New Technology Add-On Payment (NTAP): What Manufacturers Must Do to Secure Inpatient Reimbursement
For pharmaceutical and medical device manufacturers launching innovative inpatient therapies, the New Technology Add-On Payment (NTAP) is one of the most important reimbursement levers in the Medicare inpatient prospective payment system (IPPS). NTAP provides an additional payment on top of the MS-DRG lump sum to offset the cost of qualifying new drugs and devices—up to 65 percent of the technology cost, or 75 percent for Qualified Infectious Disease Products (QIDPs).
Securing NTAP approval is not easy, and the program runs for no more than three years per indication. Once granted, hospitals can claim the additional payment by submitting inpatient claims with the specific ICD-10-CM diagnosis and ICD-10-PCS procedure codes that represent the eligible patient case. Manufacturers must execute a coordinated post-approval strategy across coding, provider education, payer communication, and field reimbursement to ensure hospitals capture the add-on payment and maintain access to the technology.
Common Post-Approval Implementation Mistakes for NTAP
Even after NTAP approval is granted, manufacturers frequently fall short on post-approval execution. Avoid these common pitfalls:
Assuming hospitals will identify NTAP-eligible cases on their own: Hospitals must submit claims with the specific ICD-10-CM and ICD-10-PCS codes that trigger the add-on payment. Without clear provider education on which codes apply and how to document the case, NTAP-eligible cases are often missed.
Neglecting the three-year window: NTAP lasts no more than three years per indication. Manufacturers must track the window closely and plan for the transition when NTAP ends and the technology cost must be absorbed into the underlying MS-DRG payment calibration.
Missing the FY 2021 antimicrobial changes for QIDPs: Starting in the FY 2021 application cycle, Qualified Infectious Disease Products are considered new and not substantially similar to existing technology by definition. QIDPs do not need to meet the substantial clinical improvement criterion. QIDP add-on payments increase to 75 percent of the product cost or the additional cost of the case, whichever is lower. QIDPs approved under the FDA Limited Population Pathway (LPAD) can begin receiving NTAP the quarter after FDA marketing authorization—not the following fiscal year.
Failing to align field reimbursement with the coding requirements: Field reimbursement managers, key account managers, and medical science liaisons must be trained on the specific ICD-10-CM and ICD-10-PCS codes required to trigger NTAP, the documentation that supports them, and the three-year payment window.
To realize the full reimbursement value of an NTAP approval, manufacturers should coordinate across coding strategy, provider education, payer communication, and field reimbursement teams. The actions below outline a coordinated approach.
Critical Actions Following NTAP Approval
To support hospital adoption of NTAP-eligible technology and capture the additional payment for which the technology qualifies, manufacturers should align on the following actions.
1. Confirm Effective Date, ICD-10 Codes, and Payment Amount
Review the IPPS final rule to confirm the effective date of NTAP for the specific indication, the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes that hospitals must submit to trigger the add-on payment, and the maximum NTAP amount. For most technologies, the offset is capped at 65 percent of the technology cost. For Qualified Infectious Disease Products (QIDPs), the offset rises to 75 percent of the product cost or the additional cost of the case, whichever is lower.
2. Educate Hospitals on the Required Coding Combination
Hospitals receive NTAP only when the claim is submitted with the specific ICD-10-CM and ICD-10-PCS code combination that represents the eligible patient case. Provide hospitals with clear coding guides, real-world claim examples, and chart documentation templates so the coding workflow consistently captures NTAP-eligible cases.
3. Train Field Reimbursement and Key Account Teams
Field reimbursement managers, key account managers, and medical science liaisons should be trained on the NTAP coding requirements, the three-year payment window, and the documentation that supports the add-on. Provide approved, compliant messaging and leave-behinds so customer-facing teams can address provider questions confidently.
4. Communicate Coding and Payment to Payers
Although NTAP is a Medicare inpatient payment policy, some commercial payers follow Medicare coding and payment logic. Communicate the new ICD-10 codes, the documentation requirements, and the clinical rationale to major payers so commercial claims adjudication aligns with Medicare where appropriate.
5. Track the Three-Year NTAP Window for Each Technology
NTAP lasts no more than three years per indication. Track the start date and expiration date for each NTAP designation in your portfolio. Plan for the post-NTAP transition by engaging with CMS on MS-DRG recalibration data, evaluating the impact of the technology cost on the underlying MS-DRG base payment, and preparing field teams for the change.
6. For QIDPs and LPADs, Apply the FY 2021 Antimicrobial Rules
Starting in the FY 2021 application cycle, Qualified Infectious Disease Products are considered new and not substantially similar to existing technology by definition, and QIDPs do not need to meet the substantial clinical improvement criterion. QIDP add-on payments are 75 percent of the product cost or the additional cost of the case, whichever is lower. QIDPs approved under FDA's Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD) that otherwise meet NTAP criteria begin receiving NTAP effective for discharges the quarter after FDA marketing authorization, instead of waiting until the next fiscal year.
7. Monitor Claims for Underpayment and Coding Errors
After the NTAP effective date, monitor claims for evidence that hospitals are capturing the add-on payment. Common issues include claims submitted without the required ICD-10-PCS code, claims that lack documentation of the technology used, and intermediaries that have not loaded the new code logic. Rapid identification allows targeted provider education or payer outreach.
8. Use NTAP Data to Inform Future Reimbursement Strategy
NTAP cases generate detailed claims data that can inform pricing strategy, MS-DRG recalibration arguments after the NTAP window expires, real-world evidence development, and future coverage and coding requests. Build internal infrastructure to capture and analyze NTAP claims data from the first quarter of the effective date.
Resources
Medicare Learning Network — Increasing Access to Innovative Antibiotics for Hospital Inpatients Using NTAP: FAQ (MLN Matters SE20004)
CMS — IPPS Annual Rulemaking and NTAP Application Materials
Disclaimer: The coding guidance and regulatory requirements described in this article are provided for general informational purposes. Coding logic and reimbursement mechanics vary by payer and setting. Hospitals and manufacturers should consult with compliance, legal, and coding counsel prior to implementing changes.
