achieved at least a 30 percent reduction in PANSS total score from baseline to week 52, with 37.1 per t stated that nearly 70 percent of participants in the overall modified intent-to-treat population achieved at least a 30 percent reduction in PANSS total score from baseline to week 52, with 37.1 percent of participants achieving a 50 percent or greater reduction. The applicant asserted that the trial observed these PANSS total score improvements consistently across both positive and negative symptom domains, supporting the robust and durable therapeutic benefit of COBENFYTM beyond short- term clinical trials. Lastly, the applicant reiterated the EMERGENT–4 and EMERGENT–5 trials’ pooled safety and tolerability data that it submitted in its application. The applicant asserted that these pooled data demonstrate durable effectiveness beyond dopamine receptor-based therapies, with a tolerability profile that can support improved medication adherence and reduce the risk of cumulative side effects that often complicate long-term antipsychotic use. Response: We thank the applicant and commenters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received and all data received to date, we continue to have concerns as to whether ters for their comments regarding the substantial clinical improvement criterion. Based on the additional information received and all data received to date, we continue to have concerns as to whether COBENFYTM meets the substantial clinical improvement criterion to be approved for new technology add-on payments. Specifically, it remains unclear that COBENFYTM offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments for schizophrenia in adults and that the use of COBENFYTM significantly improves clinical outcomes over existing technologies. While the applicant noted that COBENFYTM may be able to help patients who do not respond to or are intolerant of other therapies, the basis for this assertion was COBENFYTM’s different mechanism of action rather than data supporting it. There was also no data provided indicating that other antipsychotics cannot manage negative symptoms. Therefore, we do not believe the evidence provided indicates COBENFYTM is a treatment option for patients who are unresponsive to or ineligible for other therapies. With regard to the assertion that COBENFYTM improves clinical outcomes relative to previ dicates COBENFYTM is a treatment option for patients who are unresponsive to or ineligible for other therapies. With regard to the assertion that COBENFYTM improves clinical outcomes relative to previously available therapies, we note that there was no data provided comparing COBENFYTM to other therapies for schizophrenia in adults with regard to efficacy and safety. While the potential risk of certain side effects was noted for treatments for schizophrenia, there was no data provided comparing the relative risk of these side effects for COBENFYTM versus typical and atypical antipsychotics. In addition, while the applicant stated that COBENFYTM’s different mechanism of action reduces the risk of the side effects that frequently lead to antipsychotic discontinuation, there was no comparative data provided indicating a lower risk of discontinuation for COBENFYTM compared to typical and atypical antipsychotics. After consideration of all the information received from the applicant as well as the public comments we received, we are unable to determine that COBENFYTM represents a substantial clinical improvement over existing technologies for the reasons discussed in the proposed rule a as the public comments we received, we are unable to determine that COBENFYTM represents a substantial clinical improvement over existing technologies for the reasons discussed in the proposed rule and in this final rule, and therefore, we are not approving new technology add-on payments for COBENFYTM for FY 2026. e. FIBRYGA® (Fibrinogen (Human)) Octapharma USA, Inc. submitted an application for new technology add-on payments for FIBRYGA® for FY 2026. According to the applicant, FIBRYGA® is a concentrated form of human fibrinogen, indicated for fibrinogen VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00168 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations 36703 supplementation in bleeding patients with acquired fibrinogen deficiency and the treatment of acute bleeding episodes in patients with congenital fibrinogen deficiency, including afibrinogenemia and hypofibrinogenemia. We note that the applicant is seeking new technology add-on payments for FIBRYGA® for FY 2026 specific to the 2024 supplemental Biologics License A y, including afibrinogenemia and hypofibrinogenemia. We note that the applicant is seeking new technology add-on payments for FIBRYGA® for FY 2026 specific to the 2024 supplemental Biologics License Application (sBLA) indicated for the fibrinogen supplementation in bleeding adult and pediatric patients with acquired fibrinogen deficiency. Please refer to the online application , available at posting for FIBRYGA® https://mearis.cms.gov/public/ publications/ntap/NTP241007YU8UR, for additional detail describing the technology and acquired fibrinogen deficiency. With respect to the newness criterion, according to the applicant, FIBRYGA® was granted supplemental BLA approval from FDA on July 31, 2024, expanding its previous BLA indication to include the fibrinogen supplementation in bleeding adult and pediatric patients with acquired fibrinogen deficiency indication and to update the U.S. prescribing information to include this indication.45 According 45 Previous FDA approvals for FIBRYGA® : In 2017, FDA granted FIBRYGA® approval under a BLA application for the treatment of acute bleeding episodes in adults and adolescents ≥ 12 years of age with congenital fibrinogen deficiency, includi : In 2017, FDA granted