Blog October 28, 2019

Long Awaited CMS Rules on Medicare Coverage for CAR-T Therapies

48001917692_524acc42f0_hIn August, the Centers for Medicare and Medicaid Services (CMS) finalized long-sought rules framing the coverage of chimeric antigen receptor T-cell (CAR-T) treatments. Two CAR-T therapeutics are currently on the market: Gilead’s Yescarta and Novartis’ Kymriah, both approved for diffuse large B-cell lymphoma (DLBCL) with the latter also approved for acute lymphocytic leukemia (ALL). Under the new rules, expected to take effect in 2020, Medicare will cover CAR-T-cell therapies when they are provided in healthcare facilities that follow the FDA Risk Evaluation and Mitigation Strategies (REMS) for administration in the approved indications. In addition, the agency will cover yet unapproved, new CAR-T treatments and off-label usage for approved products for indications that are supported by at least one CMS-approved compendium. 


Hospitals have long complained that the lack of clear rules from CMS on Medicare coverage for CAR-T treatments, combined with the treatments’ high prices, has hindered patient access to CAR-Ts. CMS’s coverage decision is intended to provide more consistent and predictable patient access to these therapies nationwide.


In the latest version of its coverage rules, CMS has attempted to address some of the concerns that had been previously expressed, especially by physicians and hospitals. For example, the updated rules now require treatment to be administered in appropriate “healthcare facilities” rather than “hospitals” as originally specified, thus including stand-alone oncology centers in the list. The agency has also dropped the requirement for hospitals to collect patient outcome data, which would have added greatly to the administrative burden on those institutions.


However, the new rule is not designed to address the amount that CMS will ultimately reimburse for CAR-T. Seema Verma, CMS Administrator, admits that the agency is struggling with how much to pay for the very expensive therapy. Under the new rules, the agency proposes to reimburse up to 65% of the cost of therapy (about $242,000), up from the current 50% ($186,500). While the 15% increase may promote greater access to CAR-T treatment, experts believe it falls short at covering overall CAR-T related costs. For instance, in addition to the costs of treatment ($373,000 for Yescarta and $475,000 for Kymriah), experts estimate that the total cost of administering these therapies is more than double the drug price tag, as a result of the required post-treatment inpatient hospitalization and interventions for potential toxic side effects.


Dr. Verma says that existing laws requiring a certain level of outcomes data to set reimbursement levels for a new therapy are hindering the agency. Indeed, such comprehensive real-world evidence does not yet exist for CAR-Ts because the therapy is so new. She notes that private insurers have been able to provide better coverage than Medicare for these treatments as they aren’t hampered by the legal requirement to consider long-term outcomes data when setting the amounts to reimburse.