New CMS rule emphasizes antimicrobial drugs

The U.S. Centers for Medicare and Medicaid Services (CMS) instituted last week a new final rule, altering its 2020 Hospital Inpatient Prospective Payment System (IPPS) in a way that changes how Medicare services are paid for, along with greater payment for newer antimicrobial drugs.

The new rule achieves three things. First, it changes the severity designation for multiple codes for antimicrobial drug resistance as a means of increasing payments to hospitals, which is intended to offset the clinical complexity of treating drug-resistant infections. Second, it makes it so that qualified infectious disease products (QIDPs) no longer need to meet the clinical improvement criterion to gain the new technology add-on payment. Lastly, it increases that payment for QIDPs to 75 percent from 50 percent.

“This final rule lessens economic incentives to utilize older antimicrobial drugs such as colistin, and shift medical practice to employ more appropriate, newer generation antimicrobials,” Rick Bright, director of the Biomedical Advanced Research and Development Authority (BARDA), wrote after the announcement. “Payment more closely aligned with the value of these lifesaving medicines will shift the current market realities of these drugs for companies, investors, and patients.”

BARDA has been working with CMS to help encourage payment reform and the survival of the antimicrobials marketplace. Bright noted that this alone will not solve the growing problem of antimicrobial resistance but will improve the market and innovative capabilities, providing the resources necessary to develop and commercialize new techniques. To date, the relative return on investment for such products has been very low, Bright wrote.