FIBRYGA® approval under a BLA application for the treatment of acute bleeding episodes in adults and adolescents ≥ 12 years of age with congenital fibrinogen deficiency, including afibrinogenemia and hypofibrinogenemia. On December 23, 2020, FDA granted FIBRYGA® approval under a sBLA application for on-demand treatment of acute bleeding episodes to pediatric patients 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00169 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 36704 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations is As discussed in the FY 2026 IPPS/ LTCH PPS proposed rule (90 FR 18114), we noted the following concerns with regard to the newness criterion. While the applicant asserted that FIBRYGA® currently the only FDA-approved therapy for treating acquired fibrinogen deficiency as a result of major bleeding, we noted that INTERCEPT® Fibrinogen Complex, which is the pathogen reduced cryoprecipitated fibrinogen complex (PRCFC) produced by the INTERCEPT® Blood System, is FDA- approved for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency. The applicant further as RCFC) produced by the INTERCEPT® Blood System, is FDA- approved for the treatment and control of bleeding, including massive hemorrhage, associated with fibrinogen deficiency. The applicant further asserted that FIBRYGA® can be stored at room temperature, allowing it to be delivered quickly to bleeding patients and offering an FDA-approved rapid treatment option for acquired hypofibrinogenemia in emergent bleeds. However, we noted that INTERCEPT® Fibrinogen Complex has a 5-day shelf life at room temperature and is immediately available in a ready-to- transfuse form as a fibrinogen source.46 47 Therefore, we questioned 46 Cerus Corporation. INTERCEPT® Blood System for Cryoprecipitation Package Insert For the manufacturing of Pathogen Reduced Cryoprecipitated Fibrinogen Complex. (Revised 5/ 2024). Available at: www.fda.gov/media/143996/ download. 47 https://intercept-usa.com/products/intercept- fibrinogen-complex/#:∼:text= INTERCEPT%C2%AE%20Fibrinogen whether FIBRYGA® and INTERCEPT® Fibrinogen Complex involve the treatment of the same or similar type of disease and the same or similar patient population. In addition, we noted that the applicant asserted that FIBRYGA® has the same mec inogen Complex involve the treatment of the same or similar type of disease and the same or similar patient population. In addition, we noted that the applicant asserted that FIBRYGA® has the same mechanism of action as cryoprecipitate and works by providing a source of fibrinogen that the body can use to form blood clots to stop bleeding. We also noted that INTERCEPT® Fibrinogen Complex provides a source of fibrinogen, and therefore, we questioned whether FIBRYGA® and INTERCEPT® Fibrinogen Complex have the same mechanism of action. We also noted that the applicant asserted that use of FIBRYGA® is not expected to change the MS–DRG assignment for cases of acquired hypofibrinogenemia, and we therefore stated that FIBRYGA® would map to the same MS–DRGs as INTERCEPT® Fibrinogen Complex. Therefore, as it appeared that FIBRYGA® and INTERCEPT® Fibrinogen Complex may use the same or similar mechanism of action to achieve a therapeutic outcome, are assigned to the same MS–DRGs, and treat the same or similar patient population and disease, we stated our belief that these technologies may be substantially similar to each other. We noted that, per our policy, if these technologies are substant me or similar patient population and disease, we stated our belief that these technologies may be substantially similar to each other. We noted that, per our policy, if these technologies are substantially similar to %20Complex%20is,day%20post %2Dthaw%20shelf%20life. is substantially each other, we use the earliest market availability date as the beginning of the newness period for the technologies. Therefore, if FIBRYGA® similar to INTERCEPT® Fibrinogen Complex, we stated that we believe the newness period for this technology would begin on May 5, 2021, the date INTERCEPT® Fibrinogen Complex became commercially available.48 In addition, because the 3-year anniversary date of the INTERCEPT® Fibrinogen Complex’s entry in the U.S. market (May 5, 2024) occurred in FY 2024, FIBRYGA® would not be considered new and would not be eligible for new technology add-on payments for FY 2026. We stated we were interested in information on how these technologies may differ from each other with respect to the substantial similarity criteria and the newness criterion. We invited public comments on whether FIBRYGA® meets the newness criterion, including whether FIBRYGA® is substantially similar to I t to the substantial similarity criteria and the newness criterion. We invited public comments on whether FIBRYGA® meets the newness criterion, including whether FIBRYGA® is substantially similar to INTERCEPT® Fibrinogen Complex for purposes of new technology add-on payments. Comment: The applicant and another commenter submitted public comments regarding the newness criterion. In response to CMS’s question of whether FIBRYGA® and INTERCEPT® 48 INTERCEPT® Blood System received FDA approval on November 24, 2020, to produce PRCFC; however, as noted in FY 2022 IPPS/LTCH PPS final rule (86 FR 45149), the manufacturers stated that it was not available for sale until May 5, 2021. VerDate Sep 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00170 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k / > H P G 2014 00:36 Aug 02, 2025 Jkt 265001 PO 00000 Frm 00171 Fmt 4701 Sfmt 4700 E:\FR\FM\04AUR2.SGM 04AUR2 2 S E L U R h t i w D O R P 4 4 1 S 7 W 9 K S D n o d n o m m a h k 36706 Federal Register / Vol. 90, No. 147 / Monday, August 4, 2025 / Rules and Regulations in the INTERCEPT® Fibrinogen Complex, accurate dosing is challenging