CAR-T costs 'not sustainable' for hospitals, researchers say

A breakthrough therapy to treat certain advanced blood cancers, known as chimeric antigen receptor T-cell therapy, has shown promising results — even complete remissions in some patients — but its costs aren't sustainable for hospitals, which stand to lose hundreds of thousands of dollars per treatment, according to a commentary published in the Journal of Clinical Oncology.

The list prices of CAR-T therapies are high on their own, ranging from $373,000 to $475,000. But hospitals incur other costs when providing the treatment. For example, patients are often hospitalized for a brief period post-administration.

Under the current Medicare repayment model, hospitals could lose up to $300,000 for each CAR-T treatment administered, the authors said.

Medicare reimburses hospitals for CAR-T therapy through a new technology add-on payment. However, the difference in the amount hospitals get reimbursed for CAR-T treatment varies widely based on whether the treatment is administered in inpatient or outpatient settings.

In inpatient settings, the maximum payment is 50 percent of the cost of the therapy, which would be $186,500 for CAR-T therapy. Hospitals can apply for reimbursement for the remaining costs, called outlier payments, but those payments would cover less than 80 percent of the remaining costs.

Hospitals receive higher reimbursements if they administer CAR-T in outpatient settings,which may incentivize the facilities to give the therapy in an outpatient setting even though that may not be the best option for a patient, the authors said.

The authors said that CAR-T is a risky therapy that could cause life-threatening complications that require a patient to be hospitalized.

CMS has said it will increase the new technology add-on payment from 50 percent to 65 percent in 2020, which will raise reimbursements for CAR-T to $242,450. However, the study's authors said that is not enough, because the higher reimbursement could mean hospitals receive less outlier payments.

The add-on payment rate increase is also only a short term solution, because CAR-T products that are on the market now will no longer be eligible for the payments in 2021.

"In the inpatient setting, the losses that hospitals incur providing CAR-T are unsustainable and may limit the number of hospitals that are willing to offer CAR-T, affecting patient access to these potentially life-saving therapies," the study authors wrote.

The authors were: Chrisopher Manz, MD, a fellow in the division of hematology Oncology at the Philadelphia-based University of Pennsylvania, David Porter, MD, a professor of leukemia care at the University of Pennsylvania; and Justin Bekelman, MD, associate professor of radiation oncology at the University of Pennsylvania.

Read the full study here.

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