New Technology Add-On Payment (NTAP) Updates for FY 2025

New Technology Add-on Payments or NTAPs can represent a significant source of reimbursement for hospitals. As such, coders should make it a priority to recognize and assign the codes that report devices, substances and technologies approved for new technology add-on payment.

What are New Technology Add-On Payments?

For a new medical service or technology to be considered for new technology add-on payment, three criteria must be met. The technology must be new, it must be costly such that the DRG rate is determined to be inadequate, and it must demonstrate a substantial clinical improvement over existing services or technologies.

For those services and technologies that meet the new technology criteria, CMS provides incremental payment in addition to the DRG payment.

For FY 2025 Medicare will make an add-on payment equal to the lesser of

• 65% of the costs of the new medical service or technology or
• 65% of the amount by which the cost of the case exceeds the standard DRG payment

Additionally, certain services/technologies may be selected by Medicare for an increase in payment amount from 65% to 75%.

NTAPs Approved for FY 2025

For FY 2025 there are a total of 39 new medical services or technologies that have been approved for NTAP.

Two new substances that received NTAP approval for FY 2025 are Casgevy and Lyfgenia. Both of these medications are gene therapies that have indications for the treatment of sickle cell disease and when used for this purpose their administration qualifies for the 75% NTAP amount. The maximum NTAP payment a hospital can receive for administration of Casgevy is $1,650,000.00 and for Lyfgenia is $2,325,000.00. Recognizing the substantial reimbursement amounts associated with these medications underscores the importance of being diligent in capturing every NTAP approved procedure. Every code counts!

Getting it Right

Correctly capturing NTAP revenue requires knowing something about what NTAP procedures are and what they are not. For example, not every code in the New Technology section of ICD-10-PCS is an NTAP approved procedure. Additionally, although NTAP procedures can come from the New Technology section, codes with NTAP can also come from other sections of ICD-10-PCS, such as the Medical and Surgical section. Coders need to be careful not to assign codes from the wrong section when reporting NTAP procedures. For example, don’t assign a code from the Administration section of ICD-10-PCS with the root operation of Introduction for administration of a substance that should be more specifically reported with a specific New Technology code that qualifies for NTAP.

Example: Administration of Lunsumio™

Prepare Now

Make sure you and your team are ready on October 1, 2024, to capture all NTAP approved substances, devices and technologies. To assist you in identifying all technologies that have been approved for NTAP for FY 2025, including a description of the technology, the relevant diagnosis and procedures codes and the maximum payment organizations can receive for these procedures, check out our downloadable guide to FY 2025 New Technology Add-On Payments.

Since 1992, HIA has been the leading provider of compliance audits, coding support services and clinical documentation audit services for hospitals, ambulatory surgery centers, physician groups and other healthcare entities. HIA offers PRN support as well as total outsource support.

The information contained in this coding advice is valid at the time of posting. Viewers are encouraged to research subsequent official guidance in the areas associated with the topic as they can change rapidly.